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  • Comment Detail

  • Date: 03/14/16
    First Name: Hal
    Last Name: Keller
    Organization: Ohio Capital Corporation for Housing
    City: N/A
    State: N/A
    Attachment: N/A
    Number: RIN-2590-AA27

  • Comment

    Alfred M. Pollard
    General Counsel
    Federal Housing Finance Agency

    Submitted Via: www.fhfa.gov/open-for-comment-or-input

    Re: RIN 2590-AA27

    Dear Mr. Pollard:

    The Ohio Capital Corporation for Housing (OCCH) appreciates the opportunity to comment
    on the proposed rule regarding Enterprise Duty to Underserved Markets.

    OCCH is a nonprofit financial intermediary and has operated as a LIHTC syndicator since 1989. We have invested over $3.5 billion in over 40,000 units of affordable housing, primarily in Ohio and Kentucky. Until the financial crisis in 2008, both Fannie Mae and Freddie Mac were active investors with us.

    Rather than answer each question individually, I submit the following comments for your consideration:

    • The LIHTC equity market is quite strong at present and there is no need for the Enterprises to invest at present. A large level of investment by the Enterprises would add instability and supplant private capital.

    • That being said, we would advocate that the FHFA allow the Enterprises to resume investment at a low to moderate level i.e., below $500 million. The rational is that the Enterprises need to rebuild investment platforms and procedures. To minimize the start-up time, it is reasonable instruct the Enterprises to work with existing syndicators that have successful platforms already in place. By having a “toe in the water”, the Enterprises will be able quickly respond to a contraction in the LIHTC equity market.

    • All well-structured projects, including rural, HUD / RD preservation, and special needs housing projects are attracting capital in the current LIHTC marketplace. Though projects in a non-CRA market are receiving lower prices.

    • FHFA should not limit investments by the Enterprises to such projects or projects in areas of opportunity that promote economic diversity. This would inhibit their ability to invest in multi-investor funds that in turn invest in a variety of projects including but not limited to rural, preservation, special needs or projects in areas of opportunity. Rather, FHFA should require the Enterprises to document their efforts to prioritize multi-investor funds that invest a portion of their capital in such projects.

    • In terms of permitting the Enterprises to guarantee private equity investments, there is little need in today’s market for such a product. But such activities should be permitted so that if the demand for guaranteed products returns, the Enterprises will be prepared. There does not appear to be a down side to permitting such activities.

    I hope these comments are useful. Please do not hesitate to contact me at HKeller@occh.org or by phone at 614-224-8446.

    Sincerely,

    Hal Keller
    President