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C8 financing affordable rental projects p pt - bob peterson

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This workshop will explore how organizations can utilize various federal, state, and private financing sources combined with innovative ideas to create affordable rural rental housing for veterans, seniors, and families. Participants will learn to analyze project cash flow, maximize private investment, leverage tax credits, and bridge financing gaps.

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C8 financing affordable rental projects p pt - bob peterson

  1. 1. 11/20/2012Continuum of Needs and Resources Chart No Income 50% (Area Median) 80% Median 115% Housing Trust Fund Program <Federal, State & Local Funds> Local Government & Public Housing Authorities <Federal, State & Local Funds> Housing Finance Commission <Using No State Funds> Private Sector Federal Programs Mortgage Interest Deduction & Subsidy Insurance WSHFC Housing Credits and Tax exempt Bonds – It’s Simple! WSHFC 1
  2. 2. 11/20/2012 How are the Credits Turned Into Equity for the Project? Developer = 1% Owner Equity $$ for ProjectWSHFC Tax Credits Tax Credit Partnership Investor = 99% Owner Credit to Equity Investor WSHFC $14,000,000 TAX SAVINGS TAX CREDITS 10 years Housing Investor $13,580,000 pays $0.97 / dollar EQUITY of tax credit Credit to Equity Investor WSHFC $14,000,000 TAX SAVINGS TAX CREDITS 10 years Housing Investor $9,800,000 pays $0.70 / dollar EQUITY of tax credit 2
  3. 3. 11/20/2012 Best Process:Objective vs. Subjective?•Policy Objectives: – maximize public benefit – appealing to investor – geographic dispersion – project readiness – public funder coordination•Allocation Approach – geographic credit pools – public benefit point criteria – caps and limits WSHFCPublic Benefit Point Criteria WSHFC 3
  4. 4. 11/20/2012 USDA RD 538 Loan 6 Site Portfolio Bond Tax Credit Financing Rehab 6 Site Location LIHTC BUDGET Costs Per Unit Acquisition Costs $       7,483,656  $      38,576  Construction $       6,008,074  $      30,969  Soft Costs $       3,388,296  $      17,465  Other Development $       1,812,086  $        9,341  Total Costs $    18,692,112  $      96,351  Total Project Costs $    18,692,112  Total Eligible Basis‐Acquisition $       8,061,656  Total Eligible Basis‐Rehab $       8,358,746  Reasonable Expected Basis (1st Yr.) $    17,000,402  WSHFC USDA RD 538 Loan cont. Bond Tax Credit Financing Rehab 6 Site Location Residential Sources Uses USDA 538 Loan/Bond $9,000,000 Acquisition $ 7,483,656  USDA Loan Assumptions $3,592,659 Construction $ 6,008,074  Deferred Developer Fees $1,796,927 Soft/Financing Costs $ 3,388,296  Tax Credit Equity $4,302,522 Replacement Reserves $1,812,082. Total Sources $18,692,108 $18,692,108 WSHFC Credit to Equity 4
  5. 5. 11/20/2012Chelsea Apartments - Oak Harbor, WA Harmony House – Shelton, WA Wellington Apts. – Snohomish, WA 5
  6. 6. 11/20/2012 USDA RD 515 Loan 3 Site Portfolio Competitive Tax Credit Financing Rehab 3 Site Location Residential Sources Residential UsesUSDA 515 Loan $2,347,969 Acquisition $3,323,022GP Contributions $205,780 Construction $5,201,163Sponsor Take Back Note $892,031 Soft/Financing Costs $3,388,102Tax Credit Equity $8,892,507 Reserves $426,000Total Sources $12,338,287 Total Uses $12,338,287 USDA RD 515 Loan cont. Competitive Tax Credit Financing Rehab 3 Site Location Residential Sources Residential UsesUSDA 515 Loan $2,347,969 Acquisition $3,323,022GP Contributions $205,780 Construction $5,201,163Sponsor Take Back Note $892,031 Soft/Financing Costs $3,388,102Tax Credit Equity $8,892,507 Reserves $426,000Total Sources $12,338,287 Total Uses $12,338,287 WSHFC Credit to Equity 6
  7. 7. 11/20/2012 Mercy Housing Northwest Allegre Villa, Sandstone & Cambridge Apts. RD Rehab RD Transfer Application – lots of paper Mercy Housing Northwest• Acquired 30 property, 926 unit RD portfolio 8 yrs ago from private developer to preserve housing• Strategy to rehab properties with emphasis on health and safety, energy conservation, accessibility, and extending useful life to enhance the overall sustainability and marketability• Renovated 7 properties with HUD Green Retrofit• Phase 2 - 84 senior units in 4 buildings in 3 rural towns Mercy Housing Northwest Sandstone Apartments, Tenino WA Constructed in 1978 Pre Rehab 7
  8. 8. 11/20/2012 Mercy Housing Northwest Moving Day – Residents are temporarily relocatedMercy Housing Northwest Sandstone Apartments in progress - rigid insulation, new windows and new roof & gutters installedMercy Housing Northwest Pre-rehab non- Rehab in progress toconforming stairs bring to code 8
  9. 9. 11/20/2012Mercy Housing Northwest Typical pre-rehab kitchenMercy Housing Northwest Asbestos abatement underway – floors, ceilings and wall texture throughoutMercy Housing Northwest Kitchen - asbestos abatement completed 9
  10. 10. 11/20/2012 Mercy Housing Northwest Accessibility modifications to sidewalks, ramps and driveway Mercy Housing Northwest Cementitious board siding installation underway Competitive Housing Credit TimelineHousing Tax Credit Initial developer inquiry Application submitted Day 1 Staff reviews and underwriting Day 1-90 10
  11. 11. 11/20/2012 Tax Exempt Bond Timeline Initial developer inquiryApplication submitted(Day 1) Final commitment from lender or credit enhancer Day (55) 11

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