FAQs for 2003 Tax Credit Program: Application

Rates

Preservation Plus:
7.650%
Tax-Exempt Financing:
7.900%
Taxable Bond Rate:
7.700%
Construction Plus:
5.940%
Tax Credit Financing:*
6.750%
*30 year term/15 year yield maint/30 year amort.

Click Subscribe to receive updates via e-mail or to edit your profile.

Frequently Asked Questions: Application

Why does WHEDA use an 8.0% interest rate when calculating the debt coverage ratio? I can do much better than that.
Why are the overall points reduced for mixed income developments?
Why was the General Contractor subcategory eliminated?
Why was Category 5 changed to allow points for developments that have more than 50% 3-bedroom or larger?
Do national nonprofit organizations receive points in Category 15?

FAQs about Processing

Why does WHEDA use an 8.0% interest rate when calculating the debt coverage ratio? I can do much better than that.

The 8.0% interest rate is meant to apply a consistent standard to measure relative financial strength. It is also within 20 basis points of our hedged pricing structure for a forward-committed rate (24 months). Mini-perms are available for less, but introduce another level of risk in developments that may affect their stability.

Why are the overall points reduced for mixed income developments?

Mixed income is still one of our priorities. These developments perform better on average than 100% affordable developments and are generally better accepted by communities. Further, they advance social goals by combining households of different income levels. We reduced the overall point impact in this category for the following reasons:

Syndicators have voiced concern over the buyer market's acceptance of too great a market rate component.
The average number of points received in this category was 6. A 50-point total lacked impact overall.

Why was the General Contractor subcategory eliminated?

We value the importance of a qualified general contractor as a member of a development team. The inclusion of this category in scoring is difficult because their long-term impact is less apparent. The advisory committee felt that the most important player ultimately is the developer, who will have to stand behind the work of the general contractor and cure any ultimate inadequacies of the development. The general contractor will still be evaluated as a component of the development team.

Why was Category 5 changed to allow points for developments that have more than 50% 3-bedroom or larger?

In prior applications, no points were provided if over 50% of a development served large households (3-bedroom or larger units). This proved to be a particular concern for acquisition and rehabilitation developments. The scoring was changed to allow points for percentages above 50%, though there will be no incremental benefit above 50%.

Do national nonprofit organizations receive points in Category 15?

Yes. In prior applications, the application referred to "local tax-exempt organizations." Our intent and practice is to include national non-profit groups and this language has changed to reflect this.