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NEBRASKA INVESTMENT FINANCE AUTHORITY LOW INCOME HOUSING TAX CREDIT PROGRAM
2009 LIHTC ALLOCATION PLAN
01-600031.3

LOW INCOME HOUSING TAX CREDIT PROGRAM
2009 LIHTC Allocation Plan
Table of Contents
Page
1. INTRODUCTION ............................................................................................................. 1 1.1 AVAILABLE LOW INCOME HOUSING TAX CREDITS................................ 1 1.2 DEVELOPMENT OF LIHTC ALLOCATION PLAN......................................... 1
2. APPLICATION FOR LIHTC............................................................................................ 2 2.1 LIHTC ALLOCATION ROUNDS/APPLICATION PROCESS.......................... 2 2.2 SCORING OF LIHTC APPLICATION................................................................ 3 2.3 SET-ASIDE PRIORITIES..................................................................................... 3 2.4 MAXIMUM ALLOCATION OF LIHTC ............................................................. 4 2.5 DEVELOPER FEE/ACQUISITION OF EXISTING BUILDING ....................... 6
3. LIHTC FEE SCHEDULE.................................................................................................. 6 3.1 LIHTC APPLICATION FEE ................................................................................ 6 3.2 RESERVATION/COMMITMENT FEE............................................................... 6 3.3 LATE FEE/CARRYOVER ALLOCATION......................................................... 6 3.4 ALLOCATION FEE.............................................................................................. 6 3.5 ANNUAL FEE....................................................................................................... 6 3.6 LATE PAYMENT PENALTY.............................................................................. 6 3.7 TRANSFER/ASSUMPTION FEE ........................................................................ 7 3.8 LEGAL FEES ........................................................................................................ 7
4. LIHTC REVIEW AND ALLOCATION PROCESS ........................................................ 7 4.1 FULL LIHTC APPLICATION–THRESHOLD REVIEW ................................... 8 4.2 EVALUATION OF FULL LIHTC APPLICATIONS– ........................................ 8 4.3 EVALUATION OF FINAL FULL LIHTC APPLICATIONS ............................. 8 4.4 CONDITIONAL RESERVATION ....................................................................... 8 4.5 FIRM COMMITMENT ....................................................................................... 10 4.6 REVOCATION.................................................................................................... 10 4.7 MODIFICATION OR DENIAL OF LIHTC ALLOCATION ............................ 11 4.8 CARRYOVER ALLOCATION .......................................................................... 11 4.9 FINAL LIHTC ALLOCATION .......................................................................... 12
5. CRANE PROGRAM APPLICATION AND ALLOCATION PROCESS ..................... 12 5.1 MAXIMUM ALLOCATION OF LIHTC UNDER THE CRANE PROGRAM.......................................................................................................... 14
6. CRANE PROGRAM FEE SCHEDULE ......................................................................... 15
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6.1 LIHTC CRANE APPLICATION FEE................................................................ 15 6.2 LIHTC APPLICATION FEE .............................................................................. 15 6.3 RESERVATION/CARRYOVER FEE................................................................ 15 6.4 LATE FEE/CARRYOVER ALLOCATION....................................................... 15 6.5 ALLOCATION/COST CERTIFICATION FEE ................................................. 16 6.6 LATE FEE – COST CERTIFICATION.............................................................. 16 6.7 ANNUAL FEE..................................................................................................... 16 6.8 LATE FEE – ANNUAL……… ................................. ………………………….16 6.9 TRANSFER/ASSUMPTION FEE ...................................................................... 16 6.10 LEGAL FEES ...................................................................................................... 17
7. CRANE PROGRAM REVIEW AND ALLOCATION PROCESS................................ 17 7.1 CRANE APPLICATION PHASE ....................................................................... 17 7.2 CONDITIONAL RESERVATION PHASE........................................................ 17 7.3 LIHTC APPLICATIONS SUBMITTED BY CRANE PROGRAM APPLICANTS ..................................................................................................... 17 7.4 EVALUATION OF LIHTC APPLICATIONS UNDER THE CRANE PROGRAM.......................................................................................................... 18 7.5 CONDITIONAL RESERVATION ..................................................................... 18 7.6 FIRM COMMITMENT ....................................................................................... 20 7.7 REVOCATION.................................................................................................... 20 7.8 MODIFICATION OR DENIAL OF LIHTC ALLOCATION ............................ 20 7.9 CARRYOVER ALLOCATION .......................................................................... 21 7.10 FINAL LIHTC ALLOCATION .......................................................................... 22
8. LIHTC GUIDELINES ..................................................................................................... 22
9. COMPLIANCE MONITORING..................................................................................... 24 9.1 TENANT INCOME CERTIFICATIONS ........................................................... 24 9.2 ANNUAL OWNER CERTIFICATIONS............................................................ 24 9.3 RECORD KEEPING AND RETENTION .......................................................... 25 9.4 REVIEW PROCESS............................................................................................ 26 9.5 ON-SITE INSPECTION AND TENANT FILE REVIEW ................................. 26 9.6 NOTIFICATION TO OWNER ........................................................................... 26 9.7 NOTICE TO INTERNAL REVENUE SERVICE .............................................. 27 9.8 LIABILITY.......................................................................................................... 27
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NEBRASKA INVESTMENT FINANCE AUTHORITY 2009 LIHTC ALLOCATION PLAN
1. INTRODUCTION
1.1 AVAILABLE LOW INCOME HOUSING TAX CREDITS.
In 2009, the Nebraska Investment Finance Authority (“NIFA”) will have approximately $3,500,000 of Low Income Housing Tax Credits (“LIHTC”) based on the Bureau of Census Current Population Report for Nebraska multiplied by [$2.00] (as may be adjusted). The amount of LIHTC’s available may be increased by LIHTC returned to NIFA from prior years or LIHTC allocated to Nebraska from the 2009 national LIHTC pool.
1.2 DEVELOPMENT OF LIHTC ALLOCATION PLAN.
The 2009 LIHTC Allocation Plan is the result of public dialogue between NIFA and a number of individuals from many parts of Nebraska, with diverse backgrounds and interests in the LIHTC Program attending focus group meetings held throughout Nebraska. A public hearing on the proposed 2009 LIHTC Package (the “LIHTC Package”) which includes the, Allocation Plan, LIHTC Application, Carryover Allocation Procedures Manual, Cost Certification Procedures Manual, LIHTC Forms and Documents and Land Use Restriction Agreement was held in Lincoln, Nebraska (the “LIHTC Program”) with video conference sites in Omaha, Norfolk, Kearney, Chadron, North Platte, and Scottsbluff. All comments received by NIFA were taken into consideration in developing and drafting the LIHTC Package.
The LIHTC Package was approved by the Nebraska Investment Finance Authority Board of Directors and was forwarded to the Governor of the State of Nebraska for approval. The LIHTC Package encourages the selection of developments that serve to address the most pressing housing needs of Nebraska, within the guidelines and requirements under Section 42 of the Internal Revenue Code of 1986, as amended (the “Code”). NIFA, at its sole discretion, reserves the right to modify or waive any conditions, which are otherwise not mandated by the Code, contained in the LIHTC Package. Modifications by NIFA may include, but are not limited to, changes which provide for better coordination with other state and federal programs and/or funding sources.
The LIHTC Package may be amended from time to time as new guidelines and regulations are issued under Section 42 of the Code or as NIFA deems necessary to meet the LIHTC Program goals and objectives.
Persons wishing to apply for LIHTC must complete a 2009 LIHTC Application (the “LIHTC Application”). (See “CRANE Application and Allocation Process” below for LIHTC available pursuant to the CRANE Program.) The LIHTC Application can be obtained by contacting NIFA, or by downloading it from NIFA’s Internet Web site (www.NIFA.org).
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2. APPLICATION FOR LIHTC
2.1 LIHTC ALLOCATION ROUNDS/APPLICATION PROCESS.
Allocation Rounds. There will be at least two Allocation Rounds. For a development to be eligible for review during an Allocation Round, a complete originally executed and three copies of the LIHTC Application and all required supporting information must be received by NIFA by the deadline for that Allocation Round. Developments that do not submit an original and three copies of the LIHTC Application, with correctly tabbed Exhibits, will not be reviewed or scored by NIFA. The LIHTC Application is available for downloading from NIFA’s web site at www.NIFA.org.
NIFA will hold the following Allocation Rounds:

2009

Application Deadline
(no later than 5:00 p.m. CST)

Round 1
Full Application– Threshold Review:

October 10, 2008

LIHTC Reservations
Issued

Approximate LIHTC to be
Reserved

Approximate HOME funds available through joint application process with
Nebraska Department of
Economic Development

Round 1 Final Full Application:
Round 2 Full Application– Threshold Review:
Round 2 Final Full Application:
Additional Round*

December 5, 2008 February 20, 2009
April 3, 2009

January 23, 2009 (tentative)

$1,500,000

$1,892,995 for Round 1
$500,000 for CRANE

May 15, 2009 (tentative)

Balance of LIHTC

Balance of HOME funds

*NIFA reserves the right to hold additional Allocation Rounds or make changes to the above Allocation Rounds if necessary to meet LIHTC Program goals and objectives.

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LIHTC Applications that do not receive a Conditional Reservation in one Allocation Round may be carried over for consideration in a subsequent Allocation Round in the same allocation year provided that:
(a) Applicant notifies NIFA, in writing, that it still would like the development to be considered in the next Allocation Round;
(b) The development previously met the threshold criteria established by NIFA;
(c) Evidence is provided to NIFA showing that site control, financing commitments and any other required time-sensitive documents for the development remain valid; and
(d) There have been no substantial or material changes to the LIHTC Application.
2.2 SCORING OF LIHTC APPLICATION.
The following criteria will be reviewed for purposes of scoring each LIHTC Application:
• Threshold Criteria • Other Selection Criteria • NIFA Scored Criteria
NOTE: LIHTC Applications will be scored SOLELY on information provided in the LIHTC Application.
NOTE: Developments receiving financing from the United States Department of Agriculture Rural Development program must have a subsidy layering review and complete underwriting analysis before such developments will be considered eligible for LIHTC.
2.3 SET-ASIDE PRIORITIES.
All Nebraska LIHTC allocations will be based on special set-asides, federal law and the NIFA scoring system, which incorporates various Nebraska housing priorities. Notwithstanding the above, developments receiving an allocation of tax-exempt bonds will not be included for purposes of determining the set-asides, or required to compete with developments not receiving tax-exempt bond financing. Tax-exempt bond financed developments will be required to meet the requirements of this Allocation Plan in order to receive an allocation of LIHTC.
(a) NON-PROFIT SET-ASIDE.
NIFA will reserve at least ten percent (10%) of its annual LIHTC authority to qualified non-profit sponsors, as required by Code Section 42(h)(5). To qualify for this set-aside, the development sponsor must: (i) be a qualified nonprofit tax-exempt organization within Section 501(c)(3) or 501(c)(4) of the Code, (ii) have as one of its exempt purposes the fostering of low-income housing, (iii) own an interest in the development (directly or through a wholly owned subsidiary) and (iv) materially participate on a regular, continuous and substantial basis in the operation of the development throughout the
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development’s 15-year compliance period. The non-profit entity must not have been formed for the principal purpose of competition in the non-profit set-aside.

(b) METRO/NON-METRO SET-ASIDE.

Metro/Non-Metro set-aside will be as follows:

Percentage of Total LIHTC
Allocation

Area

County

50% - Metro

South Sioux City MSA

(Dakota and Dixon Counties)

Lincoln MSA

(Lancaster and Seward Counties)

Omaha MSA

(Cass, Douglas, Sarpy, Saunders, and Washington Counties)

50% Non-Metro

Balance of Nebraska

Note: NIFA will use its best efforts to maintain the Metro/Non-Metro set-aside through Allocation Rounds 1 and 2.
(c) COLLABORATIVE RESOURCES ALLOCATION FOR NEBRASKA SETASIDE.
In an effort to encourage economic growth, community development and the provision of affordable housing, NIFA will set-aside up to $1,000,000 of Nebraska’s annual LIHTC authority to be allocated under the Collaborative Resources Allocation for Nebraska (the “CRANE Program”). All CRANE applications will be scored and compete against other CRANE applications. Further details regarding the CRANE Program can be found at page 12. If the LIHTC’s in the CRANE Program are not fully reserved, the unreserved amount will be available for all developments.
2.4 MAXIMUM ALLOCATION OF LIHTC.
(a) The maximum LIHTC allocation to any single development in the Allocation Rounds will be no more than 18% of Nebraska’s annual LIHTC authority. No development may be divided into two or more developments to receive more LIHTC in the same year. Multiple applications in the same year determined to be a single development will be returned to the Applicant and all fees forfeited.

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(b) No one owner, developer, co-developer, sponsor, any member of the development Team, or an affiliate thereof with an “identity-of-interest” (excluding property management control) will be eligible to receive more than a total of 34% of Nebraska’s annual LIHTC authority (LIHTC received under the CRANE Program will be added to the total LIHTC amount when determining the ratio of LIHTC received under Nebraska’s annual LIHTC authority). An exception to this limitation may be made to ensure maximum distribution and/or effective utilization of LIHTC pursuant to the review and oversight of NIFA’s Executive Director. NIFA’s Executive Director also reserves the right to reduce the total percentage of LIHTC any one developer is allocated.

(c) Each LIHTC Application will be evaluated by NIFA to determine the amount of LIHTC to be allocated to the development. LIHTC allocations will be limited to the amount necessary to ensure the financial feasibility of the development based on the pro-forma information submitted by the development and other materials, as NIFA may deem necessary.

(d) After completion of the Round 2 process, if any LIHTC’s (under either the CRANE Program or the competitive process) have not been reserved, then such remaining LIHTC’s may be either transferred to the competitive process for Round 3 allocation or to the CRANE Program upon recommendation of the Executive Director and approval of NIFA’s Board of Directors.

(e) For purposes of determining the amount of LIHTC allocable to the development, NIFA will limit the amount of developer/contractor overhead, profit and fees, general requirements, and consultant fees included in the eligible basis to an amount not to exceed 24% of the total eligible basis of the development.

Example:

Total Eligible Basis - (Builder/Contractor Overhead) - (Builder/Contractor Profit) - (General Requirements) - (Developer Overhead) - (Developer Fee) - (Tax Credit Consultant Fee) - (Real Estate Consultant Fee) = Adjusted Eligible Basis
x 24% = Maximum amount allowable for Developer,
Contractor overhead & profit, & Consultant fees

NIFA may modify this percentage upon receipt of a written request submitted with the LIHTC Application justifying the variance. If an identity of interest exists between the developer and builder/contractor, NIFA may reduce the total amount of such fees if it deems such fees excessive. Also, developments should be aware that NIFA may reduce the LIHTC allocation to achieve the range of 24% for these fees.

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2.5 DEVELOPER FEE / ACQUISITION OF EXISTING BUILDING
The developer fee will be allowed on the acquisition cost of an existing building that is to be rehabilitated. The developer fee will be limited to 5% of the building acquisition costs excluding the cost of land and fees associated with the purchase of the land. Acquisition cost of the existing building(s) must be supported by an appraisal from an unrelated third party and a settlement statement.
3. LIHTC FEE SCHEDULE
3.1 LIHTC APPLICATION FEE.
A one time non-refundable fee equal to the greater of 1% of the annual LIHTC requested or $500 is due to NIFA at the earlier of submission at the Full Application-Threshold Review phase or Final Full Application phase.
3.2 RESERVATION/CARRYOVER FEE.
A non-refundable fee equal to the greater of 2% of the annual LIHTC stated in the Conditional Reservation or $500 is due no later than at the time of the Carryover Allocation.
3.3 LATE FEE - CARRYOVER ALLOCATION.
A late fee of 1% of the LIHTC amount will be assessed to developments that do not submit the Carryover Allocation Documentation and 10% Test certification by the required deadline as set forth in the Carryover Allocation Procedures Manual
3.4 ALLOCATION/COST CERTIFICATION FEE.
A non-refundable fee equal to 2% of the annual LIHTC allocated is due to NIFA at the time of submission of the Final Cost Certification Documentation as set forth in the Final Cost Certification Procedures Manual.
3.5 LATE FEE – COST CERTIFICATION
A late fee of 1% of the LIHTC amount will be assessed to developments that do not submit the Cost Certification Documentation by the required deadline as set forth in the Cost Certification Procedures Manual.
3.6 ANNUAL FEE.
A non-refundable fee equal to 2% of the annual LIHTC allocated with a $500 minimum is due each year of the development’s Compliance Period, which may be reduced at the discretion of NIFA’s Executive Director.
Owners have the option to pay the Annual Fee for each year of the first 15 years upfront as part of their development budget. If an Owner chooses to pay in full the Annual Fee for the first 15
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years, the fee will be discounted to 1.5% of the annual LIHTC allocated multiplied by 15 years with a minimum of $7,500.
Example: Annual Credit Amount x 1.5% x 15 years = Total Upfront Annual Fee for first 15 years.
If an Owner elects to pay the full 15 years of the Annual Fee upfront, this should be reflected in the Development Budget within the LIHTC Application.
After the first 15 years, the Annual Fee would be payable as set forth in the Post Year-15 Monitoring Procedures.
3.7 LATE PAYMENT PENALTY.
A late payment penalty equal to 5% of the Annual Fee will be charged to all accounts that are more than 30 days delinquent. Any fees not collected will be turned over to legal counsel for collection. A LIHTC Application will not be considered by NIFA if the developer or owner of the development has any delinquent fees due or if there are items of substantial noncompliance on any other developments.
3.8 TRANSFER/ASSUMPTION FEE.
A nonrefundable fee of ¼ of 1% of the development’s qualified basis may be assessed, at NIFA’s discretion, for changes in the ownership structure of the development.
NIFA reserves, commits and allocates LIHTC to partnerships, corporations, limited liability companies and individuals. Reservations and commitments of LIHTC’s are nontransferable, and any change in ownership of the development requires NIFA’s prior written approval (e.g., addition of a third party or removal of an individual/entity listed as part of the ownership of the development in the LIHTC Application).
3.9 LEGAL FEES.
Extraordinary legal fees incurred by NIFA with respect to the development will be assessed and charged to the development owner, including but not limited to the following:
• Fees for research relating to irregular situations • Ownership agreements • Rental rate questions • Unusual timing situations • Specific technical questions related to Code Section 42
4. ULIHTC REVIEW AND ALLOCATION PROCESSU
NIFA will use the following process in the allocation of LIHTC:
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Nebraska Investment Finance Authority