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FHA Low Income Housing Tax Credit Pilot Program. SMAC Conference May 30, 2013. Program Objectives & Outcome. Increase FHA’s Affordable Housing Production Implement HERA’s Pilot Program Mandate Through Accelerated Processing Compatible with Tax Credit Program Requirements - PowerPoint PPT Presentation
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FHA LOW INCOME HOUSING TAX CREDIT
PILOT PROGRAM
SMAC ConferenceMay 30, 2013
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• Increase FHA’s Affordable Housing Production
• Implement HERA’s Pilot Program Mandate Through Accelerated Processing Compatible with Tax Credit Program Requirements
• Outcome: Complete FHA Loan Processing in 120 Days, from Application to Closing
PROGRAM OBJECTIVES & OUTCOME
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• All Have Tax Credit or Bond Cap Allocations (Either 4% or 9% Credits Accepted)
• Projects in All States are Now Eligible
• All Are Comparatively Low Risk Projects, Meeting Sustaining Occupancy Requirements
• Tenants remain in place except for temporary (30 day) relocation
ELIGIBLE PROJECTS
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• All Are Eligible for 223(f) Loan Program, With Certain Adaptations for The Pilot Program:
• Rehab Expenditures of up to $40,000/unit (unadjusted for locality) will be allowed
• For Mod Rehabs, 221(d)(4) Substantial Rehab Controls have been Adopted
• Standard 223(f) 12 month repair period can be Extended
Note: Davis Bacon Wage Rates do not Apply
ELIGIBLE PROJECTS (CONTINUED)
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• Use MAP Lenders With Tax Credit Experience
• Use Senior Staff Only (supervisors) as Designated Underwriters at Each of the Pilot Hubs
• Revise Process – Not Linear with Multiple Experts, but all Review done by Designated Underwriter
• Limit Underwriting To Only one FHA Program Adapted for Use with Tax Credits: 223(f)
PROCESS CHANGES: HOW WE MAKE IT WORK
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• Hold Optional Concept Meeting (Lender/Owner and Designated Underwriter) Prior to Application, to Confirm Project’s Pilot Suitability or Refer it to Another MAP Program
• Designate HQ Asset Management Point of Contact For:• First Mortgage Prepayments • Special Approvals and Waivers (e.g. Flex Sub)
• Facilitate Section 8 Processing• HAP Contract Renewals• Section 8 Rent Increases
PROCESS CHANGES: HOW WE MAKE IT WORK (CONTINUED)
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• Defer Submission of Plans and Specs Until Just Prior to Closing
• Require Fewer Application Exhibits and Requirements (See Pilot’s Modified Exhibits Checklist)
• Use One-Stage, ‘Direct-to-Firm’ Commitment Applications – No Preliminary Application Needed
• Provide HQ Staff in MF Production to Track and Monitor Pilot Projects and Provide Ongoing Guidance
PROCESS CHANGES: HOW WE MAKE IT WORK (CONTINUED)
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• Acquisition and/or Refinancing with Moderate Rehabilitation for Developments with Project based Rental Assistance Covering at Least 90% of Units
• Owner must ask Asset Management for any desired rent increase prior to the submission of the application for processing under the Pilot
• Owner must agree to enter into a new 20 year HAP Contract
3 TRANSACTION TYPES: ASSISTED HOUSING
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• Permanent Financing of Stabilized but Newly Built or Substantially Rehabilitated Projects
• Projects Require a Waiver of the 3 Year Rule (Property must meet requirements of ML 2011-13, except owners will not have to show evidence that they have not been able to obtain alternative financing)
• Projects must meet sustaining occupancy/reserve requirements of 3 Year Rule Waiver Notice
• Equity Installments must Remain Outstanding up until time of FHA Loan Closing
TRANSACTION TYPES: RECENT CONSTRUCTION OR REHAB
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• Permanent Financing And Moderate Rehabilitation of Stabilized Tax Credit Projects Being Resyndicated with New Tax Credits
• Projects must have achieved stabilized occupancy (at least 85% or greater occupancy for previous 12 months)
TRANSACTION TYPES: RESYNDICATION
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• In September 2012, 5 new Pilot Hubs added to Original 4 Pilot Hubs, Now including Atlanta, Boston, Chicago, Denver, Detroit, Fort Worth, LA, San Francisco and Seattle
• Geographic Expansion also allowed Projects from All States to be Included. Projects not Located in Pilot Hub Jurisdictions are Assigned to and Processed in the Pilot Hubs
• 12 new MAP Pilot Lenders Selected November 2012, bringing total to 32
• Third Lender Selection Round Underway
PROGRESS AND NEXT STEPS
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Project Documentation posted in MAP page at:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/map/maphome/taxcredit
Questions? Please contact:
Lynn Wehrli(202) 402-5210Lynn.Wehrli@HUD.gov
CONTACT INFORMATION
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