Cromnibus Summary

On Tuesday, December 9, U.S. House of Representatives introduced the so-called “Cromnibus” spending legislation, a $1 trillion bill that will fund most of the government through September 30, 2015. After much debate, the bill was passed by the House on December 12, and then by the Senate shortly after and signed into law by the President on Tuesday, December 16.

The funding measure combines a three-month continuing resolution (CR) for the Department of Homeland Security and 11 full spending bills for the remaining government agencies through the end of fiscal year (FY) 2015.

The bill will provides the U.S. Department of Housing and Urban Development with $45.4 billion in gross discretionary budget authority for FY 2015. This includes:

$9.7 billion for Section 8 Project-Based Rental Assistance

$19.3 billion for Tenant-Based Rental Assistance

$75 million for the Veteran Affairs Supportive Housing (VASH) program

$1.875 billion for the Public Housing Capital Fund

$4.44 billion for the Public Housing Operating Fund

$80 million for the Choice Neighborhoods Initiative program

$330 million for the Housing Opportunities for Persons with AIDS (HOPWA) program

$900 million for the HOME Investment Partnerships program

$3 billion for the Community Development Block Grant (CDBG) program

One of the more exciting developments coming out of the “cromnibus” is the extension of HUD’s Rental Assistance Demonstration (RAD) program through 2018. The bill raises the RAD unit cap on the number of public housing units that can participate in it from 60,000 to 185,000. It also permanently extends the second component of RAD, which consolidates several legacy rental assistance programs into Section 8.



Unconventional Structuring and Buy/Hold Philosophy Fuel Expansion

MC Companies nearly $200 million apartment refinance, coupled with their Buy and Hold Philosophy return investors equity while maintaining the same level of ownership. Investors really like infinite Cash on Cash Returns.

MC Companies Owners Ken McElroy and Ross McCallister, love apartment development, and have expanded asset growth in 2014. Their eye for under managed value add apartment communities with significant upside potential, leveraged with their MC Residential in house property management group has created significant value with their apartment acquisitions.

A prevailing share of Partner and President of MC Residential Communities (Lesley Brice) are chock full with the nuances of running a fast paced for profit development enterprise, acquiring and repositioning (1,500)+ additional apartment units each year, coupled with the day to day oversight of operations of the MC Residential 7,500 and growing owned and managed apartment units throughout the Southwest.

"Levering our inherent core strength for numbers, financial statements and bottom line approach to property performance of our assets has a favorable impression with our lenders and partners, easing the way for each next new deal in what has become a complicated development environment since the great recession," says Tanner Bickelhaupt, responsible for Capital and Acquisitions and the main contact between MC Companies and investment partners.

Industry experts Ross McCallister and Ken McElroy joined forces in 1985 to build a partnership based on their strengths and decades of experience and success. While Ross and Ken share a common goal of delivering exceptional service, results and return on investment, they each bring a unique owner/investor/manager perspective to MC Companies, which is an invaluable advantage to their Lenders, Partners and Investors.**


Mortgage Rates Start 2015 on a Downswing

Mortgage rates began the new year by moving lower, with the benchmark 30-year fixed mortgage rate dropping to 3.85 percent, according to's weekly national survey. The 30-year fixed mortgage has an average of 0.31 discount and origination points.

The average 15-year fixed mortgage plunged to 3.16 percent while the larger jumbo 30-year fixed mortgage retreated to 4.01 percent. Adjustable rate mortgages were broadly lower also, with the 5-year ARM sinking to 3.20 percent and the 7-year ARM pulling back to a nearly 3-month low of 3.41 percent.       

As we start 2015, concerns about the global economy still have a tight grip on markets, bringing bond yields and mortgage rates lower. Financial markets have been jittery as investors mull the continued decline in oil prices, and what that says about the weakness of the global economy. Yields on the benchmark 10-year Treasury note dropped below the 2 percent threshold for the first time since October, bringing about fresh declines in mortgage rates. Mortgage rates remain the lowest since May 2013. Mortgage rates are closely related to yields on long-term government bonds.

One year ago, the average 30-year fixed mortgage rate was 4.64 percent. At that time, a $200,000 loan would have carried a monthly payment of $1,030.08. With the average rate now at 3.85 percent, the monthly payment for the same size loan would be $937.62, a savings of $92 per month for anyone refinancing now.  


30-year fixed: 3.85% -- down from 3.99% last week (avg. points: 0.31)

15-year fixed: 3.16% -- down from 3.27% last week (avg. points: 0.19)

5/1 ARM: 3.20% -- down from 3.32% last week (avg. points: 0.19)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to

The survey is complemented by Bankrate's weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. More than half of the panelists, 55 percent, expect mortgage rates to continue falling. Just over one-third of respondents, 36 percent, forecast an increase with only 9 percent predicting that mortgage rates will remain more or less unchanged in the coming week.**


HUD Outlines Changes to RAD Under 2015 Funding Plan

The U.S. Department of Housing and Urban Development (HUD) announced its plans to implement the 2015 HUD Appropriations Act as it relates to the Rental Assistance Demonstration (RAD).  HUD is in the process of updating PIH Notice 2012-32 (the “RAD Notice”) to incorporate the recent statutory changes and to provide policy and program clarifications.

In the interim, HUD is offering the following guidance:

1st Component

Subject to re-review of their eligibility status, applications on the RAD waiting list that previously received Contingent Approval Letters will be issued Commitments to enter into Housing Assistance Payments (CHAP) contract awards. The Department expects to begin issuing these CHAPs in February 2015.

For all other applications previously submitted, once their review is complete and they are determined to be eligible, a CHAP will be issued.

RAD rents will be set according to FY 2014 Funding Levels.

Because Congress extended the date for which RAD awards could be made to September 30, 2018, the Department will also extend the submission dates for portfolio and multi-phase applications, accordingly.

With the conversion limit increased to 185,000 units, the Department expects that there will be approximately 8,000 units that will be available to applications not yet submitted. The Department will continue to accept applications on a first-come, first-serve basis.

Once the Department reaches the cap of 185,000 units, it will maintain a waiting list.

Following CHAP issuance, the Department will be conducting regional RAD training sessions for all awardees. These sessions will be voluntary, but strongly encouraged.

Based on feedback received from program participants, the Department is examining a number of suggestions for streamlining transactions, which will be addressed through further guidance.

2nd Component

The Department will continue to process all active applications received under the 2nd component.

Owners may continue to submit conversion requests for Rent Supplement (Rent Supp), Rental Assistance Payment (RAP), and Moderate Rehabilitation (Mod Rehab) properties.

A revision to the RAD Notice will establish program requirements for conversion to Project Based Rental Assistance (PBRA). The Department expects to publish this revision by March 1, 2015.

Revised guidance on contract extension for Rent Supp and RAP contracts will be published on or before March 1, 2015. In the interim, the Office of Recapitalization will be reviewing rent supplement and RAP contract extension requests on a case-by-case basis.

Guidance on applicability of Davis-Bacon requirements for 2nd Component transactions has now been posted to the RAD website.

Moderate Rehabilitation (Mod Rehab) SRO

A revision to the RAD Notice will establish program requirements for conversion of Mod Rehab McKinney SRO properties to either PBRA or Project Based Vouchers (PBV) contracts under either component. The Department expects to publish this revision by March 1, 2015.*



Events (2015)

  • Gill Group plans to attend CARH’s Midyear Meeting January 27th – 29th in St. Pete Beach, FL.
    • Cash Gill will be speaking on a panel Wednesday, January 28th entitled Preservation Challenges and Opportunities

Events (2014)

  • Gill Group attended 40+ meetings and conferences throughout the United States in 2014.

GROWTH (2014 - Highlights):

  • Gill Group began the process of working with owners of affordable housing to develop a web-based program that will work hand-in-hand with our services. It will give the users of our appraisals, market studies, capital needs assessments and many other services easy access and real time usage.
  • Gill Group added 2 offices with appraisers, market analysts, engineers and architects.
    • Within the offices are 11 architects, one MAI appraiser, one general certified appraiser, four market analysts and 12 additional support staff. 

Events (2013)

  • Gill Group attended 22 conferences and meetings throughout the United States in 2013

GROWTH (2013 - Highlights):

  • Gill Group expanded our cutting-edge market analysis software and added our own in-house developed needs assessment software for CNAs, PNAs, PCNAs, PCAs, RPCAs, and every other acronym for this type of service.  
  • Gill Group added 4 offices with appraisers, market analysts, engineers and architects.
    • Within the offices are three architects, one MAI appraiser, two general certified appraisers, five market analysts and 10 additional support staff. 
  • Gill Group expanded the footprint of its subsidiary, National Title & Escrow, to cover the entire United States with a local presence.

Events (2012)

  • Gill Group attended 20 conferences and meetings throughout the United States in 2012

GROWTH (2012 - Highlights):

  • Gill Group developed cutting-edge market analysis software that will allow us to do preliminary analysis that is subject-specific in any market in the United States within minutes.  
  • Gill Group added 11 offices with appraisers, market analysts, engineers and architects.
    • The offices now employ an additional 34 people.
  • Gill Group expanded coverage of its subsidiary, National Title & Escrow, to cover the entire United States.
  • Gill Group expanded coverage of its subsidiary, Gill Insurance Group, to cover the entire United States.

  Gill Group has published the following:

  • New York Real Estate Journal - How can low-income housing facilities translate into high profits?
  • New York Real Estate Journal - Up, up and away: Home mortgage interest rates and gasoline prices continue ascending.
  • Tax Credit Advisor - Boston MSA Market Snapshot
  • Tax Credit Advisor - Seattle MSA Market Snapshot
  • Northeast Industrial Development Resource Guide - What Appraisers Know About Investing.
  • Affordable Housing Finance – Urban and Rural Market Studies.
  • Tax Credit Advisor – LIHTC Appraisals 101

Cash Gill, MAI has had the opportunity to speak on the following topics:

  • (Indianapolis, IN) National Council of Affordable Housing Market Analysts - Maximize Your Market: Understanding the Methodology Behind Market Studies.
  • (Reno, NV) Nevada Council of Affordable and Rural Housing - Don't Get Caught in the Red. New Guidelines for Audits and Inspections.
  • (Washington, DC) The Institute for Professional and Executive Development - Nonrecourse HUD Deals - So You Closed Your Nonrecourse HUD Deal. Now What? And Is It Really Nonrecourse?
  • (Arlington, VA) Council for Affordable and Rural Housing - Property Valuation: The Correct Way to Value Properties.
  • (New Orleans, LA) National Council of Affordable Housing Market Analysts - Affordable Housing Site Analysis
  • (Las Vegas, NV) Nevada Council of Affordable and Rural Housing - Auditing and Accounting Guidelines for Section 42 Low Income Housing Tax Credits.
  • (Washington, DC) Council for Affordable and Rural Housing - Rural Development Appraisals and Market Studies
  • (Miami, FL) Council for Affordable and Rural Housing - The Equity Market - Impact on Rural Housing
  • (Washington, DC) Council for Affordable and Rural Housing - How to Foster Affordable Green and Rural Housing Needs Assessments
  • (Indianapolis, IN) Affordable Housing Association of Indiana - Market Analysis – Best Ways Use Market Studies to Ensure Application Points
  • (Portland, ME) Enterprise Buyer/Seller Conference for RRH 515 Properties – Valuing the Product. What Is My Development Worth?
  • (Washington, DC) National Housing and Rehabilitation Association – Financing and Underwriting Special Needs Housing.
  • (Atlanta, GA) National Council of State Housing Agencies – Comprehensive Market Analysis.
  • (Chicago, IL) AHF Live – Strategies for Rural Deals.
  • (Dallas, TX) Crittenden Multifamily – Financing Special Use Properties.
  • (Washington, DC) Council for Affordable Rural Housing – Rural Housing Preservation
  • (Denver, CO) National Council of State Housing Agencies – Rural Housing Strategies
  • (Denver, CO) National Council of State Housing Agencies – Y15: Preservation and Disposition Seminar
  • (San Antonio, TX) Rural Rental Housing Association – LIHTC Legislative Update
  • (Key Largo, FL) Council for Affordable Rural Housing – How National Appraisal Practices Impact USDA Assisted Properties
  • (San Francisco, CA) National Council of State Housing Agencies – Changes and Challenges in Rural Housing Development
  • (Chicago, IL) AHF Live – Preservation of Older LIHTC Deals
  • (Franklin, TN) Regional Affordable Housing and RAD Training – Valuation, Feasibility and Capital Needs Assessments
  • (Columbus, OH) Council for Rural Housing & Development of Ohio – Rural Housing Market Research
  •  (South Bend, IN) Great Lakes Capital Fund’s University of Affordable Housing – Valuation Risks Using Financing for RAD Deals
  • (Chicago, IL) National Council of State Housing Agencies – Rural Development Opportunities
  • (Orlando, FL) National Association of Housing and Redevelopment Officials – Affordable Housing Appraisals, Market Studies, Rent Comparability Studies and Rent Reasonableness Studies
  • (Alexandria, LA) Regional Affordable Housing and RAD Training – Valuation, Feasibility and Capital Needs Assessments
  • (Ft. Lauderdale, FL) Southeastern Affordable Housing Management Association (SAHMA) – Rent Comparability Studies 101
  • (Indianapolis, IN) Midwest Buyer/Seller Conference – CNAs and Appraisals
  • (Chicago, IL) AHF Live – Acquisition Challenges and Opportunities
  • (St. Pete Beach, FL) CARH – Preservation Challenges and Opportunities





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