Supportive Housing Multifamily Housing Program 2014 Funding Round

1. Supportive Housing Multifamily Housing Program2014 Funding Round California Department of Housing and Community Development 1

2. Supportive Housing Multifamily Housing Program (SHMHP)General Fund Summary $100 million allocation for affordable housing 2014-15 State Budget (General Fund) Funds include: MHP General $47.5 million Supportive Housing $47.5 million Administrative Costs $5 million 2

3. SHMHP NOFA – October 24, 2014 Funding Available $47.5 million $7 million maximum loan amount per project Function of unit size, location and affordability level 3

4. SHMHP Program Changes Sponsors with projects whose per unit cost is 30% or more than the historical average will be required to (historical data available on HCD website): Provide written explanation of unusual cost features Explain why an award would be sound public policy Submit recommendation from relevant public entity endorsing and supporting the project Be aware that HCD reserves the right to reject applications if the development costs cannot be reasonably justified 4

5. SHMHP Program Changes Carried Over From Prior Rounds AB 1460: Priority points for projects which utilize sustainable building methods (D7 in Scoring) USDA RD loan commitment requirements (NOFA Section C) Scrutiny of rehabilitation projects (NOFA Section C) 5

6. Timetable 6

7. MHP Program Overview 7

8. MHP Regulations Governed by two sets of regulations: Multifamily Housing Program Specific Regulations (MHP Regulations) Uniform Multifamily Regulations (UMR) Available at: http://www.hcd.ca.gov/fa/mhp 8

9. Eligible Sponsor Non-profit, for-profit and local public agencies Demonstrate: Experience developing, constructing, owning and operating affordable rental housing projects The entity that submits information for the award of the experience points (D3) must be the named Sponsor on the Application Must demonstrate site control MHP Section 7303 and UMR Section 8303 9

10. Eligible Project Multifamily rental and transitional housing projects of five or more units New construction Acquisition and rehabilitation Rehabilitation Conversion of nonresidential structures Must not have started construction as of the application due date MHP Section 7302 10

11. SH Emphasis Emphasis on units for: Homeless or at risk of homelessness and disabled adult Disabled: mental illness, HIV/AIDS, substance abuse, developmental disability or long-term chronic health condition Maximum Income: 30% Area Median Income 11

12. Eligible Use of Funds Costs attributable to Restricted units for: Construction/rehabilitation Off-site/on-site improvements Capitalized operating and replacement reserves (replacement reserves can be funded from Operating Income) Child care facility and social service facility integrally linked to Project Developer fee MHP Section 7304 12

13. Permanent Only Loans Loan Terms 55 year term 3 percent simple interest (principal and interest deferrable) First 30 years: mandatory debt service of .42 percent of outstanding principal balance Next 25 years: adjusted to cover HCD’s monitoring costs Unpaid interest and principal due at end of term 13

14. Program Limitations Payment of state prevailing wages to laborers working on MHP-financed projects is required Sponsor distributions limited to 50 percent of cash flow (UMR Section 8314) 9 percent tax credit projects are eligible to apply for SHMHP funds 14

15. Developer Fee Limits Limit of $1.2 million from funding sources (C7) New construction and substantial rehabilitation projects: first 30 units, $25,000 per unit. Each unit in excess of 30, $9,500 per unit Acquisition and rehabilitation projects without substantial rehabilitation: first 30 units, $12,000 per unit. Each unit in excess of 30, $5,500 per unit Land donations from local jurisdiction or master developer may not be counted as capital contribution Cash contributions from master developer or other entities, which are contingent upon the development of the Project may not be counted as capital contribution 15

16. Developer Fee Limits (continued) Developer Fee Calculation Includes lease-up fees, incentive fees, or other property management fees, in excess of those customarily charged by property management firms for lease up activities, which are paid to the Sponsor, Co-Sponsor or affiliate of the Sponsor or Co-Sponsor 16

17. Application Overview 17

18. Universal Application used by HCD, TCAC, CDLAC and CalHFA http://www.hcd.ca.gov/fa/mhp/ SHMHP Application Attachment http://www.hcd.ca.gov/fa/mhp/ Application 18

19. General Instructions Submitting Application Three-ring binder with sleeve on the side Large lettered tabs and divide the binder into seven sections: Universal Application, Universal Application Attachments (1-11), SHMHP Attachments A, B, C, D, E Set up dividers with numbered tabs to correspond to the Universal Application and MHP Program Specific Checklist (A1) For items that are not applicable to your application, place a sheet stating the item is “Not Applicable” behind the tab 19

20. General Instructions (continued) COMPLETE original and one duplicate of application must be received by HCD no later than 5 p.m. on December 23, 2014. Postmarks are not accepted No facsimiles, late, incomplete, or revised applications will be accepted Applications must meet all eligibility requirements upon submission Applications with internal inconsistencies will not be rated and ranked 20

21. Submit your application binders in this order: Universal Application Universal Application Attachments 1 - 11 SHMHP Attachments A, B, C, D, E Remember: Once your application is received, it must stand on its own to represent your Project Organizing the Application 21

22. Disclosure Disclosure of Application Information becomes PUBLIC RECORD available for review by the public Use Discretion Sponsor is waiving any claim of confidentiality and consents to the disclosure of all submitted material upon request 22

23. Project Evaluation • Eligibility • Feasibility • Scoring 23

24. SHMHP Attachment 24

25. A1 Universal Application and SHMHP Checklist Proof of site control Current Preliminary Title Report Relocation Plan with estimated costs Utility Allowance Chart by unit size Org. charts for Borrower, Sponsor, Developer, Affiliates Legal Status Questionnaire Previous Participation Certifications Evidence of enforceable commitments - Construction Evidence of enforceable commitments - Permanent Market Study with Rent Comparability Matrix Current Appraisal 25

26. A2 Eligibility Criteria Other funding sources are insufficient to cover Project development cost As of application due date, construction has not commenced(demolition is considered “construction” if cost of demolition is included in the development budget) Application complete and on MHP approved forms 26

27. A2 Eligibility Criteria (continued) Project site must be free from environmental conditions which are infeasible to correct Site is reasonably accessible to: Public transportation, shopping, medical services, recreation, schools and employment Must demonstrate Article XXXIV authority New construction projects with demolition: Number of bedrooms in new Project must be at least equal to the number of bedrooms demolished 27

28. Relocation Eligibility Requirements Application must contain a preliminary Relocation Plan Developmental budget must contain funding for Relocation Expenses Final Relocation Plan must be approved by the Department prior to funding MHP Section 7315 A2 Eligibility Criteria (continued) 28

29. Site Control Requirements Must be in the name of the Sponsor Documents showing site control: Lease Contract of Sale Disposition and Development Agreement Preliminary Title Report Option to Purchase or Lease Preliminary Title Report required in all cases Not older than six months UMR Section 8303 A2 Eligibility Criteria (continued) 29

30. A2 Eligibility Criteria (continued) Proof of Site Control Can take any of the forms indicated, but must: Be fully executed and unilateral Name seller and purchaser or lessee Include dollar amount and terms of agreement Be signed by all parties Not have expired 30

31. A3 Recycling Program Narrative In an effort to encourage all projects to implement as many environmentally friendly options as possible, the SHMHP application will require a narrative describing how the Project will implement and encourage residents to utilize project-based recycling programs 31

32. MHP AttachmentSection B - Eligibility 32

33. B1 Tenant Selection Criteria Provide description of your tenant selection criteria and describe rationale Senior Projects (B1a): Provide evidence of Fair Housing Compliance (legal opinion) 33

34. B2 Organizational Documents Sponsor and Ultimate Borrower (if formed) Articles of Incorporation By-laws Partnership Agreements If organized under laws of different state: Submit Certificate of Good Standing for Foreign LP/Corp/LLC plus Certificate of Registration 34

35. B3 Governing Board Resolution Authorizes application submission Specifies authorized signatory Must reference the NOFA date and the amount of loan request Must state that the entity is authorized to do business in California Sample resolutions are available 35

36. B4 Names of Officers and Board Members • Be certain not to disclose personal data (addresses, phone numbers, etc.) unless the board members have authorized the release of such information – keep in mind that the application is a public document 36

37. B5 Environmental Reports Phase I Environmental Site Assessment Other Environmental Reports (i.e. Phase II, Asbestos, Lead-based paint) Mitigation information (if applicable) Do not attach database records search 37

38. B6 Maps Parcel map showing site location Scaled Distance Map Two mile radius of site Indicate amenities 38

39. B7 Article XXXIV of the California Constitution requires voter approval authorizing development of low-income housing Provide evidence that Article 34 authority exists for this Project;or Provide a legal opinion letter explaining why this Project is exempt from Article 34 requirements 39

40. SHMHP AttachmentSection C - Feasibility 40

41. C1 Insert the Development Timetable 41

42. Maximum Allowable Loan Amount C2 Worksheet to Determine Maximum Allowable Loan Amount C3 Loan Limit Worksheet C4 Shared Cost Calculation Worksheet C5 MHP Loan Calculation Worksheet 42

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44. Loan Limits MHP: http://www.hcd.ca.gov/hpd/hrc/rep/state/incNote.html 44

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49. C6 This item (evidence of commitment status for development funding) has been replaced by Universal Application Attachments 8 and 9 See SHMHP Application Attachment Instructions for what constitutes evidence of commitment 49

50. C7 Developer Fee Calculation Not a required application attachment Tool to assist Sponsor in calculating allowable amount of developer fees 50