1. Alabama A&M University (AAMU) Community Development Corporation (CDC) 1 Building Affordable Housing The Olympia Gardens Experience  The ability of an HBCU to accomplish community economic development goals hinges upon access to capital markets  The Low-income Housing Tax Credit (LIHTC) Program provides access to private investment capital for affordable rental housing

2. Alabama A&M University (AAMU) Community Development Corporation (CDC) 2 Building Affordable Housing The Olympia Gardens Experience  This program provides a federal tax credit to investors in affordable housing. The credit can be used each year for 10 years and is allocated to non-profit developers, who may sell it to raise equity to construct or acquire and rehabilitate affordable rental housing.

3. Alabama A&M University (AAMU) Community Development Corporation (CDC) 3 Building Affordable Housing The Olympia Gardens Experience  The LIHTC or Tax Credit) program was created by the Tax Reform Act of 1986 as an alternate method of funding housing for low- and moderate-income households, and has been in operation since 1987.

4. Alabama A&M University (AAMU) Community Development Corporation (CDC) 4 Building Affordable Housing The Olympia Gardens Experience  LIHTC are a source of “debt free” capital and must be used for new construction, rehabilitation, or acquisition and rehabilitation.  Projects must also meet the following requirements: Rental Projects Projects that serve low-income individuals or families at 60% or below the area median income

5. Alabama A&M University (AAMU) Community Development Corporation (CDC) 5 Building Affordable Housing The Olympia Gardens Experience  The LIHTC program reduces the tax bracket for high income investors through syndication  Syndication is simply the selling of profits and losses (cash and tax losses) through a limited partnership

6. Alabama A&M University (AAMU) Community Development Corporation (CDC) 6 Building Affordable Housing The Olympia Gardens Experience  A limited partnership allows an investment company to pass both profit and losses to its shareholders (investors) in portion to their ownership interest in the partnership  Olympia Gardens is a limited partnership between the AAMU CDC and Olympia Construction (a for-profit developer) and AmSouth Bank (corporate investor)

7. Alabama A&M University (AAMU) Community Development Corporation (CDC) 7 Building Affordable Housing The Olympia Gardens Experience  Project Description 48 garden style apartments  8 one bedrooms  28 two bedrooms  12 three bedrooms Amenities  Clubhouse with laundry and meeting rooms  Community pool and playground  Attractive landscaping and sprinkler system

8. Alabama A&M University (AAMU) Community Development Corporation (CDC) 8 Building Affordable Housing The Olympia Gardens Experience  Project Description 29 units rent at or below 60% of AMI 19 units rent at or below 50% AMI 8 units reserved for the mentally handicapped

9. Alabama A&M University (AAMU) Community Development Corporation (CDC) 9 Building Affordable Housing The Olympia Gardens Experience  Benefits of LIHTC Project to HBCU & CDC Addressed need for quality affordable housing CDC gained experience as a housing developer Enhanced sustainability of CDC Improved visibility of CDC to community Provided positive Public Relations for the HBCU

10. Alabama A&M University (AAMU) Community Development Corporation (CDC) 10 Building Affordable Housing The Olympia Gardens Experience  Challenges - Technical Training Understanding the LIHTC Application Process  FHLBA, BB&T, Others Training Board Members about the Program Obtaining professional and technical advice  FHLBA  University Attorney Securing Reputable Private Partners

11. Alabama A&M University (AAMU) Community Development Corporation (CDC) 11  Challenges – Assembling a TA Team No one believe you can achieve goal Everybody wants to be paid  pro bono legal advisor  University accountant  Tax credit attorney FHLBA Development Doctor Program

12. Alabama A&M University (AAMU) Community Development Corporation (CDC) 12 Building Affordable Housing The Olympia Gardens Experience  Challenges – Dealing with NIMBY issues Finding a suitable site Soliciting local government involvement  City government  Housing Authority

13. Alabama A&M University (AAMU) Community Development Corporation (CDC) 13 Building Affordable Housing The Olympia Gardens Experience  Challenges – Negotiating a Development Agreement  Private partners Selling the Tax Credits  Syndicating the Project  Negotiating with Syndicators

14. Alabama A&M University (AAMU) Community Development Corporation (CDC) 14 Building Affordable Housing The Olympia Gardens Experience  Project Pitfalls after obtaining Credits University and CDC Relationship Board Members not attending Training Private partners not living up to commitments Unexpected delays in completing contracts Gov’t Approvals – take time