11

California Department of Housing and Community Development

Supportive Housing Multifamily Housing Program

2014 Funding Round

22

Supportive Housing Multifamily Housing Program (SHMHP)

General Fund Summary $100 million allocation for affordable housing

2014-15 State Budget (General Fund)

Funds include: MHP General $47.5 million Supportive Housing $47.5 million Administrative Costs $5 million

33

SHMHP NOFA – October 24, 2014

Funding Available $47.5 million

$7 million maximum loan amount per project Function of unit size, location and affordability level

44

SHMHP Program Changes

Sponsors with projects whose per unit cost is 30% or more than the historical average will be required to (historical data available on HCD website):

Provide written explanation of unusual cost features Explain why an award would be sound public policy Submit recommendation from relevant public entity

endorsing and supporting the project Be aware that HCD reserves the right to reject

applications if the development costs cannot be reasonably justified

55

SHMHP Program Changes Carried Over From Prior Rounds

AB 1460: Priority points for projects which utilize sustainable building methods (D7 in Scoring)

USDA RD loan commitment requirements (NOFA Section C)

Scrutiny of rehabilitation projects (NOFA Section C)

66

Timetable

NOFA issued October 24, 2014

Application forms available

October 24, 2014

Applications due December 23, 2014

Loan and Grant Committee Meeting

April 2015

Awards issued April 2015

77

MHP Program Overview

88

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

99

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

1010

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

1111

SH Emphasis

Emphasis on units for: Homeless or at risk of homelessness and

disabled adult Disabled: mental illness, HIV/AIDS,

substance abuse, developmental disability or long-term chronic health condition

Maximum Income: 30% Area Median Income

1212

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

1313

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

1414

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 eligible to apply for SHMHP funds

1515

Developer Fee Limits

Limit of $1.2 million from funding sources (C7) New construction and substantial rehabilitation projects:

first 30 units, $25,000 per unit. Each unit in excess of 30, $9,500 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

1616

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

1717

Application Overview

1818

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

SHMHP Application Attachment http://www.hcd.ca.gov/fa/mhp/

Application

1919

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), SHMHP 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

2020

General Instructions (continued) COMPLETE original and one duplicate of

application must be received by HCD no later than 5 p.m. on December 23, 2014. Postmarks are not accepted

No facsimiles, late, incomplete, or revised applications will be accepted

Applications must meet all eligibility requirements upon submission

Applications with internal inconsistencies will not be rated and ranked

2121

Submit your application binders in this order:

1. Universal Application2. Universal Application Attachments 1 - 113. SHMHP Attachments A, B, C, D, ERemember: Once your application is received, it must

stand on its own to represent your Project

Organizing the Application

2222

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

2323

Project Evaluation

Eligibility

Feasibility

Scoring

2424

SHMHP Attachment

2525

A1 Universal Application and SHMHP 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

2626

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

2727

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

2828

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)

2929

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)

3030

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

3131

A3 Recycling Program Narrative

In an effort to encourage all projects to implement as many environmentally friendly options as possible, the SHMHP application will require a narrative describing how the Project will implement and encourage residents to utilize project-based recycling programs

3232

MHP AttachmentSection B - Eligibility

3333

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)

3434

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

3535

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

3636

B4 Names of Officers and Board Members

Be certain not to disclose personal data (addresses, phone numbers, etc.) unless the board members have authorized the release of such information – keep in mind that the application is a public document

3737

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

3838

B6 Maps

Parcel map showing site location

Scaled Distance Map Two mile radius of site Indicate amenities

3939

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

4040

SHMHP AttachmentSection C - Feasibility

4141

C1 Insert the Development Timetable

4242

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

4343

4444

Loan Limits

MHP:

http://www.hcd.ca.gov/hpd/hrc/rep/state/incNote.html

4545

4646

4747

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

4848

1. Item C2:

2.(Total from Loan Limit Worksheets):

3. Item C4(Line A or G or H from Shared Cost Calculation Worksheet)

4.

5. MHP Loan Amount: $2,167,170(Enter the Lesser of 1 through 4 above)

Item C5

MHP LOAN AMOUNT CALCULATION WORKSHEET

Loan Amount cannot exceed lesser of 1 through 4:

$2,167,170

$3,584,000

$26,584,000

Maximum Per Project MHP Loan: $7,000,000

(Funding Gap from Worksheet to Determine Maximum Allowable Loan Amount)

Item C3:

4949

C6

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

See SHMHP Application Attachment Instructions for what constitutes evidence of commitment

5050

C7 Developer Fee Calculation

Not a required application attachment

Tool to assist Sponsor in calculating allowable amount of developer fees

5151

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: $9,500 each 57,000$ 4Total (A2 + A3) 807,000$

D Developer Fee that TCAC would allow to be included in eligible basis(ask sponsor for calculation) 807,000$

E Lesser of $1,200,000 or D 807,000$

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 857,000$

H Developer Fee budgeted for payment from Development Funding Sources(cannot exceed line G) 857,000$

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) 862,000$

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

5252

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

5353

5454

C9 Transition Reserves

If Project depends on project-based rental subsidy, attach calculation of Required Transition Reserve funding (MHP Regs 7312f)

5555

C10 Justification of Services Coordinator

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

5656

C11 Estimate of Construction Cost Based on Prevailing Wage

Complete C11 based on prevailing wages

5757

Insert the Following Documents

C12 Copies of Planning Approvals

C13 Copies of Resumes for Project Contractor and Architect

C14 Copies of Schematic Drawings

5858

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

5959

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

6060

C19 Operating Expense Comparables

Minimum three comparables

One market rate; one affordable housing

Same primary market area

Similar size, number of units and amenities

6161

SHMHP AttachmentSection D - Scoring

6262

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

6363

6464

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

6565

Or:

2. If 70 percent of Project units are reserved for Special Needs or Supportive Housing 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)

6666

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

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

Needs or Supportive Housing 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)

6767

(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)

6868

(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)

6969

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

7070

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)

7171

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)

7272

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)

7373

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.

7474

7575

D5 Leverage of Other Funds - 20 points

Deferred developer fee is not included Land value may be included if supported by an

appraisal Rural, Non-rural: As defined by TCAC Attachment D5 will auto-calculate

7676

Item D5SCORING SHEET

LEVERAGE OF OTHER FUNDSMHP Section 7320(b)(5) - 20 Points Maximum

A B

Point Award

C

$7,000,000 D. MHP Funds Requested

1 From Item C4, Shared Cost Calculation Worksheet, enter Percentage from line D, or enter percentage result of commercial calculation if applicable.

Permanent non-MHPFunding Amount

% of Total non-MHPFunding AmountAttributable to

Restricted Units 1, 2

Dollar Amountof Permanent non-MHP

Funds Attributableto Restricted Units

(A x B)

$18,000,000 100%$18,000,000

2 The manager's unit is treated as a Restricted unit for the purpose of the leverage calculation.

Rural Projects

Non-Rural Projects 15.5

20

C divided by D (as a percentage) less 100 divided by 5, rounded down to the next whole number, x 0.5 will equal the point award, to a maximum of 20 points

C divided by D (as a percentage) less 50 divided by 5, rounded down to the next whole number, x 0.5 will equal the point award, to a maximum of 20 points

7777

D6 Project Readiness - 15 points

A. Enforceable commitments - construction

B. Enforceable commitments - deferred

C. Environmental Have all clearances (NEPA & CEQA)

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

Phase I Environmental Site Assessment

7878

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)

7979

8080

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

81

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

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

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

Supportive Housing Projects: D8 Commitments for Operating Subsidy or

Services Funding - 5 points

8282

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

D8a Catalyst Program - 5 points

83

Service Plan Requirements

8484

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

85

Tenant Selection Narrative Part 1, Section 3

Must conclusively document occupancy will be limited to eligible households

For Supportive Housing projects, occupancy by Supportive Housing households must be documented for at least 5 project units or 35% of the total units (whichever is greater)

Tenant Selection Narrative Part 1, Section 3 Threshold Eligibility Criteria Other Eligibility Criteria Marketing/Outreach Referral Sources Application Process Tenant Screening Fair Housing

86

87

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

Service Needs of PopulationLead Service ProviderKey Services availableStaffing

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 Units Total FTE Support Service Staff Number of SH 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 incomeGreater 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 tenancyDuring tenancyWhich systems of care will provide the data

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

How data will be collected and analyzed

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 UnitsTotal Supportive Services CostsTotal Supportive Service Costs per Unit

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

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

Contact Information

Regi Fletcher 916-263-5882 reginald.fletcher@hcd.ca.gov

Kendra Gubaydullin 916-263-1435 kendra.gubaydullin@hcd.ca.gov

101