Low Income Housing Tax Credits & Preservation in Ohio, 2014

The Ohio Housing Finance Agency's 2014 Qualified Allocation Plan includes a $8.5 million allocation pool for existing rental units, points for preserving existing rental subsidies or prior housing tax credit deals, a basis boost for some existing properties and points to some portfolio deals that include previous LIHTC developments that have passed their initial 15-year period.

Set-Asides: Ohio Housing Finance Agency’s 2014 Qualified Allocation Plan includes 4 allocation pools ($9 million for New Rental Units Pool, $8.5 million for Existing Rental Units Pool, $4 million for Permanent Supportive Housing, and proposal that do not receive an award of credits in the other pools will be considered in the Strategic Initiatives Pool). Each of the first three pools includes a geographic distribution within each pool.

The Existing Rental Units Pool (approximately $8.5 million) is intended for proposals to renovate existing housing units. This includes proposals that competed in the preservation pool in previous years, except for developments that create new units while preserving existing subsidies (such as HOPE VI, Choice Neighborhoods, or the use of Section 8 portability), which will compete in the new rental units pool. OHFA will determine the allocation pool in which proposals that combine new and existing units will compete. The geographic distribution for this pool is approximately $3.5 million for urban areas, $2.5 million for suburban areas, $2.5 million for rural areas.

Points: Applicants that successfully meet threshold and underwriting requirements will be considered in the competitive selection process, which will consist of five areas:

A. Local Collaboration
B. Development Characteristics
C. Economic Characteristics
D. Market Characteristics
E. Areas of Distinction
F. Preservation Characteristics

The point values for each area of the competitive selection process are different for each of the allocation pools to account for policy considerations for different types of developments. See the competitive scoring chart or scoring workbook for point values by allocation pool.

Preservation Characteristic Priorities: OHFA will award points to proposed developments that meet one of the following development characteristics. Applicants may choose only one preservation characteristic. OHFA will only award funding to one development for each of the items below in each pool. Subsequent developments will be skipped in preference of other preservation characteristics. This process will continue until all credits have been allocated. Ten points will be awarded for developments meeting one of the following choices:

a. Family developments located in a non-QCT.
b. Developments that account for at least 30% of the total available affordable housing units in the PMA.
c. Developments in which a troubled asset will be acquired by an applicant who will serve as the owner/manager for the entire period of compliance.
d. Developments that have been maintained through good management but contain major components that are past their effective useful life. The proposed development cannot have undergone substantial rehabilitation in the last 20 years.
e. Developments that will utilize HUD’s Rental Assistance Demonstration program.
f. Developments which involve the conversion of obsolete unit configurations. The obsolete units must account for at least 50% of the existing structure(s).
g. Developments which have a significant risk for market conversion.
h. Developments that contain a significant and urgent need for rehabilitation.

OHFA will award points to Existing Unit proposals that preserve existing rental subsidies or prior housing tax credit deals:

  • 10 points to developments with Project Based Section 8 for at least 100% of the units or USDA rental subsidy for at least 60% of the units.
  • 10 points to portfolio deals that include at least three previous housing tax credit developments that have passed their initial 15-year period.
  • 10 points to existing units deals that receive local priority points.
  • 9 points to developments with Project Based Section 8 for at least 60% of the units or USDA rental subsidy for at least 40% of the units.
  • 8 points to developments with Project Based Section 8 for at least 30% of the units or USDA rental subsidy for at least 20% of the units.
  • 7 points will be awarded to all other proposed existing unit developments.

Extended Use Restrictions: All developments must commit to an extended use period of a minimum of thirty years of affordability. If an allocation of housing tax credits is received, the owner must file a Restrictive Covenant (provided by OHFA) which waives the right of the owner to petition OHFA to have the extended use period terminated.

Basis Boost: Projects located in a Qualified Census Tract (QCT) are eligible for an allocation of credits based on up to 130% of the eligible basis for new construction or rehabilitation. The following projects may also be considered for the 130% basis boost:

  1. New Unit developments that receive five points in the location based characteristics competitive criterion.
  2. Existing Unit developments that receive 10 points in the Preservation Characteristic Priorities competitive criterion.
  3. PSH developments that receive 15 points for Highest Priority of Continuum of Care.

 The basis boost policy may be subject to change if Congress elects to extend the fixed 9% rate. 

Year 15: Points awarded for new developments with new units in which 100% of the units will be lease-purchase and sold to qualifying residents at year 15. To be eligible for points in this category, the proposal must be strategically located to promote neighborhood revitalization. The applicant must demonstrate a viable purchase strategy for the end of the 15-year compliance period. The proposal must also be located in the new units urban pool. 

OHFA will award 10 points to portfolio deals that include at least three previous housing tax credit developments that have passed their initial 15-year period. These developments may not request acquisition credits or HDAP. The requested credit allocation may not be more than $400,000.

   

Contributed By: 
National Housing Trust

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