underwriting process - mhdc

Underwriting Process

Gus Metz

*Word Document

Application Underwriting Process / Thoughts

• Application Underwriting Process o Check for exhibits and give time to complete outstanding issues

Use FIN-125 (do not use sub-folders) o Site Visits

Visit all sites Rehab/Conversion interior inspections Signs

o Each MHDC department then has their own area of the application to evaluate Underwriting/Market & Appraisal/Credit/Architecture/MBE &

WBE/Special Needs/Environmental/Site Visits (appointment to look at the interior of rehab)

o Meetings in conference room with everyone and for several days discuss applications with input from each different department

o Review recommended application proposals with senior management o Recommend to Commission

• Thoughts

o 50 unit “Affordable” limitation (exception may include but are not limited to) Developments that are Mixed-Income Replacing existing public/subsidized housing That have at least 25% special need units Service enriched Preservation Senior housing Part of a redevelopment plan

o What makes a good application Numbers work Need Good Site Priorities - should fit tenant population, site and project configuration Others

o What makes a “not-so-good” application Numbers do not work Poor site Opposition from area residents/groups or public officials (key is

communication and distribution of information) Don’t force a project into being submitted Others

MHDC Credit/Guarantee Review/CHDO Review

Lorenzo Rice

Recurring Deficiencies

Paula Harmon

*Word Document

Recurring Deficiencies at Initial Application

• Use the updated forms that are posted on our website • Missing Documentation – If it’s on the check list, we need it • CD/Flash Drive

o Do not put files in sub folders o Make sure the CD/Flash Drive is secure in the binder

• FIN-100 Addendum – must be sent in excel form • Site Control

o Clearly labeled o Buyer and Seller site control should match

• Site Location Maps – Need detailed maps for site visits • Market Study

o 1300 needs to be a separate document • Financing Commitments

o Clearly identify what type of financing is being requested o Clearly state if a participation loan is acceptable o Clearly state if more than one financing scenario is acceptable o LOI should include interest rate, term, amortization and origination costs

• Public Official Notification – Provide proof of delivery • Form 8821 – Make sure form is signed and tax id number is included (if available) • Developer Information – Financial Statements are required

o May be included in binder or sent under confidential cover to Frank Quagraine o Required for the developer and any guarantors

Frank Quagraine

Director of Rental Production

MHDC Priority Review

Gus Metz

*Word Document

2016 Priorities

• Non-Profit o CHDO Set-Aside (Lorenzo) o TC Set-Aside o NP should be involved

• Service-Enriched (Basis Boost) o Sarah Parsons

• Special Needs (Basis Boost) o Low Rents / Rental Assistance o Sarah Parsons

• Preservation (Basis Boost) o Need for rehab o Structure of financing explained in detail

• Extended Compliance Period o 15 additional years o Already required for SF or Historic

• MBE/WBE o Sheryl Butler

• 50% AMI o At least 25% of units o Should not be HOME units o Rents 15% lower than other like LIHTC rents in application

• High Opportunity o Narrative o Market Study

• Redevelopment Plan o Letter from authorized signatory

SNH and SE Application Review

• SNH application checklist• SNH application criteria and review process• SE application checklist• SE application criteria and review process• Common areas of improvement from previous

application round

SNH Application Checklist

Draft referral and support agreement Lead referral agency experienceMarketing planDocumentation of local supportive servicesAffordability planServices budget

SNH Application Review

• Draft Supportive Services Agreement/ Memorandum of Understanding (MOU)– An executed agreement that declares the number of set aside

units and details the roles of the property owner, management company, and LRA in relation to SNH.

– Duration of compliance period– Separate roles of owner, property manager

and LRA

SNH Application Review• Lead referral agency experience

– Ability to provide access to support services– Capacity to maintain relationships with property

management – Examples of community collaboration – Agency’s mission and years of experience working

with target population including other communities serve as LRA


• Marketing plan– Demonstrate how the development will be

affirmatively marketed to persons with special needs“A development cannot give preference to potential residents based upon having a particular disability or condition to the exclusion of persons with other disabilities.”

– How property management and LRA will collaborate to meet the targeted number of set aside units

– Screening criteria


• Documentation of local supportive services– Demonstrate knowledge of local supportive services

and how to access services for all special needs populations

– Services specific to the target population– Fees– Transportation


• Affordability plan– Commitment of rental subsidy source and back up

plan if not covering all set aside units– Include commitment letter if applicable


• Services budget (Form# SNH-103)– Will provider be on site? If so, how will that position

be funded?– Include any costs to the property for services– If paying for provider to be on site, number of hours

per week– If no cost to the property or resident, note in this

section

SE Application Checklist

Detailed Supportive Services PlanProject- specific services budget (Form# SNH-

103) Letters of IntentDescription of agency’s experience with target

population

SE Application Review

• Detailed Supportive Services Plan– Who will provide the services– What type of services to be offered– When will services be offered– Where the services will be provided – Why specific services are offered– How services will be provided– How services will be funded


• Project- specific services budget (Form# SNH-103)– Include both the sources and uses– Projected cost of services– Projected cost of service coordinator


• Letter of Intent– Commitment from service providers to

participate in services program • Include services to be provided• Commitment period


• Detailed description of the agency’s experience working with target population– Ability to provide access to support services– Capacity to maintain relationships with property

management – Examples of community collaboration – Agency’s mission and years of experience working

with target population – Other service enriched developments

Sarah ParsonsCommunity Initiatives Manager

[email protected](816) 759-7265

FY-2016 Applications

Initial Application:Architectural Review

Architectural Review

Primary Purpose:Review Costs and

Conformity with MHDC’s Design and Construction Compliance Guidelines


•Development Team Information

•Narrative/Reference Information

•Scope of Work


•Consider location’s effect on cost

•Factor in the Project Type and Building Type

regarding effect on costs


•Building Use•Sustainable Housing Election/Certification•Proposed Universal

Design Elements


•Verify conformity with the Development Characteristics

Worksheet


•Factor in all proposed information against the

FIN-115 Contractors/Mortgagor’s

Cost Breakdown


•Provide an overall cost of construction

evaluation


•Review Total Architectural Fees per submitted preliminary drawings and Scope of

Work


•Conclusion: Summarize overall costs and

compliance with MHDC Guidelines

Contact:• For questions related to the

Architectural Review:

Jay W. Mahaney, AIAArchitect

Missouri Housing Development Commission920 Main, Suite 1400

Kansas City, MO 64105816.759.6678 Direct

[email protected]

THANK YOU!

Environmental Review

Karen Justice and Pamela Sanders

FIN-100 Revisions

Terence Sullivan & Gus Metz

underwriting process - mhdc

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