Long Term Workforce Housing
September 9, 2009
The following is from the State of Mississippi.
DATE: February 5, 2009
SUBJECT: HUD approved waivers for the State of Mississippi
I. Purpose: The Department of Housing and Urban Development has published a waiver of section 105(a) that allows new housing construction and of section 105(a) (24) to allow homeownership assistance for families whose income is up to 120 percent of the area median income (AMI) and up to 100 percent of housing down payment. The waiver can be found at http://www.federalregister.gov/inspection.aspx#reg_H. The Long Term Workforce Housing (LTWH) program is providing the following clarification of the approved waiver and additional regulatory guidance to assist in serving households up to 120 percent. The State is committed to serving low to moderate income households. Therefore, all projects shall serve at least 51 percent low to moderate income households.
II. Discussion:
1. The LTWH program will provide direct assistance (homebuyer assistance) to eligible households up to 120 percent of AMI due to the recent waiver. In addition, that waiver reconfirms the eligibility of new housing construction as an eligible CDBG activity as granted in the original waiver dated June 14, 2006.
2. The LTWH program, as stated in our original and modified action plan, will grant funds to Community Based Development Organizations (CBDO)/Neighborhood Based Development Organizations (NDO). As a result, any revenue generated through these programs will not be considered program income. Because the LTWH program is designed to provide affordable housing to the coastal workforce, it qualifies as a community economic development program. As a result, the CB-grantees DO/NDOs sub are able to carry out their projects under this umbrella. It is understood that some may carry out neighborhood revitalization or energy conservation projects as well, and these will be documented on a case-by-case basis. Furthermore, these organizations are not considered to be sub-recipients and should be expected to act independently in carrying out their projects.
3. To clarify and document the LTWH programs status as a community economic development program, MDA will provide HUD with a brief document detailing how the LTWH program is eligible for this designation. This documentation will be sufficient to qualify the projects of all the CBDO/NDOs participating in t he LTWH program.
4. As it pertains to new construction and rehabilitation activities, LTWH is not bound to the low/mod national objective. Instead, we may use the slum/blight and/or urgent need objectives if there is a clear demonstration of meeting these objectives. Acquisition, clearance, relocation, historic preservation and building rehabilitation activities which eliminate specific conditions of blight or physical decay on a spot basis not located in a slum or blighted area will meet this same objective. The slum/blight and urgent need objectives are not income qualified. Specifically, there are single and multi-family housing developments projects currently being funded through LTWH. These units can be occupied by households up to 80% AMI under low/mod or up to 120% AMI under urgent needs or slum/blight.
5. The number of households in mixed-income developments serving over 120 percent of AMI will be pro-rated based upon the amount of non-CDBG funds in the project.
6. All projects shall serve at least 51 percent low to moderate income households. The remaining 49 percent of the households can be up to 120% AMI.
III. Action Needed: Sub-recipients may request a change in their current contract scope to include households up to 120 percent of the AMI. The request must be made in writing and forwarded to Lynn Seals, Bureau Manager, P.O. Box 849, Jackson, Mississippi 39205.
IV. Questions: If you have questions concerning this memorandum, please contact Lynn Seals or Chuck Bearman at (601) 359-2905.
GO Zone Newsletter 11/22
November 22, 2008
Dear GO Zone Gateway members,
We have had a very busy few weeks since the second round of the Small Rental Assistance Program (SRAP) opened up on October 15th. To all the members that have moved forward we want to personally take a minute and thank you for your support and patience, we know how excited you all are about this investment.
As you know, the coordination efforts between the developer, lender, tax advisor and the MDA is alot of work, but we are committed to making this process as smooth as possible for you. The phenomenal response we have had to this project goes to show that even in these turbulent economic times a quality investment that has strong fundamentals is always in high demand.
For those of you that are still interested and have not yet had the time to connect with us or finish your due diligence we urge you to move forward quickly. Only 24 days remain before the second round of SRAP closes.
Also, don’t forget this investment is a qualified GO Zone rental property. As many of you already know, investing in the GO Zone can save you thousands of dollars on your federal income taxes. If you have not yet scheduled your one-on-one complimentary tax consultation we urge you to do so ASAP.
Call to get all your questions answered on the $73,000 governmental incentive, the development, and schedule a time with our tax advisor. He will specifically show you how much money you can save or get back from the government (amended tax returns).
Since time is running out on this program we will be hosting a live Webinar for our members on Tuesday night the (Nov 25th). We will be answering your questions about the development and the SRAP program. Also presenting will be our expert tax advisor of 33 years.
LIVE WEBINAR EVENT Tuesday November 25th at 9PM EST/8PM CST/7PM MST/6PM PST
REGISTER FOR THE LIVE EVENT AT
https://www1.gotomeeting.com/register/979518618
(NOTE: Enter YAERD or GATEWAY in the Source Code field on the Registration Page)
Spots are limited for the Webinar and the second round is closing soon so Register for the Webinar right now.
If you haven’t watched the short video yet we urge you to do so at:
http://www.gozonegateway.com/go-zone-property/ocean-springs.html
GO Zone Newsletter 10/13
October 12, 2008
The following is a copy of the newsletter that we sent out on October 13, 2008.
With the lack of positive news in the credit markets, turmoil in the stock markets, and government bailouts for Wall Street, the average investor has taken it on the chin. With the government handing out money to Wall Street CEOs and institutions it would be nice if the small investor on Main Street could get one of these bailouts.
What if there was a way for you to get $73,000 from the government to invest in the #1 Real Estate Market in the U.S.? To good to be true you say? Well the government has already released millions of dollars to every-day investors like you in the first round of the Small Rental Assistance Program and in 48 hours (after one year of waiting) they are opening up the second round. If the government is giving away Billions to Wall Street fat cats, you should get in line on one of the rare opportunities when they offer it out to small Main Street investors as well.
We have spent over a year putting this project together and are giving our investors the first chance at it this week. It will open for reservation on Wednesday October 15th, 2008 at 1pm Eastern time when the Government opens the application process to this program. After this week, we are going to release this opportunity to our national network of brokers and expect it to sell-out within a few weeks. We even have an opportunity available on a limited number of units that is completely contingent upon approval to the government program!
Your investment could yield a 270.4% instant return thanks to this program. If you have $27,000 dollars to invest, you could without risk, get a return of $73,000!
We already have had successful history with this program, as we had over 70 investors get approvals in the first round.
In addition to this awesome government program this investment is in the GO Zone and is eligible for HUGE Federal Tax Benefits known as Bonus Depreciation. The GO Zone can help you save tens of thousands and maybe even hundreds of thousands of dollars in federal income tax. We provide complimentary consultations with our 33 year veteran CPA to maximize your tax benefit. DO NOT dismiss this Bonus Depreciation Benefit! Most investors invest in the GO Zone just for this benefit alone! You owe it to yourself to find out exactly how much you will save in taxes, so take advantage of the complimentary one-on-one consultation.
In this financial market, there could not be a better opportunity to put your money into, because the risk is removed from the equation. Have you ever seen an opportunity where the U.S. Government pays 54% annually for 5 years up front? You will probably never see it again in our lifetime.
This is a first come first serve basis for the SRAP, and we expect to sell out this project within weeks, so do not hesitate to contact us at 561-404-7375. We expect you to have questions and urge you to call us with them.
Most people are lucky to get any kind of a positive return in this environment so don’t miss your chance.
We also have a complete due diligence package completed for you to review by clicking here.
Increased Section 179 Expensing
August 1, 2008
Under IRS Code Section 179, a taxpayer may elect in 2006 to expense up to $108,000 of the cost of qualifying property placed in service for the taxable year. Qualifying property under Section 179 is generally personal property (new and used) acquired or purchased for use in a trade or business. The $108,000 amount is reduced by the amount by which the total cost of qualifying property placed in service during 2006 exceeds $430,000.
The amount eligible to be expensed for a taxable year also can’t exceed the taxable income for a taxable year that is derived from the active conduct of a trade or business. Any amount that is not allowed as a deduction because of the taxable income limitation may be carried forward to succeeding taxable years, subject to similar limitations.
Under the GO Zone Act, the $108,000 maximum amount that a taxpayer may elect to deduct under Section 179 in 2006 and 2007 is increased by the lesser of $100,000 or the cost of qualified Section 179 GO Zone property placed in service during the taxable year. This provision applies with respect to qualified Section 179 GO Zone property acquired on or after Aug. 28, 2005, and placed in service on or before Dec. 31, 2007.
The $430,000 phase-out ceiling for this benefit is also raised substantially under the GO Zone Act. The maximum amount that a taxpayer may elect to deduct under Section 179 is reduced by: the amount by which the cost of qualified Section 179 GO Zone property placed in service during the taxable year exceeds $430,000 (for 2006 and 2007), increased by the lesser of $600,000 or the cost of qualified Section 179 GO Zone property placed in service during the taxable year. Therefore, the total GO Zone capital expenditure ceiling is $1,030,000 for Katrina-related expenditures.
In effect, the maximum $108,000 deduction is increased to $205,000 for qualified GO Zone property placed in service from Aug. 28, 2005, to Dec. 31, 2005, and to $208,000 for property placed in service in tax years beginning in 2006. If total payments placed in service from Aug. 28, 2005, to Dec. 31, 2005, exceed $1,020,000 ($1,030,000 for 2006 property), this provision is not available. This provision has several other limitations including that it does not apply to real property and other Section 179 rules apply.
Gorham Bypass is set to open in mid-December 2008
July 30, 2008
After more than 50 long years since city officials first started talking about it, the new Gorham Bypass is set to open in mid-December 2008 according to the Maine Department of Transportation.
Amazingly, the project will finish 6 months ahead of schedule. Approximately 7,200 vehicles are expected to use the 3.4 mile road on a daily basis once finished
Maine’s congressional delegation, particularly Rep. Tom Allen, D-1st District who helped earmark federal funds should be given credit for helping this project become a reality.
The new bypass will connect Route 25 to Route 114 which will be a huge relief to families that bought homes on South Street years ago expecting the traffic to be re-routed with the new bypass.
Many experts believe the new Gorham bypass will be a boon to small businesses around the intersection because currently rush hour traffic makes it difficult to get to them.
There are rumors of a Northern bypass being built, but there isn’t any funding for it yet.
What Does Active Really Mean? Two tax traps
July 16, 2008
The following article was written by our GO Zone tax advisor.
In my opinion, the requirement for the GO Zone property to be own by someone who is active in a trade or business creates an overall potential for investor benefit but contains two traps for the unwary. Read more
1031 Exchange from a GO Zone property to a non-GO Zone property without the recapture of the bonus depreciation?
July 16, 2008
The folllowing article was written by our GO Zone tax advisor.
My answer to this question…No!
In December of 2007, there were positions offered in tax literature that stated an IRC 1031-exchange from a GO Zone property to a non-GO Zone property would be allowed.
In my opinion, this position was (at best) aggressive. Read more
1031 Exchange from one GO Zone property to another without the recapture of the bonus depreciation?
July 16, 2008
The following article was written by our GO Zone tax advisor.
The appropriate use of IRC 1031-type exchanges is a legitimate tax concern as it can materially effect the economics of (1) Developing a portfolio of real estate investments via the deferral of gain and (2) Exiting from real estate investments to a cash position at a future point.
IRC 1031-type exchanges have been a strong tax tool over an extended period of time and it is only logical taxpayers would not like to see it’s use limited to specific geographical areas or the deferral benefits of gain restricted to only a portion of the total gain.
However, this is exactly the position the legislations seem to take and certainly the position which governs most of the IRS’s direction. Read more
What are the benefits for GO Zone Real Estate Investing?
July 16, 2008
The material benefits of the GO Zone for real estate investing are: Read more
What Properties Do Not Qualify for GO Zone Tax Treatment?
June 30, 2008
The following properties do not generally qualify for GO Zone tax treatment: Read more
To important changes to the GO Zone
New GO Zone Projects and incentives
