If a project is in a Tax Credit program, which requires that the project be placed in service no later than the end of the second year following the allocation, and therefore construction needs to be started immediately, particularly given the uncertainties due to weather, is there a possibility of bypassing the queue in order to meet these deadlines and take full advantage of the Tax Credits?
Provided the Firm Applications are submitted in a timely manner, HUD reserves the right to adjust its "Other Queue" to give preference to processing new construction and substantial rehabilitation Section 232’s that include Low Income Housing Tax Credits (LIHTC) to meet placed in service deadlines. We encourage lenders to submit the Firm Applications on these projects in such a manner that will allow as much time as possible for HUD to fully review and respond to the application. -- Nov-15
Is there a minimum threshold level of LITHC required or does any LIHTC money qualify the property for the lower annual MIP?
No, there is no minimum threshold level of LIHTC required in order for a project to qualify for the lower annual MIP. Projects with existing LIHTC or projects receiving any new tax credits as part of the financing qualify for the 45 basis points MIP. Otherwise, Section 232/223(f) refinance transactions would require a MIP of 65 basis points and Section 232 New Construction/Substantial Rehab would require a MIP of 77 basis points. -- Nov-15
For valuation and debt sizing purposes, would HUD consider utilizing the loan amount, minus the tax credits, for the LTV calculation
\ No. ORCF would not anticipate approving a waiver using the loan amount minus tax credits for the LTV calculation. All funding sources will need to be appropriately notated and calculated as established in ORCF’s underwriting, including the full amount of the loan for a LIHTC project. --Nov-15