AFFORDABLE HOUSING
Although BVC covers all commercial real estate property types in a variety of appraisal and consulting assignments, we provide an affordable housing specialty that most firms are unable to support.
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Low Income Tax Credit (LIHTC) Housing
Low-Income Housing Tax Credit (LIHTC) properties are administered by the State. Developers and investors who participate in LIHTC get reduced federal income taxes in exchange for making an investment in an affordable housing development. To be eligible for an affordable unit in a LIHTC property, a tenant must make no more than the income limit for that unit. LIHTC rents are not based on tenant income, but instead are set by the LIHTC restrictions tied to the unit. LIHTC property owners accept Section 8 voucher tenants.
LIHTC properties may not be fully encumbered (i.e. not all units are restricted by the LIHTC LURA). Some LIHTC properties may also have project-based Section 8 subsidies (PBV). LIHTC properties often have multiple funding sources with overlapping or conflicting unit/income restrictions.
USDA Rural Housing
U.S. Department of Agriculture (USDA) Rural Development (RD) Multifamily Housing programs helps property owners through loans and grants to rehabilitate properties for low-income, elderly, and disabled individuals and families as well as domestic farm laborers. USDA RD Multifamily Rental Assistance Program provides payments to owners of USDA-financed projects on behalf of low-income tenants unable to pay their full rent.
HUD Financing
Section 221(d)(4) insures mortgage loans to facilitate the new construction or substantial rehabilitation of multifamily rental or cooperative housing for moderate-income families, elderly, and the handicapped. Single Room Occupancy (SRO) projects may also be insured under this section. Section 221(d)(4) insures lenders against loss on mortgage defaults. Section 221(d)(4) assists private industry in the construction or rehabilitation of rental and cooperative housing for moderate-income and displaced families by making capital more readily available. The program allows for long-term mortgages (up to 40 years) that can be financed with Government National Mortgage Association (GNMA) Mortgage-Backed Securities.
Section 207/223(f) insures mortgage loans to facilitate the purchase or refinancing of existing multifamily rental housing. These projects may have been financed originally with conventional or FHA insured mortgages. Properties requiring substantial rehabilitation are not eligible for mortgage insurance under this program. HUD requires completion of critical repairs before endorsement of the mortgage and permits the completion of non-critical repairs after the endorsement for mortgage insurance. Section 223(f) insures lenders against loss on mortgage defaults. The program allows for long- term mortgages (up to 35 years) that can be financed with Government National Mortgage Association (GNMA) Mortgage-Backed Securities.
Section 231 insures mortgage loans to facilitate the construction and substantial rehabilitation of multifamily rental housing for elderly persons (62 or older) and/or persons with disabilities. Section 231 insures lenders against loss on mortgages. Section 231 was designed to increase the supply of rental housing specifically for the use and occupancy of elderly persons, and/or persons with disabilities. Fewer projects have been insured under Section 231 in recent years with developers opting to use Section 221(d)(4).
HOME Investment Partnerships Program provides grants to state and local governments to create affordable housing for low-income households. When HOME Investment Partnerships Program (HOME) funds are combined with other federal programs, the impact can be greater than what any one program could achieve on its own. Participating Jurisdictions (PJs) can combine programs in projects to achieve the greatest return for their resources. When using HOME with other funding sources, PJs are responsible for ensuring compliance with all of the HOME requirements over the HOME period of affordability.