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Home My WebLink AboutCHFA, Housing Tax CreditsUUUUJ I IJ.II CI IVCIUpt: IU. UIHYI.Ii�C'LUlil..'4Y 1.7-/1:.7LJ'I..JOl�UF1O Jl..�Lf Cllfam Lincoln Avenue Communities Rusty Snow 401 Wilshire Blvd, Suite 1100 Santa Monica, CA 90401 Re: Aster Place Dear Rusty: denver western slope 1981 Blake Street PO Box 60 348 Main Street Denver, CO 80202 Denver, CO 80201 Grand Junction, CO 81501 303.297.chfa (2432) 800.659.2656 tdd 970.241.2341 800.877.chfa (2432) www.chfainfo.com 800.877.8450 PRELIMINARY RESERVATION OF 2025 HOUSING TAX CREDITS July 23, 2024 Colorado Housing and Finance Authority (the "Authority") hereby advises you of its preliminary reservation ("Prefiminalry Reservation") of Federal Housing Tax Credits ("Federal Credits") in the amount of $1,450,000 for the above captioned project. The Federal Credits will be allocated when the building(s) in the Project are placed in service, section 3.D.3 of the Allocation Plan ("Final Allocation") or meet the requirements for a carryover allocation, section 3.D.2 of the Allocation Plan ("Carryover Allocation"). In either case, the amount of the credits will be determined based on the Project owner's certifications, in form and substance satisfactory to the Authority, as to the "qualified basis" of each building in the project, the equity gap, the basis limits determination, and the appropriate "applicable percentage." Such tax credit amount may not exceed that which the Authority determines necessary for the financial feasibility of the project, as determined by the equity gap calculation. This Preliminary Reservation is subject to, and no credits will be allocated unless, the Project and owner comply with the following conditions: 1. The owner must submit an application for Carryover Allocation by 5:00pm, the first day of the 13th month following the conditional award date. 2. This Preliminary Reservation of Federal Credits shall be subject to revocation, in accordance with the Authority's applicable rules and regulations and Allocation Plan, if there is evidence satisfactory to the Executive Director, that sufficient progress toward the construction or acquisition and rehabilitation of the subject building or Project is not supplied to the Authority by the dates) established by the Authority. All proposed projects which receive Preliminary Reservations of credits will be required to provide status reports in a format prescribed by the Authority outlining UUI:UblyII CI IVCIUpt! ILJ. U[tA1+%-1,0G-Ltll'lJ-ff,+I �-F1ULU-l..:JOL�LJ/1O.7L��! I..ULUR/i LJU FlUU31 IN HIVLJ r'IIVHIVL.L MUIr1URI I Y PRELIMINARY RESERVATION Aster Place Page 2 progress toward completion. Information requested will be Project specific, and may include, but is not limited to, zoning approvals, firm debt and/or equity financing commitments and, later, construction progress. Failure to submit a status report by the specified date also may result in revocation of the Preliminary Reservation. 3. Allocations of credits are subject to payment of the following fees: a. An allocation fee in the amount of three percent (3%) of the maximum federal tax credit amount for which the development is eligible, to be paid at either the time of Carryover or Final Allocation, whichever occurs first. b. If required by the Authority in connection with a status update, an earlier payment of a portion of the allocation fee to hold a reservation. At Final Allocation, a fee to offset the costs incurred by the Authority for compliance monitoring as provided in the Allocation Plan. 4. At the time of Final Allocation of Federal Credits, the Authority will require execution of a land use restriction agreement ("LURA") by the Project owner, providing for the "extended low-income housing commitment" required by Section 42(h)(6) of the Internal Revenue Code of 1986 (the "Code"), incorporating commitments made to the Authority in order to obtain points under the project selection criteria outlined in Section 5 of the Authority's Allocation Plan. The agreement will be recorded as a restrictive covenant with respect to the Project. In the event that a senior lien holder desires the LURA to be subordinate to its senior lien, the Authority is willing to execute a partial subordination which will subordinate the LURA to the senior lien of a lender, except for the requirements in Section 42(h)(6)(E)(ii) of the Code. This provision requires that for the three-year period following termination of the LURA after a foreclosure, neither the eviction of a tenant without good cause, nor the increase of gross rent is permitted. The Authority reserves the right at any time to revoke this Preliminary Reservation if it determines, in its sole judgment, that the carryover requirements will not be met by the required application submission date. The Authority also reserves the right at any time to revoke this Preliminary Reservation if it determines, in its sole judgment that (i) the building(s) will not be placed in service within 24 months from the Carryover Allocation date or (ii) the building(s) do not in fact constitute "qualified low-income building(s)" eligible for the credit under Section 42 of the Code. Please refer to Section 3.D.1 of the CHAP with regard to Preliminary Reservations. Section 42(g)(2)(A) of the Code provides that a low-income unit in the project is "rent -restricted" if the gross rent for such unit does not exceed thirty percent (30%) of the imputed income limitation applicable to the unit. Under Revenue Procedure 94-57, the effective date of the income limitation used to establish the gross rent floor for purposes of Section 42(g)(2)(A) is the date the Authority initially allocates a housing credit dollar amount to the Project (that is, the date of a Carryover Allocation or, if no Carryover Allocation is made, the date of Final Allocation) unless the owner designates a building's placed -in-service date as the effective date for the gross rent floor. Such designation must be made by advising the Authority in writing no later than the placed -in-service date. The Authority's application for Carryover Allocation will provide a space for such designation. The uuuublylI CI IVCIUpu IU. U 1/1Y l.l..D C-LUli I..-YY I - ,k_L;LUrNMUL) r1ULP31INU NIVU rIIVHIVI.0 HU I rium I Y PRELIMINARY RESERVATION Aster Place Page 3 gross rent floor for projects not seeking a Carryover Allocation will be the date of Final Allocation, which, ordinarily, closely follows the placed -in-service date. This Preliminary Reservation is made based upon, and is conditioned on, the accuracy, truthfulness and completeness of the information that you have submitted to the Authority. Such information is subject to confirmation at, or prior to, the actual allocation of the credit. This Preliminary Reservation also is subject to, and may be modified or revoked on account of, any failure to comply, or inconsistency with, applicable proposed, temporary, or final regulations promulgated by the U.S. Department of Treasury with respect to Section 42 of the Code. This Preliminary Reservation does not constitute a determination or representation by the Authority of the feasibility or viability of the project. The Authority makes no representation concerning any tax consequences resulting from this Preliminary Reservation and accepts no responsibility for any adverse consequences to the Project owner or its investors arising out of this Preliminary Reservation or other information concerning the Federal Credits. This Preliminary Reservation evidences the Authority's intent to allocate 2025 Federal Credits to the Project. This Preliminary Reservation expires on the first day of the 13' month following the conditional award date and is not assignable to another applicant or housing project. This Preliminary Reservation may be transferred to the entity which will own the Project for tax -credit purposes, provided that the transferring reservation holder is a controlling principal of such entity. Preliminary Reservations will count against the maximum credit award of $1,450,000, (refer to 3.D.1 of the QAP), as long as they are in compliance with the QAP, and until the Carryover Allocation Agreement has been executed and issued. If you have any questions, please contact Megan Herrera at mherrera@chfainfo.com or 303.297.7316. Sincerely, ED"Oigned byr:� ��/ EDFF662D77D24B7... Cris A. White Executive Director and CEO