Qualified Allocation Plan Update Indiana Housing Conference - - PowerPoint PPT Presentation

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Qualified Allocation Plan Update Indiana Housing Conference - - PowerPoint PPT Presentation

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Qualified Allocation Plan Update Indiana Housing Conference September 27, 2018 Peter Nelson, Rental Housing Tax Credit Specialist Alan Rakowski, Rental Housing Tax Credit Manager Matt Rayburn, Deputy Executive Director & Chief Real Estate

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SLIDE 1

Qualified Allocation Plan Update

Indiana Housing Conference September 27, 2018

Peter Nelson, Rental Housing Tax Credit Specialist Alan Rakowski, Rental Housing Tax Credit Manager Matt Rayburn, Deputy Executive Director & Chief Real Estate Development Officer

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SLIDE 2

SESSION OVERVIEW

  • Year in Review
  • Biggest changes introduced in the 2018-

2019 QAP

  • Results from year 1
  • Other year 1 news: Market Study

Requirements update

  • 2018 General Set-Aside: Moving

Forward 3.0

  • Between year 1 and year 2 – enter the

Omnibus Bill

  • Opportunity Zones
  • 2019 General Set-Aside announced
  • A look at where we are in year 2
  • 2020-2021 QAP – timelines
  • Presentation Part II: A Panel Discussion

with Tax Credit Development and Equity Partners

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SLIDE 3

YEAR IN REVIEW – NEW QAP

  • New QAP released shortly after last year’s conference
  • Biggest Changes:
  • Community Integration Set-Aside (serving individuals with intellectual and

developmental disabilities)

  • Workforce Housing Set-Aside
  • Total number of points decreased from 195 to 143; minimum score to meet

threshold is 80

  • New Scoring Categories
  • Housing Needs Index
  • Population growth
  • Rent burdened
  • Insufficient number of units for extremely low income
  • Non-IHCDA Rental Assistance
  • Smoke-Free Housing
  • Bond deals not subject to the $1.2 million credit cap; developer fee limited

to 15% of eligible basis

  • 2018 General Set-Aside: Moving Forward 3.0

(Lake County)

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SLIDE 4

RESULTS FROM YEAR 1 SET-ASIDES

# Applications 2018 competing in set-aside (received Nov. 6, 2017) Set Aside Category 26 (2 awarded) Qualified Not-for-profit 18 (2 awarded) Rural 17 (2 awarded) Small City 15 (2 awarded) Large City 14 (2 awarded) Community Integration 7 (2 awarded) Preservation 4 (2 awarded) Workforce Housing 2 (2 awarded) Housing First 2 (1 awarded) Stellar Community Designation N/A General (Moving Forward 3.0)

IHCDA received 51 applications and awarded 17

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SLIDE 5

SCORING CATEGORIES

  • Housing Needs Index (maximum 3 points)
  • Average points for 17 awarded deals: 1
  • Non-IHCDA Rental Assistance (2 points)
  • 6 of the 17 awarded deals earned points for this
  • Smoke-Free Housing (3 points)
  • 16 of the 17 awarded deals earned points for this
  • Final Score
  • 49 of the 51 applications met the minimum score
  • The average score of an awarded deal was 101.85
  • Removing deals competing in Housing First or Stellar, the average score of

awarded deals was 105.

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SLIDE 6

RESULTS FROM YEAR 1 BOND APPLICATIONS

Number of Bond Applications Received as

  • f Sept. 1st

Year QAP Average # of tax credit units Average TDC 18 2018 2018- 2019 118 $20.5 million 20 2017 2016- 2017 102 $16.3 million 17 2016 2016- 2017 122 $20.9 million

Take-aways:

  • IHCDA continues to see a steady supply of bond

applications

  • Bond volume requests not as sensitive to

changes in the QAP

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SLIDE 7

OTHER YEAR 1 NEWS – MARKET STUDY REQUIREMENTS & UPDATES

  • As of April 30, 2018, all firms on IHCDA’s approved market study list must be certified by the

National Council of Housing Market Analysts (NCHMA)

  • This was done as part of IHCDA’s 2017 initiative to update the approved market study list
  • List had not been updated for several years; all firms required to re-apply to stay on the list; inactive

firms removed

  • Can seek certification for up to 3 types of programs:
  • Traditional LIHTC
  • Permanent Supportive Housing
  • Residential Care Facilities
  • Other updates:
  • IHCDA entered into a contract earlier this year with a 3rd party market study firm to assist

with market studies on an as-needed basis (i.e. multiple applications in the same market and the market studies are conflicting, concerns from the constituents questioning demand, IHCDA’s internal review is contested)

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SLIDE 8

2018 GENERAL SET-ASIDE MOVING FORWARD 3.0

  • Continued partnership with Energy Systems Network (ESN) that began in 2015
  • In response to Governor Eric Holcomb’s Executive order for Declaration of Disaster Emergency in East Chicago in

February 2017, IHCDA used the General Set-Aside to encourage new developments in the East Chicago area

  • Similar to Moving Forward 1.0 and 2.0, but 3.0 dedicated to creating 2 developments in Lake County, with 1 to be

located in East Chicago

  • RFQ released on May 11, 2017 seeking 2 developers to develop and implement long-term strategies to overcome

poverty while creating housing that increases quality of life while decreasing the cost of living for low to moderate income individuals in Lake County

  • 6 development teams presented their plans and qualifications to IHCDA at the Carrie Gosch Elementary School in

East Chicago on August 7, 2017

  • IHCDA announced the 2 selected teams on September 1, 2017
  • Intensive 2-day workshop with developers and subject matter experts held at Carrie Gosch School in November 2017
  • Plans being finalized for developments in East Chicago & Gary
  • RHTC applications to be submitted to IHCDA in October of 2018
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SLIDE 9

BETWEEN YEARS 1 & 2 – OMNIBUS SPENDING BILL

  • Passed on March 23, 2018
  • Key features related to the tax credit program
  • 12.5% increase in state housing credit authority for four years beginning in 2018
  • Income averaging as a new minimum set-aside
  • IHCDA Response – 12.5% increase
  • Released RED notice on March 27, 2018
  • The 12.5% increase in 2018 credits will be rolled into the 2019 tax

credit round (after setting aside part of the increase for the 2018 General Set-Aside - Moving Forward 3.0)

  • Amount available for 2019
  • $18,000,408 (6,666,818 x $2.70)
  • Add $3,614,654 (2018 unused credit authority)
  • Subtract $1,800,000 (Moving Forward 3.0)
  • $19.8 million available for 2019 tax credit applications (with

$1.8 million to be set-aside for Moving Forward RD)

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SLIDE 10

BETWEEN YEARS 1 & 2 – OMNIBUS SPENDING BILL

  • IHCDA Response – Income Averaging
  • Released RED notice on April 27, 2018 for applicability to 4%/Tax

Exempt Bond Developments

  • Approved for new applications
  • Approved for developments that have received an award but not yet

submitted a final application

  • Must submit a modification request
  • Income averaging minimum set-aside request form
  • Updated pages of Form A
  • Update from market analyst
  • Acknowledgment from equity investor
  • 6 modifications received thus far under the policy
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SLIDE 11

BETWEEN YEARS 1 & 2 – OMNIBUS SPENDING BILL

  • Released RED notice on May 2, 2018 for applicability to 9%

Developments

  • Approved for new applications
  • Approved for developments that received a reservation of 9% credits in

February 2018

  • Must submit a modification request
  • Income averaging minimum set-aside request form
  • Updated pages of Form A
  • Update from market analyst
  • Acknowledgment from equity investor
  • Cannot result in any change in score, including scoring related to rent restrictions
  • 2 modifications received thus far under the policy
  • Not allowable for developments receiving a reservation of credits prior

to the 2018 round

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SLIDE 12

OTHER NEWS – OPPORTUNITY ZONES

  • Added to the tax code as part of the Tax Cuts Jobs Act on December 22, 2017
  • Economically distressed community where new investments, under certain conditions,

may be eligible for preferential tax treatment

  • 156 census tracts nominated by Governor Holcomb have been certified and designated

as Opportunity Zones

  • Potential impact on LIHTC and affordable housing? Should Opportunity Zones be

recognized in the QAP? Stay tuned.

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SLIDE 13

OTHER NEWS – MOVING FORWARD RURAL DEVELOPMENT (RD)

  • 2019 General Set-Aside
  • Partnership with ESN and US Department of Agriculture Rural Development (USDA-

RD)

  • RFQ released on April 27th seeking 3 developers to preserve a minimum of 30 USDA-

RD Properties

  • Financing model to combine 4% credits and 9% credits
  • IHCDA to seed three $1 million revolving loan funds
  • Focus on quality of life, built environment, finance & policy, utility systems (including

rural broadband), and systems integration

  • 7 respondents presented to IHCDA on July 25th
  • 3 teams selected to participate on August 15th
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SLIDE 14

YEAR 2 (2019 TAX CREDIT ROUND) SET-ASIDES

# Applications 2019 competing in set-aside (received July 30, 2018) Set Aside Category 23 Qualified Not-for-profit 21 Small City 17 Large City 13 Community Integration 12 Rural 7 Preservation 5 Workforce Housing 4 Housing First 2 Stellar Community Designation N/A General

  • IHCDA received 51 applications on July 30th
  • 22 applications have selected income averaging
  • Awards to be announced on November 15th
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SLIDE 15

2020-2021 QAP TENTATIVE TIMELINE

  • November-December: IHCDA to actively seek feedback on QAP and suggestions for

the 2020-2021 QAP

  • December: Writing of 1st draft by QAP team
  • Early January: Release of 1st draft, followed by a public meeting and a 2-week public

comment period

  • Early February: Release of 2nd draft, followed by a public meeting and a 2-week public

comment period

  • March 2019: Present to the IHCDA Board of Directors for approval to submit to the

Governor for final approval

  • April 2019: Release of the 2020-2021 QAP
  • July 29, 2019: Anticipated due date for 2020

applications

  • Watch for RED Notices finalizing dates and times
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SLIDE 16

THANK YOU

ALAN RAKOWSKI, RENTAL HOUSING TAX CREDIT MANAGER ARAKOWSKI@IHCDA.IN.GOV PETER NELSON, RENTAL HOUSING TAX CREDIT SPECIALIST PNELSON@IHCDA.IN.GOV