Community Investment Products - Housing Alliance of PA.org · 2017-03-17 · Case Study: JBJ Soul Homes •Sponsor: Project H.O.M.E. •Member: PNC Bank •AHP Subsidy Award: $250,000

FHLBank Pittsburgh

To learn more about how your institution can benefit from one of our products, contact:

Laura Rye – [email protected] ̶ Dave Buches – [email protected]

Starting Soon:

Affordable Housing Program

Blueprint Communities®

Capacity-building for

communities in need of

revitalization

First Front Door

Down payment and

closing cost assistance,

up to $5,000, for income-

qualified, first-time

homebuyers

Community Lending Program

Low-cost liquidity

and match

financing for

community

development

Banking On Business

Gap financing and

equity for small

business start-up

and expansion

Up to $650,000 in subsidy

for affordable housing

development

Community Investment Products

Affordable Housing Program (AHP)

Megan Krider

March 17, 2017

FHLBank Pittsburgh

AHP Community Benefits

Housing

Creates employment opportunities

Contributes to local property

tax base

Serves as a catalyst to

larger projects

– Flexible funding

– Can support a variety of

projects

FHLBank Pittsburgh

Success Story

Six new-construction homes in

South Philadelphia. The project

received an AHP subsidy

award of $123,499. The newest

homeowners, Aisha and Sekou,

devoted more than 350 hours of

“sweat equity” in lieu of a down

payment and have the financial

stability to repay a zero-percent

interest, 30-year mortgage.

Cross & Greenwich

Philadelphia, Pa.:Santander Bank &

Habitat for Humanity Philadelphia

Since 1990, in Pennsylvania,

FHLBank Pittsburgh has

awarded over $145 million in

AHP subsidy to more than 790

projects, leveraging over $2

billion in total development

costs.

FHLBank Pittsburgh

Webinar Agenda

• AHP overview

• AHP step-by-step

• Scoring review

• Feasibility review

• Awards

• Post-award responsibilities

• Next Steps and 2017 Timeline

• Maximizing FHLBank Pittsburgh resources

• Questions

FHLBank Pittsburgh

What is AHP?

• 1989 – FIRREA, Congress created AHP which requires FHLBanksto contribute 10 percent of its previous net earnings

• FHLBank Pittsburgh provides subsidy under its competitive application program, up to $650,000 per project, to support affordable housingdevelopment

• Members partner with a sponsor (developer) to submit AHPapplications for review

Project Types Income Requirements

• Rental

• Lease-purchase

• Owner-occupied purchase

• Owner-occupied rehabilitation

• Rental – at least 20% of units must

be reserved for those with incomes

at or below 50% area median

income (AMI)

• Families or individuals with

incomes at or below 80% of AMI

- 80% AMI for family of four:Charleston, WV: $46,250

Dover, DE: $50,300

Pittsburgh, PA: $56,950

Philadelphia, PA: $64,250

Uses

• New construction

• Rehabilitation

• Acquisition

FHLBank Pittsburgh

AHP Overview

Project-Specific Thresholds:

Rental Projects: Owner-Occupied Projects:

At least 20 percent of units

targeted for households at or

below 50 percent AMI

15-year retention period with

acceptable retention agreement

At least one unit targeted for

households at or below 80

percent AMI

5-year retention period with

acceptable retention agreement

Project meets Fair Housing requirements

AHP subsidy requested must be less than or equal to the

$650,000 maximum

AHP funds must be used for an eligible purpose

FHLBank Pittsburgh

AHP Overview

• AHP Implementation Plan

• Scoring – Attachment C of the Implementation

Plan

• Feasibility – Attachment B of the Implementation

Plan

Applications

are submitted

Applications

are scored

High-scoring applications undergo feasibility

Applications underwritten against Bank’s feasibility guidelines

Projects with highest score that pass feasibility are awarded funds

FHLBank Pittsburgh

AHP Overview

• Scoring

– 100 point scoring against the Bank’s established priorities

• Feasibility

– Application is underwritten against the Bank’s feasibility guidelines

• Disbursement

– Awarded projects request disbursements of AHP funds once costs have been incurred

• Compliance and Monitoring

– Completed projects subject to long-term monitoring and compliance requirements

FHLBank Pittsburgh

Case Study:

JBJ Soul Homes

Formerly Fairmount Gardens

FHLBank Pittsburgh

Case Study: JBJ Soul Homes

• Sponsor: Project H.O.M.E.

• Member: PNC Bank

• AHP Subsidy Award: $250,000

• Total Development Cost: $13,902,706

• Total Units: 55

• Location: Philadelphia, Pa.

• Description: Four-story, mixed-use development with retail offices and 55 apartments for formerly homeless and low-income individuals with access to supportive services

FHLBank Pittsburgh

AHP Step-by-Step

Review

• Review AHP Implementation Plan

• Access online resources

Partner

• Establish partnership with FHLBank member

• Communicate roles/milestones

Prepare

• Prepare AHP application

• Submit application to FHLBank member

FHLBank Pittsburgh

AHP Step-by-Step: Meet and Plan

Complete Due Diligence

• Review AHP Implementation Plan for scoring and

feasibility criteria as they relate to your project

• Access online forms, guides and technical assistance

• Identify a member partner or take advantage of the

member/sponsor match service provided by FHLBank

Pittsburgh

• Complete online registration for the funding round

Meet/Plan Input Submit Score Feasibility AwardPost

Award

FHLBank Pittsburgh

AHP Step-by-Step: Online Registration/Access

• AHP Online application

• Register for the funding round: www.fhlb-pgh.com


Award

FHLBank Pittsburgh

AHP Step-by-Step: Online Registration/Access

• Start the process now

• Members have a different registration process than sponsors:– AHP role in the system given by member “CSA”

– For CSA name, contact: • Product Delivery Service Center at 800-288-3400, option 2

• Community Investment department at 800-288-3400, option 4

• You are already registered if you:– Submitted an AHP application in 2010-2016 funding rounds

– Submitted an AHP funding request online


Award

FHLBank Pittsburgh

AHP Step-by-Step: Submit AHP Application

Round Opens June 6

Applications must be:

Sponsor approved

and

Member approved

by

Thursday, August 10, at 5:00 p.m. EST


Award

FHLBank Pittsburgh

2016 AHP Funding Round Results

50

approved

63: Last approved score

unapproved

164 Submitted

Scored Applications:

76: Highest approved score

$23.1 million committed;

approximately $461,800 average AHP

subsidy per project

FHLBank Pittsburgh

Scoring Categories Point Allocation

Use of Donated Properties 5 (fixed)

Sponsorship by Nonprofit or

Government Entity5 (fixed)

Targeting 0-22 (variable)

Housing for the Homeless 6 (variable)

Promotion of Empowerment 0-10 (variable)

2017 Scoring Categories


Award

FHLBank Pittsburgh


Award

2017 Scoring Categories

Scoring Categories Point Allocation

Special Needs 8 (variable)

Rural 5 (fixed)

Member Financial Participation 3 (fixed)

Readiness to Proceed 8 (fixed)

Subsidy per Unit 0-8 (variable)

Community Stability 0-20 (variable)

FHLBank Pittsburgh

Scoring: Serving Homeless Populations

Creation of transitional housing (excluding overnight shelters) for

homeless households permitting a minimum of six months’ occupancy

6 points 3 points

Reserve > 50% of total units

for homeless households

Reserve 20% to <50% of total units

for homeless households


Award

FHLBank Pittsburgh

Scoring: Serving Homeless Populations

Definition of “Homeless”

• Persons who are sleeping in places not meant for human habitation

• Persons sleeping in emergency shelters

• Persons graduating from a transitional housing program specifically for homeless persons

• Persons being discharged from an institution or foster care with no permanent residence available

• Persons who would be discharged from an institution if they had a permanent residence available

• Victims of domestic violence

• Persons who are “doubled-up” and are in a situation of overcrowding, defined as:

Unit Size Number of People

Efficiency 3 or more

1 Bedroom 4 or more

2 Bedrooms 6 or more



FHLBank Pittsburgh

Scoring: Serving Populations with Special Needs

Creation of units reserved for

persons with special needs defined

as:

8 points

4 points

• Physically and/or mentally disabled

• Developmentally disabled

• Recovering from domestic abuse

(physical abuse)

• Recovering from domestic abuse

(emotional abuse)

• Recovering from chemical dependency

• Persons with HIV/AIDS

Reserve > 50% of total units

for households with special needs

Reserve 20% to <50% of total units

for households with special needs


Award

FHLBank Pittsburgh

Owner-Occupied Rehab Projects

10 points 5 points

• Property receives needed

rehabilitation and/or accessibility

improvements on specific

components

• Project does not meet the criteria

outlined under 10 points

75% of properties in the project

must be:• Fully/comprehensively inspected

by qualified individual

• Certified that all hazardous or

uninhabitable conditions are

corrected at project completion

• Certified that all major systems

have reasonable (5 years)

remaining useful life at project

completion

• Qualified individual certification

must include:– Detailed inspection process

– Qualifications of individual


Award

FHLBank Pittsburgh

Case Study:

Silver Anniversary

Scattered Sites Project

24

FHLBank Pittsburgh

Case Study: Silver Anniversary

• Sponsor: Almost Heaven Habitat for Humanity

• Member: Pendleton Community Bank

• AHP Subsidy Award: $110,000

• Total Development Cost: $404,800

• Total Units: 3

• Location: Franklin, W.Va.

• Description: Celebrating 25th Anniversary,

project provided three new energy-efficient

homes to low-income households, financed with

zero interest rate, affordable mortgages

FHLBank Pittsburgh

• Projects may score well but must also pass the

feasibility review to be awarded an AHP commitment

• Review project feasibility guidelines in Attachment B of

the AHP Implementation Plan

• Feasibility factors:– Need for subsidy and viability

– Cost reasonableness

– Readiness to proceed

– Development team capacity

– Market demand

Feasibility Review Factors


Award

FHLBank Pittsburgh

Feasibility Review: Subsidy Need and Viability

• Detailed financial information required:

– Sources and uses (all projects)

– Construction cost breakdown (all projects)

– Gap analysis (owner-occupied only)

– Sponsor Financing Worksheet (owner-occupied only)

– Rental Income Worksheet (rental only)

– Operating pro forma (rental only)

– Building Information Form (rental only)

– Owner-Occupied New Construction Form (owner-occupied only)

– Scope of Rehabilitation Form (rental rehabilitation only)


Award

FHLBank Pittsburgh

• Homeownership and rental projects must demonstrate

that a funding gap exists that cannot be filled by

conventional debt

• Rental projects must demonstrate viability throughout the

15-year compliance period

Feasibility Review: Subsidy Need and Viability


Award

FHLBank Pittsburgh

Feasibility Review: Cost Reasonableness

Cost reasonableness determinations vary based on project

type:

• Marshall and Swift analysis

– Possible 10 percent cost exception with valid third-party

justification for excess cost

• “Local usual and customary costs” (owner-occupied projects)

• Costs validated by third party and/or commit to bidding

process

• Approval of rental projects will be conditioned on submission

of Third-Party Plan and Cost Review Form prior to, or with,

the request for disbursement of funds


Award

FHLBank Pittsburgh

Project awards announced December 14, 2017

AHP Awards


Award

FHLBank Pittsburgh

Post-Award Responsibilities

Activity Member Sponsor

Sign AHP Tri-Party Agreement x x

Start and complete project in timely manner and in accordance with approved AHP application

x

Semi-annual progress reporting x

Request/Approve AHP subsidy disbursements x x

Draft and submit AHP retention documents x x


Execute AHP Tri-Party Agreement x x

Draft and submit AHP retention documents x x

Review and sign the monitoring acceptance letter x

Start and complete project in timely manner and

in accordance with approved AHP application,

including any conditions of grant award

x

Semi-annual progress reporting x


Award

FHLBank Pittsburgh

Post-Award Responsibilities


Request/Approve AHP subsidy disbursements x x

Complete AHP Household Income Calculation Form

and income documentationx

Comply with all commitments and representations

made in conjunction with application scoring or

feasibility criteria

x

Long-term monitoring of rental projects x


Award

FHLBank Pittsburgh

Next Steps

Visit the AHP webpage: www.fhlb-pgh.com

Identify a partner- Member/sponsor match service

Check registration status

Online technical assistance resources- Downloadable mini-webinar for Community Stability

- Guide to Complete AHP Online Application

- Sponsor and Member System Guide

Request project-specific technical assistance- Go to AHP website, click on technical assistance link and complete

TA request form

- Submit completed form via email

- Community Investment staff will initiate contact upon receipt of

forms

FHLBank Pittsburgh

AHP 2017 Timeline

March 31Forms and resources available on

website

April 12AHP 101 and Community Stability

webinars

June 6 Round opens

July 28Last day to request technical

assistance

August 10, 5 p.m. Round closes

December 14 AHP awards announced

FHLBank Pittsburgh

Maximize FHLBank Resources: CLP

If your project needs construction financing and/or can support

debt service and needs permanent financing, consider the

Community Lending Program (CLP):

• CLP offers a flexible source of funding to FHLBank member institutions for

qualified projects

• CLP benefits:

– Readily available, simple, noncompetitive application process

– Provides for fixed-rate financing up to 30 years

– Quick approval process and no monitoring required

• How to apply:

– All CLP projects must meet member lending standards; member submits CLP

application on behalf of the project

– If you have questions, contact a member institution, or Kate Swanson at

[email protected]

FHLBank Pittsburgh

Maximize FHLBank Resources: FFD

If your project involves for-sale homeownership for first-time

homebuyers, consider the First Front Door (FFD) program:

• AHP can be used to write down the home mortgage to achieve affordability

• FFD can offer additional subsidy for down payment and closing cost up to

$5,000 for eligible homebuyers

• How to apply:

– Homebuyers must meet participating member lending standards for first

mortgage; member submits FFD homebuyer registration on behalf of eligible

homebuyers

– FFD subsidy available on a first-come, first-served basis

– For a list of participating members, go to www.firstfrontdoor.com

FHLBank Pittsburgh

FHLBank Pittsburgh Contacts

https://www.fhlb-pgh.com/ahp

Megan Krider AHP Product Manager [email protected]

David Buches Del. & Eastern PA [email protected]

Laura Rye WVa. & Western PA [email protected]

Community Investment Department

Documents

Community Investment Products - Housing Alliance of PA.org · 2017-03-17 · Case Study: JBJ Soul Homes •Sponsor: Project H.O.M.E. •Member: PNC Bank •AHP Subsidy Award: $250,000