multifamily housing program 2015 funding round general fund california department of housing and...

Multifamily Housing Program

2015 Funding Round General Fund

California Department of Housing and Community Development 1

1

2

MHP NOFA – June 5, 2015

• Funding Available– $47.5 million

• $7 million maximum loan amount per project– Function of unit size, location and

affordability level

2

3

MHP Timetable

NOFA issued June 5, 2015

Application forms available June 5, 2015

Applications due August 6, 2015

Loan and Grant Committee Meeting

October, 2015

Awards issued November, 2015

3

SHMHP TimetableNOFA issued June 12, 2015

Application forms available

June 12, 2015

Applications due August 13, 2015

Loan and Grant Committee Meeting

October, 2015

Awards issued November, 20154

5

MHP Program Changes

Projects – Total Development Cost over $400,000 (See NOFA Section K)

Section 811 Project-based Rental Assistance (See NOFA Section R)

Geographic Distribution - Rural Areas changed from 10 to 20 percent

MHP Program Overview

66

7

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

7

8

Geographic Distribution

• 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– 20 percent Rural Area

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 controlMHP 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 dateMHP Section 7302

10

11

MHP Emphasis

• Emphasis on units for:– “Deeply” targeted incomes

(MHP A, B or C)– Large families (two or more

bedrooms)– Special Needs Populations

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 feeMHP 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 not eligible to apply for MHP funds

14

15

Developer Fee Limits• Limit of $1.2 million from funding sources

– New construction and substantial rehabilitation projects: first 30 units, $25,000 per unit. Each unit in excess of 30, $10,500 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

Application Overview

1717

18

• Universal Application used by HCD, TCAC, CDLAC and CalHFA– http://www.hcd.ca.gov/fa/UniversalAp

plication.xls

• MHP Application Attachment– http://www.hcd.ca.gov/fa/mhp/MHPAp

pAttachment.xls

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), MHP 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 sent to HCD no later than 5 p.m. on August 6, 2015.

• No facsimiles, late, incomplete, revised, electronically transmitted, or walk in application packages 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:

1.Universal Application2.Universal Application Attachments 1 -

113.MHP Attachments A, B, C, D, ERemember: 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

23

Eligibility

Feasibility

Scoring

MHP Attachment

2424

25

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

25

26

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

26

27

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

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 MHP application will require a narrative describing how the Project will implement and encourage residents to utilize project-based recycling programs

31

MHP AttachmentSection B - Eligibility

3232

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

36

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

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

MHP AttachmentSection C - Feasibility

4040

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

4343

44

Loan Limits

• MHP: http://www.hcd.ca.gov/housing-policy-development/housing-resource-center/reports/state/2015non_heraincomerentsloanlimits.pd

44

4545

In the Supportive Housing Application, see Item C5b

4646

47

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

47

4848

49

C6

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

See MHP 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

51

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: $25,000 each 750,000$ 3 Units in excess of 30 at: $10,500 each 63,000$ 4Total (A2 + A3) 813,000$

D Developer Fee that TCAC would allow to be included in eligible basis(ask sponsor for calculation) 813,000$

E Lesser of $1,200,000 or D 813,000$

F Sponsor capital contribution of funds or real property 50,000$

G Maximum allowable Developer Fee payable from development funding sourcesA4, B4 or C2, not to exceed E, plus F 863,000$

H Developer Fee budgeted for payment from Development Funding Sources(cannot exceed line G) 863,000$

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 5,000$

L Total developer fee, including Fee payable from Distributions (H+J+K) 868,000$

Item C7

Developer Fee Worksheet forTax Credit Projects Subject to the Uniform Multifamily Regulations

Revised 5/6/10

A New construction and substantial rehab projects

52

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

52

5353

54

C9 Transition Reserves

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

54

55

C10 Justification of Services Coordinator

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

55

56

C11 Estimate of Construction Cost Based on Prevailing Wage

• Complete C11 based on prevailing wages

56

57

Insert the Following Documents

• C12 Copies of Planning Approvals

• C13 Copies of Resumes for Project Contractor and Architect

• C14 Copies of Schematic Drawings

57

58

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

58

59

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

59

60

C19 Operating Expense

Comparables• Minimum three comparables

• One market rate; one affordable housing

• Same primary market area

• Similar size, number of units and amenities

60

MHP AttachmentSection D -

Scoring

6161

62

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

62

6363

64

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

64

65

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)

65

66

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)

66

67

(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)

67

68

(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)

68

69

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

69

70

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)

70

71

• 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)

71

72

• 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)

72

73

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 including third-party legal opinion.

73

7474

75

D5 Leverage of Other Funds - 20 points

• Developer fee is not included• Land value may be included if

supported by an appraisal• Rural, Non-rural: As defined by TCAC• Projects With at Least 75% Homeless

Veteran or Developmentally Disabled Populations will be scored using the rural category

• Attachment D5 will auto-calculate

75

7676

77

D6 Project Readiness - 15 points

A. Enforceable commitments - constructionB. Enforceable commitments - deferredC. 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

77

78

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)

78

7979

80

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

80

D8 - Catalyst Program Award - 5 points

81

D9 - Percentage of Utilizing Section 811 Project-based Rental Assistance (PRAC) Funds – 5 Points

82

Service Plan Requirements

83

84

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

84

Tenant Selection Narrative Part 1, Section 3

– Must conclusively document occupancy will be limited to eligible households

• For Homeless Youth projects, occupancy by Homeless Youth households must be documented for at least 5 project units

85

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

86

Service Plan Summary Part 2, Section 1

• Narrative Summary of Services Plan– Service Needs of Population– Lead Service Provider– Key Services available– Staffing

87

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

88

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

89

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

90

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

91

Staffing Level Table Part 2, Section 5b

• Indicate staffing level by completing calculation:– Total SH or HYSH Units – Total FTE Support Service Staff– Number of SH or HYSH 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.

92

Tenant Engagement Part 2, Section 6

• Provide narrative of tenant engagement plan

• Explain how the Sponsor will elicit tenant participation in the services

• A tenant engagement plan may not be necessary for transitional housing

93

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)

94

Measurable Outcomes and Plan for Evaluation - Part 2, Section 8a

• Applicants must establish reasonable outcomes and outcome measures for:– Residential Stability– Increased Skills or income– Greater Self-determination

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

95

Service Utilization Part 2, Section 8b

• Applicant must describe plan for collecting and analyzing service utilization data:– Prior to tenancy– During tenancy– Which systems of care will provide the data

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

– How data will be collected and analyzed

96

Supportive Services Budget – Part 3, Section 1

97

Supportive Services Cost Per Unit Part 3, Section 2

• Indicate supportive services cost per unit by completing calculation:– Total SH or HYSH Units– Total Supportive Services Costs– Total 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

98

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

99

Experience - Part 4, Section 1

• Document 24 months experience in ownership or operation of one special needs or supportive housing project

• 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

100

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

101