New York—Centerline Capital Group, a provider of real estate financial and asset management services for affordable and conventional multifamily housing, and a subsidiary of Centerline Holding Company, announced it was selected to participate in a tax credit pilot program conducted by the U.S. Department of Housing and Urban Development (HUD).
The pilot was designed to accelerate the approval process for the purchase or refinance of multifamily rental properties assisted through the Low-Income Housing Tax Credit (LIHTC) Program.
The Pilot Program initially launched earlier in 2012 in Chicago, Detroit, Boston, and Los Angeles and recently expanded with the inclusion of the Atlanta, Denver, Fort Worth, San Francisco, and Seattle hubs. The Tax Credit pilot creates a distinct application platform and separate processing track under the Section 223(f) program. FHA’s Office of Multifamily Housing Programs believes the program can cut the time needed to review and approve financing applications for LIHTC-assisted transactions from approximately one year to 90 – 120 days. Centerline will be authorized to begin submitting loans under the program in early 2013.
The Pilot Program will be available for permanent financing for recently constructed and occupied properties, preservation and moderate rehab for Section 8 rental assistance properties, or older stabilized properties through the re-syndication of tax credits. Features of the pilot include:
- Possibility of not being subject to Davis-Bacon wage rates;
- In-place rehab, not exceeding $40,000 per unit in hard costs, and no more than 2 weeks temporary relocation;
- May have either 4 percent LIHTC with tax exempt bonds or 9 percent LIHTC;
- 90 percent or more of the units must have low income occupancy and rent restrictions as required by the Section 42 guidelines;
- Maximum loan of $25 million; and,
- Targets of firm commitment issuance within 60–90 days of application submission and a closing within 90–120 days.