2005 APPLICATION WORKSHOP

1

2005 APPLICATION WORKSHOP

Georgia Department of Community Affairs

Presented by the Office of Affordable Housing

2

1. Project Feasibility & Conformance with QAP

LIHTC Policies HOME Loan Policies Rental Charts Utility Allowances Appraisals

3


LIHTC Policies

4

LIHTC Policies

Assumption for land purchase– Identity of Interest between buyer/seller: appraisal required

Building Basis– Lesser of sales price or appraised value of building(s)

Contractor Fee Limitation– Overhead: 2%* (Construction Contract Amt. - Contractor Fees)– General Requirements: 6%

Includes Letter of Credit fee in lieu of payment & performance bond– Builder’s Profit: 6%

Construction Contingency– New construction: 2%-5% of construction hard cost– Rehabilitation: 5%-7% of hard cost

5

Relocation Budget Compliance Monitoring Fee

– Based on Total # of Units (not just Low Income Units) Maximum Developer Fee Limitation

– New construction/Rehab only: 15% (TDC* - DF - Land - Builder’s Profit**)

– Acquisition & Rehabilitation: Acquisition: 15% building acquisition cost Rehab: 15% (TDC* - DF - Land - Bldg. Acq.- Builder’s Profit**)

– Consultant Fee: No Limitation, but considered part of Developer Fee

* TDC limited to Unit Cost Limitations prior to any approved cost waiver

**When Identity of Interest exists between Developer & General Contractor

LIHTC Policies

6

Tax Credit Percentages: for application purposes– Competitive: Credit percentages for April 2005– Non Competitive (TEB financed): Credit percentage for the month

preceding application submission BMIR HOME Funding & QCT

– 40-50 Rule: Requirement met on a building by building basis– “9% credit”: not eligible for 30% basis boost

Per Unit Cost Limitation– Waiver due 3/1/05

LIHTC Policies

7

Sources of Funds: Terms tie back to documents (including government financial

assistance) Housing Credit Equity Deferred Developer’s Fee

– Must be payable within 15 years from cash flow– Not considered in GAP method of credit calculation

LIHTC Policies

8

Rent Issues

Fair Market Rents w/ HOME Types of Employee Occupied Units

– Common space: No Rent can be charged Must be occupied by employee Employee does not have to be income qualified

– Residential unit Low-income unit: rent charged, must be occupied by an employee who is income

qualified Market rate unit: rent charged, no income or rent restrictions on employee resident

Public Housing units: tax credit/HOME cannot be used for public housing units except in mixed income projects.

9

Utility Allowance

Utility Allowance– USDA– HUD– Public Housing Authority / DCA– Utility Provider allowances for electricity

10

Operating Expense Budget

Minimum Annual Operating Expense Requirements– Urban: $3,000/unit– Rural County w/USDA funding source: $2,400/unit– Rural County w/out USDA funding source: $2,600/unit

Operating Expense Waiver: due by March 1, 2005 or submit with Application.

– Note: if not approved, may result in project failing Threshold Requirement for Feasibility

Replacement reserve– New Construction: $200/year per unit– Rehabilitation: $300/year per unit– Single Family: $400/year per unit

11

Operating Pro Forma

Trending– Income: 2%– Expenses and Replacement Reserves: 3%– Vacancy& Collection Loss: 7%

Debt Coverage Ratio– First year: 1.15 - 1.35– Tax Credit projects: no less than 1.15 for each year during 15 year

compliance period– Tax Credit & HOME projects: no less than 1.15 for each year during

compliance period, period of affordability, or HOME loan term, whichever is longest

12

Project Feasibility for Scattered Sites

Scattered Site Projects

– DCR requirements must be met by the project as a whole

13

LIHTC Policies

Question and Answer

14


HOME Policies

Additional Policies Applicable to HOME Funded Projects

15

Eligible DCA HOME Loan Costs

New Construction – any project that includes the addition of dwelling units outside the existing walls of a structure is considered new construction

Rehabilitation – the improvement or modification of an existing structure

Reconstruction – refers to rebuilding, on the same lot, where housing is standing at the time of project commitment

– The number of units on the lot may not change as part of the reconstruction project, but the number of rooms per unit may change

16

Non-Amortizing Loan - Excess Cash Flow

1/2 of the Excess Cash Flow (income after secured debt service payment) Deposited in Account (Excess Cash Flow Account)

Used for Principal Reduction of HOME loan and Capital Improvements

Disbursements Require DCA Prior Approval Funds Must Remain in Account until HOME Loan is Paid in

Full

17

Non-Amortizing Loans - Future Market Value

Outstanding Loan Balance at Maturity must be less than the Projected Appraised Value at Maturity

DCA Commissioned Appraisal Projects the Future Value of the Development

Interest and a Portion of Principal must be repaid in Each Year of the HOME Loan

18

Interest Rate Exception for Projects in Rural Counties

If necessary to maintain project viability:

Years 8-15 Interest Rate may be less than 1%, but may not fall below 0.5%

Years 16-Maturity Interest Rate shall not fall below 0.25%

19

HOME Loan/Construction Contingency

DCA funds allocated to Contingency DCA approves all change orders Unused contingency used to reduce Senior Loan or HOME

Loan

20

Construction Hard Cost Financing

Site Development Unit/Building Construction Contractor services Builders overhead Builders profit HOME CHDO Pre-development Loan Construction Bridge Loan is part of the financing package HOME loans cannot be used to refinance or pay off an

existing loan

21

Conversion

24 months of HOME loan closing Loan Agreements will set conversion date

22

Developer Overhead and Consultant fee(Drawn During Construction)

Lesser of 20% of the Maximum Allowable Developer Fee, or 50% of the Total Developers Fee Requested Developer Profit (80%) can not be disbursed prior to HOME Loan

Conversion Disbursement Condition reflected in HOME Loan Agreement and

Other Funding Source Agreements

23

Identity of Interest

Owner/Contractor, Developer/Contractor Third Party Front End Analysis Required Commissioned by DCA during Underwriting Contractor Services must be reasonable as determined by DCA

Owner/Provider of Other Service Three Bids during Underwriting Services must not exceed amount ordinarily paid DCA will determine reasonableness

24

Syndicator Asset Management Fees

Paid - “After DCA Debt Service” Paid - After Excess cash Flow Payment

25

Operating Deficit Reserve

No less than 4 times the secured monthly debt service plus no less than 4 months projected operating expenses

Funded at or prior to conversion Held by DCA or Senior Lender Required for Term of HOME Loan or Period of Affordability,

whichever is longer Withdrawals must be Approved by DCA and Requested in

Writing

26

Partnership Agreement

Must Reflect Terms of HOME Loan Executed Prior to HOME Loan closing

27

Payment and Performance Bonds

Required on all Developments (100% bond required on all developments)

Include the cost of Payment and Performance Bond in 6% General Requirements

28


Identity of Interest Letter of Credit (LOC) or Construction Loan (CL) LOC - at least 50% of Construction Cost including Profit and

Overhead Construction Loan - Amount equal to DCA Construction Loan DCA will disburse $2,500 per Draw Request Include the cost of LOC or Construction Loan in 6% General

Requirements

29


Waiver Process Waiver Request must be submitted with Application DCA Waiver (Form O-3) Tab 2 Application Binder

30

Disclosure of Lobbying Activities(Byrd Amendment)

Each Owner who expects to receive a HOME loan in excess of $150,000 must certify that the funds will not be used to lobby Congress

Submittals – Certification for Contracts, Loans and Cooperative

Agreements (Form B-4)– Applicant/Recipient Disclosure/Update Report (Form B-6)

31

Disclosure of Lobbying Activities

In addition, if an owner uses non-federal money to lobby Congress, the owner must submit a Disclosure of Lobbying Activities Form SF-LLL (Form B-5)

32


Developers, contractors, subcontractors (including architects, engineers and other consultants) who receive federal funds in excess of $100,000 for any HOME activity must disclose lobbying activities

Submittals – Certification for Contracts, Loans and Cooperative

Agreements (Form B-4)– Applicant/Recipient Disclosure/Update Report (Form B-6)– Owners are responsible for meeting submission

requirements

33


All forms are located in the HOME manual and @ www.dca.state.ga.us/housing/rentalfin.html:

Submit disclosure forms in Tab 18 of Application Binder

34

HOME Loan Policies

Question and Answer

35


Rent Charts

36

Rent Charts

Low Income Units with No PBRA Low Income Units with PBRA Non LIHTC Units with PBRA Market rate units Project Summary by Unit Rent Types

37

Low Income units with No PBRA

Unit rent and income type

30/50/60 PHA Units – investment plus operating subsidy Employee Units Program Max Unit Rents

LIHTC/HOME Proposed Unit Rent (can’t exceed Program rent) Utility Allowance Unit Rent to Collect

38

PHA Units

Operating subsidy should be entered in the non occupancy based income part of the Other income sources section

Unit Rent to Collect should be reflected as 0

39

Low Income Units with PBRA

PBRA type: HUD, PHA, USDA and Governmental PHA: investment/PBRA Unit rent and income type (LIHTC) Program max Unit rent (LIHTC/HOME) Proposed unit rent Unit rent to collect Proposed unit rent without PBRA

40

Non LIHTC Units with PBRA

Used in rehabs Tenants with income in excess of 60% less than 80% Not market units because of PBRA units Not tax credit because of income

41

Project Summary

Rent Type (LIHTC limitation) Project configuration/project summary

42

Rent Charts

Question and Answer

43


Appraisals

44

Appraisals(applicable to LIHTC and/or HOME Projects)

All appraisers must be certified by the Georgia Real Estate Appraisers Board and participate in continuing education

The appraiser should have at minimum, five years experience in a combination of affordable housing and multi-family projects

Appraisal Manual located in Section I of the Application Manual

45

Appraisals

All HOME Projects Commissioned by DCA or Senior Lender during Underwriting Senior Lender Commissioned Appraisals must meet DCA

Requirements as defined in the Appraisal Manual DCA’s Cost of Appraisal Passed to Developer If project does not meet DCA requirements, funding may be

revoked

46

Appraisals

Applicant Commissioned Appraisals required when there is an Identity of Interest between Purchaser and Seller

Appraisal Commissioned by Applicant Appraisal must meet DCA Appraisal Manual Requirements “as is” Value Required

Scattered Site Projects: Appraisal for each non-contiguous Parcel is Required

47

Appraisal Guidelines

Values - “Tax Credit”, As is” (Land and Building), “As Complete” (encumbered and unencumbered)

Value at Maturity of Loan (Non-Amortizing HOME Loan) Favorable Financing Value

48

Appraisal Guidelines

Question and Answer

49


Utility Allowance

50

Utility Allowance

USDA– Building with USDA must use USDA Allowance– Tenant with USDA assistance must use USDA Allowance

HUD Regulated Buildings (such as Section 8 or 236)– Must use utility allowance reviewed by HUD annually

Tenants with Section 8 Assistance– Must use the Local PHA Utility Allowance that administers

the Section 8 Program. – This allowance must be approved for use by HUD for use in

the Section 8 Voucher /Housing Choice Program.

51

Utility Allowance

Buildings with DCA HOME and Tax Credits– All utility allowances except electricity must use Local PHA

Utility Allowance that administer the Section 8 Program– This year TWO options for electricity allowance:

May use the Local PHA Utility Allowance that administer the Section 8 Program

OR Utility Provider/DCA Energy Simulation Allowance for

electricity (APPLAUSE PLEASE)

52

Utility Allowance

Using the Utility Provider/DCA Energy Simulation Allowance Step 1

– Listing of Qualified Electric Providers can be found at

http://www.psc.state.ga.us

– Let your architect know that you will be taking advantage of this option and forward a copy of the DCA Project Data Specification Form as early as possible.

53

Utility Allowance


– Contact Provider to determine if they have an approved energy simulation system or can obtain access to one.

– Submit the required documentation for DCA and approval.– DCA will review the materials and issue a letter of approval to the

Utility Provider.– If the Provider should choose to use a consultant the Provider must

submit the required materials to DCA for review.– Applicant cannot go directly to a consultant. The Utility Provider

must deal directly with a consultant.

54

Utility Allowance


– Once the Energy Simulation has DCA’s approval, the Project Data Specification Form must be complete and accurate

– Using this data, the Utility Company will prepare allowance.– Utility Providers provide DCA with a copy of the allowance and

a listing of all Applicants who received an allowance.– Utility Providers will provide the allowance to the Applicant.– Applicant will place the Utility Provider Allowance and Project

Data Specification form in the application.– Don’t forget about other utilities: gas, water/sewer and trash.

55

Utility Allowance

Using the Utility Provider/DCA Energy Simulation AllowanceStep 4 - Ongoing Compliance

– Utility Provider must review the Utility Allowance and Project Data Specification Form when last building is placed in service.

– Updated allowance based on actual usage must be submitted with the property’s second year Annual Owners’ Report and Certification. The Project Data Form must also be submitted. This will be required on an annual basis based on actual usage.

– Utility Provider must perform update within 90 days of any rate change, fuel cost change, tax change or similar change.

– Must use this utility allowance for the entire Compliance Period.– Will involve work for both the Compliance Staff and the Utility

Providers….

56

Utility Allowance

Question and Answer

57


Question and Answer

58

2. Site Control Requirements

Warranty deed that conveys title to the subject property to the current Applicant or

a legally binding contract to purchase the proposed project site in the name of the Applicant (or which provides for an assignment to the Applicant) or

a binding long-term ground lease or an option for a binding long-term ground lease, with a minimum term of forty-five (45) years.

59


Contract must be executed prior to application submission date

Must include a legal description

Must provide legal control at least through September 15, 2005

60


Question and Answer

61

3. Environmental

All environmental matters must be resolved in a manner satisfactory to DCA

Every Project application must prepare a Phase I Environmental Site Assessment and include it in the application (See Tab Checklist #4)

For Scattered Site Projects, each parcel must meet this threshold requirement

62

Phase I Requirements

Must be prepared by an Environmental Consultant Must be prepared in accordance with DCA

Guidelines Must be conducted within 6 months of the

Application Submission Previous environmental studies must be included

in the application Must contain proof of insurance

63

Environmental Consultant

DCA defines a Environmental Consultant as:

a Professional Engineer ("P.E.") or

a Professional Geologist ("P.G.") who is licensed to practice engineering or geology, respectively, in the State of Georgia.

The P.E. or P.G. must be an employee or principal of the environmental consulting firm retained to complete the environmental assessment.

The Environmental Consultant must have at least five (5) years of experience conducting and/or reviewing environmental assessments.

64

Additional Environmental Issues

WETLANDS – DCA does not allow the disturbance of wetlands areas on the

property in excess of 1/10 of one acre– DCA does not allow the disturbance of any areas of wetlands

adjacent to the property – All areas of wetlands must be clearly documented with the

appropriate maps– All areas of disturbance must be clearly defined– Additional requirements for documentation applicable to

properties applying for HOME funds and will be discussed later this morning

65


FLOODPLAINS DCA does not allow the placement of any new construction within a floodplain unless:

– A FEMA Letter of Map Reclassification (LOMR) indicating the property is eligible for reclassification out of the floodplain is submitted

– City or County provides written approval of the proposed reclassification

– All floodplain areas must be clearly documented with the appropriate FEMA maps

– Additional requirements for documentation are applicable to properties applying for HOME funds and will be discussed later this morning

66


FLOODPLAINS The rehabilitation of existing buildings within a flood plain will meet threshold if:

– All existing flood plain areas are clearly documented with the appropriate FEMA maps

– The lowest existing floor elevation is at least 6” above the FEMA documented flood plain elevation

– The application is for Tax Credits only and no HOME funds are to be part of the application

67

Environmental Form Requirements

OAH Form E-1 (all applications)– Applicant/Engineer Environmental Certification

OAH Form E-2 (all applications)– Owner Environmental Questionnaire & Disclosure Statement

OAH Form E-3 (all applications)– Property Log & Information Checklist

OAH Form E-4 (HOME applications)– HOME Environmental Documentation

68

Insurance requirements

Environmental Consultants must carry insurance that

provides full coverage for all work performed.

The certificates must be submitted with the required Phase

I environmental review during the Application process.

69

Minimum Coverage

Commercial General Liability Insurance with limits of $1,000,000 per occurrence and $2,000,000 in general aggregate

Professional Liability Insurance with limits of $1,000,000.00 each claim and $1,000,000.00 in the aggregate

70

Common Mistakes

Improper Certificate of Insurance Insufficient or no title search Not a DCA environmental consultant Failure to follow format Not prepared within six months of application date Failure to include previous environmental study Failure to include all applicable OAH forms

71

All HOME Applications must include additional documentation to satisfy the HUD requirements.See Environmental Manual and complete OAH Form E-4 HOME Environmental Documentation for the required information (See Tab Checklist #4):

Sound Requirements Wetlands Development Floodplain Development Historic Requirements Other Hazards

HOME Additional Environmental Requirements

72

Locate major road/highway, railroad or airport

Complete HUD sound calculations and the Noise Assessment if sound levels exceed HUD average day/night levels (65db for outside and 45db for inside)

Provide a mitigation plan for all identified noise exceeding HUD average day/night levels

Provide documentation on sites investigated as options to the proposed property

HOME Environmental Sound Documentation

73

In addition to the floodplain documentation previously discussed, HOME applications must also include:

Engineer must provide a mitigation plan and sites investigated as options to the proposed property

FEMA must have already issued a LOMA or LOMR, and these must be included

Provide required notices from the Floodplain Management Requirements, 8 step process (24 CFR 55.20 Executive Order 11988)

Engineer must provide a statement on the impact of the development if it is adjacent or near to a floodplain

HOME EnvironmentalFloodplain Development

74

In addition to the wetlands restrictions and documentation previously discussed, HOME applications must also include:

Engineer must provide mitigation plan and documentation on sites investigated as options to the proposed property

Provide required notices from the Wetlands Management Requirements, 8 step process, (24 CFR 55.20 Executive Order 11990)

Engineer must provide a statement of the impact of the disturbance if it is adjacent or near to a wetlands area

HOME EnvironmentalWetlands Development

75

Is the property more than 50 years old

Is the property listed on the Nation Register of Historic Places and are there Historic Credits applicable

Documentation from the local SHPO office that the property is eligible and meets all requirements

Engineer/architect must provide mitigation plan for the neighborhood

HOME EnvironmentalHistoric Requirements

76

Industrial hazards must be identified

Any fire prone materials visible from or near to the site

Property located near a dump or landfill

Property located near an industry disposing of chemicals or hazardous wastes

Property located near the end of a runway for a civil or military airport

HOME EnvironmentalOther Hazards

77

3. Environmental

Question and Answer

78

4. Market Feasibility

DCA recommends that, prior to submitting Applications, Applicants independently obtain a market analysis sufficient to satisfy their own concerns as to market viability.

Applicants are encouraged to submit any market information with the Application that they believe may be helpful in determining the market feasibility of their proposal.

An Applicant may submit an independent market study in the Application. However, DCA will not be bound by the opinion or conclusions reached by the Applicant-commissioned market study.

Any market information or market study provided by the Applicant will be given to DCA’s market analyst.

79

Market Feasibility

Project feasibility as determined by the DCA market analyst will be based on, but not be limited, to the following factors: Market capture rates less than 30 percent for all LIHTC and Market units in the project, Market capture rates less than 70 percent for all units in each AMI income band width for the project, An absorption period less than 24 months to reach stabilized occupancy, Stabilized occupancy rate of 93% or above, Unit mixes or targets populations supported by the market, Competing proposed projects in the same geographic market area where, in part, location, unit mix, rent structure, market demand, and other factors favor one project compared to another. Ability of market rate units to lease at the projected rents.

80

Market Feasibility

To assist in determining the effect of existing and new units on properties being proposed for development, analysts are now instructed to use a Comparability Analysis on those units included in the Market Supply. This will allow for a Comparability Factor to be assigned to each comparable property and a weighted average of the existing units will be included in the Market Supply number to be subtracted from Total Demand to achieve Net Demand.

81

Market Feasibility

Units that are subsidized with PBRA or whose rents are more than 20% lower than the rent for other units of the same bedroom size in the same AMI band and comprise less than 10% of the total units, will not be used in determining project demand. These units, if priced 30% lower than the average market rent for the bedroom type in any income segment, will be assumed to be leasable in the market and deducted from the total number of units in the project for determining capture rates.

82

Retention Factor

For existing occupied properties that are going to be rehabilitated, market analysts shall consider retention of current occupants in their demand calculations. Retention is measured by the number of tenants that are not rent burdened or over-income and the number of PBRA units. For Elderly projects, demand may include residents from outside the market area, seniors living with and/or supported by their children as documented by the market analyst.

83

Market Feasibility

The analyst may also consider the following factors in determining demand from Elderly Households.

•Seniors relocating from other areas outside the Primary or Secondary Market area.•Children subsidizing rents for their parents.•Seniors moving from their children’s homes whom they had been living with.•AMI for elderly developments will be limited to 2 person households regardless of the number of bedrooms per unit proposed.

84

Market Feasibility

No adverse impact to the market and financial health of existing assisted rental housing properties in the market area. Assisted rental housing properties include those financed by Credits, USDA , HUD 202 or 811 (as appropriate), DCA or locally financed HOME properties, HTF, and HUD 221(d)(3) and 221 (d) (4) and other market rate FHA insured programs. DCA does not regard public housing as competitive with programs administered through the Plan; therefore, this policy does not apply to public housing properties,

85

Question and Answer

4. Market Feasibility

86

5. Threshold Requirements

Site Zoning Operating UtilitiesProject AmenitiesSite AccessPhysical Needs AssessmentsSite Information

87

Zoning to be confirmed in writing by the authorized Government Official which must include the zoning designation and land use classification of the property

Documentation must be accompanied by a clear explanation of the designated zoning

If there is no local zoning ordinances, a letter to that effect from the authorized Government Official

The conceptual site plan must clearly demonstrate that all restrictions of the designated zoning have been met (See Tab Checklist # 5 & #11)

For scattered site properties, each parcel must meet this threshold requirement

Site Zoning

88

All operating utilities must be available to the proposed property as of the Application Submission

All easements necessary must be secured, and all commitments from the local utility providers must be secured as of the date of Application Submittal

Any easements and/or improvements must not be contingent on annexation of the property, improvements or any

infrastructure funding due the local provider or authority

All easements and commitments must be documented fully in the application (See Tab Checklist #6)

Operating Utilities

89

Operating Utilities include:– Water and sanitary sewer service– Stormwater Sewer (if in an area that has installed storm sewer system)– Electricity– Gas service– Telephone services– Television cable services as available

Off-site costs for extension of utilities are not eligible for funding from DCA resources


Operating Utilities

90

Basic threshold project amenities must include:– HVAC systems for each unit– Refrigerator and stove for each unit– On-site laundry (one washer and one dryer for each 25 units)– One equipped recreation area

All basic amenities must be available at no extra charge to the residents, with the exception of the on-site laundry

Each tenancy characteristic may have additional basic requirements

Basic amenities are certified on OAH Amenity Certification Forms D-3 – D-6, as applicable for tenancy type, i.e. Elderly, Family etc. (See Tab Checklist #20)

ALL applications must submit the appropriate Certification Form

Required Amenities

91

For scattered site 10(B)(1)(a) each parcel must include unit amenities, project as a whole must meet the requirements for laundry & equipped recreation area

For scattered site 10(B)(1)(b) where parcels are located within a single neighborhood, the project as a whole must meet the requirements for the laundry & equipped recreation area

ALL applications, both competitive and non-competitive, must submit the Certification Forms and include the basic requirements and upgrades in the work scopes

Project Threshold Amenities

92

All sites proposed for development must be legally accessible by paved road.

This does not apply to private driveways accessing only the proposed property.

If such paved roads are not in place at the time of application documentation must be included in the application evidencing the local commitment for funding and the timetable for the completion of such paved road (See Tab Checklist #9).

Must be indicated on OAH Site Information Form D-1

For scattered site properties, each parcel must meet this threshold requirement.

Site Access

93

For rehabilitation proposals only a physical needs assessment must be included in the application (See Tab Checklist #10)Rehabilitation proposals must be accompanied by a unit-by-unit work scope that reflects the information in both the physical needs assessment, the environmental site assessment, and the Certification FormsWork scope must include the findings from the Physical Needs Assessment and upgrades from the Certification Forms for ALL applicationsFor scattered site applications, each parcel must meet this threshold requirement

Physical Needs Assessment

94

The rehabilitation must reflect an expenditure of at least $20,000 per unit in construction hard costs

– Refer to the Application Manual for the DCA requirements.– Must not be more than 90 days old at the time of application– Must be completed by a third party entity and include the

resume and the qualifications of that consultant– Note the sampling expectations included in the instructions– Forms included may be used or the consultant’s own format,

providing the same information is included

The Certification Forms and Systems and Conditions Forms are included in the Architectural Manual and must be submitted for ALL applications


95

DCA requirements include replacement of all components existing on the property that have an Effective Remaining Life of less than five years must be included in the current work scope

The completed property must exceed the life of the loan or other DCA funding source by five years

No capital expenditure in the first 5 years with the exception of maintenance activities

The Consultant and Design Team must complete the Physical Needs Assessment to meet DCA requirements



96

A conceptual site development plan must be submitted accompanied by the OAH Site Information Form D-1 (Tab Checklist #11)

The conceptual site development plan should include:– Wetlands and floodplain areas– Utility information– Easements– Zoning restrictions and setbacks– Use of all adjacent properties and access from paved roads– Layout of all buildings, roads, parking areas and site amenities– Areas of tree and vegetation preservation

For scattered site properties, each parcel must meet this requirement

Site Information

97

5. Threshold Requirements

Question and Answer Site Zoning Operating Utilities Project Amenities Site Access Physical Needs Assessments Site Information

98

5. Accessibility

All projects that receive allocations or funding under the Plan must comply with all applicable Federal and State accessibility laws

Refer to the Accessibility Manual for the Applicability Chart for Accessibility Laws

The basic requirements are to be included on OAH Accessibility Certification Form D-9, see Tab Checklist #27

For scattered sites 10(B)(1)(a) & (b) each parcel must meet the accessibility requirements

99

Applicable Lawsand DCA Requirements

Federal Fair Housing Act (FHA) Section 504 of the Rehabilitation Act of 1973 American with Disabilities Act (ADA)

State Accessibility Laws

DCA QAP Requirements - 5% of the units equipped for the mobility impaired and an additional 2% of the units equipped for the hearing/sight impaired

The most restrictive law shall prevail

100

Americans with Disabilities Act

Applicable to areas of public accommodation

Curb cuts at sidewalks and entrances Designated accessible parking spaces Wide doors, minimum 32” clearance Telephones and drinking fountains lowered Tactile markings on elevator control buttons Levered door hardware Wider toilet stalls with installed grab bars Braille and/or large print signage.

101

Fair Housing Act (FHA)

Applicable to common use areas on a property Applicable to buildings with 4 or more units Accessible building entrance on an accessible route Accessible route into and through the dwelling units All exterior facilities including mail areas, bus stops, sitting areas,

trash compactors etc., to be located in accessible locations All site amenities must be accessible

102

Visitability

Recommended DCA Practice

Provide at least one accessible means of egress/ingress for each unit. – Ex. No step entry into units including a 36” wide

primary door

Provide a 32” clear opening in bathroom and interior doorways

Refer to Accessibility Manual and Fair Housing Requirements for more information

103

Section 504 of the Rehabilitation Act

A minimum of 5% of the total dwelling units or at least one unit, whichever is greater, must be accessible for persons with mobility impairments

An additional 2% of the units or at least one unit, whichever is greater, must be accessible for persons who have hearing or vision impairments

Refer to the Act for additional requirements

104

Georgia Accessibility / Single Family

All single-family detached units a part of a multifamily project funded with HOME funds must meet the Act’s requirements

Not applicable to LIHTC Section 504 requirements must be met See Accessibility Manual (Tab C) for additional

details

105

DCA Requirements

DCA requires 5% of the total dwelling units or at least one unit, whichever is greater, must be equipped for persons with mobility impairments

An additional 2% of the units or at least one unit, whichever is greater, must be equipped for persons who have hearing or vision impairments

Required even if there is no federal funds in the project

106

6. Accessibility

Question and Answer

107

7. Preliminary Financing Commitments

Threshold Criteria 16 / Application Binder Tab 12

Required for each Funding Source

Preliminary Commitment must include: – Purpose– Property Address– Amount– Interest Rate– Terms and Conditions– and Fees must be clearly documented

Formal Commitment due within 75 of days of Carryover Allocation

108

Preliminary Financing /Assumption of Existing Debt

Required Documentation– Certification Letter as of April 30, 2005– Copy of Promissory Note and Amendments– Copy of Loan Agreement and Amendments– Copy of Security Instruments (Deed)

Threshold Criteria 16 / Application Binder Tab 12

109

Preliminary Financing

• For Scattered Site Projects all units must be developed under one master plan of financing and considered as a single project by all funding sources.

• The preliminary commitments must be applicable to the project as a whole for scattered sites.

110

7. Preliminary Financing Commitments

Question and Answer

111

8. LEGAL OPINIONS

ELIGIBILITY OF PROJECT FOR ACQUISITION CREDITS

112

ACQUISITION LEGAL OPINION

Sample Legal Opinion in Manual Non tax credit properties - 10 Year rule -Related parties – include related parties interest in residual

sales, cash flow and partnership allocations Expiring tax credit properties -15 year compliance experience has or will expire

113

8. Legal Opinions

Question and Answer

114

Requirements for Owners, Developers and Management

Companies

9. Experience

115

Owner Experience

Two multifamily rental projects 3 continuous years of ownership experience Experience must have occurred subsequent to January 1, 1995 Similar size project Direct or indirect ownership interest in previous project Material participation through regular, continuos and

substantial involvement in previous project

116

Developer Experience

Successful development experience Two multifamily rental housing projects Similar size (number of dwelling units) Developer experience occurred subsequent to January 1, 1995 Experience from project inception through project completion

117

Management Experience

Management experience in two multifamily rental housing projects of similar size (number of dwelling units)

Manager’s experience must extend for at least two years and include project lease up experience

Management experience occurred subsequent to January 1, 1995

118

Entity/Principal

Owner, Developer and management entities can meet the QAP experience requirements in one of two ways:

Through the entity itself Through the experience of a principal of the entity

119

DCA Definition of Principal

Direct or indirect ownership interest in the ownership, development or management entity

Material participation in projectRegular, continuous and substantial involvement, orExecutive director of a non profit

120

Non Profit Experience

A non-profit General Partner may also meet the experience requirements through the experience of a sponsoring non-profit.

121

Options for Inexperienced Owners and Developers

Partnering with an entity who has the required Owner and/or Developer experience, or

By providing an executed contract with a Consultant who has the required experience.

122

Partnering/Consulting Contract Requirements

Executed agreement.

The training plan must be attached to the agreement as an exhibit; and

The training plan must be approved by DCA at its sole and absolute discretion.

The Partner/Consultant must satisfy the Threshold experience requirements for Owners and/or Developers

123

Partnering/Consulting Contract Requirements

Relationship must be that of co-developers for developers The responsibilities of each party to the agreement for the

development of the project must be described in detail The inexperienced entity must materially participate in the

development process The training services must be provided from project

commencement, through construction, lease up and permanent loan conversion and/or issuance of 8609’s, whichever is later

124

Consultant / Partnering Training Guide

DCA has a Manual to assist Inexperienced entities in preparing their training plans (see Tab M).

125

Waiver

A proposed Project Owner, Developer or Manager that cannot meet the experience requirement set forth above may request a waiver of the DCA experience requirements (Forms P-1, P-2, and/or P-3 as applicable).

Due Date - March 1, 2005.

126

Submission Requirements

Pre-application Submission / Application Submission for entities that have not been determined to be experienced by DCA since 2003

Forms P-1, P-2, AND/OR P-3

127

Question and Answer

9. Experience

128

9. Award Limitations

Applicants are permitted to submit a maximum of six applications

Limitation is applicable to Ownership interests

129

Maximum Ownership Interests

Limited to combined federal Credit limit cannot exceed $1,750,000 and

HOME funding cannot exceed 35% of total HOME loan resources for year

130

Exceptions

Partner or consult with an inexperienced entity Serve as a Developer in a project Exception can only be used for two additional projects

131

Other Limitations

Inexperienced owners and/developers that meet experience through partnering or consultant contracts are limited to one project

132

9. Award Limitations

Question and Answer

133

9. Eligibility for Non Profit Set Aside

The Internal Revenue Code requires that 10 percent of the total Housing Credit ceiling amount be available only to projects with qualified nonprofit participants and owners.

In order to be included in the set aside, a project must meet certain IRS standards as well as DCA QAP requirements.

134

Requirements

Be an organization recognized by the Internal Revenue Service as a 501(c)(3) or 501(c)(4) organization

Validly exist and be in good standing

Have an ownership interest in the project throughout the entire 15-year compliance period.

DCA requires that the non profit own 51% of the partnership

The non profit can own stock in a corporation that owns a low income housing property, if the corporation is 100% owned by a qualified non profit organizations

135

Requirements

Meet the criteria defined as material participation in Treas. Reg. 469(h)

The non profit not be affiliated with or controlled by any for profit entity

One of the exempt purposes of the nonprofit must include the fostering of low income housing.

136

Material Participation

Nonprofit participates in the activity for more than 500 hours during the tax year.

Nonprofits participation constitutes substantially all of the participation in the activity of all individuals (including non-owners) for the tax year.

Nonprofit participates in the activity for more than 100 hours during the tax year, and its participation is not less than the participation of any other taxpayer for such year.

Nonprofit activity is a significant participation activity for the tax year, and the taxpayer’s participation in all significant participation activities during the year exceeds 500 hours. A significant participation activity is one in which the taxpayer has more than 100 hours of participation during the tax year but fails to satisfy any other

137

Additional QAP Requirements

If the non profit is also the developer of the project, the nonprofit must receive a percentage of the developer fee greater than or equal to its percentage of ownership interest.

A copy of the general partnership joint venture agreement which indicates the non profits interest and developer fee amount must be included in the Application binder Tab 17.

138

Additional Facts

Status of an organization can be confirmed using the IRS website www.irs.com and enter 78 in the Search IRS site.

139

Required Documentation for Tab 17

IRS Tax Exempt status determination letter Secretary of state certification of non profit status General partnership joint venture agreement Sample Legal opinion (form A-4) Documentation of non profits ownership interest Board of directors information Development agreement Bylaws CHDO prequalification, (if applicable)

140

Frequently Asked Questions

Q: Is a qualified non profit automatically eligible for the non profit set aside?

– A: Applicants must indicate in the appropriate box their desire to compete under the Nonprofit Set-aside.

Q: Does the non profit have to have an interest in the Developer entity?

– A: Depends on the circumstances.

Q: If the Non-Profit set aside is reached prior to an application filed under the non profit set aside being funded will such Non-profit be considered under the general pool?– A: Yes

141

9. Eligibility for Non Profit Set Aside

Question and Answer

142

10. Additional HOME Requirements

Additional HOME Requirements

143

10(b). HOME Site and Neighborhood Standards

Applicants for HOME funding of new construction projects must determine if the project is located in an area of minority concentration, a racially mixed area, or a non-minority area

A Minority concentration is an area that has 50% or more minorities

A Racially Mixed area is an area that has 25% or more minorities

A Non-Minority area is an area that has less than 25% minorities

144

Site and Neighborhood Standards

Minority Concentration1. Map of proposed project site2. Site map of proposed neighborhood3. Census track or enumeration district data of proposed

neighborhood population by:a. Household typeb. Tenure typec. Income group and housing conditionsd. Race of residents

Submit the above information in Tab 18 along with Certification form B-1.

145


4. Narrative on how the percentage of minority residents is determined

5. List of sufficient, comparable sites outside area of minority concentration or market study evidencing that there is an overriding housing need in the area of minority concentration

6. Expected rents for units on site and comparable rates to other low income housing near comparable sites outside area of minority concentration

7. Number of HUD assisted units located outside of the area of minority concentration

146


Special Considerations When Choosing a Minority Concentrated Area for Development:

– Must provide strong evidence/documentation that there is an overriding housing need in this area of Minority Concentration.

– DCA will be forwarding applications located in an area of Minority Concentration to HUD for review

147


Racially Mixed Area

1. Map of proposed project site2. Site map of proposed neighborhood3. Census track or enumeration district data of proposed neighborhood

population by:a. Household typeb. Tenure type c. Income group and housing conditionsd. Race of residents

4. Based upon the proposed number of units, show what increase of minority residents to non-minority residents will occur


148


Non-minority1. Map of proposed project site2. Site map of proposed neighborhood3. Census track or enumeration district data of proposed

neighborhood population by:a. Household typeb. Tenure typec. Income group and housing conditionsd. Race of residents


149


The Federal Regulations Compliance Officer is responsible for reviewing the information submitted by the applicant. The Federal Regulations Compliance Officer will certify to one of the three statements identified in the Certification of Compliance, HOME Site and Neighborhood Standards (See Forms Appendix).

Census Website:http://www.census.gov/geo/www/tractez.html

150

10(b). HOME Site and Neighborhood Standards

Question and Answer

151

10 (c) Contract Addendum

Uniform Relocation Act (URA) Requirement for Land

Acquisitions Voluntary acquisitions are subject to the requirements outlined at 49

CFR 24.101, as outlined in HUD’s implementing instructions found in Chapter 5 of Handbook 1378.

The guidance explains the voluntary acquisition process for a buyer that has the power of eminent domain, but does not plan to use such power, and for a buyer that does not have such power.

152

Contract Addendum

The URA requirement for the acquisition of property can be satisfied by the following actions:

Pre-Contract Agreement (Form B-10) -- provided before making the purchase offer

Right to Withdraw (Form B-11) – in cases where there is an existing option or contract or– Pre-Contract Agreement was not executed prior to the

execution of the Sales Contract/OptionSeller must be provided the opportunity to withdraw after the

Notice is provided

153

Contract Addendum

Applicable to voluntary acquisitions of real property with the intent of procuring federal financing:

1) Vacant Land 2) New Construction 3) Rehabilitation (occupied or not occupied)

154

Contract Addendum

Pre-Contract Agreement (Form B-10)

In voluntary acquisitions subject to 49 CFR 24.101, the buyer must inform the seller in writing that:

Buyer may use Federal Funds obtained from the U.S. Department of Housing and Development to acquire property owned by Seller.

The buyer does not have the power of eminent domain and, therefore, will not acquire the property if negotiations fail to result in an amicable agreement; or,

155

Contract Addendum

Any tenant legally occupying the property is eligible to receive relocation assistance and benefits as identified in the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended.

The buyer’s estimate of the fair market value of the property.

156

Contract Addendum

Examples of Reasonable Evidence of Fair Market value

Appraisal Letter from an Appraiser setting out fair market value (does

not have to be a full appraisal) Letter of Real Estate Broker familiar with market estimating

fair market value – (recent comparable sales should be attached)

Documentation from Tax Assessors office as to value of property

The purchase price does not have to equal the Fair Market Price

157

Contract Addendum

If the Applicant Fails to Give Notice

Right to Withdraw Sample Letter (Form B-11) The Owner must be given the option to withdraw from the purchase

agreement after receipt of the Notice

158

Contract Addendum

If Notice is not given, Seller may be able to claim that the acquisition was involuntary and relocation assistance may be available to the Seller.

All Notices must be personally served or sent by certified or registered first class mail.

Documentation required under this section must be submitted to DCA at the application stage.

Tab 18 Additional HOME Requirements

159

10 (c) Contract Addendum

Question and Answer

160

10. (d) Contractor Cost Certification

Requirements Contractors will be required to execute a Cost Certification

(Forms B12, B13, and B15) as to the actual costs incurred in construction of the project.

A Certified Public Accountant must perform the audit and issue an opinion letter in accordance with Generally Accepted Accounting Principals and Generally Accepted Auditing Standards and execute CPA Certification (Form B14).

The Cost Certification will include an audit opinion letter from a CPA certifying the contractors actual cost.

The DCA Cost Certification and audit opinion letter will be required prior to release of final retainage.

161

Contractor Cost Certification

DCA Review The Certification and Audit will be reviewed by DCA staff who

will determine the total actual allowable cost for construction. DCA Director of the Office of Affordable Housing and of

Housing and Finance Division will review staff recommendations prior to release of retainage to ensure that goals of preventing Contractor windfall profits and that sources equal uses are met. DCA shall limit the sum total of all payments from all sources to the Contractor to the lessor of:

– (1) the construction contract price as adjusted for change orders or

– (2) the total actual allowable cost for construction as determined by DCA

162


Adjustments If the Cost Certification and Audit of the actual construction

costs finds that the Contractors actual costs are equal to or more than the budgeted cost and DCA concurs with that finding, no further action is necessary.

If audit finds that Contractors actual allowable costs for construction are less than budgeted costs or DCA staff determines that the Contractor’s actual allowable cost for construction is less than budgeted costs, DCA has some flexibility in determining the action that should be taken.

DCA has the ability under its change order process to approve legitimate cost increases to the property up to the original budgeted amount

163


Adjustments

Legitimate costs increases would include (but are not limited to)– material upgrades– Amenities that provide security such as lightning,

fencing, etc.– Amenities designed to enhance the quality of life

164


If the Difference between the budgeted costs and the actual costs are significant or extraordinary, DCA may determine that change orders cannot be utilized to correct the problem. In that event, the following actions may be taken by DCA to meet the above referenced goals:

– DCA may determine that the reduction in costs will reduce eligible basis and will decrease the amount of tax credits by an amount sufficient to ensure that sources will continue to equal uses.

– DCA may determine that the project HOME loan will be reduced by an amount sufficient to ensure that sources will continue to equal uses. (DCA HOME Loan documents have been revised to reflect DCA’s ability to make this revision subsequent to closing).

– DCA may also approve an exception to its policy to only fund a portion of hard costs and fund all hard costs or a portion of the soft costs if necessary, provided that the final sources and uses remain equal.

165


HUD and/or DCA shall have the right to audit the Contractor’s Certificate of Actual Cost for a period of five years from project completion and require the return of an overpayment from the owner/borrower.

166


Construction Contract Requirements Each construction contract between the General Contractor and the

Developer of a HOME project shall at a minimum contain the following:

1. The sum total of all payments from all sources to the contractor shall not exceed the actual allowable cost for Construction as determined by DCA.

2. HUD and/or DCA shall have the right to audit the Contractor’s Certificate of Actual costs for a period of five years from project completion.

3. HUD and the Georgia Department of Community Affairs shall have access to the Contractor’s records for the project and for his/her cost certification for five years after project completion in order to conduct audits of project costs.

The General Contractor of each HOME project will be required to execute the Contractor’s Cost Certification Forms.

167

10.(d) Contractor Cost Certification

Question and Answer

168

11. Relocation and Displacement Policies

HOME applications, 9% Tax Credit applications and 4%Tax Credit applications All participants must ensure that all reasonable steps are taken to

minimize displacement of persons (families, individuals, businesses, non profit organizations) as a result of the construction or rehabilitation of the project.

Impact of proposed development and relocation on the tenants of a proposed project on the community will be reviewed in determining whether displacement can occur.

Any displacement of existing residents is subject to GHFA’s approval. Relocation and Displacement Policies are outlined in Manual.

169

Overview Relocation and displacement for GA Tax Credit Projects

Detailed project specific displacement and relocation plan Relocation Budget Explanation of efforts planned by Applicant to mitigate the impact of

displacement and/or relocation GHFA requires owners to provide temporary relocation assistance to

tenants that must move or which have a loss of use of their unit or a portion of their unit during the rehabilitation.

Relocation/Displacement Spreadsheet must be kept through out rehabilitation process.

Compliance will be monitoring and visiting properties.

170


Temporary Relocation/30 Days When a tenant looses the use of a portion of his unit or his entire

unit for a period of 30 days or less. Advisory services required.

Temporary Relocation/Over 30 Days When a tenant looses the use of a portion of his unit or his entire

unit for more than 30 days. Advisory services required If the tenant elects to temporarily relocate to a unit outside of the

immediate vicinity of the project, rent differential will be based on comparable rents within the primary market area of the property.

171


Tenants who remain on the property during the

rehabilitation In place tenants must be offered a suitable unit at an affordable

price when rehabilitation is complete. No increase in rent unit is considered affordable. In place tenants must be offered a one year lease at same rent

paying prior to rehabilitation.

172


Over Income Tenants Consider when structuring property. Place in Mkt. Rate Unit If permanently displaced before end of current lease Owner must

agree to reimburse the tenant for the following– Tenant for moving expenses to a comparable site in same area– Pay for utility disconnect and reconnect– Pay difference between rent on original unit (per lease

agreement) and comparable unit rent.– Advisory Services required (document).

173


NEW Tax Credit General Information Notice (30 days after Award) Must document how each notice was delivered 30 Day + 60 Day notice for tenant regarding any move Posters with GHFA contact (address and phone #) and Owner contact

(address and phone #) must be posted in office and at each building.

REMINDER Failure to follow the GHFA requirements for relocation and relocation

assistance will be considered a major instance of non compliance.

174

Displacement and Relocation for GA HOME funded Projects

Uniform Relocation Assistance and Real Property Acquisition Policies of Act of 1970

Displacement as a result of– Rehabilitation– Demolition– Acquisition

Protects all persons regardless of their income. Section 104(d) Protects low income person (under 80% of AMI) is eligible for

assistance if unit occupies is demolished with HOME funds or the person is displaced as a result of a HOME conversion.

175

Displacement and Relocation for GA HOME funded Projects

HOME Regulations Notices and advisory services required outline in manual. Payments for relocation or displacement are also covered in

manual. HUD Handbook 1378 covers the Federal Relocation requirements Protects all persons regardless of their income. Notice of Issuance of New Final Rule for URA (January 4, 2005) There are significant changes and all Applicants and Project

Owners who receive HOME funding must carefully review this Rule.

176

Some of the Changes

That any residential tenant who has been temporarily relocated for a period beyond one year must be offered all permanent relocation assistance. The rule also provides that temporary relocation for less than 12 months will be strictly construed to ensure that the relocation is not actually a displacement.

Eviction for cause: an eviction related to non-compliance with a requirement to carry out a project (failure to move or relocate when instructed, or to cooperate in the relocation process) does not negate a person’s entitlement to relocation assistance and payments.

177

Some of the Changes

Prohibit agencies from proposing or requesting a displaced person to waive their rights or entitlements to relocation and benefits provided by the Uniform Act and this regulation.

Residential self moves cannot be based on the lower of two bids. They must be based on actual receipts.

It also establishes a new category of eligible moving expense payments.

Just some of the changes.

178


TENANT DATA FORM

All existing tenants complete Tenant Data Form Student Question added Special Accommodations Question Detailed analysis of existing tenant base Over-income Rent burdened (currently) Rent burdened (with new rents)

179

Things to Remember

Notice Requirements. Overview in GHFA Manual. GIN Notice must be sent out prior to submitting the HOME

application. Document method of delivery. HUD currently updating.

180

Things to Remember

Required Application Documents All Tenant Data Certifications must be complete Displacement Plan and Budget Proof that all tenants at property applying for HOME were given

the General Information Notice (GIN) prior to submission of application.

Sample of Notice sent Rent rolls for 90 days (last 3 months) Relocation Displacement Project Spreadsheet

181

11. APPLICATION REQUIREMENTS FOR RELOCATION

Question and Answer

182

12. Rental Access Network Certification

183

www.rentalaccessnetwork.org(bottom of page)

184

Property Manager Login

185

ID Request Form

186

ID Request Confirmation

187

Rental Access Network (RAN)Main Menu

188

Add or Edit a Property

189

Add or Edit Accessible Unit

190

Updated Property Menu

191

Edit Another Property

192

Additional Main Menu Options

193

Transfer Properties

194

RAN Search Screen

195

Search Results

196

Property Information as viewed by prospective renter

197

Change Password

198

Questions or Comments?

Please contact [email protected]

12. Rental Access Network Certification

199

Enjoy lunch!

SECTION I End

200

Welcome back from lunch. Please be seated we are about to begin.

SECTION II

201

The application must include the following documentation (See Tab Checklist #11):

Site Location Map Site photographs Conceptual site development plan OAH Site Information Form D-1 OAH Site Certification Form D-2 Transit documentation including endorsements, route information etc. Historic designation documentation Brownfields/Greyfields documentation

1. Project Locational Characteristics

202

Adjacent Residential Development 2 points

Development must be adjacent to or directly across the street from the proposed site

Must be stable occupied residential development

Points available if the property is part of a larger parcel

For Scattered Site projects each parcel must meet the requirements to qualify for points allocation

Project Locational Characteristics

203

Desirable characteristics: 1 point for each to a maximum of 10– Non-rural sites must be within 1 mile walking/driving distance– On paved sidewalks or established walkways or trails– Rural site must be within 1 1/2 miles walking/driving distance

Undesirable characteristics: 1 point deducted to zero– Within 1/2 mile of the proposed site both rural/non-rural– Properties with evidence of criminal trespass will be reviewed for commercial/non residential properties only

For scattered site properties 10(B)(1)(a) the project will be scored as a whole

For scattered site properties 10(B)(1)(b) each parcel will be scored and the total score averaged


204

Quality Growth Initiatives 15 points

Infill Sites: 5 points– Surrounded on all but one side by established development– Maximize use of existing utilities, infrastructure – Residential or retail development on one side

For scattered site properties, each parcel must meet this requirement for points allocation


205


Community Transportation Options: 2 points– Project formally designated as transit oriented by a Rapid Transit Authority, or:– project located on a bus route with a stop within ½ mile, or;– project located within ½ mile of a transportation roadway

For scattered site properties 10(B)(1)(a) & (b) each parcel must meet this requirement for points allocation


206


Adaptive Reuse, Historic Preservation, Brownfields/Greyfields Redevelopment: 6 points

– Project is the adaptive reuse of an existing building 2 points– Building is formally designated as an historic structure and historic tax credits are part of the application 2 points– Redevelopment of a brownfields site 2 points– Redevelopment of a greyfields site 2 points

For scattered site properties, each parcel must meet this requirement for points allocation


207


Site Layout: 2 points– Parking located away from street 2 points– Durable fencing at the site entry on street side of property

2 pointsFor scattered site properties, each parcel must meet this requirement for points allocation


208

Question and Answer

1. Project Locational Characteristics

209

Please note correction in today’s package. Refer to Exhibit A to Appendix II of the 2005 QAP.

• 4 Points 2005 Application is within a Local Government (city

or unincorporated portion of a county) that is not on the attached list for 2002, 2003, and 2004.

• 2 Points 2005 Application is within a Local Government (city

or unincorporated portion of a county) that is not on the attached list for 2003 or 2004.

1 (a). Previous Projects within a Local Government

210

Question and Answer

1 (a). Previous Projects within a Local Government

211

All Tenancy Characteristics must be certified on the OAH Certification Forms as is appropriate for each tenant base.

ALL applications both competitive and non-competitive must certify to the basic threshold amenity requirements on the OAH Certification Forms D-3 – D-6

ALL applications both competitive and non-competitive must certify to upgraded amenities as is appropriate for the tenant base of the property on the OAH Certification Forms D-3 – D-6

ALL competitive applications must certify to the basic and optional threshold services requirements on the OAH Certification Forms N-1 – N-4

2. Tenancy Characteristics

212

Family Housing 22 Points

Designed to foster the development of housing for families and to encourage community activities from within the neighborhood.

1. Basic Requirements 6 points OAH Amenities Certification Form D-3

2. Optional Amenities 1 -15 points OAH Amenities Certification Form D-3

3. Optional Services 1 - 3 points OAH Services Certification Form N-1

Tenancy Characteristics

213

Special Needs Projects

For housing of the homeless, persons with disabilities (mental, developmental), abused spouses and their children, persons with alcohol or other drug addition, and persons living with HIV/AIDS (excluding Elderly Housing and Housing for Older Persons).

1. Basic Requirements OAH Amenities Certification Form D-4

2. Required Amenities & Services OAH Amenities Certification Form D-4Memorandum of Understanding for Services


214

Special Needs Projects

>30% of the units but <35% 24 points>= 35% of the units but <40% 25 points>= 40% of the units 26 points


215

Elderly Housing 20 points 1. Basic Requirements 6 points

OAH Amenities Certification Form D-52. Optional Amenities/Services 1-14 points

OAH Amenities Certification Form D-5 OAH Services Certification Form N-3

“Elderly Housing” means housing intended for and only occupied by Elderly persons including a family in which all members are Elderly (person at least 62 years of age). All household members must be Elderly (no children, and no disabled persons under the age of 62).


216

Housing for Older Persons 20 Points

1.Basic Requirements 6 pointsOAH Amenities Certification Form D-6

2.Optional Amenities/Services 1-14 pointsOAH Amenities Certification Form D-6OAH Services Certification Form N-4

“Housing for Older Persons Definition,” means housing intended and operated for occupancy by person 55 years of age or older (“Older Persons”). According to Georgia law, such housing must also have significant facilities and services serving the Older Person population even though the requirement has been eliminated from the federal definition of an elderly project. At least 80% of the total occupied units in such a housing project must be occupied by at least one Older Person. Up to 20% of the units may be occupied by others, including the landlord’s employees, the surviving spouses or children who were Older Persons when they died, and caregivers. DCA will monitor the required facilities and services during the applicable Compliance Period or the Period of Affordability whichever is longer.


217

For scattered site properties 10(B)(1)(a) parcels will be scored as a whole. Optional amenities and services must be evenly distributed across the parcels

For scattered site properties 10(B)(1)(b) parcels will be scored as a whole where they are located within a neighborhood. Optional amenities and services must be evenly distributed across the parcels

All applications must select amenity upgrades as indicated on the applicable OAH Certification Forms D-3 – D-6

Applications must meet the basic requirements before points will be allocated for optional amenities and services

See Tab Checklist #20 for documentation requirements


218

Question and Answer


219

3. Additional Rent & Income Elections

Scoring Section 4 outlines the following requirements:

4A: Public Housing Authority Development and Operating Rental Subsidy - 15 points

4B: Very Low Income & Rent Restrictions - 6 points 4C: Project Based Rental Assistance - 18 points 4D: Very, Very Low Income & Rent Restrictions - 8 points 4E: DCA PBRA-Special Needs Tenants - 2 points 4F: Mixed Income Projects - 4 points 4G: Extension of cancellation option period - 3 points

For scoring purposes, no double counting of same units under this sectionScattered site project - scoring based on project as a whole

220

PHA Investment and Operating and/or Rental Subsidy

Executed agreement between PHA & Project ownership entity– Development subsidy: type, term and amount of investment– AND Operating and/or Rental Subsidy: operating cost contributions or

project-based tenant rental subsidy Minimum 5 years Number and type of rental units exclusively for public housing

tenants– 10% of units w/ operating subsidy or rental subsidy AND investment of

5% of the total project hard cost 5 points– 20% of units w/ operating subsidy or rental subsidy AND investment of

10% of the total project hard cost 10 points– 30% of units w/ operating subsidy or rental subsidy AND investment of

15% of the total project hard cost 15 points

221

Project Based Rental Assistance

PBRA – HUD, PHA or USDA– Executed agreement: minimum 5 years & 10%

of total unitsFor USDA, include the amount of rental assistanceFor HUD or PHA, include the contract rent Number of units assistedDuration of assistanceTerms/conditions

– For existing HUD PBRA contract:Extension may be contingent upon LIHTC funding

222

PBRA – HUD, PHA or USDA

– Minimum 5 years & 10% total units>=10% but <20% 5 points>=20% but <30% 6 points>=30% but <40% 7 points>=40% but <50% 8 points>=50% but <60% 10 points>=60% but <70% 12 points>=70% but <80% 14 points>=80% but <90% 16 points>=90% 18 points

223

Project Based Rental Assistance

Other Governmental PBRA (Non-HUD, USDA, PHA)– Executed agreement: signed by COO of funding entity

Dollar Amount of Rental Assistance Minimum term of 5 years Tenant pays 30 % of income Tenant selection plan for rental assistance

Points based on percentage of: annual rental assistance divided by total potential gross annual rental income:

>= 4% but < 8% 4 points

>= 8% but < 12% 5 points>= 12% but < 18% 6 points>= 18% but < 25% 7 points>= 25% 8 points

224

Very Low-Income & Rent Restrictions

Rent*: <= 50% Income: >30% - 50% Scoring based on:

– Applicable set-aside: 40-60 tax credit minimum set-aside only 20-50 tax credit minimum set-aside only 40-50 Rule applicable (LIHTC and HOME)

– Percentage of Total Nbr of Units @50% AMI Rent divided by Total Nbr of project units

Rent/Income restriction - land use restrictive covenant (for longer of Compliance Period or Period of Affordability)

* PBRA may be claimed only if points are not claimed under PBRA AND the rents are set at 50% AMI level

225

Very, Very Low Income/ Rent Restrictions

Rent*: <= 30% Income: <= 30% AMGI Scoring based on Total Number of Units at 30% AMI Rent as a percentage of

the Total Number of Units: >3% up to 6% 2 points >6% up to 10% 4 points >10% up to 15% 6 points >15% 8 points

Rent/Income restriction - land use restrictive covenant (for longer of Compliance Period or Period of Affordability)

* PBRA may be claimed only if points are not claimed under PBRA AND the rents are set at 30% AMI level

226

DCA PBRA for Special Needs Tenants

Agreement to designate lesser of 10 units or 5% of total units by checking the box provided on the application: 2 points

227

Mixed Income Projects

Total market rate units divided by total residential units:

>10% thru 20% 2 points>20% thru 30% 3 points>30% 4 points

228

Extension of Cancellation Option / Tenant Ownership Plan

Agreement to forgo cancellation option

– 1 point for every 5 years (3 points max.)

Plan for tenant ownership– 1 point

229

4. Preservation

Scoring Section 5 LIHTC projects (maximum 10 points):

– 6 points if Credit Period ended (after Year 10)– 10 points if eligible to opt out w/a Qualified Contract (after Year 14)– Documentation required:

Partnership tax returns for 1st and last year IRS Form(s) 8609 Eligibility to opt out with a Qualified Contract (if claiming 10 points)

USDA Projects (max 6 points):– Documentation from USDA

4 points if High Priority 3 points if Medium Priority 2 points if Low Priority With documentation from USDA, some USDA 515 projects may be eligible for

2 additional points

230

Preservation

HUD Projects (max 6 points):– Documentation from HUD

4 points if High Priority 3 points if Medium Priority 2 points if Low Priority With documentation from HUD, some HUD projects with project based

Section 8 contract, Section 236 program, or 221(d)(3) BMIR program may be eligible for 2 additional points

Other affordable housing projects (2 points)– Documentation evidencing the rent and income restrictions or a current

rent roll from the subject property must be submitted

NOTE: HUD and USDA will make their own priority designations and provide any necessary documentation to the Applicant.

231

Preservation

For Scattered Site Projects, as defined Section 10(B)(1)(a) and (b) of the Plan, any non-contiguous site may meet the criteria in order to claim points.

232

Preservation

Question and Answer

233

5. Local Government Support

Adopted Resolution of Support Local Government understands the proposed project. At minimum

the type of project, the number of units and the specific location must be identified

The resolution must clearly express the Local Government’s support of the proposed project

Letter of Support and resolution (Tab 24) If the local government is governed by one elected official (as

specified in Charter), a letter in lieu of resolution must be submitted

a letter in lieu must be in the form provided by DCA

234

Government Financial Assistance

Two types of Financial Assistance The Local Government funds on site project development costs or

operating cost by funding the project with HOME, CDBG funds, or other financial resources in the form of loans, grants or a combination hereof, or through its actions creates a quantifiable reduction of on site project development cost or operating cost.

USDA, AHP, DCA HOME Loan or other governmental assistance/funding obtained by the Applicant for the on-site project development costs or operating cost and is in the form of loans, grants, or a combination thereof.

235


NO OTHER DOCUMENTATION NEED BE SUBMITTED FOR DCA HOME LOANS

236


Project Development Examples

Waiving Water and Sewer Tap Fees

Waiving Building Permit Fees

Foregoing Real Property Taxes

Contributing Land for Project Development

Below Market Rate Financing

237


Project Operating Examples

Abatement of Real Estate Taxes

Operational Cost Subsidies

238


Reductions in annual operating costs must occur in each of the first 10 years

Operating cost reductions for less than this 10 year period will not be eligible for points under this section

239


For contributions from the jurisdiction and/or actions by the jurisdiction which create a quantifiable reduction of on site project development cost or operating cost, documentation from the Local Government in which the project is located clearly showing the types, amounts, and terms and conditions of such contributions and/or quantifiable reductions must be included in the Application. For actions that create a quantifiable reduction, the documentation must include the basis and methodology for calculating the operating or development cost reduction.

240


Documentation A letter from the Chief executive officer of the Local

Government certifying the Local Government’s contribution and/or actions which create a quantifiable reduction of on site development costs or operating costs must be included in the Application.

241


USDA, AHP, CDBG, HOME or Other Assistance An award letter must be included in the Application if the

funding has been awarded. If the funding has not been awarded at the time of Application Submission, documentation indicating that the project is under final consideration must be submitted with the Application

Applicant must notify DCA on or before July 28, 2005 as to whether funding has been awarded. Letter of Notification or award or commitment letter must be submitted to DCA by July 28, 2005. Points will not be awarded unless funding is actually awarded.

242


USDA, AHP, CDBG, HOME or Other Assistance

If the assistance is not awarded, the Applicant may secure alternate financing and revise and resubmit all applicable documents by August 15, 2005.

The Application will not be eligible for additional points under any other criteria based on the revisions submitted in the revised Application.

243


Calculating Points 3% but less than 6% of the Total Project Development Cost and/or

Average Annual Operating Cost Reduction (5 points)

Greater than or equal to 6% but less than 10% of Total Project Development Cost and/or Average Operating Cost Reduction (10 points)

10% or more of the Total Project Development Cost and/or Annual Operating Cost Reduction (15 points)

Assistance that contains both Operating and Development Cost Contributions will be scored by calculating the percent of assistance by type (development or operating) and then adding the two types of assistance together

244


Special Notes

PBRA assistance does not qualify for points under this section

HUD 221(d)(3) and (d)(4) loan guarantees are eligible but the Director of the Office of Multifamily Housing at HUD must provide documentation that reflects the basis and methodology for computing the amount eligible for points

Costs associated with the waiver of zoning and or building code requirements are not eligible

245


Documentation must be clear and unambiguous Big points – don’t lose on a technicality Clarifications of support may be used for project feasibility

but you won’t get the points Double check how you input your support into your

proforma Be careful with tax abatements Don’t depend on a third party to get your notification of

award to DCA

246


Question and Answer

247

See Tab Checklist #27 for documentation requirements Energy Efficiency & Indoor Air Quality Requirements Project Design Requirements Accessibility Requirements ALL applications competitive and non-competitive must select

enhancements as indicated on the OAH Certification Forms D-7 – D-9

For scattered site properties scoring see the individual scoring categories as listed for points allocation

6. Project Characteristics

248

• ALL properties must meet Georgia energy codes as a minimum and certified on OAH Energy Certification Form D-7

• Option to construct according to the EPA Energy Star program requirements and meet their requirements

-10 total points or a menu of options to a total of 10 points

• ALL applications including non-competitive projects must select upgrades as indicated on OAH Energy Certification Form D-7

• For scattered site projects each parcel or each property must make the same upgrade selections

Energy Efficiency & Indoor Air Quality Requirements

249

• Longevity and low maintenance should be considered in the design on the property and the selection of finishes

• DCA is committed to the preservation of natural resources in the area of sustainable design and finishes

• ALL properties as a minimum, must meet the Architectural Requirements as defined in the Application Manual

• Total of 20 points for this category as applicable • ALL applications must select upgrades as indicated on OAH Design

Certification Form D-8

• For scattered sites each parcel score will be added and averaged over the number of parcels for points allocation

Project Design Requirements

250

• ALL properties as a minimum must meet applicable accessibility laws to be included on Accessibility Certification Form D-9

• DCA is committed to providing housing that meets the needs of individuals with disabilities

• Total of 6 points for this category • ALL applications must select upgrades as indicated on Accessibility

Certification Form D-9

• For scattered sites each parcel score will be added and averaged over the number of parcels for points allocation

Accessibility Requirements

251

Question and Answer

6. Project Characteristics

252

7. Neighborhood Redevelopment

Three (3) points will be awarded if the proposed development site is located in a difficult to develop area or Qualified Census Tract.

Two (2) points will be awarded if the proposed development site is located in an enterprise community or an empowerment zone within a community or a Renewal Community.

One (1) point will be awarded for Georgia Better Hometown or Georgia Mainstreet Community

253

Neighborhood Redevelopment

Three (3) points will be awarded if there is an adopted redevelopment plan / Community Revitalization Plan formulated by the community based non-profit or the Local Government, that clearly targets the specific neighborhood in which the project is located.

254


Requirements of Plan

Assessment of Physical structure/strategy for social service needs

6 months prior to Application Submission Specific time frames Potential funding sources Detailed policy goals (including housing) Implementation measures/specific time frames Development of project meets one of the goals of the plan

255


Two (2) points will be awarded if documentation is submitted that evidences a commitment by the government funding entity to provide off-site improvements totaling no less than $150,000 for urban off site improvements, or $50,000 for Rural off-site improvements. Such improvements must be completed by the projects placed in service date and must be located directly adjacent to the project site.

All required documentation and Certification Form O-4 must be included in Tab 26.

256


Notes

Size of community covered by plan Service only plans Only one plan can be submitted Must reference where scoring requirements can be found in plan Following plans will not qualify for points:

– Zoning– Municipal– Short-term work plans– Comprehensive Plans

257


Question and Answer

258

8. Compliance History Scoring

To be completed by all General Partners, Developers, Property Managers and Development Consultants.

All project participants begin with a neutral score.

Positive Compliance will result in up to ten (10) positive points to the overall application score.

Poor Compliance Points may result in loosing up to (20) points from the overall application score or could result in not being eligible to participate.

259

Compliance History Scoring

Syndicators will be scored using the same criteria but will receive a pass or fail rating.

In Georgia, Syndicators must track the compliance history of the Projects in their portfolio (GA and/or the contiguous states). Still have those that don’t this year will not be reviewed until complete Compliance History is submitted.

Syndicators are not required to submit compliance information at time of application but must submit it subsequent to the Project Award (within 75 days of issuance of carryover).

The approval or disapproval of a Syndicator will be based in part on their Compliance History Score, portfolio performance, including but not limited to bankruptcies and foreclosures. Syndicators scoring less than -20 will not be eligible to participate. The applicant would then select another Syndicator.

260


Types of Housing Program Compliance Considered in Compliance Scoring

– Low Income Housing Tax Credits– HOME– FDIC Affordable Housing Disposition Program– Georgia Housing Trust Funds

261


Project Participants with no prior compliance history in Georgia can submit compliance history from contiguous states (Florida, Alabama, North Carolina, South Carolina and Tennessee).

Project Participants with no prior compliance history in Georgia or the contiguous states will receive a neutral score (0).

Once a Project Participant has one or more properties in Georgia or one of the contiguous states that has a Compliance Audit in one of the acceptable programs that Participant can receive a Compliance Score.

262


Compliance History Summary Participants may update past years Compliance History

Summaries. Remove any audits listed in years other than 2002, 2003 or

2004. Make sure that all Tax Credit Projects have their Project

Numbers listed. Be sure to update and complete all fields on the Form. Attach all required audit documentation.

263


Things to Remember

Questions regarding determining whether the “rating” of a specific instance of non compliance should be addressed through the project specific question process.

Attach copies of any previous year Pre-Application Compliance Score Certificate(s).

Complete a 2005 Compliance Self Score. Make sure that Compliance Score transfers to the Application

Score.

264


DCA Compliance Certification (NEW) ( Form J 19)

Make sure that this form is complete and the information presented is accurate.

265


NEW

One point will be deducted from a project’s final compliance score for each instance of the following non compliance issues that occurred at any project listed on the Compliance History Summary:

- Recapture of Federal Credits

- Foreclosures of a HOME Loan or

- Project bankruptcy

- (Regardless of where the project is located)

266


Common Mistakes

Make sure that facts listed on Application, Organizational Chart and Experience Information and all other materials submitted in the 2005 Application package are uniform.

Compliance Self Score transfers to Application Score. Documentation of audits not attached. Failure to disclose participation in “troubled” property. Proof all forms.

267


Question and Answer

268

Session II End

Question and Answer