Permanent Supportive Housing with Project Based Voucher

Assistance

June 13, 2008

QAP Mechanisms to Create Permanent Supportive Housing

• Permanent Supportive Housing Set-Aside– 25% of the State’s total credit ceiling– Non-statutory– May be eligible for PBV assistance

• Ten percent (10%) Supportive Housing Requirement– All LIHTC project will be required to target 10% of the

total units to Supportive Housing Tenants– Excludes tax-exempt bonds– May be eligible for PBV assistance

Supportive Housing Set-AsideGeneral Application Information

• Non-eligible Populations – Elderly only projects are excluded

• Populations Served – Minimum 35% of the units targeted to supportive housing initiatives. Additional points for having more than 75% supportive housing units. (See definitions outlined in Addendum IIIa, Attachment A)

Supportive Housing Set AsideGeneral Application Information cont.

• Project size – Not exceed 75 units under the Supportive Housing set-aside.

• Service Organization Collaboration –Assuring adequate service coordination and delivery for tenants.

• Site Selection – See Tab C under the Combined Application for MSHDA’s Site Selection Criteria.

Supportive Housing Set-AsideThreshold Requirements

• Addendum IIIa Application – Only supportive housing proposals under the Set-Aside are required to submit Addendum IIIa.

• Letters of Support – From Continuum of Care or community group, endorsing project, and from service provider’s funder(s) if applicable.

Supportive Housing Set-AsideThreshold Requirements cont.

• Memorandum of Understanding (MOU) – Agreement between owner, service provider, and the property manager.

• Service Coordination Plan – On site service coordination must be available to all supportive housing tenants. Minimum schedule standard recommended:– One day per week – 30 units or less– Two days per week – 30-60 units– Three days per week – 60-75 units

Supportive Housing Set-AsideThreshold Requirements cont.

• Additional Threshold Requirements: See Section VIII-A of the Qualified Allocation Plan (QAP) for additional requirements which must be followed. For SH Set-Aside proposals, the Inclusion Plan, Item #1, is not required.

• Scoring and Ranking – Set-aside proposals will be scored under Addendum IIIa, not under Addendum I. See Scoring Summary, Attachment C under Addendum IIIa.

(10%) Supportive HousingThreshold Requirement

• 10% Requirement: All projects with allocated tax credits (excluding elderly projects and projects using tax-exempt bond financing) will be required to target ten percent (10%) of the total units to Supportive Housing Tenants.

• General Threshold Requirements: See Section VIII-A of the QAP for threshold requirements that must be followed including:

– Inclusion Plan: Owners must demonstrate a partnership with a local lead agency and complete an Inclusion Plan, which includes:a. Description of how the project will meet needs of the

targeted tenantsb. Description of the experience of the lead agency and

their capacity to provide access to supportive services

(10%) Supportive HousingThreshold Requirement cont.

c. A Memorandum of Understanding (MOU)

d. Certification that participation in supportive services will not be a condition of tenancy.

e. Agreement for 60 day vacancy holding period for special needs tenants

f. Agreement to maintain separate waiting list

g. Agreement to affirmatively market to persons with disabilities

(10%) Supportive HousingThreshold Requirement cont.

h. Agreement to include a section on reasonable accommodation in application for tenancy

i. Agreement to accept Section 8 vouchers or certificates

j. A description of how to make targeted units affordable to persons whose incomes are limited to those from a disability-based-source

Inclusion Plan

• Required after tax credit award – An acceptable plan is due within 120 after the tax credit award.

• Collaborative Effort – Owner, Management Agent, and Lead Agency

• Lead Agency – Agrees to act as a provider, coordinator or referral agent

PBV Assistance

May 2008

PBV Requests

• Due Date: Requests for PBV assistance must be made to the Office of Supportive Housing between now and July 15, 2008.

• Conditional Commitment: Upon review of the requested PBV assistance, Supportive Housing will provide a conditional commitment for your tax credit application.

PBV Threshold Standards

• Selection of PBV Proposals - LIHTC, and/or MSHDA HOME.

• Eligible Units - Available only for special needs units as defined in MSHDA’s Addendum IIIa.

• Term of Assistance – Ten (10) year initial term, with five (5) year extensions. (Subject to annual appropriation)

PBV Threshold Standards cont.

• Ineligible Units:– Shared housing;– Units on the grounds of a penal, reformatory, medical,

mental, or similar private or public institution;– Nursing homes or facilities providing continuous

psychiatric, medical, nursing services, board and care or intermediate care;

– Units that are owned or controlled by an educational institution or its affiliate and are designated for students by the institution;

– Manufactured homes;– Cooperative housing; and– Transitional housing

PBV Threshold Standards cont.• Prohibition of Assistance for Units in Subsidized Housing:

– A public housing dwelling unit;

– A unit subsidized with any other form of Section 8 assistance (tenant based or project based);

– A unit subsidized with any governmental rent subsidy;

– A unit subsidized with Section 236 rental assistance payments. However, they may attach assistance to a unit subsidized with Section 236 interest reduction payments;

– A unit subsidized with rental assistance payments under Section 521 of the Housing Act of 1949, However, they may attach assistance for a unit subsidized with Section 515 interest reduction payments;

– A Section 202 project for non-elderly persons with disabilities, or elderly;

– Section 811 project-based supportive housing for persons with disabilities;

– A unit subsidized with any form of tenant-based rental assistance (TBRA);

PBV Threshold Standards cont.

• Site Selection Criteria – MSHDA’s Site Selection Criteria must be met. See Tab CC of the Combined Application

• Addendum IIIa or Inclusion Plan – Proposals under the PSH Set-Aside complete the Addendum IIIa, all other PSH proposals must submit the Inclusion Plan.

• Environmental Reviews – Proposals must meet the Authority’s Environmental Review (See Tab D of the Combined Application), and NEPA and related applicable federal laws and authorities in accordance with 24 CFR 58.5 and 58.6.requirements.

PBV Threshold Standards cont.

• Housing Accessibility – Must comply with program accessibility requirements of Section 504 of the Rehabilitation Act of 1973, and implementing regulations at 24 CFR part 8.

• Housing Quality Standards – Each unit must be inspected for compliance with HQS before executing the Housing Assistance Payment (HAP) Contract.

• Labor Standards – Nine (9) or more PBV assisted units triggers Davis Bacon requirements

PBV Threshold Standards cont.

• Income Limits – Currently, income eligibility is lesser of federal poverty or 30% of AMI.– Proposed change to the PHA plan includes

that a minimum of 85% of the PBV assisted units must be occupied by households with incomes at or below 30% of Area Median Income (AMI), with the remainder at or below 50% of AMI.

PBV Threshold Standards cont.

• Rent to Owner – For a tax credit development outside a QCT, rent to the owner will be the lowest of:– The tax credit rent minus utility allowance;– The reasonable rent; or– The rent requested by the owner

PBV Threshold Standards cont.

• Rent to Owner – For a tax credit development within a QCT, rent to the owner will be the lowest of:– An amount determined by MSHDA, not to

exceed 110 percent of the applicable FMR for the unit bedroom size minus any utility allowance;

– The reasonable rent; or– The rent requested by the owner

PBV Threshold Standards cont.

• Subsidy Layering – All proposals with PBV assistance are subject to a HUD subsidy layering review.

PBV Underwriting Considerations

• Feasibility/Commitment – Under the MSHDA Taxable Loan Program, feasibility will be based on rents targeted within the tax credit application for scoring purposes.

• Mortgage Term/Prepayment – Standard Direct Lending Programs (TEAM, HOME Team, Taxable…) terms and prepayment conditions.

PBV Underwriting Considerations cont.

• Market Studies – All proposals are subject to MSHDA’s Guidelines for Market Studies. (See Tab C of the Combined Application)

• Concessions and Inducements - A ¼ percent rate reduction may be available if at least 15% of the units are affordable to a special needs population, where these units are supported with PBV assistance.