Housing Solutions: The Low Income Housing Tax Credit (LIHTC)

Program

Robin AmbrozDeputy Director of Programs

Nebraska Investment Finance Authority

LIHTC Program: The DetailsLIHTC Program: The Details

*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)

Basic RequirementsBasic Requirements

*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

How it worksHow it works*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

Project Project StructureStructure

Annual Qualified Annual Qualified Allocation Plan (QAP)Allocation Plan (QAP)

*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

Application Process: Application Process: Competitive CycleCompetitive Cycle

*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: CRANEApplication Process: CRANE

*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

Cirrus HouseCirrus House

*48 units for individuals with Severe Mental Illness completed in 3 phases

*New construction completed in 2003, 2006, and 2012

Stephen Center Stephen Center *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

People’s City Mission: Curtis People’s City Mission: Curtis CenterCenter*60 Single Room Occupancy Units for men

*Shared restroom & dining facilities

*New construction completed in 2008

Christian Worship Center: Christian Worship Center: New Visions New Visions

*14 Efficiency Units for Veterans

*New construction completed in 2010

Open Door Mission: Open Door Mission: Rebuilding Lives Rebuilding Lives *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

Siena / Francis House: Siena / Francis House: Siena / Francis Apartments Siena / Francis Apartments *48 One-bedroom units*Shared common space

*Single men & women

*New construction completed in 2012

Contact Information:

Teresa KileLIHTC Manager

teresa.kile@nifa.org

Kelly SchultzeLIHTC Assistant Managerkelly.schultze@nifa.org

Nebraska Investment Finance Authority (NIFA)1230 ‘O’ Street, Suite 200

Lincoln, NE 68508402-434-3900www.nifa.org