You asked several questions about the Connecticut Housing and Finance Authority's (CHFA) programs and services. Specifically you asked:

1. how many of the 4,174 single family mortgages CHFA made in 2001 were for first-time buyers and how were they distributed among low-and moderate-income households,

2. what is the distribution of household incomes in projects that were developed with low-income housing tax credits administered through CHFA,

3. what process does CHFA use to determine who receives these credits,

4. how many legitimate requests for tax credit reservations could CHFA not fund,

5. can unused employer tax credit program funds be transferred to the state housing tax credit program, and

6. does CHFA have additional programs not described in its annual reports?

Following are general descriptions of CHFA programs you asked about and the specific answers to your questions.

SINGLE FAMILY PROGRAM HOMEBUYER MORTGAGES

CHFA homebuyer mortgages are available to first-time homebuyers with low or moderate incomes who are buying moderately priced homes within CHFA sale price limits. Prior homeowners who have not had an ownership interest in a home for three years before applying may qualify for a mortgage if the home they purchase is within a targeted area. Household income limits, which vary by town, apply to all borrowers with the exception of targeted areas where prospective buyers may still apply for CHFA financing despite having income over these limits.

More information is available at: http: //www. chfa. org/firsthome/firsthome_BuyerMortProgram. asp

2001 Program Figures

First-time Buyers. Of the 4,174 CHFA single-family program homebuyer mortgages granted in 2001, all but one went to first-time buyers.

Mortgagees' Income Levels. Of the 4,174 mortgages:

1. 1,820 or 43% went to low-income earners (those earning less than 80% of the Area Median Income (AMI) as established by the U. S. Department of Housing and Urban Development and adjusted for family size),

2. 2,053 or 49. 2% were moderate income earners (between 80% and 120% of the AMI), and

3. 301 or 7. 2% earned over 120% of the AMI.

Attachments 1 and 2 list Connecticut's AMIs by Primary Metropolitan Statistic Area (major cities alone) and Metropolitan Statistic Area (including towns surrounding major cities).

LOW-INCOME HOUSING TAX CREDITS (LIHTC)

LIHTC Program

CHFA administers the federal Low-Income Housing Tax Credit program. LIHTCs are a financing tool that allows developers to provide affordable rental housing for people of limited income. Developers who receive tax credits typically sell them to private investors who benefit from a reduction in tax liability. The proceeds from the sale generate equity for the development, thus reducing the need for debt financing and enabling the owner to charge affordable rents. Tax credits are often needed to finance multifamily proposals because the rental income generated by an affordable housing complex would be insufficient to cover the costs of developing and maintaining the property.

The amount of credits available varies each year. In 2001, $ 5. 6 million was available (but CHFA reserves for future years can be tapped).

To be eligible for LIHTCs, a project developer must set aside a minimum percentage of units for low-income residents. This percentage must be maintained for an extended use period, usually at least 30 years. The minimum set-aside is either (1) 20% of the units rented to tenants earning 50% or less of the AMI or (2) 40% of the units rented to tenants earning 60% or less of the AMI.

More information is available at: http: //www. chfa. org/TaxCredits/taxcredits_LowIncomeTaxCredAllocations. asp

2000 and 2001 LIHTC Distribution

Very low-income families, those earning less than 50% of the AMI, made up 41% of those residing in LIHTC projects in 2001, the highest percentage served that year. But in 2000, low-income families, those making 60% of the AMI, made up the highest percentage in LIHTC projects, with 46%.

Table 1 shows the distribution of all household incomes served by projects that received LIHTC in 2000 and 2001.

Application Process

Applications for LIHTC are rated and ranked according to criteria in CHFA's LIHTC Qualified Allocation Plan (QAP). CHFA considers (1) qualifications of the development team, (2) site suitability, (3) project operating income and expenses, and (4) projected construction costs. According to Michael Ward, CHFA's administrator for multifamily underwriting and technical services, staff ranks results from the QAP scoring process, and the board approves credit reservation requests in rank order according to the current year's available credit authority. The board can use additional credit authority from future years for the current year's credit reservation.

Denial of Legitimate Requests

Ward reported that in 2001, the CHFA received 23 requests for credit reservation, totaling $ 11. 1 million against $ 5. 6 million in available 2001 credit. Three requests did not meet the program requirements and were not considered beyond the application review phase.   Of the 20 applications eligible for consideration, CHFA approved reservations for 15 with a combination of 2001 and 2002 credits, totaling $ 8. 3 million.  

The demand for credit reservations typically exceeds the supply of available credits in any given year by about a two or three to one margin, said Ward.

EMPLOYER ASSISTED HOUSING TAX CREDIT PROGRAM (EAHTC)

Under the EAHTC program, businesses qualify for up to $ 100,000 in tax credits annually for contributing money to a revolving loan fund their low- and moderate-income employees can access to buy or rent housing.

Up to $ 1 million in credits are annually available to all businesses for this purpose. More information is available at:

http: //www. chfa. org/TaxCredits/taxcredits_EAHTCProgram. asp

Unused Employer Assisted Housing Tax Credits

Unused employer assisted housing tax credit funds cannot be used for other programs, according to CHFA legislative liaison, Peg Fitzgerald, because the money remains part of the revenue stream.

CHFA PROGRAMS

CHFA's annual report does not describe all of its programs. Attachment 3 is a complete list of CHFA programs.

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