POAH - Preservation of Affordable Housing

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Questions about Preservation of Affordable Housing

We welcome your questions.
These are some of the most frequently asked. If you don't see your question here, send it to us by email.

What kind of properties is POAH interested in acquiring? Are there particular minimum or maximum sizes, or geographical areas of interest?

POAH is interested in multi-family properties that provide housing for low and moderate income persons. While there are no absolutes, most of the properties that we purchase are 50 units or more (there is no maximum), and are subsidized by HUD under the Section 8 program or are otherwise assisted. POAH does not have any geographical limitations. Properties with ancillary commercial uses are of interest, provided that the commercial uses are not the primary uses of the property.

I own a property that is subject to HUD's "Mark to Market" program - does POAH purchase such properties? If the current mortgage balance exceeds the market value of the property - will I receive anything for my interest?

As a non-profit, POAH is able to access the non-profit owner incentives of the Mark to Market program, and is actively pursuing such acquisitions. In most cases, POAH can structure the transaction so that the owner will, at a minimum, receive cash sufficient to pay ‘exit taxes’ (i.e. tax-imputed gain at disposition), and can sometimes provide more. For each transaction POAH undertakes, the availability and amount of funds depends on the particular circumstances of the property.

I own an affordable housing property that is in a strong market and can terminate my affordability commitments. Can POAH purchase my property at a price that is equal to the price I can get as an unrestricted property?

POAH, HUD and state housing finance agencies are all seeking to preserve properties "at-risk" of being lost to affordability, and have generally made special resources available to do so. POAH has purchased several dozen "at-risk" properties, and generally HUD and/or the state have made additional resources available to encourage such preservation, and make sure that sellers are not financially disadvantaged by selling their property to an entity which intends to preserve it as affordable.

I own a property that does not have any subsidies, but is nevertheless affordable because of the market that it is in. Does POAH buy such properties?

For unsubsidized properties, provided that at least 75% of the residents earn at or below 80% of the median income, POAH is interested in pursuing acquisition opportunities for properties.

I own a limited partnership interest in an affordable housing project. Can I sell or donate the interest to POAH?

Depending on the circumstances and the terms of the partnership agreement, limited partnership interests can be sold and/or donated to POAH.

I am the general partner of an affordable housing project, with an affiliated management company. Can I sell the project and retain management?

In most cases the management agreement can be negotiated separately from the purchase of the property.

Are there any special tax benefits to be had by selling a property to POAH?

For some sellers, a so called "bargain sale" (i.e. part cash, part donation) transfer will yield a better after-tax result on the sale of a property than an all cash sale. In some states (such as Missouri and Illinois) there are state "donation tax credit" programs which provide additional state tax incentives (tax credits, which may be sold for cash or retained and used) in addition to the federal tax incentives. Not all taxpayers, however, can utilize donation credits, and accordingly, each individual's tax advisor should be consulted.