HABITAT HEADLINES

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Nov 11, 2019

SVP, Charlton Hamer, on Affordable Housing Funding

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Recently, SVP of Habitat Affordable Group, Charlton Hamer, was quoted in a new finance article in Heartland Real Estate Business about low-income housing tax credits! Read his excerpt below, and the full article HERE!

AGENCIES, LENDERS RAMP UP LOAN PRODUCTION FOR AFFORDABLE HOUSING PROPERTIES While developers address shortage of affordable units, financial organizations expand available tools.

By Kristin Hiller

How the capital stacks up

Merchants Capital, a multifamily, affordable housing and healthcare lender, has closed $38 million of Fannie Mae M.TEB transactions over the past six months. In southern Indiana, the company secured $21.4 million for the renovation of Carriage House of Evansville, a Section 8 housing development.

“Our bank structured the construction loan as tax-exempt, which provided a streamlined, cost-efficient execution,” says Michael Dury, president of Carmel, Indiana-based Merchants Capital.

Dury adds that the financing options are quite attractive for the preservation of affordable units, given renewed commitment from government-sponsored enterprises. In addition to the M.TEB financing for the Evansville project, PNC Bank provided low-income housing tax credits (LIHTC).

Most developers within the affordable housing space are heavily dependent on LIHTC for project financing. The program is the most significant form of providing equity to fund affordable projects in which the units are reserved for 60 percent AMI and lower, says Charlton Hamer, senior vice president with Chicago-based Habitat Affordable Group, the affordable housing division of The Habitat Co.

“Credit investors receive a dollar-for-dollar offset of income tax liability with the purchase of credits,” he says. “The credits are claimed over a proportional share during a 10-year period.”