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California Department of Housing and Community Development

Multifamily Housing Program2010-2011 Funding Round 1C-6

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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

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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

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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)

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MHP Program Changes Carried Over From 1C-5 (cont’d)

Scrutiny of rehabilitation projects Hard debt service on public agency financing

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Timetable - MHP

NOFA issued June 14, 2011

Application forms available

June 14, 2011

Applications due August 31, 2011 (by 5 PM)

Loan and Grant Committee Meeting

December 2011

Awards issued January 2012

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Timetable – HY & SH

NOFA issued June 14, 2011

Application forms available

June 14, 2011

Applications due from

HY: July 5, 2011 to 5PM, April 6, 2012 – SH: August 10, 2011 to 5PM, May 11, 2012

Loan and Grant Committee Meeting

As necessary due to OTC status

Awards issued Month following L & G Meeting

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MHP Program Overview

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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

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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

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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 controlMHP Section 7303 and UMR Section 8303

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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 dateMHP Section 7302

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MHP Emphasis

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

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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

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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

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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 feeMHP Section 7304

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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

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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)

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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

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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

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Application Overview

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

MHP Application Attachment http://www.hcd.ca.gov/fa/mhp/MHPApp1C_6Attachment.xls

Homeless Youth or Supportive Housing Project:Use Supportive Housing Application Attachment instead of the MHP Application Attachment http://www.hcd.ca.gov/fa/mhp/MHPSH_App1C_6attachment

.xls

Application

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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

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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

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Submit your application binders in this order:

1. Universal Application2. Universal Application Attachments 1 - 113. MHP Attachments A, B, C, D, E4. 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

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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

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Project Evaluation

Eligibility

Feasibility

Scoring

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MHP/SH Attachments

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A1 Universal Application and MHP Checklist

1. Proof of site control2. Current Preliminary Title Report3. Relocation Plan with estimated costs4. Utility Allowance Chart by unit size5. Org. charts for Borrower, Sponsor, Developer, Affiliates6. Legal Status Questionnaire7. Previous Participation Certifications8. Evidence of enforceable commitments - Construction9. Evidence of enforceable commitments - Permanent10. Market Study with Rent Comparability Matrix11. Current Appraisal

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A2 Eligibility Criteria

1. Other funding sources are insufficient to cover Project development cost

2. As of application due date, construction has not commenced (demolition is considered “construction” if cost of demolition is included in the development budget)

3. Application complete and on MHP approved forms

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A2 Eligibility Criteria (continued)

4. Project site must be free from environmental conditions which are infeasible to correct

5. Site is reasonably accessible to: Public transportation, shopping, medical services,

recreation, schools and employment

6. Must demonstrate Article XXXIV authority

7. New construction projects with demolition: Number of bedrooms in new Project must be at

least equal to the number of bedrooms demolished

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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)

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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)

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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

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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

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MHP/SH AttachmentsSection B - Eligibility

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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)

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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

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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

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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

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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

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B6 Maps

Parcel map showing site location

Scaled Distance Map Two mile radius of site Indicate amenities

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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

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MHP AttachmentsSection C - Feasibility

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C1 Insert the Development Timetable

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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

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Loan Limits

MHP (see pages 31-45):http://www.hcd.ca.gov/fa/mhp/2010IncomeRentsLoanLimits.pdf

Homeless Youth or Supportive Housing Units (see pages 46-75: Chart A for 9% credits, Chart B without 9% credits): http://www.hcd.ca.gov/fa/mhp/2010IncomeRentsLoanLimits.pdf

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In the Supportive Housing Application, see Item C5b

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In the Supportive Housing Application, see Item C5b

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OR

H. Portion of TDC attributable to Restricted Units:

Calculate proportion of total development costs attributable to restricted units pursuant to Section 7304(c) of the MHP Regulations . Clearly show calculation and attach to this page.

$0

For those projects containing commercial space, we recommend the Sponsor contact an MHP Representative for assistance.

For Projects Containing Commercial Space

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C6

This item (evidence of commitment status for development funding) has been replaced by Universal Application Attachments 8 and 9

See MHP or SH Application Attachment Instructions for what constitutes evidence of commitment

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C7 Developer Fee Calculation

Not a required application attachment

Tool to assist Sponsor in calculating allowable amount of developer fees

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Instructions: Just complete the yellow, shaded cells - choose only one in the 'A', 'B' or 'C' sections.

1 Number of units (include manager's unit) 362 First 30 units at: $23,000 each 690,000$ 3 Units in excess of 30 at: $9,500 each 57,000$ 4Total (A2 + A3) 747,000$

D Developer Fee that TCAC would allow to be included in eligible basis(ask sponsor for calculation) 1,500,000$

E Lesser of $1,200,000 or D 1,200,000$ F Sponsor capital contribution of funds or real property 500,000$ G Maximum allowable Developer Fee payable from development funding sources

A4, B4 or C2, not to exceed E, plus F 1,247,000$ H Developer Fee budgeted for payment from Development Funding Sources

(cannot exceed line G) 1,247,000$ I Maximum Deferred Fee payable from cash flow

prior to Distributions and residual receipts loan payments (E+F-H) -$ J Deferred Developer Fee budgeted for payment from cash flow prior to Distributions

and residual receipts loan payments (cannot exceed line I) -$ K Deferred Fee budgeted for payment from Distributions -$ L Total developer fee, including Fee payable from Distributions (H+J+K) 1,247,000$

Item C7Developer Fee Worksheet for

Tax Credit Projects Subject to the Uniform Multifamily Regulations

A New construction and substantial rehab projects

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C8 Unit Mix and Income Information Complete the Unit Mix and Income Information chart

For rental assistance, operating, project based and other subsidies attach evidence of commitment

1. If not available, attach other documentation such as Reservation or third-party letter stating the following: Annual subsidy amount Date or expected date of award Term Number of subsidized units

2. If not available, attach Voucher Payment Standard and Fair Market Rents from Housing Authority

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C9 Transition Reserves

If Project depends on project-based rental subsidy, attach calculation of Required Transition Reserve funding

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C10 Non-Special Needs Population Justification of Services Coordinator

Attach narrative description of tenant needs and the role of the resident Services Coordinator in linking tenants to services

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C11 Estimate of Construction Cost Based on Prevailing Wage

Complete C11 based on prevailing wages

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Insert the Following Documents

C12 Copies of Planning Approvals

C13 Copies of Resumes for Project Contractor and Architect

C14 Copies of Schematic Drawings

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Rehabilitation Projects

C15 Provide a narrative description of current condition of structures

C16 Provide a detailed narrative description of the intended scope of work

C17 Provide a copy of current rent roll including household composition and income

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C18 Letter to Local Government

Statutory requirement to notify local government jurisdiction that application is being submitted

Must be addressed to the City Council or County Board of Supervisors (whichever is applicable)

THIS IS AN ELIGIBILITY THRESHOLD REQUIREMENT

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C19 Operating Expense Comparables

Minimum three comparables

One market rate; one affordable housing

Same primary market area

Similar size, number of units and amenities

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MHP AttachmentsSection D - Scoring

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D1 Extent Project Serves Households at the Lowest Income Levels - 35 points

Enter total number of Restricted Units

Enter number of units for MHP A, B, or C

Scoring sheet will auto calculate

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D2 Extent Project Addresses the Most Serious Identified Local Housing Needs -

15 points(A) 5 points for either: 1. Letter from City or County

Local need identified in local housing policy document

The local housing policy document in which the need is identified

A statement that the Project meets the need Must specifically name the Project

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Or:

2. If 70 percent of Project units are reserved for Special Needs Populations: Letter from local government department

stating that the Project will address a serious local housing need as it relates to Special Needs Populations

D2 Extent Project Addresses the Most Serious Housing Needs (continued)

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AND Choose option B, C or D - 5 or 10 points

(B) - 10 points1. At least 70 percent of units reserved for Special

Needs Populations or2. At least 70 percent of units have two or more

bedrooms and located in Alameda, Contra Costa, Los Angeles, Marin, Monterey, Napa, Orange, San Diego, San Francisco, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, or Ventura counties

D2 Extent Project Addresses the Most Serious Housing Needs (continued)

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(C) - 5 or 10 pointsComparable Market Rental Data Forms

At least the five nearest comparable projects

Senior projects - limit comparables to this population

One rental data form for each comparable

If weighted vacancy rate is < 3 percent = 10 points

If weighted vacancy rate is < 5 percent = 5 points

D2 Extent Project Addresses the Most Serious Housing Needs (continued)

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(D) - 5 or 10 pointsVacancy Rate Determined by Market Study

Performed by qualified third party per TCAC guidelines

Senior projects - limited to this population

Vacancy rate < 3 percent = 10 points

Vacancy rate < 5 percent = 5 points

D2 Extent Project Addresses the Most Serious Housing Needs (continued)

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D3 Development and Ownership Experience of Project Sponsor - 20 points

Affordable housing developments completed in the five years preceding application due date

Minimum ten units

Exception: If proposed project has < 15 units, and 70 percent of units reserved for Special Needs Populations, a completed project may have five units

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Experience points awarded if: Project Sponsor or affiliate was sole developer

Project Sponsor or affiliate in partnership with another entity if: Controlled key aspects Had sufficient staff to manage the

development process Received majority share of developer fee

D3 Development and Ownership Experience of Project Sponsor (continued)

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Projects were developed by staff (or a principal) currently employed by Sponsor if: Staff had primary responsibility for the

development process Staff will serve as Project Manager, or directly

supervise the Project Manager and have primary responsibility for managing the development process

D3 Development and Ownership Experience of Project Sponsor (continued)

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Only experience of one entity counted

Experienced entity must have controlling interest in partnership, primary responsibility for development, ongoing control of operations and sufficient staff

Must receive majority share of developer fee

D3 Development and Ownership Experience of Project Sponsor (continued)

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D4 Percentage of Units for Families, Supportive Housing or Special Need Populations or At-risk Rental Housing

Developments - 35 points

Scoring sheet will auto-calculate for unit size and Special Needs Population designated units

At-risk Rental Housing must meet TCAC definition. Attach completed checklist and supporting documentation

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D5 Leverage of Other Funds - 20 points

Developer fee is not included

Value of donated land may be included if supported by an appraisal

Rural, Non-rural: As defined by TCAC

Attachment D5 will auto-calculate

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D6 Project Readiness - 15 points

A. Enforceable commitments - construction

B. Enforceable commitments - deferred

C. Environmental Have all clearances (NEPA & CEQA)

If NEPA Responsible Entity is not the locality: Submit form to appropriate NEPA Responsible Entity

Phase I Environmental Site Assessment

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D. Local design review approval

E. Public land use approvals (not to include building permits and ministerial approvals)

F. Either: Fee Title or long-term leasehold (attach PTR

or documentation of lease agreement)

Working drawings at least 50 percent complete (attach architect certification)

D6 Project Readiness - (continued)

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D7 Adaptive Reuse, Infill, Proximity to Site Amenity or Sustainable Building

Methods - 10 points Infill: Vacant or soon to be vacant lot in established

or developed area

Adaptive Reuse: Rehabilitation of vacant commercial or industrial buildings in developed areas

Proximity to Site Amenity: Must qualify for any points under TCAC

Sustainable Building Methods: Must qualify for any points under TCAC

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A commitment for the operating subsidies, sufficient to sustain project operations for five years or longer from the local government.

A commitment for services funding, sufficient to make available services adequate to meet the needs of the tenants housed in the Supportive Housing Units, for five years or longer. Must include: Project name, description of services to be funded or provided,

dollar value of funds or in-kind services (if cash is to be provided, state the source of funds), term of funding or service provision and a brief description and history of the agency/organization providing the funding or services.

Homeless Youth or Supportive Housing Projects: D8 Commitments for Operating Subsidy or Services Funding - 5 points

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Projects that have received an award from the Department’s Housing Policy Development Division via the Catalyst Projects for California Sustainable Strategies Pilot Program will receive five bonus points in the application scoring process. More information is available on the Department’s website at: http://www.hcd.ca.gov/hpd/cpcsspp.html

D8a Catalyst Program

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Service Plan Requirements

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Index and Checklist (Application Item B14) Part 1. Populations to be served Part 2. Supportive Services Plan Part 3. Supportive Services Budget Part 4. Project Sponsor and Service

Provider Experience Part 5. Property Management Experience

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Tenant Selection Narrative Part 1, Section 3

Must conclusively document occupancy will be limited to eligible households

Occupancy by Homeless Youth or Supportive Housing households must be documented for the greater of 5 units OR 35% of the total units

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Occupancy Standards, Exit Strategies, and Rent Subsidies Part 1, Section 4 Describe policies related to duration of stay Describe strategies to ensure viable housing

options for Homeless Youth exiting the project – or reassigning units

Describe subsidies which will allow for project feasibility. Describe how the subsidies may function (be reduced) in the event tenant income increases

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Service Plan Summary Part 2, Section 1 Narrative Summary of Services Plan

Service Needs of PopulationLead Service ProviderKey Services availableStaffing

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Characteristics of Permanent Homeless Youth Housing Tenant holds a lease and is responsible for rent (not

required) Tenant has own room or apartment and is individually

responsible for arranging any shared tenancy (not required)

Tenant may stay as long rent is paid and the terms of lease complied with

Unit subject to applicable state and federal landlord tenant laws

Tenant’s participation in service(s) shall not be required as a condition of tenancy

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Verification from Funding Agency Part 2, Section 3 Agency shall be knowledgeable of the

supportive service needs of the Target Population

Agency shall endorse the services plan and the Project Sponsor as a known provider of Supportive Services similar to those proposed

Use Supportive Service Verification Form

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Supportive Services ChartPart 2, Section 4

Record in chart: Each Support Service separately Population to be served Short Description of the Service Name of Service Provider Relationship to Sponsor Type of Agreement (i.e., MOU or letter of

commitment) Service Location – on or off Project site

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Services Delivery Chart Part 2, Section 5 List each Staff Position separately Describe the roles and duties of each position Indicate percentage of full-time equivalent staff Name the employer organization of the position Specify Location work will be performed

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Staffing Level Table Part 2, Section 5b Indicate staffing level by completing calculation:

Total SH or HY Units Total FTE Support Service Staff Number of SH or HY Units per FTE Staff Person

If Staff level differs from HCD’s historical averages [10 – 15 households per staff for intensive services or 15 – 25 households per staff for less service intensive], provide a narrative explanation.

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Tenant Engagement Part 2, Section 6 Provide narrative of tenant engagement plan Explain how the Sponsor will elicit tenant

participation in the services

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Collaboration Part 2, Section 7 Provide a Narrative Description of the

Collaboration Relationship (Section 7A) Provide Collaborative Relationship

Documentation such as a Contract, MOU or Letter of Intent (Section 7B)

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Measurable Outcomes and Plan for Evaluation - Part 2, Section 8a Applicants must establish reasonable outcomes

and outcome measures for:Residential Stability Increased Skills or incomeGreater Self-determination

Applicants must reasonably describe the proposed system for tracking the data and agree to report on the data annually

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Service Utilization Part 2, Section 8b Applicant must describe plan for collecting

and analyzing service utilization data:Prior to tenancyDuring tenancyWhich systems of care will provide the data

(i.e. health, mental health, substance abuse, criminal justice)

How data will be collected and analyzed

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Supportive Services Budget – Part 3, Section 1

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Supportive Services Cost Per Unit Part 3, Section 2 Indicate supportive services cost per unit

by completing calculation:Total SH or HY UnitsTotal Supportive Services CostsTotal Supportive Service Costs per Unit

If supportive service cost per unit differs from a range of $5,000 - $10,000 per unit, provide narrative explanation

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Funding and Service Commitments

Part 3, Section 3 A minimum of 25% of total Service Budget must be

committed at the application stage Letters of Commitment or Intent to Fund must provide

the following on organization letterhead: Project name Description of services to be funded or provided Value of funds or in-kind services Term of funding or service provision History of organization providing funds or services

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Experience Part 4, Section 1

Document 24 months experience in ownership or operation of one special needs or supportive housing project containing 5 or more dwelling units

Document 24 months experience in providing services to the target population

Property manager must have 24 months experience in managing a supportive housing or special needs housing project containing 5 or more dwelling units

This is a threshold requirement

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Service Funding History Part 4, Section 2B Document the funding history of the qualifying service

provider Document that the provider will be able to access funds

from the programs that fund the services identified in the Supportive Services Plan

List only funding obtained in last 5 years

THE END Thanks for your attention. We will now

answer any remaining questions that you may have.

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