Affordable Housing Gurus

PHFA Releases Final 2012 Qualified Allocation Plan

PHFA recently released the final Qualified Allocation Plan for the 2012 Low-Income Housing Tax Credit Program. Check back for the 2012 Multifamily Housing Application Package and Guidelines.

August 15 - An Important Deadline in Pennsylvania

Today marks two important deadlines in the world of low-income housing tax credits in Pennsylvania. For developments that received a 2010 allocation of credits, 10% of the reasonably expected basis must be incurred as of today. For developments that received a 2011 reservation of low-income housing tax credits, today is the deadline for executing the Carryover Allocation Agreement.

The 10% Test deadline for developments that received 2010 low-income housing tax credits in Pennsylvania is here. These developments must have incurred 10% of their reasonably expected basis as of today and have until noon on August 25, 2011, to submit the required information  to the Pennsylvania Housing Finance Agency. This is an important test because failure to satisfy it can cause a development to lose its tax credits.

In order to meet the 10% Test for 2010 credits, a development must have incurred 10% of the reasonably expected basis by today. Reasonably expected basis is the estimated land and all depreciable property (not just basis eligible property) expected to be part of the development.

Generally, a development must be placed in service in the year that the low-income housing tax credits are awarded by the state housing finance agency (in Pennsylvania, this is PHFA). A carryover allocation can extend the placed in service date to the end of the second calendar year after the year that a carryover allocation is made.  For any development receiving an allocation of 2011 credits that will not be placed in service by the end of this year, a Carryover Allocation Agreement must be executed today and submitted to PHFA along with other required information  by August 22, 2011. Having a valid Carryover Allocation Agreement in place will give developments that received an allocation of 2011 low-income housing tax credits until December 31, 2013 to be placed in service.

McKonly & Asbury is a leader in accounting for affordable housing developments in Pennsylvania. IRS and PHFA regulations require specialized knowledge when preparing a 10% Test. This test is critical in the tax credit process and it is important to work with someone who has the experience and expertise to ensure that your Test is accurate and your credits are not lost. The M&A Team has the audit and tax expertise and experience needed to complete an accurate 10% Test. For more information, please contact Elizabeth Brooks at ebrooks@macpas.com.

The information presented in this post is intended solely for informational purposes and should not be construed as accounting advice from McKonly & Asbury, LLP.

PHFA Issues Draft 2012 Qualified Allocation Plan

The Pennsylvania Housing Finance Agency (PHFA) issued a draft of their 2012 Qualified Allocation Plan (QAP). PHFA is proposing to return to a one-application submission process for the 2012 low-income housing tax credits. According to the draft QAP, applicants will be required to submit their application on or before October 12, 2011. It appears that the requirements for the 2012 application will be similar to the application requirements for the 2011 applications. Stay tuned for further details!

McKonly & Asbury is a leader in preparing and consulting on low-income housing tax credit applications in Pennsylvania. Our team is passionate about making your application a success. We have a comprehensive understanding of the challenges and nuances of structuring a low-income housing tax credit deal. We are able to assist you in putting the entire application package together for submission, or we can review your application and provide suggestions for optimizing points for PHFA scoring. We will help you maximize your tax credits and, therefore, increase your equity proceeds. For more information, please contact Elizabeth Brooks at ebrooks@macpas.com.

PHFA Announces Conditional Awards for 2011 Funding and Low-Income Housing Tax Credits

The Pennsylvania Housing Finance Agency (PHFA) announced the conditional awards for 2011 PHFA funding and low-income housing tax credits. For a list of developments receiving this funding, click here. Congratulations to all who have received this great news!

PHFA Announces Applicants Approved to Submit 2011 Underwriting Applications

The Pennsylvania Housing Finance Agency (PHFA) has announced the applicants that have received first round approval in a two round competitive application process to be awarded 2011 Low-Income Housing Tax Credits in Pennsylvania. The applicants appearing on this list have been approved to submit an “Underwriting Application” to PHFA on or before March 1, 2011. Congratulations to all!

The 10% Test – It’s All or Nothing

The 10% Test deadline for projects that received 2009 low-income housing tax credits in Pennsylvania is quickly approaching. These projects have until November 2, 2010 to incur 10% of their reasonably expected basis; and until November 11, 2010, to submit the required information to the Pennsylvania Housing Finance Agency. This is an important test because failure to satisfy it can cause a project to lose its tax credits.

Generally, a project must be placed in service in the year that the low-income housing tax credits are awarded by the state housing finance agency (in Pennsylvania, this is PHFA). A carryover allocation can extend the placed in service date to the end of the second calendar year after the year that a carryover allocation is made.  In order to obtain the extended time for placing a project in service, the project must receive a valid carryover allocation agreement and satisfy the 10% Test timely. 

In order to meet the 10% Test for 2009 credits, a project must incur 10% of the reasonably expected basis by November 2, 2010. Reasonably expected basis is the estimated land and all depreciable property (not just basis eligible property) expected to be part of the project. Projects should already be planning how they are going to meet the test. One issue to keep in mind is that including a portion of the developer’s fees will require certain documentation. Another issue is that purchasing and storing materials prior to the commencement of construction will require advanced planning and appropriate documentation.

McKonly & Asbury is a leader in accounting for affordable housing projects in Pennsylvania. IRS and PHFA regulations require specialized knowledge when preparing a 10% Test. This test is critical in the tax credit process and it is important to work with someone who has the experience and expertise to ensure that your Test is accurate and your credits are not lost. The M&A Team has the audit and tax expertise and experience needed to complete an accurate 10% Test. For more information, please contact Elizabeth Brooks at ebrooks@macpas.com.

The information presented in this post is intended solely for informational purposes and should not be construed as accounting advice from McKonly & Asbury, LLP.

PHFA Issues Draft 2011 Qualified Allocation Plan

The Pennsylvania Housing Finance Agency (PHFA) issued a draft of their 2011 Qualified Allocation Plan (QAP). PHFA is proposing a significant change in the way they process the multifamily applications for 2011. According to the draft QAP, applicants will be required to submit a Preliminary Application on or before November 5, 2010. The draft QAP indicates that the Preliminary Application will be evaluated based on the following selection criteria: Neighborhood Characteristics; Site Suitability and Building Location; Availability, Quality, and Proximity of Services, Amenities, and Features; and Marketability/Need. According to the draft QAP, if an applicant’s Preliminary Application is approved by PHFA, applicants may then submit an Underwriting Application to PHFA by March 1, 2011. It appears that the requirements for the Underwriting Application will be similar to the application requirements for the 2010 applications. Stay tuned for further details!

McKonly & Asbury is a leader in preparing and consulting on low-income housing tax credit applications in Pennsylvania. Our team is passionate about making your application a success. We have a comprehensive understanding of the challenges and nuances of structuring a low-income housing tax credit deal. We are able to assist you in putting the entire application package together for submission, or we can review your application and provide suggestions for maximizing points for PHFA scoring. We will help you maximize your tax credits and, therefore, maximize your equity proceeds. For more information, please contact Elizabeth Brooks at ebrooks@macpas.com.

PHFA Extends 2010 Multifamily Housing Application Deadline

Due to the forecasted snow storm, the Pennsylvania Housing Finance Agency has extended the deadline for submitting the 2010 Multifamily Housing Application until 3:00 p.m. on Monday, March 1, 2010. 

PHFA Releases Preapplication Workshop Q&A

The Pennsylvania Housing Finance Agency (PHFA) this week released a document containing the questions posed by participants at the Preapplication Workshop held on December 16, 2009 and PHFA’s responses. The Q &A contains good information relating to the new scoring criteria of having an equity investor secured, site control, and submitting an application with a funding gap.

For additional information regarding low-income housing tax credit application preparation, contact Elizabeth Brooks at ebrooks@macpas.com or (717)761-7910.

PHFA Holds 2010 Pre-Application Workshop

The Pennsylvania Housing Finance Agency (PHFA) held a 2010 Pre-Application Workshop on December 16, 2009. PHFA discussed the 2010 Low-Income Housing Tax Credit (LIHTC) application. PHFA discussed the application process including the new “ability to proceed” selection criteria, changes to development budget requirements, and the affordability of units.

A dramatic change to the application process for 2010 is the availability of 40 points (out of a total of 170 points) for the “ability to proceed”. Ability to proceed includes appropriate zoning, site plan approval, and site ownership (which PHFA indicated the property can be owned by a related party or an affiliate with the intent to transfer the property to the limited partnership at the time of closing). Points will also be awarded under the ability to proceed selection criteria for evidence that satisfies PHFA that an equity investor has been secured.