American Housing Foundation

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American Housing Foundation

• A National 501(c)(3) Non-Profit Organization

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AHF was founded in 1989

• Catholic Church in trouble with 2 multifamily
  properties.
• 221(D)(3) HUD financing non-dividend.
• The properties were in need of rehabilitation in
  excess of funds.

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Went to HUD

• HUD approved a Transfer of Physical Assets (TPA).
• Applied to Texas Housing Finance Agency, now
  Texas Dept of Housing and Community Affairs
  (TDHCA), for Low Income Housing Tax Credits
  (LIHTC).
• Cold Call to Chevron to sell tax credits
• Chevron agreed to purchase tax credits at 55
  cents on thedollar.
• Tax Credits would be paid for over 8 years w/no
  interest.
• At this point we thought we were pretty smart.

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Construction Loan Bridge Funding

• Went to banks for conventional financing.
• Turned down due to resident mix, low income
  neighborhoods (QCT) and uncertainty of tax
  exemption.

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Construction Loan Bridge Funding

• Guido Loan
• 20 points
• 18 interest
• Secured by all personal assets

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Taxable Bonds

• Issued taxable bonds secured with tax credit
  investor payments. The underwriter was Coughlin
  Company in Denver, CO.
• 1st Bridge financing of tax credit funds in the
  U.S.

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Funding Paid Guido Off
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Snapshot of AHF Growth(1993 to 1999)

• Tried conventional financing, but no equity for
  down payments.
• Utilized LIHTC for equity.
• 9 non-qualified QCT funding.
• Developed housing in qualified census tract (QCT)
  for additional 30 funding.

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Free Transitional Housing Shelter

• Assumptions
• Building cost 5 million
• Soft cost (Architects, etc) 250,000.00
• Land cost 500,000.00
• Non-Profit developer fees at 15 787,500.00.
• Located in a Qualified Census Tract (30 bonus).

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Free Transitional Housing
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Bonds (started 1999)

• Issued Tax Exempt Financing / 501(c)(3) Bonds.
• Equity is still a problem.
• Sold Bonds for a premium.
• Owner finance so debt was refinanced as opposed
  to purchase debt.
• Private Activity Bonds (PAB)
• Low Income Housing Tax Credits for equity.
• Savings from Property Tax Exemptions.

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Education Opportunity Plan (EOP)Established in
2002

• IRS Private Letter Ruling (1st in U.S.)
• Primary purpose of EOP is to provide charitable
  benefit for education by partnering with
  Universities and Colleges.
• AHF develops market rate student housing to
  provide scholarships to low income students.
• Qualified students include
• First generation college students
• Family income at or below 60 AMI
• Single Moms
• Preference on B and C Students

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Scholarship Programs Established in 2003

• Walden II Portfolio
• Dallas Housing Authority
• 300,000 annually since December 2003.
• Travis County Housing Finance Authority
• 60,000 per asset annually as long as the bonds
  are outstanding.
• Florida Take Stock in Children Program.
• 500,000 in 2006 for match grant.

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Bigger Is Better

• Pooled portfolio of tax exempt bond financing
  allows for savings in
• cost of issuance
• diversity of assets
• strength of cross-collateralization

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One Asset vs. Multiple AssetsPlum Creek vs.
Walden II
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Problems in Texas

• Limited Resources
• Equity for Funding
• Utilize LIHTC for Equity.
• Utilize Sales Tax Savings.
• Utilize Property Tax Savings.
• Tax Exemption Legislation (Ever Evolving)
• 11.182e 100 tax exemption prior to Dec 31,
  2004.
• 11.182.5 50 tax exemption after Dec 31, 2004.
• Leverage funding with other Federal State
  Programs(i.e., HOME, HOPE VI, Funding from Local
  Political Subdivisions and In Kind
  Contributions).

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Tools for Non-Profits

• Low Income Housing Tax Credits
• Identify QCT areas for development with 30
  increase funding.
• Preservation with rehabilitation target state
  funding.
• Private Activity Bonds.
• Tax Exemption Savings
• Join the fight for 100 tax exemption
  legislation.

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American Housing Foundation

• www.americanhousing.org