Hud 202 recapitalization
Download
1 / 12

HUD 202 Recapitalization - PowerPoint PPT Presentation


  • 84 Views
  • Uploaded on

HUD 202 Recapitalization. Utilizing Tax Exempt Bonds and Tax Credits to Meet Your Financing Needs. The Intent of DHCD’S 202 Recapitalization Initiative. To use its tax exempt bond resources to assist owners in the preservation of HUD 202 projects in Maryland.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' HUD 202 Recapitalization' - dinh


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Hud 202 recapitalization

HUD 202 Recapitalization

Utilizing Tax Exempt Bonds and Tax Credits to Meet Your Financing Needs


The intent of dhcd s 202 recapitalization initiative
The Intent of DHCD’S 202 Recapitalization Initiative

  • To use its tax exempt bond resources to assist owners in the preservation of HUD 202 projects in Maryland.

  • To raise capital for multiple projects at once to achieve costs savings and processing efficiencies. This successful model was used by DHCD to benefit Public Housing Authorities statewide

  • To work collaboratively using a “team approach” in order to meet your processing schedules


How bonds and tax credits work
How Bonds and Tax Credits Work

Authority to issue tax exempt bonds is awarded to States by the federal government based on population data

4% Low Income Housing Tax Credits are available with tax exempt bonds and provide additional equity

DHCD is the administering agency for tax exempt bonds and tax credits


What is the benefit to me
What Is The Benefit To Me ?

TAX EXEMPT BONDS:

  • CDA has sufficient resources available at this moment in time to assist projects

  • Capital markets are experiencing historically low interest rates that are subject to change in the future

  • Tax exempt bonds can be used to replace current debt with a lower interest rate mortgage


Benefits cont
Benefits (Cont.)

TAX CREDITS:

  • Can be sold to investors to generate additional equity for your projects

  • Value of cash paid in by investors for tax credits is currently at a historically high level

  • Equity can be used to pay a developer fee to your organization

  • Equity can be used to pay for eligible project costs AND to recapitalize reserve accounts

  • Equity can be used to supplement social service and tenant service budgets



What is required when an owner chooses to utilize tax credits
What is Required When an Owner Chooses to Utilize Tax Credits?

  • A change of the existing ownership structure is required but the current owner can continue to be the primary DECISION MAKER for the project

  • Long term use and income restrictions much like those currently in place

  • Property Managers will have additional recordkeeping, and compliance duties but will be able to access additional training as needed


What are the next steps
What Are The Next Steps ? Credits?

  • Assess your total financing needs- Include all funds needed to pay off your existing HUD 202 loan, preliminary construction budget, and an estimate of any related fees including estimated costs for required third party lender reports.

  • Sign and return your Expression of Interest letter by June 1st to qualify for your incentive

  • Contact DHCD with any questions or for additional information whenever you need


What are the next steps cont
What Are The Next Steps ? (cont.) Credits?

  • Choose qualified partners to assist with the preparing applications, loan processing and securing HUD approval, construction, and property management.

  • Choose a credit enhancer for the tax exempt bonds.

  • Choose a tax credit investor.


Pre application tasks
Pre- Application Tasks Credits?

  • Select the members of your development team or choose an experienced development partner to assemble the team and oversee the development process on your behalf.

  • Typical development teams members include the Owner/Developer, Contractor, Architect, Management Agent, Equity Provider, Attorneys and the various Lenders.

  • Select vendors to complete all required third party Lender reports such as market studies, environmental reviews, capital needs assessments etc.

  • Meet with the appropriate HUD Office to discuss the approval process

  • Assemble and submit the financing applications.


Dhcd application processing phases
DHCD Application Processing Phases Credits?

  • Application Review DHCD staff will review the application to determine threshold compliance and minimum scoring requirements.

  • Loan Processing DHCD will be a member of the processing team, providing assistance based on the experience and needs of the team and the project.

  • Loan Closing and Construction Start – Once your credit enhancer and tax credit investor provide approvals, DHCD will issue the tax exempt bonds and tax credits you need to start construction.


Who are my dhcd contacts
Who Are My DHCD Contacts ? Credits?

Patricia Rynn Sylvester, Director, Multifamily

(410) 514-7460

[email protected]

Yvonne Johnson, Director, CDA Marketing and Outreach

(410) 514-7455

[email protected]


ad