Freddie Mac Announces Record Financing Support for Affordable Rental Housing in 2015
Freddie Mac announced that it had a banner year for its multifamily business with $47.3 billion in loan purchase and bond guarantee volume in 2015, including a record high of $5 billion in financing for properties that house individuals with low incomes and $2.6 billion in loans for small apartment properties.
"These milestones represent our contributions in every corner of the market, including supporting affordability for households who need it most," said David Brickman, executive vice president of Freddie Mac Multifamily. "This year we will continue on our path to preserve more workforce and affordable housing, and grow our financing for small properties, manufactured housing communities and senior housing."
Of the total new business volume, approximately $17 billion included certain loans for affordable housing, smaller multifamily properties, seniors housing and manufactured housing communities not subject to the Federal Housing Finance Agency $30 billion loan purchase cap.
Brickman added, "We think the industry will grow this year due to continued investment sale activity and refinance opportunities of CMBS maturing loans. We also expect Freddie Mac's business to grow proportionately with the market."
Freddie Mac Multifamily 2015 Business Highlights:
Settled more than $5 billion in targeted affordable housing business, of which approximately $1.3 billion went toward multifamily bond credit enhancements, other guaranteed transactions, and Tax-Exempt Bond Securitizations (TEBS).
Purchased just over $2.5 billion in senior housing mortgages (including senior apartments).
Transacted roughly $1.8 billion in student housing loans.
Financed nearly $2.6 billion in small balance loans.
Purchased more than $1 billion in manufactured housing community loans.
Executed 47 Multifamily securities offerings for a total transactions volume of $37.7 billion which includes K-Deals and a small volume of other securities such as SB-, Q- and M-Deals.
Securitized $35.6 billion of multifamily loans into K-Deal securities bringing the total since 2009 to $128.4 billion, backing approximately $109.8 billion in guaranteed certificates and almost $18.6 billion in unguaranteed certificates.
Continued to provide a consistent source of liquidity to support affordable rental housing nationwide. Nearly 90 percent of the eligible apartment units Freddie Mac finances are affordable to households earning up to the area median income, and most of those loans are securitized.
Provided financing for more than 3,500 properties comprising just over 650,000 apartment units, of which the majority are affordable to families earning low or moderate incomes.
Reported a low delinquency rate of 2 basis points as of December 31, 2015, reflecting our continued strong portfolio performance.
Since the launch of Freddie Mac's multifamily business in 1993, it has provided more than $393 billion in financing for more than 66,000 multifamily properties.*
FHA Updates Multifamily Accelerated Processing Guide
On January 29, the U.S. Department of Housing and Urban Development released an updated Multifamily Accelerated Processing (MAP) Guide. The new MAP Guide delegates more underwriting responsibility to approved “MAP lenders” and includes all relevant guidance published by FHA since the MAP Guide was last updated in 2011. It will take effect on May 28, 2016, applying to all loans for which an initial application for Firm Commitment is submitted on or after the effective date.
Love Funding pointed out the following key changes on their website:
- The ability to provide more loan dollars for qualified properties due to less stringent coverage requirements and higher underwritten LTVs
- The ability to include more repairs in your mortgage under section 223(f) due to an increase in the maximum per unit cost of rehabilitation allowed
HUD prepared a matrix to summarize significant changes to the guide, as well as the documents that have been released since 2011 and incorporated into the guide.
Ted Toon, Director of FHA Multifamily Production for the U.S. Department of Housing & Urban Development, will present the new MAP Guide and other recent HUD developments at the NH&RA Annual Meeting on February 26.
The National Council of Housing Market Analysts, a subsidiary of NH&RA, successfully worked with HUD to better align Chapter 7 of the guide with NCHMA standards. A panel session will discuss the changes at the NCHMA Spring Meeting on April 19-20 in Baltimore, MD. **
CDFI Fund Opens 2016 Funding Round for Capital Magnet Fund
The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) opened the fiscal year (FY) 2016 funding round for the Capital Magnet Fund.
Through the Capital Magnet Fund, the CDFI Fund provides competitively awarded grants to CDFIs and qualified non-profit housing organizations. These awards can be used to finance affordable housing activities, as well as related economic development activities (including community service facilities), with the objective of revitalizing low-income communities and underserved rural areas. Funding for the Capital Magnet Fund comes from allocations made by the Government-Sponsored Enterprises Fannie Mae and Freddie Mac. The total amount of funds available for the FY 2016 round will be determined in early 2016. Currently, the CDFI Fund estimates that approximately $80 million will be available for the FY 2016 round.
Capital Magnet Fund awardees are able to utilize funds to create financing tools such as loan loss reserves, revolving loan funds, risk-sharing loans, and loan guarantees. Recipients are required to leverage private and public funds to finance affordable housing and economic development activities that yield a minimum ratio of 10:1.
In order to provide potential applicants with as much time as possible, the CDFI Fund is posting the Notice of Funds Availability (NOFA) and application materials for the Capital Magnet Fund on the CDFI Fund’s website today in advance of the publication of the NOFA in the Federal Register later this week.
The deadline for submission of the Capital Magnet Fund application materials due through Grants.gov is 11:59 p.m. Eastern Time (ET) on Wednesday, March 16, 2016.
The deadline for submission of the Capital Magnet Fund application materials due through the CDFI Fund’s Award Management Information System (AMIS) is 11:59 p.m. ET on Wednesday, March 30, 2016.
The CDFI Fund will stop taking questions about the application at 5:00 p.m. ET on Monday, March 28, 2016.
The CDFI Fund will stop providing technical assistance about submitting the application through AMIS at 5:00 p.m. ET on Wednesday, March 30, 2016.
Please see the NOFA for more information on submitting Capital Magnet Fund applications.
The FY 2016 Capital Magnet Fund NOFA, application, application instructions, and related guidance can be found on the CDFI Fund’s website at www.cdfifund.gov/cmf under How to Apply Step 2: Apply.
Application materials will be available online through Grants.gov and AMIS. All applicants must be registered in SAM.gov, Grants.gov, and AMIS to apply for funding. Organizations should confirm that their accounts are up-to-date as soon as possible in order to avoid potential application submission problems. New potential applicants are encouraged to begin the registration process now. Registration guidance for Grants.gov and SAM.gov can be found on the websites for those systems. Guidance on using AMIS (including registration) can be found at https://amis.cdfifund.gov.
The CDFI Fund will send out an additional notification when the electronic application is available in AMIS for application submission. The CDFI Fund strongly recommends that the instructions and application timelines are reviewed closely by both first-time and repeat applicants and that applicants give themselves adequate time to submit their applications using AMIS.
Learn About Applying to the Capital Magnet Fund
The CDFI Fund will be holding several live webinar sessions to learn more about the FY 2016 Capital Magnet Fund round.
Thursday, February 11, 2016 at 2:00 p.m. ET: General Application Webinar
Tuesday, February 16, 2016 at 1:00 p.m. ET: Webinar for Certified CDFIs
Thursday, February 18, 2016 at 2:00 p.m. ET: Webinar for Nonprofit Housing Organizations
Wednesday, February 24, 2016 at 1:00 p.m. ET: General Application Webinar
Tuesday, March 1, 2016 at 1:00 p.m. ET: AMIS Technical Webinar
Thursday, March 3, 2016 at 3:00 p.m. ET: AMIS Technical Webinar
Access information for all webinars is available on the CDFI Fund’s website here.
No prior registration is necessary. Requests for reasonable accommodations under section 504 of the Rehabilitation Act should be directed to Michael Jones at 202-653-0300 no later than 48 hours before the conference calls begin.
Presentation materials will be added to the CDFI Fund’s website after the webinars are held.
For more information on the Capital Magnet Fund, please contact the CDFI Fund’s Help Desk by e-mailing firstname.lastname@example.org or by calling (202) 653-0421. The CDFI Fund will stop responding to questions about the FY 2016 award round at 5:00 p.m. ET on Monday, March 28, 2016." **
Top Predictions for Nonprofit Senior Living
Nonprofit senior living providers experienced a 2015 marked by an aggressive push for affiliations, and the year ahead will likely follow suit.
Technology adoption, repositionings and staff recruitment and retention will play an increasingly important role in the sector, as well, according to predictions from Chicago-based specialty investment bank Ziegler.
In 2014, Ziegler tracked roughly 60 changes in ownership and sponsorship among nonprofits, and that increased to about 80 in 2015, Lisa McCracken, senior vice president of senior living research and development, tells Senior Housing News. In 2016 and the years ahead, those numbers will follow that upward trend.
“We anticipate for the next several years there will be a very high level of activity with consolidation,” McCracken says. “The number one driver today is not financial distress. It’s really just the increased complexity of running our business and the need for more resources.”
Such complexities stem primarily from health care reform continuing to unfold and bundled payment mandates entering the mix, but leadership turnover and technology demands also persist in the nonprofit sector, she says. These factors, among others, aren’t anticipated to disappear.
“The forces that are really the triggers for consolidation right now, we don’t see them going away any time soon,” McCracken says. “Quite frankly, there may be more triggers, more pressures out there to take a hard look at affiliations.”
Nonprofit providers will further grow their business models through expansion of existing communities in 2016 and beyond, more than through new construction, McCracken says. This prediction is exemplified by a move toward revamping independent living, for example, with one nonprofit provider in the midst of refurbishing more than 15,000 independent living units across 23 existing communities along the East Coast.
“When you look at the capital investment, what we at Ziegler have been financing, it’s really been that maintaining and upgrading and reinvesting in their physical campus,” she says. “The reality is, new location development has gone down for a number of reasons, but a big part of that is there have been so many other things the providers have been focused on that have really drawn their resources.”
And, according to Ziegler, 2016 will be the ideal year for providers to tap into capital with low borrowing costs, before gradual rate increases really take their toll.
“To be a tax-exempt borrower today—there are very few times in our history that it’s been any better,” McCracken says. “This is the time to be reinvesting and refinancing and getting cheap cost of capital.”
Other predictions from Ziegler regarding nonprofit senior living in 2016 include:
More home and community-based service options: About 35% of the largest 150 not-for-profit multi-site providers in the 2015 LeadingAge Ziegler 150 report indicated their engagement in a joint venture or formal partnership, and the majority of those relationships involve home and community-based services, McCracken says. Beyond partnerships or joint ventures, providers might acquire a home health or home care agency or purchase equity ownership in an agency.
“We see providers saying, ‘We want to continue to expand our continuum beyond our bricks and mortar,’” she says. “The pace of growth is much quicker when you partner or if you acquire an existing agency as opposed to creating a whole new brand. Plus, competition is pretty significant.”
An increasing role of technology: Technology has the potential to assist nonprofit senior living providers in terms of operations, care coordination and staff documentation, but it’s crucial that the implementation of technology is strategic, McCracken says.
“Organizations cannot get by and really keep up with just a help desk IT person. We all love that person that can help fix the printer, but that strategic CIO or CTO is really important,” she says.
Staffing and Succession Planning: As providers scramble to address caregiver shortages, not-for-profit senior living providers are increasingly prioritizing their company’s staffing needs.
“We see some of the larger system providers hiring corporate level staff to focus on recruitment and retention,” McCracken says. “It’s top of mind for many providers.”
C-suite retirements are also a prevalent factor in transactions occurring across the nonprofit space, McCracken says, as many smaller providers don’t necessarily have a successor in line.
“I would not say it’s the sole driver, but it’s definitely, when you look at different not-for-profit affiliations, it’s part of the equation for a handful of them,” McCracken says.* **
- Gill Group plans to attend the National Housing and Rehabilitation Association’s Annual Meeting February 24th – 27th in West Palm Beach, Florida.
- Gill Group attended the Council for Affordable Rural Housing’s Midyear Meeting January 25th – 27th in San Antonio, Texas.
- In 2015, Gill Group attended over 50 meetings and conferences from California to New York, and just about everyone in between.
GROWTH (2015 - Highlights):
- Gill Group added two offices in Michigan and one in Wisconsin, further expanding our staff of architects and engineers.
- Gill Group and Greystone formed a Joint Venture to provide a full line of consulting and development services for Rental Assistance Demonstration (RAD) transactions. Gill Group and Greystone are utilizing each of our areas of expertise in a collaborative effort, with a mission to partner with PHAs across the nation in preserving and expanding the affordable housing inventory under the HUD RAD program. Our team fully understands the intricacies of the real estate and affordable housing industries, and our services are provided by professionals who are fully immersed in LIHTC executions, construction management, project accounting, regulatory compliance, real estate transactions, and opportunity development. We sit on national and state boards and have in-depth knowledge of industry trends and best practices. As a developer team, we operate as three individual entities, each with a unique set of previous transaction experiences that add value to the project at hand. As a collaborative unit, we draw upon those experiences to bring to the table creativity, fresh ideas and unsurpassable development advisory services.
- Gill Group’s subsidiary, National Title & Escrow, added two new offices in Missouri and Arkansas, further expanding our ability to service our nationwide base of customers.
- 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.
- 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.
- 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 (2014)
- (St. Pete Beach, FL) CARH – Preservation Challenges and Opportunities
- (Nashville, TN) TAHRA – Appraisals, Market Studies, Rent Comparability Studies and Rent Reasonableness Studies for LIHTC and RAD Transactions
- (Los Angeles, CA) NCSHA – Successful Development in Challenging Markets
- (Chicago, IL) AHF Live – Acquisition Challenges and Opportunities (2015)
*as seen on multifamilybiz.com
**as seen on housingonline.com
***as seen on seniorhousingnews.com
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