Low-Income Housing Tax Credits
The Federal Tax Reform Act of 1986 created Low-Income Housing Tax Credits for qualified residential properties to encourage the production of affordable low-income rental housing.
Credits provide a reduction in federal tax liability to owners and investors of qualified low-income housing developments. The owner/investors may use Credits annually for ten years, but qualified low-income housing projects must comply with federally-imposed rent and tenant income restrictions for 15 years with an extended use period of an additional 15 years. At a minimum, 40% of the units must be affordable and rented to households at or below 60% of the area median income (AMI) or 20% of units must be affordable and rented to households at or below 50% of AMI for the duration of the restricted period. The Owner can also elect for Income Averaging under Section 42(g)(1)(c). Federal law gives preference to selected properties which serve the lowest income qualified tenants for the longest period, and projects which are located in qualified census tracts for community revitalization.
The Housing and Redevelopment Authority (“HRA”) of the City of Saint Paul is accepting applications for the 2021 Federal Low-Income Housing Tax Credits for eligible rent housing developments located within the boundaries of the City of Saint Paul. The program offers a reduction in the tax liability to owners and investors in eligible low-income new construction, rehabilitation and/or acquisition of existing rental buildings. The HRA is anticipating an allocation up to $914,334 of Low-Income Housing Tax Credits (9% Credits) for 2021.
NOTE: Regarding ongoing Compliance requirements, the Housing Tax Credit Program Compliance Manual as well as other relevant tax credit compliance information is currently available at Affordable Housing Connections.
DEADLINE: All applications, including those mailed, must be received no later than 4:00 p.m. Friday, July 31, 2020.
NO LATE PROPOSALS WILL BE ACCEPTED. THE SAINT PAUL HOUSING AND REDEVELOPMENT AUTHORITY RESERVES THE RIGHT TO REJECT ANY OR ALL PROPOSALS.
APPLICATION MATERIALS: To make an application, it is essential that applicants read the Low-Income Housing Tax Credit Procedural Manual, Qualified Plan, and the requirements for all Exhibits before submitting an application. The Procedural Manual, Qualified Plan, and Exhibits may be picked up at the address listed below or printed directly from files as noted. Interested developers should review the 2021 LIHTC Manual, Qualified Allocation Plan, and all additional materials as follows:
- Minnesota Housing Multifamily Common Application (“Multifamily Workbook”)
- 2021 Low-Income Housing Tax Credit Manual (PDF)
- 2021 Qualified Allocation Plan (Exhibit A) (PDF)
- Qualified Census Tracts (Exhibit C) (PDF)
- Self-Scoring Worksheet (Exhibit E) (DOC)
- Determination of Tax Credit (HTC-8) (Exhibit I) (DOC)
- Rent and Income Limits (Exhibit 0) (PDF)
- Agreement to Utilize Public Housing Waiting List (HTC-11) (Exhibit J) (DOC)
- Opinion of Counsel – Application (Exhibit B) (DOC)
- Zoning Letter – Sample (Exhibit K) (DOC)
- Previous Participation – (Exhibit L) (DOC)
- Project Team Resumes (Exhibit M) (DOC)
- Affirmative Fair Housing Marketing Plan (AFHMP) – Multifamily Housing (HUD-935.2A) (Exhibit Z) (PDF)
- Equal Employment Opportunity Policy Statement - (Exhibit AA)(DOC)
- Minnesota Housing Income Averaging Guide
- MN Housing’s Income Averaging Rent and Income Grid (Exhibit AC)
- Minnesota Housing’s Income Averaging Certification Form (Exhibit AD)
- Declaration of Land Use Restrictive Covenants - Housing Finance Board (Exhibit R)
- Tenant Selection Plan - (Exhibit AE)(DOC)
- Saint Paul Sustainable Building Policy
- All new construction projects receiving more than $200,000 in public investment must comply with Saint Paul Sustainable Building Policy.
- PED/HRA Sustainability Initiative
- Projects that receive $200,000 or less must comply with the PED/HRA Sustainability Initiative
- Land Use Plan of the Saint Paul Comprehensive Plan
REFERENCE DOCUMENTS ARE ALSO PROVIDED FOR CARRYOVER AGREEMENT, PLACED IN SERVICE, AND ADDITIONAL LIHTC EXHIBITS
- Opinion of Counsel Regarding Carryover Application (Exhibit D) (DOC)
- Final Cost Certification (HTC-9) (Exhibit T) (DOC)
- Final Cost Certification Statement (HTC-9) (Exhibit T) (XLS)
- Notice to Transfer Interest or Change Owner’s Name Form (HTC-27)
- Building Map (HTC-28) (Exhibit S) (DOC)
- Application for Issuance of IRS 8609 Owner Certification (HTC-3) (Exhibit U) (DOC)
- 8609 Application (HTC-3A) (Exhibit U) (DOC)
- Statement of Election of Gross Rent Floor Bond-Financed (HTC-34) (Exhibit W) (DOC)
- Statement of Election of Gross Rent Floor Competitive Cap (HTC-26) (Exhibit W) (DOC)
- Election of Applicable Percentages
- Opinion of Counsel – Placed in Service (Exhibit Y) (DOC)
- 2020 Additional LIHTC Exhibits (DOC)
Initial Application Fee: An application fee made payable to Saint Paul Housing and Redevelopment Authority must also be submitted with the application. Applications submitted by for-profit developers shall be subject to an application fee of $700 or $30 times the number of units of the proposed developments with a maximum of $2000 whichever amount is greater. The fee for applications submitted by non-profit developers shall be equal to $700. The application fees are non-refundable.
Allocation Upon Receipt of Award: At such time, a project is awarded an allocation of tax credits, the application will be required to submit payment of a nonrefundable Allocation Fee made payable to the Saint Paul Housing and Redevelopment Authority in an amount equal to 1.5% of the tax credit allocation award. Allocation fee will also be required for a Carryover Agreement, if needed, and the issuance of the IRS Form 8609.
The applicant shall also pay at the time a Special Counsel Fee in the amount of $3,500 for the review of application materials. Applicant shall also pay a Special Tax Counsel not to exceed $3,500 at the time of each review for (1) Carryover allocation and/or (2) final allocation. A closing fee in the amount of $2,500 will also be charged at the time of closing.
Other fees: The MHFA now requires that a Suballocator who fails to meet deadlines established by MHFA for the submission of required documents relating to allocation or commitments, carryover, issuance, and allocation reporting shall pay the fees established in the MHFA Qualified Allocation Plan. Consequently, Saint Paul HRA, as a Suballocator, will also require that developers be responsible for meeting the deadlines related to its project and for payment of any related late fees.
APPLICATION SUBMISSION REQUIREMENTS
Please submit one original and two (2) copies, of the application, including an electronic (flash drive) copy of application to:
Jules Atangana Saint Paul Planning and Economic Development Department 1100 City Hall Annex 25 West Fourth Street Saint Paul, MN 55102
Qualified 501(c)(3) and 501(c)(4) non-profit organizations are eligible to apply for low-income housing tax credits with HRA and/or with the Minnesota Housing Finance Agency (MHFA) through the Metro Twin Cities Area non-profit set-aside pool. To make application for tax credits with MHFA, please call (651) 297-3294.
Upon request, all proposed applications and guideline materials can also be picked up at the Saint Paul Planning and Economic Development Department, 1100 City Hall Annex, 25 West Fourth Street, Saint Paul, MN 55102.
Please note that, though it is not anticipated, these materials are subject to change without notice.
For more information, please call or email Jules Atangana at 651-266-6562 or firstname.lastname@example.org