Morningside is situated along both Alter and Wayburn roads near the intersection with Mack Avenue. This duplex-style community was built in 2003 as a Low Income Housing Tax Credit (“LIHTC”) project and offers a diversified and extremely competitive unit mix comprised of eight 1,116 ft2 two-bedroom units, thirty-eight 1,386 ft2 three-bedroom units, and eighteen four-bedroom units with approximately 1,492 ft2 of living space. All units include one and a half baths, a one-car garage, and full basements with laundry hook-ups. The landlord supplies water and the tenants are responsible for all other utilities as well as lawn and snow maintenance.
Morningside is was built under and is still governed by Section 42 of the Michigan State Housing and Development Authority’s LIHTC program. As a result of this association, the property receives reduced property tax exposure; however, 100% of the units must be rented to families whose income meets certain Area Median Gross Income (“AMGI”) thresholds of 45%, 50% and 60%. The breakdown of these restrictions are 10.94% of the units at 45% AMGI, 50% of the units at 50% AMGI and 39.06% of the units at 60% AMGI. Current income limits for Wayne County assuming two persons are $28,080 at 45% AMGI, $31,200 at 50% AMGI, and $37,440 at 60% AMGI (link to MSHDA Income Limits).
Notable for investors is Section 42 of the Code includes an initial 15-year compliance period, which in the case of Morningside has expired, and the property is now in the 99-year extended use period. As such, a new owner could remove it from the program thereby lifting the income restrictions if they chose to do so. It is our expectation that most investors will seek to maintain the program; therefore, we have underwritten in this fashion.