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Rental Assistance Demonstration

Rental Assistance Demonstration. HUD Office of Public & Indian Housing Conference Meridian, Mississippi, April 23, 2012 Vincent O’Donnell Vice President, Affordable Housing Preservation Local Initiatives Support Corporation. What is LISC?. Local Initiatives Support Corporation

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Rental Assistance Demonstration

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  1. Rental Assistance Demonstration HUD Office of Public & Indian Housing Conference Meridian, Mississippi, April 23, 2012 Vincent O’Donnell Vice President, Affordable Housing Preservation Local Initiatives Support Corporation

  2. What is LISC? • Local Initiatives Support Corporation • LISC is dedicated to helping nonprofit community development organizations transform distressed communities into healthy and sustainable communities of choice- good places to work, do business, and raise children. • LISC local offices serve 30 urban areas and Rural LISC works with 74 partner CDCs in 36 states nationwide • LISC’s Preservation Initiative • Provided $80 million in financing since 2002 to preserve 15,000 homes • Supports LISC local offices and our nonprofit partners with financing, project-specific TA, creation of preservation strategies and partnerships, and policy analysis • Produces information products: guides, webcasts, trainings

  3. Summary of Types of Section 8

  4. Types of Project-Based Section 8

  5. “Orphan” Project-based Assistance

  6. Section 8 Expiration and Opt-out: MAHRA • Basic rules for renewal of project-based Section 8 (but not Rent Supplement or §236 RAP) • Options depend on type of Section 8 and property’s history • Most renewal rents at or below market level • Exception: non-FHA-insured • If FHA-insured and above market, must restructure mortgage (OAHP, née OHMAR)

  7. Section 8 Expiration and Opt-out: MAHRA • Enacted in 1997; amended in 2000, clarifying that “renewal rents no higher than market” can also mean mark up to market (or budget). • Long-term HAPs permitted, but subject to annual appropriations.

  8. Madison Park IIIMadison Park Development Corporation, Boston MA • 120 units of nonprofit-controlled family housing. • New Construction in 1975 – dense inner core neighborhood. • High Utility, Property Tax, Resident Services and Security Costs. • Pre-LIHTC Equity Syndication (accelerated depreciation); Nonprofit parent has purchased investor interests. • Section 236 with Interest Reduction Payments; Mortgage Matures in 2020. • Section 236 Rental Assistance Payments (RAP); Contract expires in 2015 (prior to mortgage maturity) and is not renewable. • Rents are $500 below market. • Well-maintained, but significant capital needs, due to low Section 236 rents and land settling. • Section 236 mortgage can be prepaid, generating Enhanced Vouchers.

  9. Project-Based Rental Subsidy Scenarios

  10. SOURCES AND USES

  11. LISC’s Preservation Resources www.lisc.org/preservation

  12. LISC’s Green Preservation Resources www.lisc.org/greenpreservation

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