• Implementing the Scope of Work standards/guidelines
• Issuing the NCAHMA analysis of State by State market study requirements compared to NCAHMA standards
• Potential for organization name change to broaden the recognition of the guidelines to include market as well as affordable projects

In March of 2011, Scott Allen attended the Eastern Conference Lenders Sessions in Baltimore. Representatives of HUD, and various HUD lenders and consultants provided information and background on pending changes to the process, and overview of current capacity and work load, and a summarization of key issues that will influence the availability of HUD financing over the next few years. While the HUD program continues to change, and the requirements of the funding becomes more restrictive, it remains a viable and favorable product for many developers. We are anticipating that 2011 will continue to be an active year for the 221(d)(4) and other HUD programs, but certainly the underwriting criteria, and the guidelines that will restrict developers and HUD lenders has become more complicated. 

Click here for some changes issued by HUD in July 2010.

GAR Associates is capable of providing market analysis throughout the Country, and we are State Certified in multiple areas for preparation of Complete Self-Contained Real Estate Appraisals in conjunction with various HUD financing efforts. We are familiar with the HUD requirements and will continue to review the guidelines as the MAP Program changes, and continue to communicate with both HUD offices and MAP lenders to make sure that we are current and familiar with all guidelines and requirements. Lastly, it should be noted that as HUD continues to advance their requirements pertaining to market, they have met with representatives of NCAHMA – Scott Allen of GAR Associates is current the chairperson for this national trade organization, which has been instrumental in regards to providing data, documentation and information to HUD as they advance their requirements and methodologies.

NCAHMA held their annual meeting in Chicago on October 5th and 6th. Scott Allen of GAR Associates was nominated as Chairperson for the Organization and has begun a two year term. This trade group has been instrumental in establishing standards and guidelines for market studies used in conjunction with affordable and market rate housing. Many states have adopted the guidelines as part of their standard requirements for allocations of LIHTC, and the group continues to meet with HUD, NCSHA and others pertaining to market study requirements. GAR Associates has been an active member of NCAHMA almost since its initiation.

Click here to view the article.

• In conjunction with DHCR’s February tax credit submission deadline, GAR completed over 30 market studies and additional real estate appraisal work that was used for the applications. Our review of the application lists indicates that we completed over 50% of the work submitted to DHCR for the current funding round.
• We continue to be active in regards to HUD-related transactions. The most active programs that we have seen are 221-(d)(4), and 223-f/202 refiancings. We have completed numerous market studies and appraisals for both HUD funding programs throughout upstate New York, the Burroughs (namely Brooklyn), and recently completed a market study that will be submitted to the Hartford, Connecticut HUD office.

• Multiple market studies completed in Arizona for the tax credit funding round (March) and syndicators.

• Massachusetts
• Vermont
• New Hampshire
• Connecticut
• Michigan
• New Jersey

The Arizona Department of Housing sponsored the 2009 Governor Housing Forum in Tempe, Arizona from September 14th to the 16th, 2009. Scott Allen of GAR Associates was in attendance and made contact with a number of developers, syndicators, bankers and public officials pertaining to trends influencing housing patterns in the state of Arizona. In 2009, GAR Associates was placed on Arizona’s Department of Housing approved list as a market analyst and was given some of the dynamic changes and variables impacting the economic climate in Arizona and its housing market. Attendance at the conference was instrumental in providing background for the upcoming 2010 funding round. Some of the information provided at various sessions included:

• Discussion pertaining to the importance of preserving affordable rents/housing; preservation projects.
• An overview of the much-anticipated Arizona State consolidated plan, which addresses housing needs and influences. The consolidated plan will be a 5-year plan running from 2010 to 2014 and it is anticipated that a draft will be issued prior to the end of 2009.
• A summarization of various Arizona Department of Housing programs.
• A summarization of bank and syndicator trends impacting deals and projects in Arizona; one critical note here is that they are currently underwriting to 15-20% vacancy based on current poor market conditions.

The forum also addressed some of the foreclosure issues that are currently occurring in Arizona and their impact on rents.

Clearly, there are many variables and influences that will impact the Arizona housing market over the next few years, and GAR Associates feels that attendance at the conference and some of the analysis of current trends will provide them with solid background for preparing market studies for the 2010 Arizona funding round.

Please contact M. Scott Allen at sallen@garappraisal.com if there are any questions or needs pertaining to studies in the state of Arizona.

Based on limited funding availability for multi-family developments, many development groups and investors are looking towards HUD programs for their financing needs. GAR Associates has recently completed numerous reports that have been submitted under HUD 221(d)(4), 223(f), and the 232 program which is now under the LEAN requirements. Recent work efforts undertaken by GAR Associates that have been applied for various HUD programs include:

• Preparation of the market study and firm application appraisal for an upscale market rate project in Stamford, Connecticut.
• Recent preparation of three assignments in the Greater Albany Area involving market studies or pre-application appraisal work; in the Town of Colonie, Town of Halfmoon, and City of Cohoes.
• Market study and pre-application work for a proposed upscale senior market rate project (independent living with no meal provision) in the Town of North Greenbush, Rensselaer County, New York.
• Appraisal work for an upscale project in Brooklyn, New York.

Given the current financing markets, we are anticipating that the HUD programs will remain extremely popular over the next year. GAR Associates is prepared to tackle market study and appraisal work throughout the United States for these types of projects and please call M. Scott Allen at sallen@garappraisal.com for information pertaining to quotations. We are in the process of obtaining state certification for licensing in Maryland, Connecticut, Michigan, and other Northeast/Mid-Atlantic regions.

On Thursday, December 11th, four members of the GAR staff attended the DHCR Workshop For Market Analysts. Scott Allen and Brian Smith were present in Albany, while David Carlon and Suzanne Stockmeyer attended in the Buffalo office. DHCR reviewed changes to their Market Study guidelines that are important for recognition during this year’s funding round.  It was a lively session with good questions and response from the agency. This will be a challenging funding round given the economic constraints from the investor marketplace. We are anticipating that both the agency and investors will be scrutinizing projects in greater detail, and a supported market will become more important than ever.

The two main changes are:

1. Additional guidelines on use of comparables for deriving market rents

2. Separate capture analysis is required for each rent level/tier - applied to each targeted income limit. The capture will still apply to each individual unit type.

We are pleased to remain a qualified analyst on DHCR's list, and we still have room for additional work prior to the February 11th funding deadline, but our schedules are filling quickly. If there is a need for a market study or appraisal in conjunction with the February 11th deadline, please contact Scott Allen as soon as possible -sallen@garappraisal.com or 716-691-7100, ext. 3019.

The National Council of Affordable Housing Market Analysts (NCAHMA) recently modified their model contents standards and requirements for market studies. These contents standards have been accepted by many State agencies and syndicators as the industry standard for preparation of market studies. GAR Associates abides by the model content standards for this trade organization, and the products are available on their website which is www.housingonline.com. Products that have been adopted and used by the organization include

Ø       Market Study Terminology. A set of uniform definitions of key terms commonly used in market studies for proposed affordable rental housing projects, particularly developments utilizing the federal low-income housing tax credit. Among the terms for which standard definitions have been developed are absorption period, capture rate, gross rent, market demand, and vacancy rate.

Ø       Model Content Standards for Market Studies for Rental Housing. A set of recommendations on the specific types of information, data, analysis, and conclusions that should be contained or addressed in a market study for an affordable rental housing project. These include an executive summary, description of the proposed project, definition of the market area for the development, and information on the local market population, employment and economy, comparable properties, and other components.

Ø       Market Study Index. Intended to help the reader of a market study find specific information quickly, this checklist provides a list of the specific individual component areas of information that the Model Content Standards says should be provided in a market study, with a space where the analyst can insert the page number of where each component is addressed in the study.

Ø       Market Study Certification. This statement will be inserted in market studies prepared by market analysts that are members of NCAHMA. Signed by the analyst that prepared the market study, the statement will certify that the analyst has no financial interest in the project and that the market study has been prepared in conformance with NCAHMA's Market Study Terminology and Model Content Standards (and, in areas where it does not conform, the reasons for non-conformance).

GAR Associates remains an active member of the National Council of Affordable Housing Market Analysts. In the fall of 2008, M. Scott Allen attended the national conference in Chicago where it was announced that he will be serving on the Standards Committee, and as Vice Chair of the organization during the 2009 year. Also, Scott Allen remains a member in good standing of this important trade organization, which continues to expand its knowledge base, through standards, requirements and certification process.

 NCAHMA standards are now generally accepted as the guidelines by New York State DHCR as their recommended practices, and methodology for market analysts.