Offering added flexibility, shorter timelines, and increased cost-effectiveness for affordable housing developments with LIHTC Equity.
Churchill Mortgage Investment, a subsidiary of Churchill Stateside Group (CSG), has been approved by HUD as a Low Income Housing Tax Credit Pilot Program Lender (“Pilot Program”). This means more flexible, timely and cost-efficient HUD financing for clients with intricate LIHTC projects.
The Pilot Program utilizes HUD’s Section 223(f) program and allows CSG to guide affordable housing developers through an FHA mortgage insurance application process that is specifically designed for projects with Low Income Housing Tax Credit Equity. In general, the Pilot Program permits more rehabilitation than previously allowable under the 223(f) and is streamlined to prevent failure to meet tight bond closing or LIHTC performance deadlines.
Currently, the program allows for three types of transactions; acquisition and/or refinance and moderate rehab of properties with at least 90% of the units supported by a Section 8 HAP contract, moderate rehab and permanent financing of stabilized LIHTC assets that are being re-syndicated with new tax credits, and permanent financing for LIHTC deals under the 3-year rule waiver for assets with high interest rate forward commitments. In this program, moderate rehab is defined as $40,000 per unit or less in hard costs with only temporary relocation of residents. With respect to flexibility, HUD will consider waivers for transactions on a case-by-case basis. Finally, the timeline goals of the program are to issue a commitment within 60-90 calendar days of submission, and close within 90-120 days of submission.
Keith Gloeckl, Chief Executive Officer of CSG stated, “These refined FHA processes will ultimately lead to more developers enjoying the lower rates and terms of FHA-insured executions. HUD is taking great strides to attain this business and now is the time to take advantage of it.”