Creating Affordable Housing with FHLB Cincinnati. Leveraging partnerships to magnify impact

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Melvin Aldous Golden
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1 Creating Affordable Housing with FHLB Cincinnati Leveraging partnerships to magnify impact

The FHLBank System Each of the 11 FHLBanks serves a distinct geographic region in the U.S. All FHLBanks set aside 10 percent of income earned to fund affordable housing throughout the country.

2 The FHLBank System Each of the 11 FHLBanks serves a distinct geographic region in the U.S. All FHLBanks set aside 10 percent of income earned to fund affordable housing throughout the country. Since 1990, $5.4 billion has been awarded to assist in the purchase, construction or rehabilitation of more than 827,000 units of affordable housing.

Housing and Community Investment The primary mission of the Housing and Community Investment Department is to support our Members community investment efforts through: The

3 Housing and Community Investment The primary mission of the Housing and Community Investment Department is to support our Members community investment efforts through: The responsible investment of available funds in sustainable affordable housing, and Economic development activities benefiting low- and moderate-income households across the Fifth District

4 Affordable Housing Program Welcome Home Program Zero-Interest Fund $675 million Affordable Housing funds awarded to create over 86,000 rental and homeownership opportunities for moderate-, low- and very low-income households since 1990 FHLB Cincinnati HCI Programs Community Investment Cash Advances $3.4 Million Disaster Recovery Funds supporting 207 households to date. Carol M. Peterson Housing Fund Disaster Reconstruction Economic Program Development Program $442 million Total advances supporting community economic initiatives and affordable housing development in 2017 alone

5 Affordable Housing Program Provides direct grants to support development of ownership and rental housing for very low- to moderate-income households ( 80% AMI). Federally regulated AHP Implementation Plan sets forth policies for administering the federal regulation Competitive application process; projects are evaluated based on: Eligibility and threshold requirements Financial feasibility Scoring criteria

6 Who Uses AHP? Members are financial institutions Commercial banks Savings institutions/thrifts Credit unions Insurance companies Community development financial institutions Sponsors are housing providers & developers Non-profit organizations For-profit entities Government agencies

7 AHP Eligible Uses Ownership or Rental Housing Costs directly related to housing development New Construction Rehabilitation Acquisition/Purchase of land or buildings Any of combination of the above

8 Not Eligible for AHP Facilities that require a Certificate of Need or require licensure as an ICF or ICF/MR Cash-out refinancing Land banking Predevelopment costs (only) Capitalized costs Operating costs Commercial space Social services

9 AHP Examples

10 Chapel Street Apartments (Cincinnati, Ohio) This project involved the renovation of a multifamily building into 24 units of permanent supportive housing to support individuals at risk of homelessness.

11 Chapel Street Funding Sources of Funds: LIHTC Equity $3,743 City HOME $ 400 OHFA HDAP $ 300 Deferred Developer Fee $ 28 Member Cash Contribution $ 1 AHP Grant $ 244 Total $4,716 *numbers in thousands

12 Charles Place(Athens, Ohio) The Charles Place project involved the development of seven 2 and 3 bedroom apartment units that provide homes for individuals and families coming out of homelessness.

13 Charles Place Funding Sources of Funds: OH Dept of MHAS grant $ 281 OHFA HDGF $ 506 Member Loan $ 560 Sponsor Cash $ 658 AHP Grant $ 136 Total $2,141 *numbers in thousands

14 The Commons at Madaline Park II (Akron, Ohio) This project involved the new construction of 60 multifamily rental units for permanent supportive housing for very low- and low-income households.

15 The Commons at Madaline Park Funding Sources of Funds: LIHTC Equity $7,310 City HOME $ 800 County HOME $ 206 Member Cash $ 1 OHFA HDAP $ 350 Deferred Developer Fee $ 46 AHP Grant $ 800 Total $9,513 *numbers in thousands

16 Tubman Towers (Springfield, Ohio) The project involved the acquisition and rehabilitation of 99 multifamily rental units in Springfield, OH, reserved for low- and very-low income tenants, 97 of which will be elderly households.

17 Tubman Towers Funding Sources of Funds: Member Loan $ 685 Sponsor Donation/deferred fee $ 246 Contingent Mortgage $ 420 Flex Subsidy Note $ 1,266 GP Cap/Member Contribution $ 1 LIHTC Equity $ 7,343 Assumed Replacement Reserves $ 99 Assumed City Loan $ 317 AHP Grant $ 911 Total $11,288 *numbers in thousands

18 Habitat for Humanity Southeast Ohio This project involves the acquisition and new construction of 10 singlefamily units in Athens, Perry, Noble, Hocking, Meigs, and Morgan Counties for low- and very low-income first-time homebuyers.

19 Habitat for Humanity Southeast Ohio Funding Sources of Funds: State/Local Government grants $140 Foundation Grants $ 50 Other Grants $ 10 Member & Cash Contributions $ 1 Donated Land $ 15 Value of Habitat Mortgage $334 AHP Grant $250 Total $800 *numbers in thousands

20 Characteristics of a Successful AHP Application Project has met all threshold requirements Project meets all feasibility requirements or has provided a reasonable, detailed explanation for why an exception should be made. More than 85% of project units will serve households with income at or below 60% AMI Project is located in Kentucky, Ohio, or Tennessee AHP is equal or less than 25% of TPC and other funding is committed at time of application AHP Subsidy per unit is $13,000 to $17,000 Project includes $10,000 or more per unit in rehabilitation or is energy efficient new construction

21 AHP Resources Ohio Housing Conference Roundtable How to Successfully Secure an AHP Grant (Thursday, November 8, 9:30 11:30 a.m.) AHP Workshops held annually in Ohio, Kentucky, and Tennessee Technical Assistance provided upon request for all applicants who were not funded in the current round (usually set-up in January after the round has closed) Call FHLB Housing & Community Investment at for technical assistance Webinars on specific AHP topics are also available on the FHLB website at

Cincinnati by connecting with us on social media.

22 Connect with Us! Get the latest news, events and updates at FHLB Cincinnati by connecting with us on social

24 24 OHFA Gap Financing Options An Overview

25 Bridging the Gap with OHFA 25 Financing Options offered by OHFA Multifamily Lending Program Housing Development Loan Housing Development Assistance Programs Housing Credit Gap Financing Bond Gap Financing Housing Development Gap Financing

26 Multifamily Lending Program 26 (MLP) Uses: Long-term permanent financing for multifamily rental housing for low to moderate income residents Three loan categories New LIHTC MLP loans Existing LIHTC MLP loans Choice MLP loans Limitations: May NOT be used during construction Maximum loan amount is $3 million Organizations limited to $6 million in total loan funding per fiscal year

27 Multifamily Lending Program 27 (MLP) More questions? Contact Matt Wootton

28 Housing Development Loan (HDL) 28 Uses: Eligible uses Construction and permanent financing Permanent financing May be used with 9% or 4% housing tax credits Request in AHFA Limitations MUST be used with one of OHFA s housing tax credit programs Cannot exceed the amount of equity resulting from the sale of credits Maximum loan amounts Subject to appropriations from Department of Commerce

29 Housing Development Loan (HDL) 29 Terms Used During Construction Maximum request May be reduced/increased 2.5% interest rate 10 year term Collateral MUST be qualified cognovit investor note Must close within 12 months of the Carryover Allocation Agreement

30 Housing Development Loan (HDL) 30 Used During Permanent Financing Only Maximum request May be reduced/increased 2.25% interest rate 10 year term Collateral More flexible Must close within 90 days of 8609 deadline

31 Housing Development Assistance Programs (HDAP) 31 HDAP Housing Credit Gap Financing (HCGF) Bond Gap Financing (BGF) Housing Development Gap Financing (HDGF)

32 Housing Credit Gap Finance 32 Uses: Utilized with competitive (9%) LIHTC projects Ohio Housing Trust Fund- up to $300,000 Service Enriched Pool Located in Very High or High Opportunity Areas HOME- up to $600,000 Must meet set aside requirements Must be an eligible CHDO set aside project Limitations: Must seek an exception if project has received prior HDAP funding There may not be cash out in on related party transactions HOME projects must undergo a Part 58 Environmental Review OHTF have a ER Lite Please review the QAP for any updated eligibility requirements

HOME Set Aside Projects 33 Requirements Must be a certified Community Housing Development Organization (CHDO) 2019 application was due October 31, 2018 CHDO must be the

33 HOME Set Aside Projects 33 Requirements Must be a certified Community Housing Development Organization (CHDO) 2019 application was due October 31, 2018 CHDO must be the Sole GP of the ownership structure Part 58 Environmental Review May not start any part of construction prior to release There may be a small operating subsidy available

34 Bond Gap Financing 34 Uses: Gap financing for 4% HTC developments using multifamily bonds HOME/OHTF Max Requests <150 units $1,500,000 >151 units $2,500,000 ($10,000/unit) NHTF Max Request $500,000 $750,000 if development is ONLY seeking NHTF Limitations: Check latest QAP for requirements BGF is subject to competitive review Two week correction period Two application rounds

35 Housing Development Gap Finance 35 (HDGF) Uses Small projects without housing tax credits Four to 24 units Guidelines will be available early Please consult Consolidated HDAP Guidelines for up to date info Funding round(s) Eligibility requirements HOME, OHTF or NHTF $1,250,000 max award

36 Woda Cooper Companies, Inc. Woda Cooper Companies, Inc. and its affiliates are nationally recognized and experienced developers, general contractors, and property managers.

, and Woda Management & Real Estate, LLC First such firm in nation to be owned by Employee Stock Ownership Plan (ESOP) Consistently ranked among

37 About Us Founded in 1990 Operations in 15 States with offices in Georgia, Virginia, Indiana, Kentucky, Maryland, Michigan, Ohio, North Carolina, and Tennessee Vertically integrated Woda Cooper Development, Inc., Woda Construction, Inc., and Woda Management & Real Estate, LLC First such firm in nation to be owned by Employee Stock Ownership Plan (ESOP) Consistently ranked among the top 10 largest affordable housing developers in the United States: Portfolio comprised of senior, multifamily, student, veteran s housing, permanent supportive, mixedincome as well as mixed-use properties

State Gap Financing Examples Georgia (DCA) Low Income Housing Tax Credits paired with State Low Income Housing Tax Credits Wisconsin (WHEDA) State Low Income

(PHFA) Low Income Housing Tax Credit paired with PA Housing Affordability and Rehabilitation Enhancement Fund New York (NYSHCR) - Low Income Housing Tax Credits

38 State Gap Financing Examples Georgia (DCA) Low Income Housing Tax Credits paired with State Low Income Housing Tax Credits Wisconsin (WHEDA) State Low Income Housing Tax Credits paired with National Housing Trust Fund North Carolina (NCHFA) Low Income Housing Tax Credits paired with Housing Trust Fund Pennsylvania (PHFA) Low Income Housing Tax Credit paired with PA Housing Affordability and Rehabilitation Enhancement Fund New York (NYSHCR) - Low Income Housing Tax Credits paired with New York State Low Income Housing Tax Credits, New Construction Capital Program, Supportive Housing Opportunity Program, and Middle Income Housing Program.

tenants: Increasing deferred developer fee to 50% on bond transactions

39 Developer Gap Financing Examples As long term owners of affordable housing, we are more concerned with extending the useful life of our assets for our tenants: Increasing deferred developer fee to 50% on bond transactions Valhalla Soft Mortgage General Partner Capital Contributions Federal Home Loan Bank

Audubon Crossing Dayton, OH Capital Stack

$3,388,000 RHF Funds $100 SLP Contribution

40 Audubon Crossing Dayton, OH Capital Stack $4,352,879 - Investor Equity $800,000 - OHFA A Note $100,000 - OHFA B Note $749,950 HDAP $156,000 City of Dayton HOME $3,388,000 RHF Funds $100 SLP Contribution $133,150 GP Contribution $253,439 Deferred Developer Fee

Prospect Yard Cleveland, OH Capital Stack $3,948,757

$1,717,537 Federal Historic Equity $799,800 State

41 Prospect Yard Cleveland, OH Capital Stack $3,948,757 - Investor Equity $1,850,000 - OHFA A Note $60,000 - OHFA B Note $1,000,000 HDAP $325,000 City of Cleveland HOME $580,000 Valhalla Soft Mortgage $1,717,537 Federal Historic Equity $799,800 State Historic Equity $100 SLP Contribution $338,609 Deferred Developer Fee

42 Wheatland Crossing Dayton, OH Capital Stack $4,111,440 - Investor Equity $1,350,000 - OHFA MLP $1,300,000 R-TCAP $1,000,000 HDAP $500,000 City of Columbus HOME $337,052 Deferred Developer Fee

43 Points to Consider 9% deals that don t really need gap financing Gap financing when resyndicating Prioritizing gap financing in 4% transactions to increase affordable housing stock

DRAFT. Program Year NATIONAL HOUSING TRUST FUND ALLOCATION PLAN

DRAFT. Program Year NATIONAL HOUSING TRUST FUND ALLOCATION PLAN DRAFT Program Year 20172018 NATIONAL HOUSING TRUST FUND ALLOCATION PLAN Office of Planning, Preservation and Development DRAFT August 1, 2017February 1, 2018 Contents 1. Introduction... 4 1.1. NHTF Overview...