Blueprint for September
Sealing the Deal
By Jessica Hoefer
3 min read
Have you ever had that feeling where something you are newly knowledgeable about seems to suddenly be everywhere? It’s really a cognitive bias in which people notice a particular thing everywhere, and it has a name, the Baader-Meinhof phenomenon, also known as the frequency illusion. It simply means that you are acutely aware of something after learning about or experiencing it.
For me, the phenomenon recently occurred around financing for affordable housing. Coming in the form of stalled construction due to inflation on a nearby house, a mention of funding to support affordable housing in rural areas in the book I am reading (American Fire: Love, Arson, and Life in a Vanishing Land), a news article about the new federal loan for Maryland’s Purple Line and, in general, an influx in articles and conversations surrounding the topic. Everywhere I look, the topic of finance seems to crop up. A befitting manifestation in laying the groundwork for our finance issue.
This month, we look at ongoing efforts to address affordable housing funding – the strategies and resources available. We explore using state and local fiscal recovery funds for affordable housing, how rising interest rates and an impending recession are driving developers’ and lenders’ creativity, as well as strategies for navigating related party issues in tax-exempt bond transactions.
The U.S. Department of the Treasury recently released an Affordable Housing How-To Guide for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) from the American Rescue Plan for the construction and preservation of affordable housing. In both Industry Insights and Utilizing State and Local Fiscal Recovery Funds for Affordable Housing, we get a look at how SLFRFs can and are being used to make deals work.
Affordable Housing and the Finance Market is a survey of lenders in which these finance strategists outline the shifts they’re seeing in the market and advise developers on completing deals. For example, “it’s best to look at financing options from multiple angles and perhaps form partnerships with others with more liquidity.”
Guest writer Alex Zeltser, Esq., a partner at Washington, DC-based Tiber Hudson LLC, expertly explains how dual Strategies for Navigating Related Party Issues in Tax-Exempt Bond Transactions tend to bring about better tax credit pricing and more streamlined execution.
“Tax-exempt bonds (TEBs) have their own special place in the financing of affordable multifamily housing, and few people understand how to structure deals that maximize their impact more so than Washington, DC attorney Wade Norris,” writes Darryl Hicks in Breaking Ground which discusses recent issues and trends in the tax-exempt bond market and where things may be headed, as well as strategies for meeting the 50 percent test.
And as the market continues to shift, Fannie Mae and Freddie Mac Set for Strong 2022 reveals pricing incentives, the use of impact bonds for multifamily properties and how increases in volume cap and Low Income Housing Tax Credits have bolstered investments.
It’s all about what you can do to seal the deal.
Regards,
Jessica Hoefer
Editor-in-Chief
