2004 APPLICATION WORKSHOP

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2004 APPLICATION WORKSHOP

• Georgia Department of Community Affairs

Presented by the Office of Affordable Housing
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1. Project Feasibility Conformance with QAP

• LIHTC Policies
• HOME Loan Policies
• Rental Charts
• Appraisals

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LIHTC Policies

• Assumption for land purchase
• Identity of Interest between buyer/seller
  appraisal required
• Building Basis
• Lesser of sales price or appraised value of
  building(s)
• Contractor Fee Limitation
• Overhead 2 (Construction Contract Amt. -
  Contractor Fees)
• General Requirements 6
• Includes Letter of Credit fee in lieu of payment
  performance bond
• Builders Profit 6
• Construction Contingency
• New construction 2-5 of construction hard cost
• Rehabilitation 5-7 of hard cost

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LIHTC Policies

• Relocation Budget
• Compliance Monitoring Fee
• Based on Total of units (USDA Sec. 538 -
  600/unit)
• Maximum Developer Fee Limitation
• New construction/Rehab only
• 15 (TDC - DF - Land - Builders Profit)
• Acquisition Rehabilitation
• Acquisition 15 building acquisition cost
• Rehab 15(TDC - DF - Land - Bldg. Acq.-
  Builders Profit)
• When Identity of Interest exists between
  Developer Genl Contractor
• Consultant Fee Limitation 20 of Developer Fee
• No Consultant Fee allowed if Identity of Interest
  btwn Consultant Owner/Developer

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LIHTC Policies

• Tax Credit Percentages 9 and 4 for application
  purpose
• BMIR HOME Funding QCT
• 40-50 Rule (seek professional advice)
• 9 credit not eligible for 30 basis boost
• Per Unit Cost Limitation
• Waiver due 3/1/04

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LIHTC Policies

• Terms tie back to documents (including government
  financial assistance)
• Housing Credit Equity
• Deferred Developers Fee
• Must be payable within 10 years from cash flow
• Not considered in GAP method of credit calculation

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Rent Issues

• Metro Atlanta maximum rent limit _at_ 54 eliminated
• Fair Market Rents w/ HOME
• Types of Employee Occupied Units
• Common space
• No Rent can be charged
• Must be occupied by employee
• Employee does not have to be income qualified
• Residential unit
• Low-income unit rent charged, must be occupied
  by an employee who is income qualified
• Market rate unit rent charged, no income or rent
  restrictions on employee resident
• Public Housing units tax credit/HOME cannot be
  used for public housing units except in mixed
  income projects.

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Utility Allowance

• Utility Allowance
• USDA
• Public Housing Authority
• DCA

9
Operating Expense Budget

• Minimum Annual Operating Expense Requirements
• Urban 3,000/unit
• Rural County w/USDA funding source 2,400/unit
• Rural County 2,600/unit
• Operating Expense Waiver due by March 1, 2004 or
  submit with Application
• Replacement reserve
• Rehabilitation 300/year per unit
• New Construction 200/year per unit
• Single Family 400/year per unit

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Operating Pro Forma

• Trending
• Income 2
• Expenses and Replacement Reserves 3
• Vacancy Collection Loss 7
• Debt Coverage Ratio
• First year 1.15 - 1.35
• Tax Credit projects no less than 1.15 during 15
  year compliance period
• Tax Credit HOME projects no less than 1.15
  during compliance period, period of
  affordability, or HOME loan term, whichever is
  longest

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Project Feasibility for Scattered Sites

• Scattered Site Projects
• DCR requirements must be met by the project as a
  whole and for scattered site projects under
  section 10 B (1) (b) - 3 non-contiguous
  multifamily properties within 50 mile radius-
  each property must meet the criteria

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Financial Adjustments

• At DCAs Discretion
• For each adjustment, deduct 1 point. No limit on
  deduction.

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HOME Policies
Additional Policies Applicable to HOME Funded
Projects
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Eligible DCA HOME Loan Costs

• New Construction any project that includes the
  addition of dwelling units outside the existing
  walls of a structure is considered new
  construction
• Rehabilitation the improvement or modification
  of an existing structure
• Reconstruction refers to rebuilding, on the
  same lot, where housing is standing at the time
  of project commitment
• The number of units on the lot may not change as
  part of the reconstruction project, but the
  number of rooms per unit may change

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Non-Amortizing Loan - Excess Cash Flow

• 1/2 of the Excess Cash Flow (income after secured
  debt service payment) Deposited in Account
  (Excess Cash Flow Account)
• Used for Principal Reduction of HOME loan and
  Capital Improvements
• Disbursements Require DCA Prior Approval
• Funds Must Remain in Account until HOME Loan is
  Paid in Full

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Non-Amortizing Loans - Future Market Value

• Outstanding Loan Balance at Maturity must be less
  than the Projected Appraised Value at Maturity
• DCA Commissioned Appraisal Projects the Future
  Value of the Development
• Interest and a Portion of Principal must be
  repaid in Each Year of the HOME Loan

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Assumptions for Land Purchase and Existing
Buildings

• No Identity of Interest
• Cost limited to the lesser of sales price or
  appraised as is value
• Identity of Interest
• Cost limited to the lesser of sales price or
  appraised as is value
• Appraisal prepared by an appraiser that is a
  Georgia Certified Appraiser
• Appraisal prepared within 6 months of application
  submission
• Provide separate land and building values

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Construction Contingency

• New Construction 2 to 5 of Total Construction
  Cost
• Rehabilitation 5 to 7 of Total Construction Cost

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HOME Loan/Construction Contingency

• DCA funds allocated to Contingency
• DCA approves all change orders
• Unused contingency used to reduce Senior Loan or
  HOME Loan

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Construction Hard Cost Financing

• Site Development
• Unit/Building Construction
• Contractor services
• Builders overhead
• Builders profit

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Conversion

• 24 months of HOME loan closing
• Loan Agreements will set conversion date

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Developer Overhead and Consultant fee(Drawn
During Construction)

• Lesser of 20 of the Maximum Allowable Developer
  Fee, or
• 50 of the Total Developers Fee Requested
• Developer Profit (80) can not be disbursed prior
  to HOME Loan Conversion
• Disbursement Condition reflected in HOME Loan
  Agreement and Other Funding Source Agreements

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Identity of Interest

• Owner/Contractor, Developer/Contractor
• Third Party Front End Analysis Required
• Commissioned by DCA during Underwriting
• Contractor Services must be reasonable as
  determined by DCA
• Owner/Provider of Other Service
• Three Bids during Underwriting
• Services must not exceed amount ordinarily paid
• DCA will determine reasonableness

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Syndicator Asset Management Fees

• Paid - After DCA Debt Service
• Paid - After Excess cash Flow Payment

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Operating Deficit Reserve

• No less than 6 times the secured monthly debt
  service plus no less than 6 months projected
  operating expenses
• Funded at or prior to conversion
• Held by DCA or Senior Lender
• Required for Term of HOME Loan
• Withdrawals must be Approved by DCA and Requested
  in Writing

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Partnership Agreement

• Must Reflect Terms of HOME Loan
• Executed Prior to HOME Loan closing

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Payment and Performance Bonds

• No Identity of Interest
• Required on all Developments (100 bond required
  on all developments)
• Include the cost of Payment and Performance Bond
  in 6 General Requirements

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Payment and Performance Bonds

• Identity of Interest
• Letter of Credit (LOC) or Construction Loan (CL)
• LOC - at least 50 of Construction Cost including
  Profit and Overhead
• Construction Loan - Amount equal to DCA
  Construction Loan
• DCA will disburse 2,500 per Draw Request
• Include the cost of LOC or Construction Loan in
  6 General Requirements

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Payment and Performance Bonds

• Waiver Process
• Waiver Request must be submitted with Application
• DCA Waiver (Form N-3)
• Tab 2 Application Binder

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Disclosure of Lobbying Activities(Byrd
Amendment)

• Each Owner who expects to receive a Home loan in
  excess of 150,000 must certify that the funds
  will not be used to lobby Congress
• Submittals
• Certification for Contracts, Loans and
  Cooperative Agreements (Form B-4)
• Applicant/Recipient Disclosure/Update Report
  (Form B-5)

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Disclosure of Lobbying Activities

• In addition if an owner uses non-federal money to
  lobby Congress the owner must submit a Disclosure
  of Lobbying Activities Form SF-LLL (Form B-6)

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Disclosure of Lobbying Activities

• Developers, contractors, subcontractors
  (including architects, engineers and other
  consultants) who receive federal funds in excess
  of 100,000 for any HOME activity must disclose
  lobbying activities
• Submittals
• Certification for Contracts, Loans and
  Cooperative Agreements (Form B-4)
• Applicant/Recipient Disclosure/Update Report
  (Form B-5)
• Owners are responsible for meeting submission
  requirements

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Disclosure of Lobbying Activities

• All forms are located in the HOME manual and _at_
  www.dca.state.ga.us/housing/rentalfin.html
• Submit disclosure forms in Tab 18 of Application
  Binder

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Rent Charts

• Low Income Units with No PBRA
• Low Income Units with PBRA
• Non LIHTC Units with PBRA
• Market rate units

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Low Income units with No PBRA

• Unit rent and income type
• 30/50/60
• PHA Units
• Program Max Unit Rents
• LIHTC/HOME
• Proposed Unit Rent (cant exceed Program rent)
• Unit Rent to Collect

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PHA Units

• Operating subsidy should be entered in the non
  occupancy based income part of the Other income
  sources section
• Unit Rent to Collect should be reflected as 0

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Low Income Units with PBRA

• PBRA type Government/Non government
• Unit rent and income type (LIHTC)
• Program max Unit rent (LIHTC/HOME)
• Proposed unit rent
• Unit rent to collect
• Proposed unit rent without PBRA

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Non LIHTC Units with PBRA

• Used in rehabs
• Tenants with income in excess of 60 less than
  80
• Not market units because of PBRA units
• Not tax credit because of income

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Application instructions

• New application instructions
• Use your project specific question period

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Appraisals(applicable to LIHTC and/or HOME
Projects)

• All appraisers must be certified by the Georgia
  Real Estate Appraisers Board and participate in
  continuing education
• The appraiser should have at minimum, five years
  experience in a combination of affordable housing
  and multi-family projects
• Appraisal Manual located in Section I of the
  Application Manual

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Appraisals

• All HOME Projects
• Commissioned by DCA or Senior Lender during
  Underwriting
• Senior Lender Commissioned Appraisals must meet
  DCA Requirements as defined in the Appraisal
  Manual
• DCAs Cost of Appraisal Passed to Developer
• If project does not meet DCA requirements,
  funding may be revoked

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Appraisals

• Applicant Commissioned Appraisals required when
  there is an Identity of Interest between
  Purchaser and Seller
• Appraisal Commissioned by Applicant
• Appraisal must meet DCA Appraisal Manual
  Requirements
• as is Value Required
• Scattered Site Projects
• Appraisal for each non-contiguous Parcel or
  Multifamily Property is Required

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Appraisal Guidelines

• Values - Tax Credit, As is (Land and
  Building), As Complete (encumbered and
  unencumbered)
• Unencumbered Value at Maturity of Loan
  (Non-Amortizing HOME Loan)

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2. Site Control Requirements

• Warranty deed that conveys title to the subject
  property to the current Applicant
• or
• a legally binding contract to purchase the
  proposed project site in the name of the
  Applicant (or which provides for an assignment to
  the Applicant)
• or
• a binding long-term ground lease or an option for
  a binding long-term ground lease, with a minimum
  term of forty-five (45) years.

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2. Site Control Requirements

• Contract must be executed prior to application
  submission date
• Must include a legal description
• Must provide legal control at least through
  September 15
• Requirement that a copy of warranty deed showing
  Seller has ability to convey has been eliminated

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2. Environmental

• All environmental matters must be resolved in a
  manner satisfactory to DCA
• Every Project application must prepare a Phase I
  Environmental Site Assessment and include it in
  the application (See Tab Checklist 4)
• For Scattered Site Projects, each parcel or each
  multifamily property must meet this threshold
  requirement

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Phase I Requirements

• Must be prepared by an Environmental Consultant
• Must be prepared in accordance with DCA
  Guidelines
• Must be conducted within 6 months of the
  Application Submission
• Previous environmental studies must be included
  in the application
• Must contain proof of insurance
• Must have a Reliance letter

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Environmental Consultant

• DCA defines a Environmental Consultant as
• a Professional Engineer ("P.E.") or
• a Professional Geologist ("P.G.") who is
  licensed to practice engineering or geology,
  respectively, in the State of Georgia.
• The P.E. or P.G. must be an employee or
  principal of the environmental consulting firm
  retained to complete the environmental
  assessment.
• The Environmental Consultant must have at least
  five (5) years of experience conducting and/or
  reviewing environmental assessments.

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Additional Environmental Issues

• WETLANDS
• DCA does not allow the disturbance of wetlands
  areas on the property in excess of 1/10 of one
  acre
• DCA does not allow the disturbance of any areas
  of wetlands adjacent to the property
• All areas of wetlands must be clearly documented
  with the appropriate maps
• All areas of disturbance must be clearly defined
• Additional requirements for documentation
  applicable to properties applying for HOME funds
  and will be discussed later this morning

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Additional Environmental Issues

• FLOODPLAINS
• DCA does not allow the placement of any new
  construction within a floodplain unless
• A FEMA Letter of Map Reclassification (LOMR)
  indicating the property is eligible for
  reclassification out of the floodplain is
  submitted
• City or County provides written approval of the
  proposed reclassification
• All floodplain areas must be clearly documented
  with the appropriate FEMA maps
• Additional requirements for documentation are
  applicable to properties applying for HOME funds
  and will be discussed later this morning

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Additional Environmental Issues

• FLOODPLAINS
• The rehabilitation of existing buildings within
  a flood plain will meet threshold if
• All existing flood plain areas are clearly
  documented with the appropriate FEMA maps
• The lowest existing floor elevation is at least
  6 above the FEMA documented flood plain
  elevation
• The application is for Tax Credits only and no
  HOME funds are to be part of the application

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Environmental Form Requirements

• OAH Form E-1 (all applications)
• Applicant/Engineer Environmental Certification
• OAH Form E-2 (all applications)
• Owner Environmental Questionnaire Disclosure
  Statement
• OAH Form E-3 (all applications)
• Property Log Information Checklist
• OAH Form E-4 (HOME applications)
• HOME Environmental Documentation

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Insurance requirements

• Environmental Consultants must carry insurance
  that
• provides full coverage for all work performed.
  
• The certificates must be submitted with the
  required Phase
• I environmental review during the Application
  process.

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Minimum Coverage

• Workers Compensation and Employers Liability
  insurance, as legally required by Georgia law
• Commercial General Liability Insurance with
  limits of 1,000,000 per occurrence and
  2,000,000 in general aggregate
• Commercial Automobile Liability insurance, total
  combined single limits of 1,000,000.00 per
  occurrence and in the aggregate
• Professional Liability Insurance with limits of
  1,000,000.00 each claim and 1,000,000.00 in the
  aggregate

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Common Mistakes

• Improper Certificate of Insurance
• No Reliance Letter
• Insufficient or no title search
• Not a DCA environmental consultant
• Failure to follow format
• Not prepared within six months of application
  date
• Failure to include previous environmental study
• Failure to include all applicable OAH forms

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HOME Additional Environmental Requirements

• All HOME Applications must include additional
  documentation to satisfy the HUD requirements.
• See Environmental Manual and complete OAH Form
  E-4 HOME Environmental Documentation for the
  required information (See Tab Checklist 4)
• Sound Requirements
• Wetlands Development
• Floodplain Development
• Historic Requirements
• Other Hazards

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HOME Environmental Sound Documentation

• Locate major road/highway, railroad or airport
• Complete HUD sound calculations and the Noise
  Assessment if sound levels exceed HUD average
  day/night levels (65db for outside and 45db for
  inside)
• Provide a mitigation plan for all identified
  noise exceeding HUD average day/night levels
• Provide documentation on sites investigated as
  options to the proposed property

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HOME Environmental Floodplain Development

• In addition to the floodplain documentation
  previously discussed, HOME applications must also
  include
• Engineer must provide a mitigation plan and
  sites investigated as options to the proposed
  property
• FEMA must have already issued a LOMA or LOMR,
  and these must be included
• Provide required notices from the Floodplain
  Management Requirements, 8 step process (24 CFR
  55.20 Executive Order 11988)
• Engineer must provide a statement on the impact
  of the development if it is adjacent or near to a
  floodplain

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HOME Environmental Wetlands Development

• In addition to the wetlands restrictions and
  documentation previously discussed, HOME
  applications must also include
• Engineer must provide mitigation plan and
  documentation on sites investigated as options to
  the proposed property
• Provide required notices from the Wetlands
  Management Requirements, 8 step process, (24 CFR
  55.20 Executive Order 11990)
• Engineer must provide a statement of the impact
  of the disturbance if it is adjacent or near to
  a wetlands area

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HOME Environmental Historic Requirements

• Is the property more than 50 years old
• Is the property listed on the Nation Register of
  Historic Places and are there Historic Credits
  applicable
• Documentation from the local SHPO office that
  the property is eligible and meets all
  requirements
• Engineer/architect must provide mitigation plan
  for the neighborhood

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HOME Environmental Other Hazards

• Industrial hazards must be identified
• Any fire prone materials visible from or near to
  the site
• Property located near a dump or landfill
• Property located near an industry disposing of
  chemicals or hazardous wastes
• Property located near the end of a runway for a
  civil or military airport

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3. Market Feasibility

• DCA recommends that, prior to submitting
  Applications, Applicants
• independently obtain a market analysis
  sufficient to satisfy their
• own concerns as to market viability.
• Applicants are encouraged to submit any market
  information with
• the Application that they believe may be
  helpful in determining the
• market feasibility of their proposal.
• An Applicant may submit an independent market
  study in the
• Application. However, DCA will not be bound by
  the opinion or
• conclusions reached by the Applicant-commission
  ed market study.
• Any market information or market study provided
  by the Applicant
• will be given to DCAs market analyst.

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Market Feasibility

• Project feasibility as determined by the DCA
  market analyst will be based on, but not be
  limited, to the following factors
• Market capture rates less than 30 percent for
  all LIHTC and Market units in
• the project,
• Market capture rates less than 70 percent for
  all units in each income band
• width for the project,
• An absorption period less than 24 months to
  reach stabilized occupancy,
• Stabilized occupancy rate of 93 or above,
• Unit mixes or targets populations supported by
  the market,
• Competing proposed projects in the same
  geographic market area where, in
• part, location, unit mix, rent structure,
  market demand, and other factors
• favor one project compared to another.
• Ability of market rate units to lease at the
  projected rents.

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Market Feasibility
No adverse impact to the market and financial
health of existing assisted rental housing
properties in the market area. Assisted rental
housing properties include those financed by
Credits, USDA , HUD 202 or 811 (as appropriate),
DCA or locally financed HOME properties, HTF, and
HUD 221(d)(3) and 221 (d) (4) and other market
rate FHA insured programs. DCA does not regard
public housing as competitive with programs
administered through the Plan therefore, this
policy does not apply to public housing
properties,
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4. Threshold Requirements

• Site Zoning
• Operating Utilities
• Project Amenities
• Site Access
• Physical Needs Assessments
• Site Information

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Site Zoning

• Zoning to be confirmed in writing by the
  authorized Government Official which must
  include the zoning designation and land use
  classification of the property
• Documentation must be accompanied by a clear
  explanation of the designated zoning
• If there is no local zoning ordinances, a letter
  to that effect from the authorized Government
  Official
• The conceptual site plan must clearly demonstrate
  that all restrictions of the designated zoning
  have been met
• (See Tab Checklist 5 11)
• For scattered site properties, each parcel or
  each multifamily property must meet this
  threshold requirement

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Operating Utilities

• All operating utilities must be available to the
  proposed property as of the Application
  Submission
• All easements necessary must be secured, and all
  commitments from the local utility providers
  must be secured as of the date of Application
  Submittal
• Any easements and/or improvements must not be
  contingent on annexation of the property,
  improvements or any infrastructure funding due
  the local provider or authority
• All easements and commitments must be documented
  fully in the application (See Tab Checklist 6)

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Operating Utilities

• Operating Utilities include
• Water and sanitary sewer service
• Stormwater Sewer (if in an area that has
  installed storm sewer system)
• Electricity
• Gas service
• Telephone services
• Television cable services as available
• Off-site costs for extension of utilities are
  not eligible for funding from DCA resources
• For scattered site properties, each parcel or
  each multifamily property must meet this
  threshold requirement

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Required Amenities

• Basic threshold project amenities must include
• HVAC systems for each unit
• Refrigerator and stove for each unit
• On-site laundry (one washer and one dryer for
  each 25 units)
• One equipped recreation area
• All basic amenities must be available at no
  extra charge to the residents, with the
  exception of the on-site laundry
• Each tenancy characteristic may have additional
  basic requirements
• Basic amenities are certified on Amenity
  Certifications C1-C4 (OAH Forms D-3 D-6), as
  applicable for tenancy type, i.e. Elderly,
  Family etc. (See Tab Checklist 20)

70
Required Amenities

• For scattered site 10(B)(1)(a) each parcel must
  include unit amenities, project as a whole must
  have laundry equipped recreation area
• For scattered site 10(B)(1)(b) each multifamily
  property must include unit amenities, laundry
  equipped recreation area

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Site Access

• All sites proposed for development must be
  legally accessible by paved road.
• This does not apply to private driveways
  accessing only the proposed property.
• If such paved roads are not in place at the time
  of application documentation must be included in
  the application evidencing the local commitment
  for funding and the timetable for the completion
  of such paved road (See Tab Checklist 9).
• Must be indicated on Site Information Form A
  (OAH Form D-1)
• For scattered site properties, each parcel or
  each multifamily property must meet this
  threshold requirement.

72
Physical Needs Assessment

• For rehabilitation proposals only a physical
  needs assessment must be included in the
  application (See Tab Checklist 10)
• Rehabilitation proposals must be accompanied by a
  unit-by-unit work scope that reflects the
  information in both the physical needs assessment
  and the environmental site assessment
• For scattered site applications, each parcel or
  each multifamily property must meet this
  threshold requirement

73
Physical Needs Assessment

• The rehabilitation must reflect an expenditure
  of at least 12,000 per unit in construction
  hard costs
• Refer to the Application Manual for the DCA
  requirements.
• Must not be more than 90 days old at the time of
  application
• Must be completed by a third party entity and
  include the resume and the qualifications of
  that consultant
• Note the sampling expectations included in the
  instructions
• Forms included may be used or the consultants
  own format, providing the same information is
  included
• The required documentation to be completed is
  included in the Architectural Manual

74
Physical Needs Assessment

• DCA requirements include replacement of all
  components existing on the property that have a
  useful life of less than five years must be
  included in the current work scope
• The completed property must exceed the life of
  the loan or other DCA funding source by five
  years
• For scattered site properties, each parcel or
  each multifamily property must meet this
  threshold requirement

75
Site Information

• A conceptual site development plan must be
  submitted accompanied by the site Information
  Form A (OAH Form D-1) (Tab Checklist 11)
• The conceptual site development plan should
  include
• Wetlands and floodplain areas
• Utility information
• Easements
• Zoning restrictions and setbacks
• Use of all adjacent properties and access from
  paved roads
• Layout of all buildings, roads, parking areas
  and site amenities
• Areas of tree and vegetation preservation
• For scattered site properties, each parcel or
  each multifamily property must meet this
  requirement

76
5. Accessibility

• All projects that receive allocations or funding
  under the Plan must comply with all applicable
  Federal and State accessibility laws
• Refer to the Accessibility Manual for the
  Applicability Chart for Accessibility Laws
• The basic requirements are to be included on
  Accessibility Certification F (OAH Form D-9, see
  Tab Checklist 27)
• For scattered sites 10(B)(1)(a) the project is
  treated as a whole with accessible units
  distributed across the parcels
• For scattered sites 10(B)(1)(b) each multifamily
  property must meet the accessibility requirements

77
Applicable Lawsand DCA Requirements

• American with Disabilities Act (ADA)
• Federal Fair Housing Act (FHA), including HUD
  visitability requirements
• Section 504 of the Rehabilitation Act of 1973
• State Accessibility Laws
• DCA QAP Requirements - 5 of the units equipped
  for the mobility impaired and an additional 2 of
  the units equipped for the hearing/sight impaired
• The most restrictive law shall prevail

78
Americans with Disabilities Act

• Applicable to areas of public accommodation
• Curb cuts at sidewalks and entrances
• Designated accessible parking spaces
• Wide doors, minimum 32 clearance
• Telephones and drinking fountains lowered
• Tactile markings on elevator control buttons
• Levered door hardware
• Wider toilet stalls with installed grab bars
• Braille and/or large print signage.

79
Fair Housing Act (FHA)

• Applicable to common use areas on a property
• Applicable to buildings with 4 or more units
• Accessible building entrance on an accessible
  route
• Units to be visitable (first floor units all
  units in a building with an elevator)
• Accessible route into and through the dwelling
  units
• All exterior facilities including mail areas, bus
  stops, sitting areas, trash compactors etc., to
  be located in accessible locations
• All site amenities must be accessible

80
Visitability

• Applicable to first floor units and all units in
  a building with an elevator, where there are more
  than 4 units in a building
• No step entry into units including a 36 wide
  primary door
• Provide a 32 clear opening in bathroom and
  interior doorways
• Usable kitchen and bathroom, (a five foot turning
  circle is not necessary for this requirement)
• Environmental controls at accessible heights
• Reinforced walls for grab bars
• Refer to Accessibility Manual and Fair Housing
  Requirements for more information

81
Section 504 of the Rehabilitation Act

• New developments have a minimum of 5 of the
  total dwelling units or at least one unit,
  whichever is greater, must be accessible for
  persons with mobility impairments
• An additional 2 of the units or at least one
  unit, whichever is greater, must be accessible
  for persons who have hearing or vision
  impairments
• Refer to the Act for additional requirements

82
DCA Requirements

• DCA requires 5 of the total dwelling units or at
  least one unit, whichever is greater, must be
  equipped for persons with mobility impairments
• An additional 2 of the units or at least one
  unit, whichever is greater, must be equipped for
  persons who have hearing or vision impairments
• Required even if there is no federal funds in the
  project

83
6. Preliminary Financing Commitments

• Threshold Criteria 16 / Application Binder Tab 12
• Required for each Funding Source
• Preliminary Commitment must include
• Purpose
• Property Address
• Amount
• Interest
• Terms and Conditions
• and Fees must be clearly documented
• Formal Commitment due within 75 of days of
  Carryover Allocation

84
Preliminary Financing /Assumption of Existing
Debt

• Required Documentation
• Certification Letter
• Original Promissory Note and Amendments
• Original Loan Agreement and Amendments
• Original Security Instruments (Deed)
• Threshold Criteria 16 / Application Binder Tab 12

85
Preliminary Financing

• For Scattered Site Projects all units must be
  developed under one master plan of financing and
  considered as a single project by all funding
  sources.
• The preliminary commitments must be applicable to
  the project as a whole for scattered sites.

86
7. Experience
Requirements for Owners, Developers and
Management Companies
87
Owner Experience

• Two multifamily rental projects
• 3 continuous years of ownership experience
• Experience must have occurred subsequent to
  January 1, 1995
• Similar size project
• Direct or indirect ownership interest in previous
  project
• Material participation through regular, continuos
  and substantial involvement in previous project

88
Developer Experience

• Successful development experience
• Two multifamily rental housing projects
• Similar size (number of dwelling units)
• Developer experience occurred subsequent to
  January 1, 1995
• Experience from project inception through project
  completion

89
Management Experience

• Management experience in two multifamily rental
  housing projects of similar size (number of
  dwelling units)
• Managers experience must extend for at least two
  years and include project lease up experience
• Management experience occurred subsequent to
  January 1, 1995

90
Entity/Principal

• Owner, Developer and management entities can
  meet the QAP experience requirements in one of
  two ways
• Through the entity itself
• Through the experience of a principal of the
  entity

91
DCA Definition of Principal

• Direct or indirect ownership interest in the
  ownership, development or management entity
• Material participation in project
• Regular, continuous and substantial involvement,
  or
• Executive director of a non profit

92
Non Profit Experience

• A non-profit General Partner may also meet the
  experience requirements through the experience of
  a sponsoring non-profit.

93
Options for Inexperienced Owners and Developers

• Partnering with an entity who has the required
  Owner and/or Developer experience, or
• By providing an executed contract with a
  Consultant who has the required experience.

94
Partnering/Consulting Contract Requirements

• Executed agreement.
• The training plan must be attached to the
  agreement as an exhibit and
• The training plan must be approved by DCA at its
  sole and absolute discretion.
• The Partner/Consultant must satisfy the Threshold
  experience requirements for Owners and/or
  Developers

95
Partnering/Consulting Contract Requirements

• Relationship must be that of co-developers for
  developers
• The responsibilities of each party to the
  agreement for the development of the project must
  be described in detail
• The inexperienced entity must materially
  participate in the development process
• The training services must be provided from
  project commencement, through construction, lease
  up and permanent loan conversion and/or issuance
  of 8609s , whichever is later

96
Consultant / Partnering Training Guide

• DCA has prepared a new Manual to assist
  Inexperienced entities in preparing their
  training plans (see Tab M).

97
Waiver

• A proposed Project Owner, Developer or Manager
  that cannot meet the experience requirement set
  forth above may request a waiver of the DCA
  experience requirements (forms O-1, O-2, and/or
  O-3 as applicable).
• Due Date - March 1, 2004.

98
Submission Requirements

• 2003 Experience Determinations
• Preapplication Submission
• Forms O-1, O-2, AND/OR O-3
• OR
• Application Submission
• Forms N-5, N-6, AND/OR N-7

99
8. Award Limitations

• Applicants are permitted to submit a maximum of
  six applications
• Limitation is applicable to Ownership interests

100
Maximum Ownership Interests

• Limited to combined federal Credit limit cannot
  exceed 1,750,000 and
• HOME funding cannot exceed 35 of total HOME loan
  resources for year

101
Exceptions

• Partner or consult with an inexperienced entity
• Serve as a Developer in a project
• Exception can only be used for two additional
  projects

102
Other Limitations

• Inexperienced owners and/developers that meet
  experience through partnering or consultant
  contracts are limited to one project

103
9. Eligibility for Non Profit Set Aside

• The Internal Revenue Code requires that 10
  percent of the total Housing Credit ceiling
  amount be available only to projects with
  qualified nonprofit participants and owners.
• In order to be included in the set aside, a
  project must meet certain IRS standards as well
  as DCA QAP requirements.

104
Requirements

• Be an organization recognized by the Internal
  Revenue Service as a 501(c)(3) or 501(c)(4)
  organization
• Validly exist and be in good standing
• Have an ownership interest in the project
  throughout the entire 15-year compliance period.
• DCA requires that the non profit own 51 of the
  partnership
• The non profit can own stock in a corporation
  that owns a low income housing property, if the
  corporation is 100 owned by a qualified non
  profit organizations

105
Requirements

• Meet the criteria defined as material
  participation in Treas. Reg. 469(h)
• The non profit not be affiliated with or
  controlled by any for profit entity
• One of the exempt purposes of the nonprofit must
  include the fostering of low income housing.

106
Material Participation

• Nonprofit participates in the activity for more
  than 500 hours during the tax year.
• Nonprofits participation constitutes
  substantially all of the participation in the
  activity of all individuals (including
  non-owners) for the tax year.
• Nonprofit participates in the activity for more
  than 100 hours during the tax year, and its
  participation is not less than the participation
  of any other taxpayer for such year.
• Nonprofit activity is a significant
  participation activity for the tax year, and the
  taxpayers participation in all significant
  participation activities during the year exceeds
  500 hours. A significant participation activity
  is one in which the taxpayer has more than 100
  hours of participation during the tax year but
  fails to satisfy any other

107
Additional QAP Requirements

• If the non profit is also the developer of the
  project, the nonprofit must receive a percentage
  of the developer fee greater than or equal to its
  percentage of ownership interest.
• A copy of the general partnership joint venture
  agreement which indicates the non profits
  interest and developer fee amount must be
  included in the Application binder Tab 17.

108
Additional Facts

• Status of an organization can be confirmed using
  the IRS website www.irs.com and enter 78 in the
  Search IRS site.

109
Required Documentation for Tab 17

• IRS Tax Exempt status determination letter
• Secretary of state certification of non profit
  status
• General partnership joint venture agreement
• Sample Legal opinion (form A-4)
• Documentation of non profits ownership interest
• Board of directors information
• Development agreement
• Bylaws
• CHDO prequalification , (if applicable)

110
Frequently Asked Questions

• Q Is a qualified non profit automatically
  eligible for the non profit set aside?
• A Applicants must indicate in the appropriate
  box their desire to compete under the Nonprofit
  Set-aside.
• Q Does the non profit have to have an interest
  in the Developer entity?
• A Depends on the circumstances.
• Q If the Non-Profit set aside is reached prior
  to an application filed under the non profit set
  aside being funded will such Non-profit be
  considered under the general pool?
• A Yes

111
10. HOME Site and Neighborhood Standards

• Applicants for HOME funding of new construction
  projects must determine if the project is located
  in an area of minority concentration, a racially
  mixed area, or a non-minority area
• A Minority concentration is an area that has 50
  or more minorities
• A Racially Mixed area is an area that has 25 or
  more minorities
• A Non-Minority area is an area that has less than
  25 minorities

112
Site and Neighborhood Standards

• Minority Concentration
• Map of proposed project site
• Site map of proposed neighborhood
• Census track or enumeration district data of
  proposed neighborhood population by
• Household type
• Tenure type
• Income group and housing conditions
• Race of residents
• Submit the above information in Tab 18 along with
  Certification form B-1.

113
Site and Neighborhood Standards

• Narrative on how the percentage of minority
  residents is determined
• List of sufficient, comparable sites outside area
  of minority concentration or market study
  evidencing that there is an overriding housing
  need in the area of minority concentration
• Expected rents for units on site and comparable
  rates to other low income housing near comparable
  sites outside area of minority concentration
• Number of HUD assisted units located outside of
  the area of minority concentration

114
Site and Neighborhood Standards

• Racially Mixed Area
• Map of proposed project site
• Site map of proposed neighborhood
• Census track or enumeration district data of
  proposed neighborhood population by
• Household type
• Tenure type
• Income group and housing conditions
• Race of residents
• Based upon the proposed number of units, show
  what increase of minority residents to
  non-minority residents will occur
• Submit the above information in Tab 18 along with
  Certification form B-3.

115
Site and Neighborhood Standards

• Non-minority
• Map of proposed project site
• Site map of proposed neighborhood
• Census track or enumeration district data of
  proposed neighborhood population by
• Household type
• Tenure type
• Income group and housing conditions
• Race of residents
• Submit the above information in Tab 18 along with
  Certification form B-2.

116
Site and Neighborhood Standards

• The Federal Regulations Compliance Officer is
  responsible for reviewing the information
  submitted by the applicant. The Federal
  Regulations Compliance Officer will certify to
  one of the three statements identified in the
  Certification of Compliance, HOME Site and
  Neighborhood Standards (See Forms Appendix).
• Census Website
• http//www.census.gov/geo/www/tractez.html

117
10 (c). Contract Addendum

• Before a binding sales contract is executed for a
  property that will ultimately receive HOME
  funds, owners who are voluntarily selling a
  property must receive notice that

118
Contract Addendum Notice

• Buyer is seeking federal funds through the HOME
  Program to assist in acquiring the property
• Buyer does not have right of eminent domain and
  will not acquire the Property if negotiations
  fail as a result of purchase agreement
• The estimated fair market value of the property
• Even though federal funds are used for
  acquisition the seller will not be entitled to
  any relocation benefits
• If an occupied property, serve notice that the
  buyer is required to send notice to tenants
  concerning there rights under the Uniform
  Relocation Act and the seller agrees to allow
  such delivery once the application for HOME funds
  has been accepted by DCA as complete.

119
Contract Addendum

• If the Applicant fails to have the Addendum
  executed, the Seller may be able to claim that
  the acquisition was involuntary. This may cause
  relocation assistance to be available to seller.
• Notices must be personally served or sent by
  certified or registered first class mail.

120
Contract Addendum

• A copy of the Contract Addendum (Form15) is in
  the HOME manual and must be submitted with the
  DCA Application in Tab 18 under the Additional
  HOME Requirements section

121
10.(d) Construction Cost Certification

• Required for all HOME projects
• Contractor will complete DCA Multifamily Loan
  Contractors Certificate of Actual Project Cost
  (Certificate)
• Certificate supported by an audit report and
  opinion letter prepared by a CPA in accordance
  with Generally Accepted Accounting Principals and
  Auditing Standards

122
Construction Cost Certification

• Loan documents will contain a provision that
  requires the execution of the Certificate and
  supporting CPA reports
• Loan documents will include a stipulation that
  requires the borrower to refund any overpayment
  or windfall received by the Borrower and/or
  General Contractor
• Certification must be completed prior to release
  of retainage

123
Construction Cost Certification

• DCA will review the Certification and supporting
  documents
• If actual Contractors cost are equal to contract
  amount no adjustment
• If actual Contractors cost are less than the
  contract retainage will be adjusted and proceeds
  will be used to reduce HOME loan amount
• If actual Contractors cost are greater than the
  contract no adjustment will be made.
• Certification form is being finalized.

124
11. APPLICATION REQUIREMENTS FOR RELOCATION

• INCLUDES ALL PROJECTS THAT HAVE TENANTS IN PLACE
  AT THE TIME OF APPLICATION SUBMISSION (HOME and
  Tax Credits)
• Requirements are the same for Tax Credit and HOME
  projects at the time of application
• DCA Tenant Data Forms (Form L-1) Must be
  completed and submitted for all occupied units at
  the time of application
• Non residential Tenants List where applicable
• Relocation/Displacement Spreadsheet (Form L-5)
  Must be completed
• General Information Notice (GIN) (Form L-6)
  copy of GIN sent, explanation of the date and
  notification method used to send to tenant
  (certified mail, registered mail, or personal
  service)
• Tenant Relocation Plan and Budget (to include DCA
  Temporary Relocation Cost Estimate form (Form
  L-3) Detailed and Project Specific
• Detailed Summary of Advisory Assistance As well
  as any other contact that will be made by the
  Project Owner in an effort to assist the tenant
  with permanent or temporary relocation.

125
Relocation HOME Projects Only

• Signed Certification Form L-2.
• Requirements for HOME Projects will be gone over
  at the preconstruction conference with the
  Participant whose Projects are funded.
• References
• HUD Handbook 1378
• http//www.fhwa.dot.gov/realestate/act.htm

126
SECTION II
Welcome back from lunch. Please be seated we
are about to begin.
127
1. Project Location Characteristics

• The application must include the following
  documentation (See Tab Checklist 11)
• Site Location Map
• Site photographs
• Conceptual site development plan
• Site Information Form A (OAH Form D-1)
• Site Certification B (OAH Form D-2)
• Transit documentation including endorsements,
  route information etc.
• Historic designation documentation

128
Project Location Characteristics

• Adjacent Residential Development 4 points
• Development must be adjacent to or directly
  across the street from the proposed site
• Must be stable occupied residential development
• Points available if the property is part of a
  larger parcel for which there is a redevelopment
  plan
• For Scattered Site projects each parcel or each
  multifamily property must meet the requirements
  to qualify for the points

129
Project Location Characteristics

• Desirable characteristics 1 point for each to
  a maximum of 10
• Non-rural sites must be within 1 mile
  walking/driving distance
• On paved sidewalks or established walkways or
  trails
• Rural site must be within 1 1/2 miles
  walking/driving distance
• Undesirable characteristics 1 point deducted
  to zero
• Within 1/2 mile of the proposed site both
  rural/non-rural
• Vacant properties with evidence of criminal
  trespass will be reviewed for commercial/non
  residential properties only
• For scattered site properties 10(B)(1)(a) the
  project will be scored as a whole
• For scattered site properties 10(B)(1)(b) each
  multifamily property will be scored and the
  total score averaged

130
Project Location Characteristics

• Quality Growth Initiatives 11 points
• Infill Sites 5 points
• Surrounded on three sides by established
  development
• Maximize use of existing utilities,
  infrastructure
• Residential or retail development on one side
• For scattered site properties, each parcel or
  each multifamily property must meet this
  requirement

131
Project Location Characteristics

• Quality Growth Initiatives 11 points
• Transportation Availability 2 points
• Project formally designated as transit oriented
  by a Rapid Transit Authority, or
• project located on a bus route with a stop
  within ¼ mile, or
• project located on a major transportation route
• For scattered site properties 10(B)(1)(a), the
  project will be scored as a whole
• For scattered site properties 10(B)(1)(b) each
  multifamily property must meet this requirement

132
Project Location Characteristics

• Quality Growth Initiatives 11 points
• Adaptive Reuse Historic Preservation 4
  points
• Project is the adaptive reuse of an existing
  building - 2 points
• Building is formally designated as an historic
  structure and historic tax credits are part of
  the application - 2 points
• For scattered site properties, each parcel or
  multifamily property must meet this requirement

133
1.a Previous Projects within a Local Government

• 6 Points
• 2004 Application is within a Local Government
  (city
• or unincorporated portion of a county)
  that is not on the
• attached list for 2001, 2002, and 2003.
• 4 Points
• 2004 Application is within a Local Government
  (city
• or unincorporated portion of a county)
  that is not on the
• attached list for 2002 or 2003.

134
2. Tenancy Characteristics

• Family Housing 22 Points
• Designed to foster the development of housing for
  families and to encourage community activities
  from within the neighborhood
• 1. Basic Requirements 6 points
• Amenities Certification C1 (OAH Form D-3)
• 2. Optional Amenities 1 -15 points
• Amenities Certification C1(OAH Form D-3)
• 3. Optional Services 1 - 3 points
• Services Certification OAH Form O-5

135
Tenancy Characteristics

• Special Needs Projects 20 Points
• For housing of the homeless, persons with
  disabilities (mental, physical, developmental),
  abused spouses and their children, persons with
  alcohol or other drug addition, persons living
  with HIV/AIDS, and migrant farm workers
  (excluding Elderly Housing and Housing for Older
  Persons).
• 1. Basic Requirements 6 points Amenities
  Certification C2 (OAH Form D-4)
• 2. Optional Amenities Services 1 -14 points
  Amenities Certification C2 (OAH Form D-4)
• Services Certification OAH Form O-5

136
Tenancy Characteristics

• Elderly Households 20 points
• Housing for Elderly Households
• Basic Requirements 6 points
• Amenities Certification C3 (OAH Form D-5)
• Optional Amenities/Services 1-14 points
  
• Amenities Certification C3 (OAH Form D-5)
• Services Certification OAH Form O-5
• Elderly Housing means housing intended for and
  only occupied by Elderly persons including a
  family in which all members are Elderly (person
  at least 62 years of age). All household members
  must be Elderly (no children, and no disabled
  persons under the age of 62).

137
Tenancy Characteristics

• Housing for Older Persons 20 Points
• Designed to foster development of housing for
  Older Persons.
• Basic Requirements 6 points
• Amenities Certification C4 (OAH Form D-6)
• Optional Amenities/Services 1-14 points
  
• Amenities Certification C4 (OAH Form D-6)
• Services Certification OAH Form O-5
• Housing for Older Persons Definition, means
  housing intended and operated for occupancy by
  person 55 years of age or older (Older
  Persons). According to Georgia law, such
  housing must also have significant facilities and
  services serving the Older Person population even
  though the requirement has been eliminated from
  the federal definition of an elderly project. At
  least 80 of the total occupied units in such a
  housing project must be occupied by at least one
  Older Person. Up to 20 of the units may be
  occupied by others, including the landlords
  employees, the surviving spouses or children who
  were Older Persons when they died, and
  caregivers. DCA will monitor the required
  facilities and services during the applicable
  Compliance Period or the Period of Affordability
  whichever is longer.

138
Tenancy Characteri