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Multifamily Housing Program 2010-2011 Funding Round 1C-6

Multifamily Housing Program 2010-2011 Funding Round 1C-6

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Multifamily Housing Program 2010-2011 Funding Round 1C-6

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  1. Multifamily Housing Program2010-2011 Funding Round 1C-6 California Department of Housing and Community Development 1

  2. Multifamily Housing Program (MHP)Proposition 1C Summary $1.5 billion allocation for affordable housing approved in the 11/7/06 General Election Bond funds included approximately: MHP General $345 million Supportive Housing $195 million Homeless Youth $50 million 2

  3. MHP/HY/SH NOFA – June 14, 2011 Funding Available $80 million (MHP General) $12 million (Homeless Youth) $65 million (Supportive Housing) $10 million maximum loan amount per project Function of unit size, location and affordability level 3

  4. MHP Program Changes Carried Over From 1C-5 AB 927: Senior unit set-aside (MHP NOFA Section S) AB 1460: Priority points for projects which utilize sustainable building methods (MHP & SH NOFA Section C and D7 in Scoring) USDA RD loan commitment requirements (MHP NOFA Section C) Elevated loan limits are available for Homeless Youth projects (SH & HY NOFA Section L) Point scoring differences (SH NOFA Section V; HY NOFA Section U; MHP NOFA Section W) 4

  5. MHP Program Changes Carried Over From 1C-5 (cont’d) • Scrutiny of rehabilitation projects • Hard debt service on public agency financing

  6. Timetable - MHP 6

  7. Timetable – HY & SH 7

  8. MHP Program Overview 8

  9. MHP Regulations Governed by two sets of regulations: Multifamily Housing Program Specific Regulations (MHP Regulations) Uniform Multifamily Regulations (UMR) Available at: 9

  10. Geographic Distribution (MHP) Statute requires HCD to: “ensure a reasonable geographic distribution of funds” To prevent award imbalance, distribution target of no less than approximately: 45 percent Southern California 30 percent Northern California 10 percent Rural Area 10

  11. 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 11

  12. 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 12

  13. MHP Emphasis Emphasis on units for: “Deeply” targeted incomes (MHP A, B or C) Large families (two or more bedrooms) Special Needs Populations 13

  14. HY Emphasis Emphasis on units for: Homeless/at risk of homelessness, aged-out of foster care or ran away from home Emancipated youth under age 18 Persons who are at least age 18, but not older than age 24 14

  15. SH Emphasis Emphasis on units for: Homeless/at risk of homelessness and disabled adult or disabled emancipated youth Disabled: mental illness, HIV/AIDS, substance abuse, developmental disability or long-term chronic health condition 15

  16. 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 16

  17. 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 17

  18. 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 not eligible to apply for MHP General funds (HY and SH projects are permitted to use 9% credits though lower per unit loan limits and other restrictions apply) 18

  19. Developer Fee Limits Limit of $1.2 million from funding sources (C7) New construction and substantial rehabilitation projects: first 30 units, $23,000 per unit. Each unit in excess of 30, $9,500 per unit Acquisition and rehabilitation projects without substantial rehabilitation: first 30 units, $11,000 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 19

  20. 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 20

  21. Application Overview 21

  22. Universal Application used by HCD, TCAC, CDLAC and CalHFA MHP Application Attachment Homeless Youth or Supportive Housing Project: Use Supportive Housing Application Attachment instead of the MHP Application Attachment Application 22

  23. 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), MHP or SH 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 23

  24. General Instructions (continued) COMPLETE original and one duplicate of application 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 24

  25. Submit your application binders in this order: Universal Application Universal Application Attachments 1 - 11 MHP Attachments A, B, C, D, E HY or SH: SH Attachments A, B, C, D, E Remember: Once your MHP General application is received, it must stand on its own to represent your Project Organizing the Application 25

  26. 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 26

  27. Project Evaluation • Eligibility • Feasibility • Scoring 27

  28. MHP/SH Attachments 28

  29. A1 Universal Application and MHP 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 29

  30. 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 30

  31. 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 31

  32. 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) 32

  33. 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) 33

  34. 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 34

  35. A3 Recycling Program Narrative In an effort to encourage all projects to implement as many environmentally friendly options as possible, the MHP application will require a narrative describing how the Project will implement and encourage residents to utilize project-based recycling programs 35

  36. MHP/SH AttachmentsSection B - Eligibility 36

  37. 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) 37

  38. 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 38

  39. 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 provided 39

  40. 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 40

  41. 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 41

  42. B6 Maps Parcel map showing site location Scaled Distance Map Two mile radius of site Indicate amenities 42

  43. 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 43

  44. MHP AttachmentsSection C - Feasibility 44

  45. C1 Insert the Development Timetable 45

  46. 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 46

  47. 47

  48. Loan Limits MHP (see pages 31-45): Homeless Youth or Supportive Housing Units (see pages 46-75: Chart A for 9% credits, Chart B without 9% credits): 48

  49. In the Supportive Housing Application, see Item C5b 49

  50. In the Supportive Housing Application, see Item C5b 50