Annual Affordable Housing & Development
Update: Opportunities in a Changing Economy
The Fairmont Miramar Hotel
Santa Monica, CA
June 4 - 5, 2009
IMPORTANT RURAL HOUSING
• Go Zone/Disaster Area Credit Qualification For
Exchange – Reform!
• 538 Interest Credit Subsidy – Protect!
• MPR/Restructuring Permanent Legislation
• Additional Subsidy – Existing, New and Preservation
• 515 mortgage subordination and tax credit
re-syndication to reposition properties.
• 9% LIHTC
• Transactions combining multiple sites have
been closed repeatedly
• Alternative Funding
• “Tiered” rents for LIHTC properties?
• New 30 year RUP required
• CRCU rents will probably continue to be the
• Equity can be paid by non-RD sources or from
RD sources with appraisal
• 20 year CNA
• 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
• 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
• 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
– Must offer for 6 months
– If non profit makes offer, have up to 24 months to close
– If neither happens, can prepay
• 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
• 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
Richard Michael Price
Nixon Peabody LLP
401 Ninth Street
Washington, DC 20004
Telephone: (202) 585-8716
Facsimile: (202) 585-8080