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Capital Fund

Capital Fund. U .S. Department of Housing and Urban Development Office of Public and Indian Housing (PIH) Washington, D.C. Presented By: Kevin Gallagher and Deana McCormick CFFP Specialists Office of Capital Improvements. CAPITAL FUND FINANCING PROGRAM (CFFP). Authorization and Need

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Capital Fund

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  1. Capital Fund U .S. Department of Housing and Urban Development Office of Public and Indian Housing (PIH) Washington, D.C. Presented By: Kevin Gallagher and Deana McCormick CFFP Specialists Office of Capital Improvements

  2. CAPITAL FUND FINANCING PROGRAM(CFFP) • Authorization and Need • QHWRA of 1998 • Section 9 – Allowed for financing as eligible use of CFP • Section 30 –Mortgages and Security • Modernization Backlog • Current backlog estimated at $18 billion • Annual accrual $2 billion • Current appropriation funding $2.4 billion

  3. CAPITAL FUND FINANCING PROGRAM(CFFP) • Program Overview • Bond Issuance or Direct Loan • Individual PHAs or Pools • PHA uses a portion of CFP for debt service • Future CFP pledged as collateral • Direct LOCCS Payments • Bond Holder/Bank: Appropriations Risk and Performance Risk

  4. CAPITAL FUND FINANCING PROGRAM(CFFP) • Program Uses • Proceeds considered as CFP funds: all public housing laws and regulations apply • Should address long-term planning needs • Modernization • New Development

  5. CAPITAL FUND FINANCING PROGRAM(CFFP) • Program Requirements • Debt Service - Generally no more than 33% annual Capital Fund • Term – Generally no more than 20 years • Management Assessment of PHA capability • Fairness Opinion on reasonableness of financing • PHAS High or Standard Performer

  6. CAPITAL FUND FINANCING PROGRAM(CFFP) • Program Requirements-Cont. • Work based on Physical Needs Assessment • Declaration of Trust on all covered properties • Approved PHA Plan: including use of CFP for debt service and use of proceeds • PHA Board Resolution

  7. CAPITAL FUND FINANCING PROGRAM(CFFP) • Proposal Development • Contact OCI for latest CFFP documents • Term Sheet • Scope of work for Management Assessment and Fairness Opinion • Sample Debt Service Schedule • Sample Annual Statement • CFFP Staff (202)708-0614 • Kevin Gallagher x4192 • Deana McCormick x4228 • Tom Shelton x4799

  8. CAPITAL FUND FINANCING PROGRAM(CFFP) • Proposal Development • Procurement • All professional services must be procured according to Procurement Regulations • Pool Structure • Lead PHA • Partnership with State Housing Finance Agency • Non-profit

  9. CAPITAL FUND FINANCING PROGRAM(CFFP) • Proposal Development • Key Players • Underwriter • Underwriter’s counsel • Bond Counsel • PHA Counsel • Issuer • Trustee • Rating Agency • Financial Advisor (optional)

  10. CAPITAL FUND FINANCING PROGRAM(CFFP) • Proposal Submission • Submission requirements • Cover Letter request to Assistant Secretary • Term Sheet with attachments • Debt Service Schedule and other financial schedules • Loan Documents • Proposal Submission • Three copies sent to Office of Assistant Secretary • One copy sent to PIH Field Office Director

  11. CAPITAL FUND FINANCING PROGRAM(CFFP) • HUD Approval • HUD Review • OCI, FO and OGC review • 3-6 month review process • Development and demolition approvals required before approval • Approval Stumbling Blocks • Declaration of Trust • Annual Plan Submission and Approval • Annual Statement/Five-Year Action Plan – CFP • Annual Statement – Use of Proceeds

  12. CAPITAL FUND FINANCING PROGRAM(CFFP) • Success • 40 transactions approved • $2.4 billion in capital provided • Assisted 102 PHAs • Pools in Alabama, Kentucky, Maryland, California, New Jersey, Illinois • Multiple issuances to Philadelphia, Washington, D.C. • Challenges • Danbury, CT

  13. Approved Proposals

  14. Approved Proposals

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