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IPED Annual Affordable Housing & Development Update: Opportunities in a Changing Economy

IPED Annual Affordable Housing & Development Update: Opportunities in a Changing Economy . The Fairmont Miramar Hotel Santa Monica, CA June 4 - 5, 2009. IMPORTANT RURAL HOUSING SPECIFIC ISSUES. Go Zone/Disaster Area Credit Qualification For Exchange – Reform!

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IPED Annual Affordable Housing & Development Update: Opportunities in a Changing Economy

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  1. IPEDAnnual Affordable Housing & Development Update: Opportunities in a Changing Economy The Fairmont Miramar Hotel Santa Monica, CA June 4 - 5, 2009

  2. IMPORTANT RURAL HOUSINGSPECIFIC ISSUES • Go Zone/Disaster Area Credit Qualification For Exchange – Reform! • 538 Interest Credit Subsidy – Protect! • MPR/Restructuring Permanent Legislation • Additional Subsidy – Existing, New and Preservation

  3. Preservation Tools • 515 mortgage subordination and tax credit re-syndication to reposition properties. • 9% LIHTC • Transactions combining multiple sites have been closed repeatedly • Alternative Funding

  4. Preservation Tools • “Tiered” rents for LIHTC properties? • New 30 year RUP required • CRCU rents will probably continue to be the standard • Equity can be paid by non-RD sources or from RD sources with appraisal • 20 year CNA

  5. ELIHPA • Handbook – HB-3-3560 – Chapter 15 • Apply to prepay • Must be “complete” – but completeness can vary by office • Must demonstrate “ability to prepay” with loan commitment or assets • You can receive “incentives” – equity take-out loan • From RD – 1% interest rate but little money and long wait • Obtain yourself – must locate and educate lenders

  6. ELIHPA • You may be able to prepay with a “life -estate” use restrictions for current residents • If housing determined to be unnecessary • If no adverse impact on minority persons • And/Or you can offer for sale to a non-profit, at apprised value • Must offer for 6 months • If non profit makes offer, have up to 24 months to close • If neither happens, can prepay

  7. MPR • MPR is seeking pre-applications by 5 p.m. est June 29, 2009. • The authorized restructuring tools are debt deferrals, revitalization grants, zero percent loans and soft-second loans. • Market value. • Excess cash. • Simple transactions that involve no change in ownership. • Complex transactions consist of a property transfer to new ownership or a subordination • Portfolio transactions. • Top ranked pre-applicants are invited to submit a formal application. • Capital needs assessment • “Community market rent” demonstration, allowing an owner to set a rent above the approved basic rent for any unit not currently occupied by a tenant receiving RA.

  8. Richard Michael Price Nixon Peabody LLP 401 Ninth Street Suite 900 Washington, DC 20004 Telephone: (202) 585-8716 Facsimile: (202) 585-8080 E-Mail: rprice@nixonpeabody.com

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