2. AHF was founded in 1989. Catholic Church in trouble with 2 multifamily properties.221(D)(3) HUD financing
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1. 1 American Housing Foundation A National 501(c)(3) Non-Profit Organization
3. 3 Went to HUD
4. 4 Construction Loan – Bridge Funding Went to banks for conventional financing.
Turned down due to resident mix, low income neighborhoods (QCT) and uncertainty of tax exemption.
5. 5 Construction Loan – Bridge Funding “Guido Loan”
Secured by all personal assets
6. 6 Taxable Bonds Issued taxable bonds secured with tax credit investor payments. The underwriter was Coughlin & Company in Denver, CO.
1st Bridge financing of tax credit funds in the U.S.
7. 7 Funding Paid Guido Off
8. 8 Snapshot of AHF Growth (1993 to 1999) Tried conventional financing, but no equity for down payments.
Utilized LIHTC for equity.
9% non-qualified QCT funding.
Developed housing in qualified census tract (QCT) for additional 30% funding.
9. 9 Free Transitional Housing Shelter Assumptions
Building cost: $5 million
Soft cost (Architects, etc): $250,000.00
Land cost: $500,000.00
Non-Profit developer fees at 15% [$787,500.00].
Located in a Qualified Census Tract (30% bonus).
10. 10 Free Transitional Housing
11. 11 Bonds (started 1999) Issued Tax Exempt Financing / 501(c)(3) Bonds.
Equity is still a problem.
Sold Bonds for a premium.
Owner finance so debt was refinanced as opposed to purchase debt.
Private Activity Bonds (PAB)
Low Income Housing Tax Credits for equity.
Savings from Property Tax Exemptions.
12. 12 Education Opportunity Plan (EOP) Established in 2002 IRS Private Letter Ruling (1st in U.S.)
Primary purpose of EOP is to provide charitable benefit for education by partnering with Universities and Colleges.
AHF develops market rate student housing to provide scholarships to low income students.
Qualified students include:
First generation college students
Family income at or below 60 % AMI
Preference on “B” and “C” Students
13. 13 Scholarship Programs Established in 2003 Walden II Portfolio
Dallas Housing Authority
$300,000 annually since December 2003.
Travis County Housing Finance Authority
$60,000 per asset annually as long as the bonds are outstanding.
Florida “Take Stock in Children” Program.
$500,000 in 2006 for match grant.
14. 14 “Bigger Is Better” Pooled portfolio of tax exempt bond financing allows for savings in:
cost of issuance
diversity of assets
strength of cross-collateralization
15. 15 15 One Asset vs. Multiple Assets: Plum Creek vs. Walden II
16. 16 Problems in Texas Limited Resources
Equity for Funding:
Utilize LIHTC for Equity.
Utilize Sales Tax Savings.
Utilize Property Tax Savings.
Tax Exemption Legislation: (Ever Evolving)
11.182e – 100% tax exemption prior to Dec 31, 2004.
11.182.5 – 50% tax exemption after Dec 31, 2004.
Leverage funding with other Federal & State Programs (i.e., HOME, HOPE VI, Funding from Local Political Subdivisions and “In Kind” Contributions).
17. 17 Tools for Non-Profits Low Income Housing Tax Credits
Identify QCT areas for development with 30% increase funding.
Preservation with rehabilitation “target” state funding.
Private Activity Bonds.
Tax Exemption Savings
Join the fight for 100% tax exemption legislation.
18. 18 American Housing Foundation www.americanhousing.org