NEW YORK, NY - Centerline Capital Group (“Centerline”), a provider of real estate financial and asset management services for affordable and conventional multifamily housing, and a subsidiary of Centerline Holding Company (OTC: CLNH), announced today 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.
“We are honored to have been selected to be included in this innovative initiative,” noted Philip Melton, Senior Managing Director and business head for Centerline’s Affordable Housing Debt platform. “Centerline’s extensive history in affordable housing lending and equity investment through the Low Income Housing Tax Credit program made us a logical choice to participate and will serve us and HUD well in the 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% LIHTC with tax exempt bonds or 9% LIHTC;
» 90% 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.
“It has become clear that we need to rethink our process at FHA if we hope to leverage LIHTC to the maximum degree possible,” said FHA’s Acting Commissioner Carol Galante. “This pilot program will test our ability to significantly cut our review process so we can put people in affordable homes and provide unique financing options for developers.”
At the outset of the program implementation, Marie Head, HUD’s Deputy Assistant Secretary for Multi-family Housing said, “If we can successfully cut the time it takes to approve these lower risk LIHTC projects in these four cities, we have the potential to dramatically increase the production of affordable rental projects nationwide.” The success in the initial 4 cities warranted expansion of the Pilot Program.
About Centerline Capital Group
Centerline Capital Group, a subsidiary of Centerline Holding Company (OTC: CLNH), provides real estate financing and asset management services focused on affordable and conventional multifamily housing. We offer a range of both debt financing and equity investment products, as well as asset management services to developers, owners, and investors. An industry leader, Centerline is structured to originate, underwrite, service, manage, refinance or sell through all phases of an asset’s life cycle. A leading sponsor of Low-Income Housing Tax Credit (LIHTC) funds, Centerline has raised more than $10 billion in equity across 137 funds, and invested in over 1,600 assets spanning 47 states. The firm’s multifamily lending platform services more than $11.5 billion in loans. Founded in 1972, Centerline is headquartered in New York City, with 246 employees in ten offices throughout the United States. A strategic partner of Island Capital, Centerline is organized around four business units: Affordable Housing Equity, Affordable Housing Debt, Mortgage Banking and Asset Management. To learn more about Centerline, visit www.centerline.com.