Housing Solutions: The Low Income Housing Tax Credit (LIHTC) Program Robin Ambroz Deputy Director of Programs Nebraska Investment Finance Authority.

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Presentation transcript:

Housing Solutions: The Low Income Housing Tax Credit (LIHTC) Program Robin Ambroz Deputy Director of Programs Nebraska Investment Finance Authority

* Established under the Tax Reform Act of 1986 * An effort to partially privatize the affordable housing industry * Program works by providing investor equity, thus reducing the amount of debt service on a project, allowing lower rents to be charged to tenants while still producing positive cash flow * Provides a dollar-for-dollar reduction in tax liability for owners (and the partners of the owners)

* Low Income Units: * Rent & Income restricted to a minimum of either * 20% of units at 50% of AMI or * 40% of units at 60% of AMI * Points given in application process for lower income targeting * Affordability Period: * Minimum of 30 years (15-year initial compliance period & 15-year extended use period) * Points given in application process for longer affordability periods

* Project owners are generally Limited Partnerships or Limited Liability Companies * Equity generated from LIHTC typically covers 60-70% of project costs * Sources to fill the gap * HOME Funds * NE Affordable Housing Trust Funds * FHLBank of Topeka * Permanent Loan * Deferred Developer Fee * Additional Equity Contributions

TBD Apartments, L.P. (Project Owner) TBD Bank (Lender) NIFA (Tax Credit Allocation) NDED, FHLBank, City, etc. (gap funds) Non-Profit or For Profit Sponsor \ Developer (.01% General Partner ) Tax Credit Investor (99.99 % Limited Partner)

* The QAP governs the annual distribution of tax credits. * QAP Process: * Focus Group Meetings * NIFA \ NDED planning sessions * Public Hearing * Board Approval * Governors Approval

* Threshold Review (optional) * Applications are reviewed for the threshold requirements * Applicant receives feedback regarding the threshold items in their application. * Final Review * Applicants must meet threshold requirements before the development can be considered for an allocation. * Points awarded for specific items contained in the application.

* CRANE = Collaborative Resource Allocation for Nebraska * Difficult-to-Develop Projects * Negotiated Outcomes \ Individualized timelines * Public Process \ Monthly Meetings * Eligible Project Type: * Housing for individuals with special needs * Must meet all Threshold items & complete entire application

* 48 units for individuals with Severe Mental Illness completed in 3 phases * New construction completed in 2003, 2006, and 2012

* 16 Two-bedroom units for men & women in their HERO program * Shared restroom and dining facilities * New construction completed in 2006 * Received allocation for additional 61 units in 2013

* 60 Single Room Occupancy Units for men * Shared restroom & dining facilities * New construction completed in 2008

* 14 Efficiency Units for Veterans * New construction completed in 2010

* 219 units in 3 phases * Single Room Occupancy * One, Two, and Three Bedroom Units * Shared common areas * Serving men, women, and families with children * New construction completed in 2009, 2011, and 2012

* 48 One-bedroom units * Shared common space * Single men & women * New construction completed in 2012

Contact Information: Teresa Kile LIHTC Manager Kelly Schultze LIHTC Assistant Manager Nebraska Investment Finance Authority (NIFA) 1230 O Street, Suite 200 Lincoln, NE