Louisiana-housing-corporation Overview of LHC Resources June 9, 2015

Louisiana-housing-corporation Outline of Presentation Overview of the Tax Credit Program The Anatomy of a LIHTC Project Post Award Requirements Questions & Answers

Louisiana-housing-corporation Program Funding Opportunities 9% Competitive Low Income Housing Tax Credits (LIHTC) 4% Non-Competitive LIHTC HOME Initiative Utilizing 4% Tax Credits CDBG Initiative for Targeted Areas Risk Share Program

Louisiana-housing-corporation Tax Reform Act of 1986 The low-income housing tax credit (LIHTC) program, created in 1986 and made permanent in 1993, is an indirect federal subsidy used to finance the construction and rehabilitation of low-income affordable housing. The LIHTC program represents the largest federal housing program in existence in terms of the number of units developed each year. The program acts as an incentive for private developers and investors to provide more low-income housing.

Louisiana-housing-corporation LIHTC Background Section 42 of Internal Revenue Code of 1986 The Tax Credit program is contained in Section 42 of the Tax Code. The program is administered by state housing finance agencies with each state receiving a fixed allocation of credits based on the state’s population. The state credit agencies decides which projects receive credits each year pursuant to allocation guidelines and the state’s Qualified Allocation Plan (QAP).

Louisiana-housing-corporation LIHTC Background The QAP outlines the following: Funding Priorities Amount of available funds Guidelines for applying for funds and the threshold requirements for receiving an award Scoring criteria Funding timeline and deadlines

Louisiana-housing-corporation QAP Timeline Draft timeline submitted to the Board of Commissioners for review Stakeholders meeting with developers, CHDO/Non-Profits, Local and National Investors, include potential tenants, representatives, etc. Deadline for receipt of additional written comments from stakeholders meeting Draft QAP presented to the Board of Commissioners Release of RFPs for Market Study Analyst Statewide Publication of Draft QAP/Public Hearing Notice Public Hearing on QAP Board adopts Final QAP – Simultaneous submission to Governor and Joint Committee on Budget (JLCB)

Louisiana-housing-corporation QAP Timeline Application Fee 1 to 4 Units$ to 32 Units$1, to 60 Units $1, to 100 Units $2, Over 100 Units $5, Analysis Fee 1 to 4 Units$ to 32 Units $1, to 60 Units $1, to 100 Units $2, Over 100 Units $5, Reprocessing Fee 1 to 4 Units$ to 32 Units $ to 60 Units $ to 100 Units $1, Over 100 Units $2,500.00

Louisiana-housing-corporation LIHTC Basics Market Study Fee $4500 Credit Award Fee 5% of Credit Reserved Return/Reallocated 5% of Reallocated Credits Annual Compliance/ Monitoring Fee $33 per unit Subsidy Layering Review ¼ Analysis Fee PIS Review Cost $250.00

Louisiana-housing-corporation LIHTC Basics The Louisiana Housing Corporation awards tax credits annually to the highest scoring projects. Once awarded and following completion, tax credits are taken over the initial 10-year operating period. LIHTC are subject to recapture if the project fails to comply during the first 15 years. Tax credits provide a dollar-for-dollar credit against income tax liability of investors.

Louisiana-housing-corporation LIHTC Basics Projects are generally owned by a Limited Partnership (LP) or Limited Liability Company (LLC). The LP or LLC usually consists of the General Partner and the Limited Partner. Limited partnership passes tax benefits on to the investor and maximizes the investor equity in the project.

Louisiana-housing-corporation LIHTC Basics Limited Partner generally owns between % of the tax credits, profits and losses. – Limited Partner pays in capital contributions in multiple installments, based upon negotiated benchmarks.

Louisiana-housing-corporation LIHTC Basics General Partner generally owns about 0.01%, guarantees completion of the project, amount of credits and funding of deficits. – Usually controls and operates the project; handles reporting and tax matters. – May receive a share of the cash flow if allowed in the partnership agreement.

Louisiana-housing-corporation LIHTC Basics Generally tax credits are taken over the initial 10-year operating period. Investors also take any tax losses over the entire investment period. LIHTC are subject to recapture if the project fails to comply during the first 15 years. Tax credits provide a dollar-for-dollar credit against income tax liability of investors.

Louisiana-housing-corporation LIHTC Basics Tax Credits vs. Tax Deductions Tax credits are subtracted directly from one’s tax liability. Credits reduce tax liability dollar-for-dollar. Example:  A $1,000 tax credit in a 15% tax bracket reduces tax liability by $1,000.

Louisiana-housing-corporation LIHTC Basics Tax Credits vs. Tax Deductions Tax deductions are subtracted from a taxpayer’s total income to compute the tax base. Deductions reduce tax liability by the amount of the deduction times the tax rate. Example:  A $1,000 deduction in 15% tax bracket reduces taxable income by $1,000, thereby reducing tax liability by $150 ($1000 X 15%).

Louisiana-housing-corporation LIHTC Basics New Construction – Housing units which have not previously been occupied. Rehabilitation - Any rehabilitation meeting the minimum rehabilitation expenditure requirements. Substantial Rehabilitation or Conversion - Any rehabilitation in which Hard Costs equal or exceed $20,000 per unit.

Louisiana-housing-corporation LIHTC Basics Types of LIHTCs 9% Credits – New Construction/Rehabilitation credit rate 4% Credit – New Construction/Rehabilitation when there is federal subsidy (tax-exempt bonds, below market federal loans, etc.) 4% Acquisition Credit – used for the cost of buying an existing building for which rehabilitation expenditures are incurred

Louisiana-housing-corporation Project Restrictions There are ALWAYS income and rent limitations. INCOME: Threshold election – each building must meet one of two minimum thresholds: 1) 40/60 – 40% of the units affordable to households at 60% AMI or below. 2) 20/50 – 20% of the units affordable to households at 50% AMI or below.

Louisiana-housing-corporation Project Restrictions RENT - Rents are set at 30% or less of household’s eligible income. AMI - Area Median Income is published annually by HUD, calculated based on the size of the family. Compliance Period - Buildings must remain rent and income restricted for at least 15 years; and may be subject to extended use periods.

Louisiana-housing-corporation LIHTC Terms/Calculations Total Development Cost – Includes all project costs. Eligible Basis – Depreciable basis of residential rental housing (exclude costs not related to residential rental housing or that are not depreciable). Qualified Basis – includes eligible basis costs of only the units occupied by qualified tenants. Applicable Percentage Rate – Rate set monthly for the 9% and 4% credits.

Louisiana-housing-corporation LIHTC Terms/Calculations Applicable Fraction – the lesser of the percent of units or square feet qualifying for credits. Basis Boost – Increase in tax credit basis by 30% if the building is in a Qualified Census Tract (QCT) or Difficult to Develop Area (DDA). Tax Credit Regulatory Agreement – Document containing the terms and restrictions for maintaining a tax credit property. IRS Form 8609 – Document issued once the project is complete to allocate tax credits.

Louisiana-housing-corporation LIHTC Terms/Calculations Example  100 unit project with 70 low income units  TDC (including land) = $5.5M  Land value $500K –subtracted from TDC because land is non- depreciable.  Eligible basis - $5.0M  Qualified basis would be less because only 70% will be LIHTC units – $5.0M X 70% = $3.5M

Louisiana-housing-corporation LIHTC Terms/Calculations Example Continued  Applicable percentage = 9.0%  Annual credit = $315,000 ($3.5M x 9.0%)  10 year credits = $3,150,000 Assuming that an investor is willing to pay 80 cents per tax credit dollar, the equity would yield $2,517,480 ($3,150,000 X 99.9% x 80%).

Louisiana-housing-corporation LIHTC Terms/Calculations Assuming that this is a bond financed or 4% deal:  Applicable percentage = 3.40%  Annual credit = $119,000 ($3.5M x 3.40%)  10 year credits = $1,190,000  Assuming that an investor is willing to pay 80 cents per tax credit dollar, the equity would yield $951,048 ($1,190,000 X 99.9% x 80%).

Louisiana-housing-corporation LIHTC Application Process Pre-award – Application deadline – Market Study commissioned by Corporation – Feasibility and Viability Analysis Completed – Application reviewed – Application competitively scored – Challenge period – Application scored and ranked – Board Approval of Awards List – Reservation of Credits

Louisiana-housing-corporation LIHTC Application Process Post Award Carryover Allocation Monthly Construction Reports Construction Monitoring Placed in Service Analysis SLR/Field Report Issuance of IRS Form 8609 Placed in Service Audit

Louisiana-housing-corporation LIHTC Application Process Selection Criteria Targeted Project Types – 2015 QAP De-concentration Project 4-12 Points Redevelopment Project 6 Points High Vacancy Projects 2-6 Points Rehab Project (Abandoned) 6-8 Points Scattered Site/Rehab10 Points New Const/Scattered Site 2-4 Points

Louisiana-housing-corporation LIHTC Application Process Selection Criteria Targeted Project Types – 2015 QAP Preservation Priority Project – PBRA/100% or Subsidy/60% 10 Points – PBRA/60% or Subsidy/40% 9 Points – PBRA/30% or Subsidy/20% 8 Points

Louisiana-housing-corporation LIHTC Application Process Selection Criteria Targeted Population Type – 2015 QAP Special Needs 3-5 Points Veterans Households7 Points Elderly Households6 Points

Louisiana-housing-corporation LIHTC Application Process Selection Criteria Priority Development Areas and Other Preferences Extended Affordability Agreement 2-4 Points Increased Unit Affordability 4-6 Points Difficult Development Area (QCT/DDA) 2-4 Points Rural Area Project 10 Points Other Governmental Priority 2-3 Points Governmental Support2-4 Points

Louisiana-housing-corporation Application Process Continued… Location Characteristics 0-10 Points Project Characteristics Green Buildings5 Points Community Facilities2 Points Optional Amenities1-7 Points Additional Accessible Units1-3 Points On Site Security3 Points Leverage, Efficiency and Viability Leverage for Disability Funding 3 Points TDC/Unit 10% below Maximum3 Points Viability Penalty Points Loss of Points Project & Submission Penalty Points Loss of Points

Louisiana-housing-corporation Development Team Developer General Contractor Architect Attorney Property Manager Accountant Consultant

Louisiana-housing-corporation Development Team Lenders Construction lender and attorneys Permanent lender and attorneys Syndicator Equity underwriter and attorney State Allocating Corporation Allocate credits Provide soft loans Monitor timelines and compliance Other Professionals Engineers, Historic, Environmental, etc.

Louisiana-housing-corporation General Tax Credit Timeline Apply for tax credits Get a tax credit reservation Incur more than 10% of costs in year 1 Receive carryover allocation Complete project and place it in service Submit PIS Docs for review Record TCRA & extended use agreement Receive Form 8609 Rent tax credit units to qualified tenants Elect when to start tax credits Keep tax credit units in compliance

Louisiana-housing-corporation Application Process Upon Submission General Timeline (Approx. 4-5 month process)

Louisiana-housing-corporation LIHTC Requirements Acquisition – Rehabilitation Rehabilitation costs must be the greater of (IRC § 42(e)(3)) – $3,000 per unit; or 10% of the adjusted basis of the building Rehabilitation costs included in basis must be incurred during any 24-month period (IRC § 42(e)(4)(A)) Can’t claim acquisition credits prior to rehab credits (IRC § 42(f)(5)(A))

Louisiana-housing-corporation LIHTC Project Pre-Submission 1. Process Needs Assessment and Cost Analysis Developer Conducts a Needs Assessment  Market Study, Housing Analysis, Own Data Must evidence a need for the proposed units and targeted population With the development there is still an unmet demand Get estimated TDC (Total Development Cost) Can the expected revenue meet the expected expenses?

Louisiana-housing-corporation LIHTC Project Pre-Submission 2. Site(s) Selection Proper Zoning – Must be zoned for proposed use Possible Environmental Clearances Needed Location Characteristics  Proximity to goods and services  Infrastructure – Streets, Roads, Sewer, Drainage, utilities

Louisiana-housing-corporation LIHTC Project Pre-Submission 3. Getting Project Support Local Community Support Local Government’s Financial Support  Loans, Grants, Infrastructure assistance, etc. Local Concerted Revitalization Plans  Fills local objectives and needs  Blight mitigation/remediation

Louisiana-housing-corporation LIHTC Project Pre-Submission 4. Secure Financial Commitment Banks, Lenders, Local/State/Federal Governmental Funds, Non-profit funding  HOME, CDBG, Grants, (Soft Funds)  Used to provide leverage  Minimize the amount of LIHTCs needed Investor/Syndicators – Provide Equity, Purchase Tax Credit and Enters the Partnership  Typical Arrangement: Developer to Investor? Generally % of the Partnership % to the Developer

Louisiana-housing-corporation LIHTC Project Post Award The application has been submitted and awarded What’s next? Closing Construction Place In Service

Louisiana-housing-corporation LIHTC Project Post Award Project’s Financial Closing Documents signed & Commitments Locked-In Funding Commitments made by Developer, Lenders and Investors are finalized  Tax Credit Guarantees  Construction Completion & Deficit  Lease-Up  Permanent Loan Funding  Tax Credits (Adjusters)  Compliance Monitoring Syndicator enters into the partnership  Commits to the funding the project  Sets timetable and benchmarks for equity pay-in

Louisiana-housing-corporation LIHTC Project Post Award What Does The Developer Retain? Developer Fees Property Management Fees Operating Cash Flow Sale or Refinancing Proceeds

Louisiana-housing-corporation LIHTC Project Post Award Project’s Construction Begins After Financial Closing Developer issues NTP (Notice to Proceed) 9% LIHTC Projects have up to 24 months to complete and PIS project 4% LIHTC Bond Projects Longer to PIS Staff monitors the project’s progress 90 days off schedule requires reprocessing

Louisiana-housing-corporation Follow the Money Feasibility and Viability Study Rigorous financial evaluations to make sure project receives only enough Housing Credits to make it viable as long-term, low income housing. State evaluates every source and use of funds, including government subsidy, reasonableness of costs, and developer and builder profit. The Corporation’s Underwriting team reviews each project’s financial pro forma for short-term feasibility and long-term viability Awarded only the amount necessary for feasibility.

Louisiana-housing-corporation Calculating the Housing Credit Eligible basis High cost area adjustment (30% Boost) Applicable fraction Applicable percentage

Louisiana-housing-corporation Eligible basis Portion of total project costs Acquisition basis (building) Rehab/new construction basis Excludes:  Costs attributable to land

Louisiana-housing-corporation High Cost Area Adjustment Also called “boost” Increases eligible basis by 30% High cost areas Difficult Development Areas Qualified Census Tracts State-designated high cost areas

Louisiana-housing-corporation Applicable Percentage Also called “tax credit rate” Rate eligible basis is multiplied by to determine tax credits Set monthly by U.S. Treasury Currently 9% is flat 9% (Rehab/New Construction) The 4% is a floating percentage (varies monthly)

Louisiana-housing-corporation Calculating the Credit (Example) EB x AF x CP x 10 = Credits (9% LIHTC Project) 9,000,000 Project Costs +1,300,000 Developer Fee 10,300,000 Total Project Costs (1,000,000) Non-eligible Project Costs (1,000,000) Land 8,300,000 Eligible Basis

Louisiana-housing-corporation Calculating the Credit Equity 8,300,000 Eligible Basis * 100% Low Income Occupancy % (Applicable Fraction) 8,300,000 Qualified Basis * 9.00% Credit Percentage 747,000 Credits Per Year * 10 Years 7,470,000 Total Credits * 99.99% Investor Limited Partner Ownership *.80 Credit Price $5,916,240 Equity

Louisiana-housing-corporation Calculating the Debt 100 Rental Units *600 Rent Per Unit 60,000 Per Month Rental Income (30,000) Operating Expense (50%) 30,000 Net Operating Income Per Month *12 Months 360,000 Net Operating Income Annually /1.20 Debt Coverage Ratio 300,000 Cash Available $3,708,000 Loan (approx. 7.5% 30yr)

Louisiana-housing-corporation Calculating the Credit 10,000,000 Project Costs (5,916,240) Equity (3,708,000) Permanent Loan 375,760 Unfunded Project Costs (Gap) (375,760) Deferred Developer Fee (or other sources; CDBG, HOME, etc) $0

Louisiana-housing-corporation Calculating the Credit (Acq/Rehab) (Difference is Acquisition Credits) Single Bldg-100 unit project = 100% Low Income Applicable percentage = 3.25% (4% rate)

Louisiana-housing-corporation Calculating the Credit (Acq/Rehab) 1,600,000Eligible Acq. Basis ($2M acq. -$400k land) * 100%Applicable Fraction * 3.25%Credit Percentage (monthly) 52,000Credits per year *10years 520,000Total Credits *99.99% Investor Ownership *.80Credit Price $411, Equity

Louisiana-housing-corporation If using conventional financing (9% LIHTC) If using tax-exempt bonds (4% LIHTC) Total development costs$21,000,000 Less: Ineligible costs, including land Eligible basis (Total LIHTC eligible costs)20,000,000 Applicable fraction100% Qualified basis (Eligible basi1s x Applicable fraction) 20,000,000 Applicable percentage9.00%*3.34%* Annual credit before basis boost1,800,000668,000 Basis boost (130%)540,000-- Annual credit after basis boost2,340,000668,000 Total credit (Annual credit x 10)23,400,0006,680,000

Louisiana-housing-corporation Definitions Reservation ▫ Commitment of funds from Corporation to Taxpayer after Board Approval if certain conditions are met ▫ Can not be carried forward into the next year Allocation ▫ Formal commitment that can be carried forward into the next year Binding Agreement ▫ Agreement between the Corporation & Taxpayer to committing of actions Placed-In-Service ▫ when the building meets the minimum occupancy requirements

Louisiana-housing-corporation Post Award Timeline Awards approved in July 2015… 07/2015 – Reservation Letters/ Commitment Agreements mailed 8/5/2015 – Credit Award Fee & Recorded Commitment Agreement due 11/15/2015 – Carryover Allocations granted 03/15/2016 – Carryover Allocations granted for applicable projects 12/31/2017 – All projects granted carryover in 2015 must be placed in service 04/1/2018 – PIS Documents due to Corporation 6/30/2018 – Project receives 8609s

Louisiana-housing-corporation Reservation Letter Commits credits Stipulates instructions for attached Housing Credit Percentage Commitment Agreement Documents due dates for Allocation Documentation

Louisiana-housing-corporation Reservation Letter For 4% projects, the following documents are issued. – Commitment Letter Commits credits approved by the Corporation’s Board of Commissioners – 42(M) Letter Declares that the tax exempt bonds finances at least 50% of the Total Development Cost of the project

Louisiana-housing-corporation Housing Credit Percentage Commitment Agreement Binding Agreement Serves as basis for compliance with the provisions of the Code and IRS Guidelines. Includes 3 exhibits

Louisiana-housing-corporation Exhibit I (HCPCA) Legal Description of Project Location ▫Provided by Taxpayer ▫Shall include detailed location ▫Map must be included ▫Must be consistent with application and all subsequent documents

Louisiana-housing-corporation Exhibit II (HCPCA) Excel Spreadsheet completed by Corporation ▫Specifies Housing Credit Dollar and Qualified Basis ▫Specifies types of building to which the credit dollar applies ▫Specifies location and Taxpayer ▫Specifies Applicable Credit Percentage

Louisiana-housing-corporation Exhibit III (HCPCA) Credit Percentage Election Form ▫Locks in the credit percentage  Percentage to be applied to Qualified Basis to determine amount of tax credit per building  Issued by the IRS monthly in Revenue Rulings Optional  Applicable percentage can also be locked in when the project places in service.

Louisiana-housing-corporation Exhibit III Percentage can be locked in – 9% Rehabilitation or New Construction Month when binding agreement is issued Month project places in service – 4% Bonds Projects month in which bonds are issued Month project places in service – 4% Acquisition Month building is acquired = places in service

Louisiana-housing-corporation Deadlines required by Reservation Letter & Commitment Agreement Agreement must be recorded by the end of the month in which it was issued. Award Fee – equal to 5% of Credit Award must be paid to LHC by no later than the 5 th day of the following month

Louisiana-housing-corporation Carryover Formal commitment of credit dollar Given to projects that do not place in service by the end of the year of reservation To qualify, projects must incur 10% of reasonably expected costs by end of the year ▫Certificate of Allocation is granted.

Louisiana-housing-corporation Carryover Section 42 allows an allocation to be made to a project that does not incur the 10% if more than 10 percent is incurred no later than 6 months following close of year Housing and Economic Recovery Act of 2008 allowed an additional 6 months to incur 10% ▫Carryover Allocation Agreement is granted.  Binding Agreement

Louisiana-housing-corporation Carryover Revenue Procedure Extensions – IRS Rev. Proc Grants carryover relief or PIS relief for projects in disaster areas by allowing an additional year following any additional time granted to incur the 10 percent

Louisiana-housing-corporation Monitoring Staff Monitoring Monthly Construction Reports Field Inspection Reports Project Schedule Updates

Louisiana-housing-corporation Staff Monitoring Staff is in constant contact with Taxpayers through and telephone ensuring the progress of the project.

Louisiana-housing-corporation An electronic report is sent to all Taxpayers of projects that have not evidenced being Placed-In-Service ▫Updates Current Status of Project  Closed, Not Closed, Under Construction, Placed-In-Service ▫Closing Dates ▫Percentage of Construction Completed ▫Impediments? Monthly Construction Reports

Louisiana-housing-corporation Construction Department inspects each projects at the following intervals: ▫30% ▫60% ▫90% ▫Completion Field Inspection Reports

Louisiana-housing-corporation The QAP allows projects to alter their previously specified dates by up to 90 days. Anything above 90 days requires approval by the Corporation. Project Schedule Updates

Louisiana-housing-corporation Reprocessing Reprocessing Change Material Change

Louisiana-housing-corporation Reprocessing Change Can be approved by Staff Adjustments of sources or uses greater than 5% but less than 10% Increases or decreases in # of buildings, # of units, unit mix, square footage greater than 5% but less than 10% Changes in project schedule by more than 90 days Any increase in the interest rate of long term debt required for completion of project

Louisiana-housing-corporation Material Change Requires Board Approval Any change above 10% Any reprocessing change resulting in project no longer being feasible and viable Any reprocessing change resulting in a reduction of points Site Change – NIMBY (Not In My Back Yard)

Louisiana-housing-corporation Reprocessing Example Original # of UnitsReprocessing # of UnitsAction 5048None Necessary 5047New Application & Analysis/ Staff Approval 5044New Application & Analysis/ Board Approval

Louisiana-housing-corporation Recapture Credits can only be returned to the Corporation’s Credit Ceiling for 2.5 years following allocation. Voluntary Credit Return Agreement Act of Correction Act of Cancellation

Louisiana-housing-corporation Placed-In-Service A building is deemed placed-in-service when the building meets the minimum occupancy requirements and receives a Certificate of Occupancy from the parish in which the project is located. Multi-building projects are deemed PIS when the last building receives a CO. All 9% projects must PIS 24 months after receiving the Carryover Allocation. 4% projects are not under the same time constraint.

Louisiana-housing-corporation Placed-In-Service By April 1 of the year following PIS, the following must be submitted ▫ Financing Certification  Specifies sources of funds for the projects, Syndication Information, subsidies provided, and amounts allocated to various developer costs at Application, Reservation, and PIS ▫ Syndication Certification  Certification between Taxpayer & Syndicator specifying other information costs or items incurred for the packaging of the investment

Louisiana-housing-corporation Placed-In-Service ▫ Cost Certifications/Certificate of Actual Cost  Specifies all of the sources & uses throughout the Placed in Service Date ▫ GAAP Audit  Must audit the certificate of actual costs, the sources & uses through the PIS Date  Identify all identities of interest and related persons to the Taxpayer receiving payment ▫ Baseline Operating Budget  Budget established during the first year of the Credit Period

Louisiana-housing-corporation Placed-In-Service The carryover allocation of credits is subject to recapture if these documents are not received by the specified date. An one-year extension may be requested from the Corporation if the Taxpayer has elected to begin the first year of the credit period following the year in which the project is placed-in-service.

Louisiana-housing-corporation Placed-In-Service – Annual Audit Must identify all transactions involving related persons Must distinguish operating expenditures from capital expenditures Specify surplus cash Must be submitted by April 1 of each year following the year the project Placed-In-Service Failure to submit timely can preclude Taxpayers from participating in funding rounds

Louisiana-housing-corporation Placed-In-Service These documents are sent to the Corporation’s underwriters for final analysis. This analysis called the Final Subsidy Layering Review determines the final credit allocation for the project. The credit dollar can be decreased from the carryover allocation, but not increased.

Louisiana-housing-corporation Placed-In-Service Tax Credit Regulatory Agreement ▫Ensures that the project will be constructed, used, and operated in accordance with the Tax Code, Louisiana Housing Finance Act, and the Application. ▫Includes an Extended Use Agreement to promote the long term use of low income housing tax credit property. ▫Agreement has the legal status of restrictive covenants against the property ▫Must be filed in the Mortgage and Conveyance Records of appropriate parish

Louisiana-housing-corporation Placed-In-Service Tax Credit Regulatory Agreement ▫Address & Location of Project ▫Final Allocation ▫PIS Date ▫Credit Period ▫Compliance Period ▫Extended Use Period ▫Awarded Selection Criteria

Louisiana-housing-corporation Placed-In-Service IRS Form 8609 ▫Final allocation document completed by the Corporation and provided to the Taxpayer ▫Document is submitted to the IRS by both the Corporation and Taxpayer to reduce the income tax liability on behalf of the investor.

Louisiana-housing-corporation Placed-In-Service Compliance Monitoring Agreement – Included with TCRA Once 8609s are issued, the Corporation’s Compliance Department monitors the project with visits every 3 years and annual submission of certification of tenant income and rent for each unit.

Louisiana-housing-corporation HOME Program Overview Block‐grant, formula‐funded program administered by the U.S. Department of Housing and Urban Development (HUD) Purpose ◦ Expand the supply of decent, safe, affordable housing for low‐income households

Louisiana-housing-corporation HOME Program Overview Eligible Applicants: 1. Units of General Local Government 2. Nonprofit organizations 3. Public housing agencies 4. For-profit Entities

Louisiana-housing-corporation HOME Program Overview Eligible Activities: 1.Homeowner Rehab 2.Homebuyer 3.Rental Rehab and New Construction 4.Tenant-based Rental Assistance

Louisiana-housing-corporation HOME Program Overview Community Housing Development Organization (CHDO) ◦ LHC designates the CHDO. ◦ CHDOs can maintain program income as CHDO proceeds. ◦ LHC is required to invest at least 15% to CHDO eligible activities.

Louisiana-housing-corporation HOME Initiatives Utilizing 4% Credits LHC has made available HOME funds to be used in conjunction with 4% LIHTC under Section 42 of the IRS code. Participating projects must apply for and receive approval of Tax Exempt Bonds and an allocation of 4% LIHTC.

Louisiana-housing-corporation HOME Initiatives Utilizing 4% Credits 2015 SPRING NOFA 1. Focus on development of rental units for Low and Very Low income households. 2. All funds will be in the form of a loan. 3. Repayment of loan will be from a minimum of 50% of Cash Flow. All other terms will be based on LHC underwriting. 4. Maximum award of $1,500,000 but no more than necessary to make the project feasible and viable.

Louisiana-housing-corporation HOME Initiatives Utilizing 4% Credits 2015 SPRING NOFA 5. Any deferred developer fees will be paid from the developer’s portion of Surplus Cash. 6. All HOME assisted rental units must be leased to eligible tenants within 18 months from date of construction completion or all HOME Funds which were a part of the project must be repaid to the LHC.

Louisiana-housing-corporation HOME Initiatives Utilizing 4% Credits 2015 SPRING NOFA 7. HOME awards may be terminated due to lack of program or project productivity. 8.Applications fees are due at time of submittal. 9. Market study and analysis fees due 7 days from the receipt of preliminary award letter.

Louisiana-housing-corporation HOME Initiatives Utilizing 4% Credits April 2, 2015 Question Submittals June 17, 2015 Application Deadline 4:00 PM July 2015 Application Awards 7 Days from PA Market Study Fees Due Executed PA TIMELINE

Louisiana-housing-corporation Additional Financial Resources Community Development Block Grant Funds LHC will make available CDBG funds in conjunction with 4% Credits and Bond Allocation. Available to targeted areas

Louisiana-housing-corporation Additional Financial Resources Risk Share Pilot Program To provide FHA Risk-Sharing Loans to qualified projects that are applying for Non-Competitive Low Income Housing Tax Credits. Under the Risk Sharing Program, LHC and HUD share full insurance risk for the project’s permanent financing.

Louisiana-housing-corporation Risk Share Pilot Program Insured projects must meet minimum project set-asides by assisting households with incomes at or below 60% of the AMI. Compliance with LHC’s underwriting requirements and the FHA Risk-Sharing Underwriting and Development Policies contained in HUD Handbook No Rev-1 is required.

Louisiana-housing-corporation Risk Share Pilot Program Eligible Projects: The Risk Share Program is available to the following projects: o Certain Existing Residential Rental Developments o Substantial Rehabilitation o Single Room Occupancy Projects o Elderly Projects o Board and Care/Assisted Living Facilities

Louisiana-housing-corporation CONTACT Brenda Evans Marjorianna Willman Urshala Hamilton