Repositioning Advisory Services
Baker Tilly’s experienced PHA team provides HUD program application and RAD consulting and strategy services along with other public housing repositioning options.
Repositioning Advisory Services
Reimagining your aging public housing assets can include some daunting tasks, from selecting the right option to coordinating execution. U.S. Department of Housing and Urban Development (HUD) and Internal Revenue Service notices are helpful tools in repositioning your assets but can be difficult to keep up to date with. With Baker Tilly on your team, we’ll help you plan and work through your public housing repositioning — no matter the size of your portfolio.
Project financing options to meet your needs
Public Housing Authorities (PHAs) have unique needs. Our understanding of your industry and mission, paired with targeted experience working with PHAs, will not only help you thrive now, but as you evolve over time.
Our firm’s ability to secure funds for housing authority projects using various competitive funding programs at the federal, state and local levels is evidenced by our success with the following programs.
Our housing specialists posses in-depth understanding of real estate fundamentals, design and construction best practices, affordable housing programs and sound financial structuring alternatives. The diversity and volume of affordable housing and community development projects we have worked on have provided us with the knowledge and relationships necessary to provide you great value, including:
- Rental assistance demonstration (RAD), RAD/Section 18 Blend, and section 18 applications and financing plans
- LIHTC applications (4% and 9% projects)
- Soft financing applications
- Mixed finance
- New Markets Tax Credits
- Due diligence, predevelopment and re/development support
- Development advisory services
- Quantitative analysis, financial modeling and financial feasibility
- Negotiation with investors, lenders and developers
- Structuring of loan documents and development agreements
- Education surrounding HUD notices and financing tools
- Assistance in obtaining debt
- Closing assistance
Public housing repositioning
Baker Tilly works with PHAs to explore all repositioning options, review the pros and cons and find the solution that best fits their agency’s needs. Every PHA is unique and Baker Tilly’s specialists have extensive experience in a full range of repositioning options.
Baker Tilly is at the forefront of the RAD program initiative, having helped clients since the program’s inception. We leverage our experience of obtaining many layers of financing and our understanding of the complex levels of compliance that come with using them to:
- Evaluate RAD feasibility and perform financial modeling
- Complete the RAD program application and manage HUD processing
- Identify, apply for and obtain tax credits, tax-exempt bonds and other financing sources
- Structure and underwrite mixed-finance transactions
- Negotiate with equity investors and lenders
Our specialists assist PHAs in assessing their developments related to RAD feasibility. We have also collaborated with housing developers experienced in the RAD program to efficiently and effectively address the challenges and opportunities presented with their projects. In addition, we have worked hard to build effective relationships with state housing finance agencies nationwide.
Section 18 demolition or disposition allows PHAs to demolish or dispose of public housing units under certain criteria and entitles the PHA to request Section 8 Tenant Protection Vouchers (TPVs) for any vacant unit occupied by an assisted household within the past 24 months. The PHA can elect to project-base these TPVs, provided the assisted units are offered to the impacted families. In many communities (but not all) the TPVs result in rents that are higher than the RAD rents. In the case of disposition, the units must actually be disposed of, which can be accomplished by transferring the asset to a PHA related entity for nominal value in order to support affordable housing. Section 18 also qualifies the PHA for certain phase-out funding under the public housing operating and capital programs.
PHAs can use RAD and section 18 together as a “blend”. This flexibility creates higher contract rents to support greater financing, maintains robust resident rights, ensures RAD one-for-one replacement requirements apply (with de minimis provisions still applicable), allows for public housing funds to be used in project conversion and HUD underwriting of the project to determine project feasibility. HUD approves a portion of units under section 18, to be replaced with TPVs that can be project based, dependent on the level of rehab/construction achieved. Percentage of units eligible for section 18 disposition within the converting project is based on the hard construction costs proposed for the new construction or rehabilitation of the covered project compared with HUD’s published housing construction costs for the market.
PHAs can dispose of public housing to create homeownership opportunities for low-income households. As with section 18, a PHA may request Section 8 vouchers (TPVs) to protect assisted households and for all vacant units occupied by an assisted household within the past 24 months. A PHA must develop a HUD-approved homeownership plan.
Mixed-finance public housing allows PHAs to mix public, private, and non-profit funds to develop and operate housing developments. New developments may be made up of a variety of housing types: rental, homeownership, private, subsidized, and public housing. These new communities are built for residents with a wide range of incomes and are designed to fit into the surrounding community.
Proven experience to meet your needs
Baker Tilly regularly works with affordable housing clients in closing transactions that have received more than $1 billion in low-income housing tax credit (LIHTC) equity, more than $350 million from agency and government funding sources such as those listed above and another $50 million of Historic Tax Credit (HTC) equity.
Baker Tilly can help round out the capital stack by applying for soft funding sources including AHP funds through the Federal Home Loan Bank system, HOME funds, CDBG funds, and energy credits and grants.
Mixed-finance transactions are multilayered capital structures that utilize public and private sources to fund development costs. These structures can present a unique and complex constellation of issues such as priority payments, risk allocation, capital cost, return requirements, regulatory restrictions and project ownership. Creativity, technical expertise and proven deal experience are crucial factors in navigating through these issues and securing successful development outcomes.
We work with new and experienced NMTC borrowers to determine project eligibility, solicit interest from CDEs, structure and assist in closing the transaction, perform post-closing servicing and monitor compliance, and provide ongoing advisory services for future planning. To date, Baker Tilly has identified opportunities for more than 290 clients and our projected value of closed transactions is over $12 billion.
Baker Tilly regularly provides development consulting for PHAs. With a wealth of experience in assessing various professionals and contractors selected by Baker Tilly’s PHA and not-for-profit clients, we are able to assist in choosing professionals as well as monitoring and evaluating ongoing performance.
Baker Tilly’s affordable housing team is nationally known for its quantitative analysis and financial modeling expertise. Our housing specialists possess an in-depth understanding of real estate fundamentals, affordable housing programs and sound structuring alternatives.
Our professionals maintain trusted relationships within the affordable housing lending and investing communities. We have worked with large financial institutions, mortgage lenders and community banks throughout the country. Baker Tilly can assist with structuring your capital transactions to maximize the amount of equity and financing raised from investors, lenders and “soft” sources. The diversity of development projects we have assisted with has provided us with vast technical knowledge and project experience.
Baker Tilly’s team works with clients and their attorneys to review, structure and negotiate loan documents for compliance with the financial projections and relevant laws and regulations. In addition, our specialists will look for opportunities for you to minimize economic risk and tax impacts through proper documentation. We work on taxable debt and soft loan agreements, focusing on business terms and risks.
Baker Tilly has assisted PHAs and private developers across the country in executing mixed-finance transactions that included a wide range of government subsidies including Capital Fund Financing Program (CFFP) financing, project-based section 8, public housing ACC, RAD and more. Our team members have experience with HUD mixed-finance requirements and frequently consult with clients on the regulatory requirements of their major funding sources and housing programs.
Our professionals
