News
OHCS Announces Results of Recent Preservation RFA
On December 16, Oregon Housing and Community Services (OHCS) announced two successful applications for its recent Request for Pre-Application (RFA) for Preservation funds. The 1200 Building, co-sponsored by Cedar Sinai Park and Winkler Development Corporation, and Crooked River Apartments, a three-property portfolio sponsored by Chrisman Development and Management Inc, received funding reservations and must now submit applications for OHCS bond financing within 45 days. The Crooked River Apartments, consisting of Madison Apartments and Willow Creek Apartments in Madras and Wintergreen Apartments in Redmond, totals 94 units, 79 of which currently have and 12 are expected to receive Rental Assistance (RA) through USDA Rural Development (RD); while the 1200 Building in Portland has 89 units, all of which currently have project-based Section 8 rental assistance. In order to preserve these 183 units, OHCS will use bond financing and issue Oregon Affordable Housing Tax Credits to accompany the $5.7 million in Preservation gap funds available. During the one-month application period in the fall, OHCS received requests for funding exceeding $14 million.
— Posted on 12/19/2011
Use of New Data to Affect CDBG Formula Allocations
A recent report produced by HUD discusses the impact of new data on future allocations of Community Development Block Grant (CDBG) funds, which entitlement communities (metropolitan areas and urban counties) and the state often use to contribute financing to preservation projects. Replacing the use of old 2000 Census data and less accurate intermediate estimates, the 2010 Census and 5-year American Community Survey (ACS) estimates will now provide data for the five CDBG formula factors: population, people in poverty, overcrowded units, population growth log (since 1960), and pre-1940 housing units. HUD looked at total FY2011 CDBG funding and examined the differences between actual FY2011 allocations and what allocations would have been using the new data. Nationally, use of new data would have resulted in communities of 100,000 to 999,999 people receiving slight increases in funding, with those or more than 1,000,000 or fewer than 100,000 seeing slight decreases. For Oregon, the new data would have resulted in an overall increase of 3.0%, with only four of the 14 entitlement communities seeing small decreases. The report stresses that the analysis does not indicate actual FY2012 allocation amounts. Nationally, CDBG funding will decrease by 12% in 2012, as a result of the FY2012 HUD appropriations bill that passed Congress in November (see November blog post). Click here for HUD’s report.
— Posted on 12/19/2011
OHCS Site Review Schedule for 2012 CFC
Starting in 2012, Oregon Housing and Community Services (OHCS) will arrange third-party site reviews of acquisition rehabilitation projects (including Preservation) at the beginning of the Consolidated Funding Cycle (CFC) process. Feedback from project sponsors indicated that information from the reviews would be help in drafting CFC applications. Site visits will take place between January 17 and 31 and applicants will receive the review team’s recommendations by February 17. OHCS will post the 2012 CFC application online on January 9, with final materials due by March 30. Sponsor’s planning to submit a 2012 CFC application for a project not considered during the 2011 CFC must notify the Regional Advisor to the Department (RAD) for their area by January 6. Click here for more information.
— Posted on 12/19/2011
HUD Releases FY12 Income Limits
On December 1, HUD released both FY12 Incomes limits and median family income (MFI) estimates, which help set eligibility requirements for potential residents at properties in HUD-assisted housing programs, including Section 8. The MFI estimate for a four-person household provides the basis of the income limit in a specific county or metropolitan area. HUD then adjusts by household size and for areas with abnormally high or low rents in order to determine final figures. Project-based Section 8 units at a property are generally available to households with very low income (50% or less of MFI), with some percentage, depending upon the initial contract date, available to those with low income (80% or less of MFI). The statewide FY12 MFI for a four-person household in Oregon is $63,900, which is 1.7% below the national average of $65,000 and a 1.3% increase (on par with the average increase nationally) from the FY11 Oregon MFI of $63,100. Click here for HUD’s FY12 income limit webpage.
— Posted on 12/08/2011
HUD Clarifies Sale Proceeds Issue for FHA-Insured Properties
In November, HUD issued a policy notice designed to encourage long-term preservation of properties with upcoming maturity dates on FHA-insured mortgages, primarily, but not exclusively, Section 236 or Section 221(d)(3). Marking a change from previous limitations, nonprofit owners of such properties can now retain sale proceeds if meeting certain conditions, such as requiring the buyer to agree to use restrictions that extend the property’s affordability for at least 20 years beyond the original mortgage maturity date. Especially in situations where the current nonprofit owner does not desire to remain the owner or cannot attract the capital needed for adequate improvements to the property, HUD believes the incentive of being able to sell at a market price will steer more sales toward preservation-focused purchasers. If the property reaches mortgage maturity, residents not living in units with some form of rental assistance would be subject to large rent increases or eviction (save the recent FY12 HUD appropriations provision allowing for a limited number of tenant protection vouchers nationally for residents in such situations).
Other stipulations contained in the notice are the execution of 20-year renewals of any project-based Section 8 rental assistance contracts for the property; the possibility of rent increases using Mark-up-to-Budget for nonprofit buyers and Mark-up-to-Market for for-profit buyers; a cap of 10% on increases to rent on units without project-based Section 8; commissioning of a Capital Needs Assessment and a timetable for addressing the property’s physical needs; and a buyer with affordable housing experience and the capacity maintain the property throughout the extended affordability period. Click here for more information.
— Posted on 12/08/2011