Capital Briefs

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Tax Credit Advisor, August 2010:

HUD Revises FHA Multifamily Underwriting Standards, Policies

The U.S. Department of Housing and Urban Development (HUD) has issued a new mortgagee letter (2010-21) making significant changes to underwriting standards, policies, and procedures for Federal Housing Administration multifamily mortgage insurance programs, including Sections 221(d)(4), 221(d)(3), 223(a)(7), and 223(f). For most programs, the letter, among other things, increases minimum debt service coverage ratios and reduces maximum loan value/cost ratios, both for market-rate and affordable projects. The guidance also requires new project concept meetings with HUD for new projects under all programs other than 223(f). It establishes a two-stage processing system for market-rate projects; one stage for affordable projects. The changes are effective 60 days from July 6 for new pre-applications; later for pending proposals.
      (http://fhadirect.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-21ml.pdf)

HUD Releases Guidelines for Subsidy Layering Reviews

HUD has published new administrative guidelines for housing credit agencies to follow in conducting subsidy layering reviews for proposed new multifamily construction or rehabilitation projects that will combine HUD Section 8 project-based voucher assistance with other government assistance. The guidelines, published July 9, implement provisions of the Housing and Economic Recovery Act of 2008.
      (http://edocket.access.gpo.gov/2010/pdf/2010-16827.pdf)

IRS Solicits Comments on LIHTC Regulations

The Internal Revenue Service, while proposing no changes, is soliciting public comments by September 7 on the following current final regulations for the federal low-income housing tax credit program: Procedure for Monitoring Compliance with Low-Income Housing Credit Requirements (TD 8430); Rules to Carry Out the Purposes of Section 42 and for Correcting Administrative Errors and Omissions (TD-8521); and Compliance Monitoring and Miscellaneous Issues Relating to the Low-Income Housing Credit (TD 8859).
      (http://www.gpo.gov/fdsys/pkg/FR-2010-07-06/pdf/2010-16231.pdf)

Regulators Propose Changes to CRA

Federal banking regulators have proposed changes to Community Reinvestment Act regulations to revise the term “community development” to give favorable CRA consideration to financial institutions for loans, investments, and services for projects or activities in designated target areas under Neighborhood Stabilization Program.
      (http://edocket.access.gpo.gov/2010/pdf/2010-15119.pdf)

HUD Announces Availability of Sustainable Planning Grants

HUD has announced the availability of $68 million in competitive grants under the Sustainable Communities Regional Planning Grant program. The grants are to support metropolitan and multijurisdictional planning efforts that integrate housing, land use, economic and workforce development, transportation, and infrastructure investments in ways that empower jurisdictions to consider the interdependent challenges of: economic competitiveness and revitalization; social equity, inclusion, and access to opportunity; energy use and climate change; and public health and environmental impact.
      (http://edocket.access.gpo.gov/2010/pdf/2010-15717.pdf)

HUD Establishes NSP “First Look” Process

HUD has established a temporary new “first look” sales process that will give certain entities first preference to acquire FHA REO properties under the Neighborhood Stabilization Program.
      (http://edocket.access.gpo.gov/2010/pdf/2010-17335.pdf)