221(d)(4) Tax Credit Pilot Program

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2 221(d)(4) Tax Credit Pilot Program Moderator Toni Jackson, Jones Walker, LLP Panel Members Ken Cooper, HUD Ray Landry, Davis-Penn Mortgage Randy Mason, Mason Joseph Company Inc. Richard Price, Berkadia

elements such as chalkboards, basketball goals and shot clocks were

3 Historic Lofts of Waco High, 815 Columbus Avenue, Waco, TX Adaptive reuse of dilapidated 1911 school building and gym Architectural elements such as chalkboards, basketball goals and shot clocks were preserved and incorporated in the units Photo: Baylor University Photo: Randy Willis

4 TAX CREDIT PILOT SECTION 221(d)(4)

5 LIHTC and HUD History Low Income Housing Tax Credit (LIHTC) program enacted as part of the Tax Reform Act of 1986 Administered by Treasury Department and State Housing Finance Agencies (HFAs) July 2008 Housing and Economic Recovery Act (HERA) provided statutory rulings for FHA multifamily program changes to facilitate use of insured mortgages with LIHTC developments

6 Guidance for LIHTC applications Multifamily Accelerated Processing (MAP) Guide, revised January 29,2016 Mortgagee Letter , LIHTC Pilot Program 223(f) Tax Credit Pilot FAQs Mortgage Insurance Reduction Federal Register, January 28,2016 Mortgagee Letter for 221(d)(4) Program o To be released summer/fall 2016

7 MAP Guide Highlights, Chapter 14, Revised January 29, 2016 All tax credit projects underwritten using single underwriter model Tax credit usually go direct-to-firm Identity of interest permitted between lenders and equity syndicators, investors, or bridge loan lenders in limited circumstances

8 MAP Guide Highlights, Chapter 14, Revised January 29, 2016 Streamlined processing including delayed submission of final plans No market study for projects with at least 90% project based rental assistance No cost certification required for tax credit project loans under 80% of cost

9 Approach to 221 (d)(4) Pilot Expansion Incorporate Lessons Learned From 223(f) Use demonstration projects in California: One Project Approved, One in processing in FTW through WLS Incorporate 221(d)(4) Program into Pilot via Notice, in order to: Continue to Increase Pilot Production Allow New Construction and Substantial Rehab Projects to be done

10 Sub-Rehabs or New Construction Tax Credit Pilot Section 221 (d)(4) Key Elements Not Limited by 223(f) s $40K/Unit Rehab Limit Rents Must Have a 10% Discount to Market, or a 20 Year Project Based Section 8 Contract for at least 90% of the Units Clean less Complex Proposals Suitable for Quicker, Single Underwriter Processing Required

11 Tax Credit Pilot Section 221 (d)(4) Key Elements (Continued) No projects with Historical or Environmental Issues Solid, HUD-experienced Developer, General Contractor and Architect Experienced Lender

12 Likely (d)(4) Processing Fundamentals Concept Meetings Required Early Elimination of Projects with Environmental or Historical Structures Concerns Single Designated Underwriter with Assistance from Architect, and Assistance from Valuation and Other Tech Staff Only as Needed

13 Likely (d)(4) Processing Fundamentals (Continued) Commitment to Expedited, High Priority 221(d)(4) Processing in Field Offices (120 days, application to closing) Dedicated HQ Staff in Production and Asset Management Immediate Communications between HUD and MAP Lender as Issues Arise

14 Streamlined Appraisal Review When Possible Likely (d)(4) Processing Fundamentals (Continued) Architecture and Cost Streamlined Review When Possible for New Construction, with Possibility of Using Equity Investor s Cost and Plan Review, with Certification Use of Simplified MAP Checklists for (d)(4)s and Elimination of Redundant or Unnecessary Documents Abridged Loan Committee Template for HUD Underwriter Use (Narrative)

Concept meetings are held in Kansas City and Fort Worth Please contact Carolyn Wright at 817-978-5899 if

15 Application Process What to Expect Concept Meetings & Loan Committee Concept Meetings occur Tuesday Thursday at 10:00 a.m. (CT). Concept meetings are held in Kansas City and Fort Worth Please contact Carolyn Wright at if you wish to schedule a Concept Meeting; additional meeting times may be established if the calendar is booked beyond two weeks Loan Committee is held Tuesday Thursday from 1:00 p.m. 3:00 p.m. (CT)

Missouri - 20 Concepts Nebraska - 5 Concepts New Mexico - 9

16 Concept Meeting Map FY 2016 Arkansas - 6 Concepts Iowa - 4 Concepts Kansas - 5 Concepts Louisiana - 31 Concepts Missouri - 20 Concepts Nebraska - 5 Concepts New Mexico - 9 Concepts Oklahoma - 5 Concepts Total 200 Concepts Texas Concepts

17 Application Intake & Assignment As of May 5, 2014, all applications are submitted to the Fort Worth Office: ATTN: Production Division U.S. Department of HUD 801 Cherry Street, Unit #45, Suite 2500 Fort Worth, TX Applications are uploaded to a Regional system and assigned for processing (based on capacity) throughout Fort Worth and Kansas City Within 3 5 days of receipt of application, the assigned Underwriter will the lender with instructions on where to send the hard copy

18 Firm Commitments Issued FY 15 & 16 FY 16 YTD FY 15 comments Project slightly less than 2015 $ Billion $ Billion Project dollar volume to be greater than 2015

19 FY 16 Breakdown Southwest Region 134 Firms Issued NC/SR % $ 223a7 Refi % $ 223f Refi % $ HFA Risk Shg % $ LIHTC No 23% LIHTC/TE Bonds % $ LIHTC/TE Bonds % $ ALL PROGRAMS 77% NC/SR % $ 223f Refi % $ 223a7 Refi % $

20 Southwest Region Workload July 15, 2016 Firms Not Issued SOA In Processing 221 NC/SR 28 (8 LIHTC) 223f 13 (4 LIHTC) 223a7 4 Total 45 (12 LIHTC) 4 Underwriting Teams 19 underwriters at present

21 NC/SR 60 Days Firms Issued 33 Firms Issued on Time 33 Percent Issued on Time 100% 51 Days Average Processing Time 55 Days FY 15 Processing Data from 10/1/2015 04/1/2016 223(f) 45 Days Firms Issued

21 21 NC/SR 60 Days Firms Issued 33 Firms Issued on Time 33 Percent Issued on Time 100% 51 Days Average Processing Time 55 Days FY 15 Processing Data from 10/1/ /1/ (f) 45 Days Firms Issued 35 Firms Issued on Time 35 Percent Issued on Time 100% 40 Days Average Processing Time 61 Days FY (a)(7) 30 Days Firms Issued 8 Firms Issued on Time 8 Percent Issued on Time 100% 21 Days Average Processing Time 26 Days FY 15

22 Closing Coordination As part of the Transformation, the position of Closing Coordinator was established to manage and coordinate the closing process Closing Coordinators and Technical Branch Chiefs meet weekly to review work Closing and Technical assistance workload to balance work across the Region Rebecca Livens, Krystle Hamilton, and Leslie Winston are the Closing Coordinators in the Southwest Region.

23 Completed 175 Closings FY 16 YTD Oct Nov Dec Jan Feb Mar Apr May Jun Jul

24 Pending Closings Kansas City 16 Fort Worth 34 Total 50

25 Region VI Program Attorneys FORT WORTH REGIONAL OFFICE U.S. Department of Housing and Urban Development 801 Cherry St., Unit 45, Suite 2500 Fort Worth, TX William Daley Regional Counsel (817) Jack Stark Deputy Regional Counsel (817) Betsy Darling Attorney Advisor (817) Christopher Kinnear Attorney Advisor (817) Carol Horton Paralegal Specialist (817) Vickie Spinks Paralegal Specialist (817) NEW ORLEANS FIELD OFFICE U.S. Department of Housing and Urban Development Hale Boggs Federal Building 500 Poydras Street, 9 th Floor New Orleans, LA Bam V. Gressett Associate Regional Counsel (504) Emily Turner Attorney Advisor (504) Gwen Tucker Paralegal (504)

26 Region VI Program Attorneys Continued SAN ANTONIO FIELD OFFICE U.S. Department of Housing and Urban Development H. Garcia Federal Building 615 E. Houston Street, Suite 347 San Antonio, TX Debra L. Loya Chief Counsel (210) Brian Surratt Attorney Advisor (210) Sylvia Caballero Paralegal Specialist (210) OKLAHOMA CITY FIELD OFFICE U.S. Department of Housing and Urban Development 301 NW 6 th St., Suite 200 Oklahoma City, OK Mikel Anderson Associate Regional Counsel (405) Randall McMains Attorney Advisor (405) Gaylene Fox Paralegal Specialist (405)

27 Region VI Program Attorneys Continued LITTLE ROCK FIELD OFFICE U.S. Department of Housing and Urban Development 425 W. Capitol Ave., Suite 1000 Little Rock, AR Jessica Lee Chief Counsel (501) Elaine Holland Paralegal Specialist (501)

28 Region VII Program Attorneys KANSAS CITY REGIONAL OFFICE (Jurisdiction: Kansas, Nebraska, Western Missouri) U.S. Department of Housing and Urban Development Gateway Tower II 400 State Ave., Suite 200 Kansas City, KS Gayle E. Bohling Regional Counsel (913) Bion W. Vance Deputy Regional Counsel (913) Kevin M. Muesenfechter ARC Hsg Fin & Prog (913) Bradley E. Laxson Attorney Advisor (913) Alphonso L. Eason Attorney Advisor (913) SAINT LOUIS FIELD OFFICE (Jurisdiction: Eastern Missouri) U.S. Department of Housing and Urban Development Robert A. Young Federal Building 1222 Spruce St. St. Louis, MO Daniel J. Dugan Chief Counsel (314) Douglas J. Finer Attorney Advisor (314) Michelle M. Berken Paralegal Specialist (314)

29 Region VII Program Attorneys Continued DES MOINES FIELD OFFICE (Jurisdiction: State of Iowa) U.S. Department of Housing and Urban Development Neal Smith Federal Building 210 Walnut St., Room 937 Des Moines, IA James V. Provenzale Chief Counsel (515) Sang-Ki Han Attorney Advisor (515)

30 Southwest Region Construction Activity April d4 New Construction $1.8 B 17,813 units 221d4 SubRehab $125.6 M 2,048 units 220 SubRehab $54.3 M 376 units 241a/223f refi $2.5 M 364 units HFA Risk New Construction/SubRehab $7.2 M 172 units 213 Coop $21.2 M 148 units Total 2.09 B 21,143 Units

31 Construction Email Box We have assigned a Construction Analyst Loan Administrator to handle all construction requests for the

gov upon Initial Closing of all New Construction/Sub Rehab loans: Permissions to Occupy (PTO) Change Orders Draw Requests

31 31 Construction Box We have assigned a Construction Analyst Loan Administrator to handle all construction requests for the Southwest Region We encourage you to submit the following construction requests to SWConstruction@hud.gov upon Initial Closing of all New Construction/Sub Rehab loans: Permissions to Occupy (PTO) Change Orders Draw Requests Construction Inspections Upon retrieval from the box, the Fort Worth and Kansas City Technical Specialist Branch Chiefs will assign the work to the appropriate staff

32 32 LIHTC Contacts Southwest Region Elizabeth Arteaga Branch Chief, Fort Worth Arteaga, Elizabeth H Elizabeth.H.Arteaga@hud.gov Buis, Michael A <Michael.A.Buis@hud.gov>

33 33 Comments, Questions, or Concerns? Please contact or

HUD Multifamily Southwest Region

HUD Multifamily Southwest Region Southwestern Affordable Housing Management Association (SWAHMA) March 17-18, 2015 Presentation Agenda Kelly Haines Regional Director 1. MFT Transformation Wave 1 Overview