11/20/2012 1 WSHFC Continuum of Needs and Resources Chart Local Government & Public Housing Authorities <Federal, State & Local Funds> Housing Trust Fund Program <Federal, State & Local Funds> Housing Finance Commission <Using No State Funds> Private Sector Private Sector Subsidy Insurance Federal Programs Federal Programs No Income 50% (Area Median) 80% Median 115% Mortgage Interest Deduction & Housing Credits and Tax exempt Bonds – It’s Simple! WSHFC
C8 financing affordable rental projects p pt - bob peterson
Jul 08, 2015
This workshop will explore how organizations can utilize various federal, state, and private financing sources combined with innovative ideas to create affordable rural rental housing for veterans, seniors, and families. Participants will learn to analyze project cash flow, maximize private investment, leverage tax credits, and bridge financing gaps.
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Transcript
11/20/2012
1
WSHFC
Continuum of Needs and Resources Chart
Local Government & Public Housing Authorities<Federal, State & Local Funds>
Housing Trust Fund Program<Federal, State & Local Funds>
Housing Finance Commission<Using No State Funds>
Private SectorPrivate Sector
SubsidyInsurance
Federal ProgramsFederal Programs
No Income 50% (Area Median) 80% Median 115%
Mortgage Interest Deduction &
Housing Credits and Tax exempt Bonds – It’s Simple!
WSHFC
11/20/2012
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Tax Credits
Eq
uity
$$
for
Pro
ject
How are the Credits Turned Into Equity for the Project?
WSHFC
Tax Credit Partnership
Investor = 99% Owner
Developer = 1% Owner
$14,000,000
Credit to Equity
$13,580,000
WSHFCTAX CREDITS
InvestorTAX SAVINGS
10 years
Investorpays $0.97 / dollar
of tax credit
HousingEQUITY
$14,000,000
Credit to Equity
$9,800,000
WSHFCTAX CREDITS
InvestorTAX SAVINGS
10 years
Investorpays $0.70 / dollar
of tax credit
HousingEQUITY
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WSHFC
Best Process:
Objective vs. Subjective?
•Policy Objectives:– maximize public benefit
– appealing to investor
– geographic dispersion
– project readiness
– public funder coordination
•Allocation Approach– geographic credit pools
– public benefit point criteria
– caps and limits
Public Benefit Point Criteria
WSHFC
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WSHFC
USDA RD 538 Loan
6 Site PortfolioBond Tax Credit Financing
Rehab 6 Site Location
LIHTC BUDGET
Costs Per Unit
Acquisition Costs $ 7,483,656 $ 38,576
Construction $ 6,008,074 $ 30,969
Soft Costs $ 3,388,296 $ 17,465
Other Development $ 1,812,086 $ 9,341
Total Costs $ 18,692,112 $ 96,351
Total Project Costs $ 18,692,112
Total Eligible Basis‐Acquisition $ 8,061,656
Total Eligible Basis‐Rehab $ 8,358,746
Reasonable Expected Basis (1st Yr.) $ 17,000,402
.
WSHFC
USDA RD 538 Loan cont.
Bond Tax Credit Financing
Rehab 6 Site Location
Residential Sources Uses
USDA 538 Loan/Bond $9,000,000 Acquisition $ 7,483,656
USDA Loan Assumptions $3,592,659 Construction $ 6,008,074
Deferred Developer Fees $1,796,927 Soft/Financing Costs $ 3,388,296
Tax Credit Equity $4,302,522 Replacement Reserves $1,812,082
Total Sources $18,692,108 $18,692,108
Credit to Equity
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Chelsea Apartments - Oak Harbor, WA
Harmony House – Shelton, WA
Wellington Apts. – Snohomish, WA
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USDA RD 515 Loan
3 Site PortfolioCompetitive Tax Credit Financing
Rehab 3 Site Location
Residential Sources Residential Uses
USDA 515 Loan $2,347,969 Acquisition $3,323,022
GP Contributions $205,780 Construction $5,201,163
Sponsor Take Back Note $892,031 Soft/Financing Costs $3,388,102
Tax Credit Equity $8,892,507 Reserves $426,000
Total Sources $12,338,287 Total Uses $12,338,287
WSHFC
USDA RD 515 Loan cont.
Competitive Tax Credit Financing
Rehab 3 Site Location
Residential Sources Residential Uses
USDA 515 Loan $2,347,969 Acquisition $3,323,022
GP Contributions $205,780 Construction $5,201,163
Sponsor Take Back Note $892,031 Soft/Financing Costs $3,388,102
Tax Credit Equity $8,892,507 Reserves $426,000
Total Sources $12,338,287 Total Uses $12,338,287
Credit to Equity
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Mercy Housing Northwest Allegre Villa, Sandstone & Cambridge
Apts. RD Rehab
RD Transfer Application – lots of paper
Mercy Housing Northwest
• Acquired 30 property, 926 unit RD portfolio 8 yrs ago from private developer to preserve housing
• Strategy to rehab properties with emphasis on health and safety, energy conservation, accessibility, and extending useful life to enhance the overall sustainability and marketability
• Renovated 7 properties with HUD Green Retrofit• Phase 2 - 84 senior units in 4 buildings in 3 rural
towns
Mercy Housing Northwest
Sandstone Apartments, Tenino WAConstructed in 1978
Pre Rehab
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Mercy Housing Northwest
Moving Day – Residents are temporarily relocated
Mercy Housing Northwest
Sandstone Apartments in progress - rigid insulation, new windows and new roof & gutters installed
Mercy Housing Northwest
Pre-rehab non-conforming stairs
Rehab in progress to bring to code
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Mercy Housing Northwest
Typical pre-rehab kitchen
Mercy Housing Northwest
Asbestos abatement underway – floors, ceilings and wall texture throughout
Mercy Housing Northwest
Kitchen - asbestos abatement completed
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Mercy Housing Northwest
Accessibility modifications to sidewalks, ramps and driveway
Mercy Housing Northwest
Cementitious board siding installation underway
Competitive Housing Credit Timeline
Initial developer inquiry
Application submitted Day 1
Staff reviews and underwriting Day 1-90
Housing Tax Credit
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Tax Exempt Bond Timeline
Initial developer inquiry
Application submitted(Day 1)
Final commitment from lender or credit enhancer Day (55)
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