1. LIHTC: Real World Considerations and Advocacy Issues
NAIHC Legal Symposium
December, 2016

2. RTHawk Housing Alliance LLC
100% Tribally Owned Company
(Standing Rock Sioux)
Specialized in LIHTC financed development and management and other affordable housing programs
Experienced Staff
Housing Relationships Built to Last

3. Planning Considerations:
Determining Need
New Construction vs. Rehab project – or combination of both
Waiting List – what does it tell you about your current housing needs
Community surveys
Wish lists – community buildings, playgrounds, office space for needed community services
Housing Relationships Built to Last

4. Planning Considerations: Realistic Goals and Timelines
Develop a “real” budget to include all line items needed for your project-including:
Soft Costs – Fees for: legal, accounting, architect, market study, environmental, capital needs assessment
Hard Costs – Infrastructure and Construction Costs. NOTE: when developing estimates utilize recognized construction estimating resources as well as internal and local knowledge of current building costs.
Housing Relationships Built to Last

5. Planning Considerations: Realistic Goals and Timelines
What are the deadlines for the funding sources you wish to apply for?
What is a realistic construction schedule based on your local weather seasons?
What is a realistic schedule for when you will need the actual funds?
Housing Relationships Built to Last

6. Planning Considerations: Realistic Goals and Timelines
Determining when you need to draw down funds for construction can impact the price you receive for tax credits. Examples: Percentage of completion, monthly, quarterly, etc.
NOTE: All budgets and timelines should also take into consideration what items can be handled “in-house” versus those that need to be contracted for using third parties. This will allow realistic schedules that include time for required procurement activities and internal schedule planning for in house services such as Force Account Crews.
Housing Relationships Built to Last

7. Planning Considerations:
Political Support
Provide a Project Summary that includes an overview of the planned project and how, the budget, funding sources and construction timeline.
Explain the role that the Tribal Council / Housing Board will need to play to ensure the Project’s success.
Plan Community Meetings to provide information about planned project.
Remember: Elected leadership changes over the life of a Project. Be prepared to take the time to educate new staff, Board, and Council members about your housing programs/projects.
Housing Relationships Built to Last

8. Low Income Housing Tax Credits - Equity
IRS Program
Apply through the state allocating agency
Generates tax credits for investors
Dollar for Dollar reduction in tax liability
Maximum incomes and rents of 60% of Area Median Income
Rental or Rent to Own
Typically funds 80% or more of project costs
Partnership Structure
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9. New Construction Example
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10. Rehabilitation Example
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11. How do the numbers really work?
Cost caps
Additional leveraging sources
Final Costs
Timing of equity
Investor Pricing
Economies of Scale
Location of Project
Construction/Lease Up Schedule
May need to be creative
Housing Relationships Built to Last

12. Disclaimer:
The next few slides contain photos and other information about specific projects. Please note that RTHawk was not a party to these transactions; however, its principals and staff worked on these projects while employed by other consulting firms. The purpose of the slides is to inform the audience about creativity and what can happen when we think “outside the box”. These real world examples will put the program into context and help everyone to further understand the opportunities available with the LIHTC program. The photos and other information have been obtained via the Tribal Entities and/or the world wide web.
Housing Relationships Built to Last

13. Colville Homes IV – Colville Indian Housing Authority – Various, WA
Existing Units
Inchelium – 14 units at two sites
Keller – 21 units at two sites
New Construction Site – 12 Units and Sports Court - Nespelem
Housing Relationships Built to Last

14. Colville Homes IV Continued
Size
# Units
Basis Limits
Total Basis Limits
Blended/Unit
2BR 22
$204,862
$4,506,964
3BR 18
$265,864
$4,785,552
4BR 6
$292,561
$1,755,336
6BR 1
Totals 47
$11,340,443
$241,286
12 New Construction Units - ~$320,000/unit = $3,840,000
35 Rehab Units - ~$210,000/unit = $7,350,000
47 Total Units - $11,190,000
Housing Relationships Built to Last

15. ZHA LIHTC # 2
21 Units - LR Rehab  Community Building - New  LIHTC Requested: $343,087 in Credits
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16. ZHA LIHTC # 2 – Zuni Housing Authority – Zuni, NM
Construction Period Sources:
Final Out of Pocket Costs for ZHA
Value of Units
$ ,000
Initial ZHA Contribution
$ 260,190
RJTCF 99 cents
$ ,396,222
Less:
AHP Funding (anticipated) $
Contractor Fees
ZHA
$ ,190
Developer Fees
$ 402,500
Total Sources
$ ,233,098
Equals: Net out of pocket
$ (455,814)
Uses:
Acquisition of the Units
Rehab of units
$ ,858,500
Community Space
$ ,000
Construction Contingencies
$ ,850
Tenant Relocation Fees
$ ,000
Soft Costs / Professional Fees
$ ,882
Operating Reserves
$ ,176
Consulting Fees
$ ,000
$ ,500
Total Uses
Housing Relationships Built to Last

17. Cuspes Park - Perry Maine - Pleasant Point Passamaquoddy
LIHTC Equity
NAHASDA
MSHA
AHP
Title VI
USDA
BIA
IHS
Other
Housing Relationships Built to Last

18. 2016 ELECTION – Tax Reform (Impact on Low Income Housing Tax Credit Program)
Pricing is Yield Driven
Tax Credits $1 for $1 reduction in tax liability
Losses
Timing
Location/other
Feasibility
Filling the Gap (grants vs. loans)
Marketability
Operations
Long Term Outlook
Competition for LIHTCs
Uncertainty -----> Stabilization
Time
More information
Investors may enter or exit market
Legislative Fixes (patches or permanent)
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19. Tax Reform Impact
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20. Advocacy Public Hearings Advisory Positions
LIHTC’s / Other Funding (HTF, AHP, HOME, VASH etc.)
Federal and State Representatives
Industry Groups
Lobbyists
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21. Advocacy – Current Issues
NAHASDA Reauthorization
Senator Cantwell’s bill to increase amount of LIHTC’s
VASH
Section 8 vouchers
State Housing Agencies – QAP’s / Local Resources
Housing Relationships Built to Last

22. Questions? RTHawk Housing Alliance LLC Wilbur Red Tomahawk,
Lorna Fogg, and Robin Thorne
Housing Relationships Built to Last