HRR Administrators’ Workshop June 8, 2009

1. HRR Administrators’ Workshop June 8, 2009

2. Greetings and Introductions • Minnesota Housing HOME Team Members Sue Morrison Central & SE Territories Tere Hopponen WC, NW & SW Territories Julie LaSota Team Lead / Program Manager Meg Stinchcomb Program Coordination Renee Dickinson MF Asset Management – Compliance • Guest Speaker Lisa Marvin Essence Properties

3. Our Partners in the Field • Your name and the housing organization you work for • How many years you have administered the HOME Rental Rehab Program

4. The Essentials • Restrooms • Lunch will be provided • Handouts

5. Today’s Objective • A better understanding of HOME requirements and local administrator responsibilities • A stronger partnership through communication and cooperation to achieve our common mission of preserving affordable housing for underserved persons and families.

6. 2009 Administrators’ Workshop- AGENDA June 8, 10:00am-2:00pm • 10:00am Welcome • Introductions • Summary of 2008 accomplishments • Allocations and Timing for 2009 Funding Round • 10:15am Program Changes for 2009 • 10:45am Changes to HOME forms • 11:00am Affirmative Marketing Fair Housing Training • 11:45pm Lunch- 30 min. break. Box lunches and beverages available

7. 2009 Administrators’ Workshop- AGENDA (continued) • 12:15pm Administrator Responsibilities • Changes in Administrator Agreements • Policy for Administrator-owned Properties • Record Retention • 12:45pm Setting up Owners for Compliance Success • 1:00pm General Q & A • Summary of Transition to State-funded program • CHDO set aside • 2:00pm Adjourn

11. 2008 Program Accomplishments

12. 2008 HOME Rental Rehab Activity 56 HOME Projects • Loans totaling $6.9MM ($130,500 average loan) • 496 HOME-assisted units • 8 Federally Assisted properties preserved

13. HOME Program Portfolio 209 HOME Projects in their Compliance Periods • Loans totaling slightly more than $35MM • 2,682 HOME-assisted units • 44 Federally Assisted properties preserved

14. 2009 Allocations and Timing • 2009 Allocation Spreadsheet • No funds available above your allocation • Program restructure- looking forward

15. HRR 2009 Funding Round Program Changes and Updates

16. HRR- 2009 Funding Round • Program Changes and Updates • Production and Loan Processing • Design and Construction Standards • Rents & Incomes, Property Management • Review of Compliance and Monitoring Procedures

17. HRR- 2009 Funding Round • Production and Loan Processing • Please ensure your application packages are complete • Review application • Title work • 2 – bids from licensed prime general contractors • Junior Lien Approval/Intent to subordinate

18. HRR- 2009 Funding Round • Section 3 • Davis Bacon – bids must have wage determination and 4010 attached • If a Phase I was required, review summary section

19. HRR- 2009 Funding Round • Production and Loan Processing • Documents required at application: • $1,000,000 in general liability insurance • EPLS printouts for General Contractor and Subcontractors receiving over $20,000.

20. HRR- 2009 Funding Round • Production and Loan Processing • Completion Documentation: • No Post-Rehab Energy Audit required • Certify items with 7 years or less payback included in scope of work

21. HRR- 2009 Funding Round • Production and Loan Processing • Completion Documentation: • No application (HOME Form 1) required • Break down of all soft costs, including Administrator Fee, in Sworn Construction Statement

22. HRR- 2009 Funding Round • Closing Documentation and Process • Ensure package is complete!!

23. HRR- 2009 Funding Round • Design and Construction Standards • Use HQS standards for all projects • LBP Relocation review – 24 CFR 35.1345 • Carbon Monoxide Detectors • Effective August 1, 2009, all units must have CO detectors in compliance with MN Statute 299F.50.

24. HRR- 2009 Funding Round • Rents & Incomes • 2009 HOME Rent & Income Limits- effective April 27, 2009

25. HRR- 2009 Funding Round • Rents & Incomes- Income Eligibility • For Initialincome certifications:Tenants in HOME units must meet the 60%AMI threshold. In properties with 5 or more HOME units, 20% of HOME-eligible tenants must be at or below 50% AMI, and 10% of HOME-eligible tenants may have incomes as high as 80% AMI. • Also applies to any tenant household to move into a HOME unit that was vacant at project completion and has been vacant since.

26. HRR- 2009 Funding Round • Rents & Incomes- Income Eligibility • For certifications After the initial income certification:Tenants in HOME units—including move-ins—must meet the 80% AMI threshold. This means a tenant household can be over 60% AMI at move-in, as long as they are at or below 80% AMI. In properties with 5 or more HOME units, 20% of HOME must be at or below 50% AMI. • SEE RENT & INCOME CHART FOR REFERENCE

27. HRR- 2009 Funding Round • Units Vacant at Project Completion • Must rent to tenant at Initial Income Certification limits • Perform Income verification • Upon move-in, submit a revised HOME Form #15 (Rental Completion Report)

28. HRR- 2009 Funding Round Rent Increase Clarification • For existing tenants in HOME units: • No rent increases are allowed from application date to one year after development completion. • Limited to 5% per year after the first year, and must be within reasonable limits • For lease-up of a previously vacant unit, or at unit turnover: • Rents may be increased over 5%

29. HRR- 2009 Funding Round Rent Increase Clarification- All HOME Units • All increased rents must remain within HOME Program limits. • All rent increases must receive written approval by the local administrator. Borrower must submit written request for a rent increase accompanied by a schedule of current rents and proposed rents by unit size and bedroom type. • Tenants must have 30 day notice. • All rent increases must be in accordance with lease terms and applicable laws.

30. HRR- 2009 Funding Round Rent Increases due to Temporary Non-Compliance • Cannot conflict with the lease • 30 day notice

31. HRR- 2009 Funding Round • Termination of Tenancy- Review: • Must have just cause to terminate a tenant. • 30 day notice required, even if tenant is in violation of the lease or engaged in illegal activity. • Crime-Free Housing Policies do not apply.

32. HRR- 2009 Funding Round Remind owners to not discriminate against tenants based on their status as voucher- holders, or for receiving any other type of public assistance.

33. HRR- 2009 Funding Round • Program Changes- Compliance Monitoring • Late or Missing Compliance Documentation

34. Changes to HOME Forms

35. Changes to HOME Forms • Application (HOME Form 1) • Property Inspection Report (HOME Form 3) • Tenant Survey (HOME Form 5) • Renovate Right (HOME Form 6) • List of Improvements/Sworn Construction Statement (HOME Form 9)

36. Changes to HOME Forms • Forgivable Loan Submission Checklist (HOME Form 13) • Deferred Loan Submission Checklist (HOME Form 14) • Rental Completion Report (HOME Form 15)

37. Changes to HOME Forms • Lease (HOME Form 21) – deleted • Lease Addendum (HOME Form 22) • Tenant Occupancy Form (HOME Form 23) • Owner Checklist (HOME Form 24) • HOME Unit Designation (HOME Form 25)

38. Affirmative Fair Housing Marketing Guest Speaker – Lisa Marvin, Essence Properties

39. Administrator Responsibilities

40. Changes in Administrative Agreements • All current Administrative Agreements have been extended, by letter, through June 30, 2009 • 2009 Administrative Agreements will be revised to include an inventory of all properties within their compliance periods • Local Administrator Funding Allocations will be by a letter agreement this year

41. Policy for Administrator Owned Properties • Contact Minnesota Housing Region Rep • MN Contracts with other Administrator • Then you may proceed with the application

42. Records Retention • Administrator Recordkeeping Responsibilities • Project records – 5 years after completion • Tenant records – 5 years after the affordability period terminates

43. Records Retention • Marketing Efforts • Administrators must demonstrate steps taken to assist borrowers and document the borrowers’ actions in affirmatively marketing vacant units, including the use of the Equal Housing Opportunity logo on all marketing materials

44. Records Retention • Owner Recordkeeping Responsibilities • Individual tenant income verifications, project rents and project inspections must be retained for 5 years after the affordability period terminates.

45. Records Retention • Marketing Efforts • Owners must demonstrate steps taken in affirmatively marketing vacant units, including the use of the Equal Housing Opportunity logo on all marketing materials

46. Setting up Owners for Compliance Success

47. Keeping Properties in Compliance • Understand & communicate all restrictions • Ensure owner & manager have updated program information & all loan documents and covenants • Ensure owner & manager understand the income certification process & timelines • Issue timely notices of noncompliance • Follow up to ensure compliance

48. Understand & Communicate all Restrictions • Compliance restrictions can be confusing • Programs do not always work well with others – must follow each program’s rules • Important to involve management company and share all compliance requirements early in development process • An ounce of prevention is worth a pound of cure

49. Understand Income Certification Process • Owners are responsible for renting to qualified households • Timely recertifications are essential • Assist owners in keeping organized tenant files and required record retention • Important to have internal controls for quality – document all follow-up

50. Notice of Noncompliance • Provide written notice of noncompliance and details of violations – 30 day notice to correct • Copy Minnesota Housing on notices of noncompliance • Track due dates to ensure owners respond timely