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LIHTC Program: The Details

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

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LIHTC Program: The Details

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  1. Housing Solutions: The Low Income Housing Tax Credit (LIHTC) ProgramRobin AmbrozDeputy Director of ProgramsNebraska Investment Finance Authority

  2. 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) LIHTC Program: The Details

  3. 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 Basic Requirements

  4. 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 How it works

  5. Project Structure

  6. The QAP governs the annual distribution of tax credits. • QAP Process: • Focus Group Meetings • NIFA \ NDED planning sessions • Public Hearing • Board Approval • Governor’s Approval Annual Qualified Allocation Plan (QAP)

  7. 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. Application Process: Competitive Cycle

  8. 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 Application Process: CRANE

  9. 48 units for individuals with Severe Mental Illness completed in 3 phases • New construction completed in 2003, 2006, and 2012 Cirrus House

  10. 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 Stephen Center

  11. 60 Single Room Occupancy Units for men • Shared restroom & dining facilities • New construction completed in 2008 People’s City Mission: Curtis Center

  12. 14 Efficiency Units for Veterans • New construction completed in 2010 Christian Worship Center: New Visions

  13. 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 Open Door Mission: Rebuilding Lives

  14. 48 One-bedroom units • Shared common space • Single men & women • New construction completed in 2012 Siena / Francis House: Siena / Francis Apartments

  15. Contact Information: Teresa Kile LIHTC Manager teresa.kile@nifa.org Kelly Schultze LIHTC Assistant Manager kelly.schultze@nifa.org Nebraska Investment Finance Authority (NIFA) 1230 ‘O’ Street, Suite 200 Lincoln, NE 68508 402-434-3900 www.nifa.org

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