Tuesday, July 22, 2008
The Mortgagee Letter contains important changes to FHA processing which will provide flexibility and cut costs, making FHA insurance a very competitive financing vehicle for affordable rental properties with low income housing tax credits.
"I want to thank FHA Commissioner Brian Montgomery (middle left photo) and John Garvin, his Senior Advisor and Deputy Assistant Secretary for Multifamily Housing Programs, for taking a leadership role on this issue.
"This will assist the tax credit market by removing some of the impediments to financing with FHA insurance as well as eliminating unnecessary costs in the program," said Kieran P. Quinn, (top right photo) CMB, Chairman of the MBA. "This is a major step forward in modernizing and enhancing FHA processes and will make it much easier to combine tax credits with FHA insurance, producing more affordable housing at a lower cost."
A key feature of the streamlined process permits the deferred submission of full plans and specifications, which will better align the FHA process with the tax credit process and will allow borrowers to lock rates earlier.
Another significant change is that 20 percent of the tax credit equity (reduced from 100 percent) must be funded at the time of HUD's initial endorsement, with the remainder allowed to be paid in over the development period-as is the case for most conventional financing.
"This provision alone will significantly increase the tax credit proceeds for these properties and will allow many more projects to be feasible," said Quinn. "Investors will pay more for the tax credits if they can phase in the purchase price over time. This is critical for the feasibility of many of these projects and will bring new entrants into the FHA-insured market."
Other changes introduced by the Mortgagee Letter permit firm commitments to be conditioned, under certain defined circumstances, upon HUD-2530 approval.
This approval must be received prior to initial endorsement, but the ability to condition firm commitments will provide timing flexibility to transactions and will improve borrowers' chances of obtaining favorable rate locks and equity pricing.
In addition, the Mortgagee Letter requires the designation of a LIHTC Coordinator in each Multifamily Hub and Program Center to work with credit allocation agencies and developers to better synchronize tax credit funding cycles with FHA's application process.
The Mortgagee Letter is effective July 22 and should immediately have an impact on properties being financed.
"There are, however, a number of legislative impediments to using FHA insurance with tax credits that need to be resolved," continued Quinn. "Most of those issues were addressed in the House version of the omnibus housing bill. We are hopeful that Congress will include those provisions in its final version of a housing bill this year."
With the changes in the Mortgagee Letter, along with the legislative changes being considered, a number of affordable rental properties that have not been able to find financing at terms that would allow the development to move forward will now be built.
"This is an extremely challenging time for the tax credit program," added Quinn. "At the same time that there are fewer sources of financing, investors are demanding higher returns and interest rates are higher.
" With these adverse market conditions, it has become more difficult to make these developments work. FHA should be commended for understanding the need for the FHA multifamily programs in this market and stepping in to improve their product."
(Federal Reserve Bank, Washington, DC photo at bottom right)
CONTACT: Jason Vasquez, (202) 557-2950, firstname.lastname@example.org
Robert Blackwell, SIOR or Sean Dupree, CCIM at NAI Realvest 407-875-9989;
Larry Vershel or Beth Payan,
JVC will occupy the entire space at New Manchester Distribution Center,(top right photo) located two miles south of Interstate 20 on Camp Creek Parkway. The company will use the facility for creation and distribution of media products. This is JVC's first lease agreement with ProLogis.
"We are excited to enter into this new relationship with JVC in Atlanta," said Rodney Davidson, first vice president and market officer for ProLogis in Atlanta. "The company's brands are recognized worldwide, and we hope to leverage our global platform to serve their future distribution space needs. We believe this location will enhance JVC's distribution network in the region, especially with its close access to national highway systems."
New Manchester Distribution Center is a freestanding distribution facility with easy access to both Interstate 20 and Interstate 285. Building features include an energy-efficient, T-8 lighting system, which helps to greatly reduce operating costs and energy expenditure.
JVC America, Inc. is a division of JVC Americas Corp., a wholly owned subsidiary of JVC Victor Company of Japan, Limited. JVC is a leading developer and manufacturer of sophisticated audio and video products that use superior technologies to deliver high quality sound and images.
media, Mo Sheahan of ProLogis, +1-303-567-5434,
Suzanne Dawson of Linden Alschuler & Kaplan, Inc.,
+1-212-329-1420, email@example.com, for ProLogis; or
Marsden of ProLogis, +1-303-567-5622, firstname.lastname@example.org
Web site: http://www.prologis.com/
Mr. Scandalios has over 18 years of experience in the real estate investment banking business as a manager, advisor and transactional agent. He has been involved in real estate asset sales for major corporate, institutional and entrepreneurial owners totaling over $10 billion.
“Andrew has shown continued growth and success in the investment sales business since joining HFF in 2001 and we are more than happy to recognize his accomplishments,” said HFF executive managing director John Fowler.(bottom left photo)
HFF (NYSE: HF) operates out of 18 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF offers clients a fully integrated national capital markets platform including debt placement, investment sales, structured finance, private equity, note sales and note sale advisory services and commercial loan servicing.
· Sand Lake Hospitalists (top right photo) has renewed its 1,648 SF space in Atrium Tower, 7680 Universal Boulevard, Orlando, for three years. Lisa Bailey represented the landlord, Atrium Tower Place, LLC.
Bowman, a Regional Director at GE Real Estate, is responsible for managing the Southeast Region (Atlanta and Boca Raton offices) for the North America Lending Division.
Kelly is a Director at GE Real Estate, responsible for originating Structured Debt and Capital Markets transactions on behalf of the North America Lending Division. His originations efforts are concentrated on sourcing new transactions in the Southeast. He began his career at GE in 2005 and has served in his current position since 2006. Kelly graduated with honors from Georgia State University.
GE Real Estate's North America Lending division offers financing for retail, industrial, self-storage, multifamily, office, student housing, and hotels. North America Lending is also a provider of financing solutions for niche asset classes including affordable housing, golf, vacation ownership, manufactured home communities and RV resorts.
The Real Estate Investment Advisory Council (REIAC) is a national nonprofit trade association that provides an open forum for the exchange of ideas, concerns and experiences between professionals who conduct commercial real estate transactions.
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HOUSTON, Texas, July 22, 2008—There’s a new hotel lobby in town, and it’s drawing quite a crowd.
Located at 15700 John F. Kennedy Blvd., the property is adjacent to the airport. “Because we offer shuttle service to the airport every 20 minutes, we believe that we’ll also be an attractive gathering place for people who have extended waits for airplanes. The combination of free Internet, great food and a friendly, relaxed atmosphere presents a compelling alternative, compared to a jammed-packed airport.”