Low Income Housing Tax Credit Refinance Program Announced
June 4, 2011
“FHA AND FANNIE MAE ANNOUNCE GREEN REFINANCE PLUS TO PAY FOR ENERGY-EFFICIENT UPGRADES IN AFFORDABLE APARTMENT BUILDINGS”
Yesterday HUD Secretary Shaun Donovan introduced a program called “Green Refinance Plus” targeting the refinancing of Low Income Housing Tax Credit Projects. This program’s focus is on energy conservation renovation, a major operational expense, for building owners and/or their tenants-occupants and offers a refinance option, that in this era of tight mortgage money, is a big, big issue.
One Common Sense inclusion was a statement that “Property owners will be able to select the energy- efficiency upgrades that make the most economic sense for their properties.” Government sponsored programs have been know to arm twist property owners into making decisions that aren’t economically feasible, in exchange for financing, while limiting rents that can be paid, creating a cash flow nightmare for property owners. One of the reasons projects opt out of the LIHTC program after the mandatory period.
It mentions a “Green Physical Needs Assessment” to be completed by a qualified provider. Here comes the sticky wicket, “Who qualifies to be a Provider?” In this world of Green Experts, many may state they are qualified, but are they? What will be the determining factor of qualifying providers? There are many starry eyed, Green Experts out there who have no knowledge of cost or practicality in application, and even less knowledge of building. Without some common sense the goals of the program may never be obtained, to the detriment of affordable housing, families and Redevelopment Agencies.
One can only hope that the goal of having this assessment identify property improvements that “reduce energy and operating costs” while giving the borrowers choices for the greatest energy savings for their investment actually is what is implemented and results.
Don’t get me wrong. I believe this is a fantastic move on behalf of the government. I work with LIHTC projects daily. I believe in them. I believe affordable housing options in the this country are sorely overlooked, while being absolutely necessary. Everyone can’t afford a White Picket Fence, 2 kids, a lawn and a house.
There is one thing that this initial program announcement does not mention. One mandatory item missing in most program announcements or grant awards, the education of the occupant and owner. You can put in the greatest, most energy efficient, sustainable building items, but they are only as good as the people who use them daily. I see some of the most practical applications implemented in Affordable Housing and yet occupants continue to move a thermostat up and down; continue to run AC with doors open; try to keep a house at temperatures exceeding 80 degrees in the winter and the main reason is–”They just don’t know any better.” We can continue to give grants, subsidies, free money and make great improvements, but the greatest improvement may be in the education of people living and working in energy efficient, healthy, Green houses and buildings.
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