Low Income Housing Tax Credits & Preservation in Maine, 2019

Maine Housing has established a number of housing needs and priorities in the State for the Qualified Allocation Plan of 2019, highlighting the preservation of existing affordable rental housing that is at risk of being lost due to deterioration or market conditions.

Set Aside:

Preservation Set-Aside. MaineHousing will set aside up to $300,000 of the annual State Ceiling for the preservation and rehabilitation of one existing multifamily rental housing project if the scope of rehabilitation meets the minimum requirements set forth in Section 5.D.2. and one of the following:

1. at least 25% of its units, or those in a Related Development, are assisted under a Rural Development program; or

2. at least 25% of its units will be converted to Section 8 under HUD’s Rental Assistance Demonstration (RAD) Program.

 

Demolition and reconstruction of housing site will be treated as new construction and is not eligible for this set-aside.

 

The preservation set-aside is limited to one Project. If the set-aside is not sufficient to complete the Project proposed in the highest-scoring eligible Application, MaineHousing may allocate additional Credit, allocate the Credit under the set-aside to the next highestscoring eligible Application that does not need more than the set aside, or not allocate any Credit under the preservation set-aside. All Applications that participate in the preservation set-aside and do not win will be placed on a waiting list.

 

Basis Boost

The calculation of the amount of Credit will be based on 130% of Eligible Basis. MaineHousing has designated the entire State as a DDA under Section 42(d)(5)(B)(v) of the Code because of the high cost of developing housing, the low median income, and the high annual operating costs for housing relative to other states.

 

Point Incentives

MaineHousing awards point incentives for project building characteristics.

 

A. Rehabilitation or Reuse of Existing Housing, Structure or Site - 3 Points

The Project or the site on which the Project will be developed has one or more of the following characteristics.

1. Rehabilitation of existing multi-family rental housing containing 5 or more units without displacing any existing tenants and without increasing any tenant’s housing costs (including rent and all other charges paid by the tenant) by more than 10%.

2. Rehabilitation, remediation or reuse of an existing substantial building or structure other than multi-family rental housing.

3. one or more buildings or structures used for purposes other than single family residential housing or agricultural purposes, have been or will be demolished or removed for purposes of redeveloping the site

4. Site that was left vacant or nearly vacant in the development of downtown or other city or town center, such as a vacant lot or a parking lot between or surrounded by abutting commercial buildings, and/or multi-family rental housing.

5. specifically designated by a municipality for redevelopment to renew a blighted area or remediate environmental risks to the occupants.


B. Historic Rehabilitation - 3 points

 The Project includes the rehabilitation of a certified historic structure and capital contributions generated from the federal historic rehabilitation tax credits

 

Thresholds

Acquisition and Rehabilitation Projects

Acquisition and Rehabilitation Projects. Projects that involve the acquisition and rehabilitation of Affordable Housing must include the addition of at least 20 new units, or meet the requirements of the Preservation Set-Aside in Section 3.B.

 

Acquisition and Rehabilitation of Existing Housing

Projects that involve the acquisition and rehabilitation of existing multi-family housing are subject to the following limitations and requirements:

 

1. Capital Needs Assessment - The Application must include a capital needs assessment acceptable to MaineHousing. The capital needs assessment must be performed by a qualified independent third party, such as a licensed architect or engineer, must satisfy the requirements set forth in Appendix C, and must be completed within one (1) year before the deadline for submitting Applications.

 

2. Minimum Rehabilitation Requirements - Minimum Rehabilitation Requirements. The Rehabilitation Costs per unit of existing housing must be at least $50,000.

 

3. Relocation/Displacement. The Project must comply with MaineHousing’s Temporary Relocation and Permanent Displacement Policies and, if the Project is federally-assisted, all applicable federal requirements, including the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended. The Applicant must take reasonable steps to minimize the displacement of existing tenants of the Project. The Application must identify any tenants who will be permanently displaced and the reason for the displacement. The Project’s TDC must include all costs associated with permanent and temporary displacement or relocation. MaineHousing will not allocate Credit until it has approved a project’s relocation plan.

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Extended Use/Y15/Qualified Contract

Affordability. An Applicant must agree that the Project will comply with Section 42 of the Code and this QAP for a minimum period of 45 years to maintain the Project as residential rental housing, keep at least 40% of the total Credit Units in a Project occupied by persons with 50% area median income, and keep the Credit Units in the Project rent-restricted in accordance with Section 42 of the Code.

Contributed By: 
National Housing Trust

Other Items of Interest