NYS HOME Local Program Homebuyer Development Projects Technical Assistance Webinar October 10, 2018
Welcome and Introductions Ann M. Petersen, LEED AP Director NYS HOME Program (Albany Regional Office) ann.petersen@nyshcr.org Stephanie Galvin-Riley, Assistant Director (Albany Regional Office ) stephanie.galvin-riley@nyshcr.org
Welcome and Introductions NYS HOME Program Managers: Caillin Furnari (Albany Regional Office) caillin.furnari@nyshcr.org Richard Baldwin (Syracuse Regional Office) richard.baldwin@nyshcr.org Leland Bearup (Albany Regional Office) leland.bearup@nyshcr.org
Welcome and Introductions Alex Smith Manager of Finance and Compliance (Albany Regional Office) alex.smith@nyshcr.org NYS Homes and Community Renewal website link to RFP & related documents: http://www.nyshcr.org/funding/homelocalfy2018fu ndinground.htm
Agenda Timeline and Technical Assistance Project Description Project Requirements Subsidy Right Sizing the Assistance Underwriting and Subsidy Layering Homebuyer Counseling CHDOs Helpful Hints Q&A & Wrap-up
Timeline Application Deadline: Friday, November 16, 2018-4:00 PM Award Announcement: Estimate February, 2019
Technical Assistance Activity Specific Application Technical Assistance Webinars HOME Local Eligible Activity Date & Time Homeowner Housing Rehabilitation With or Without Rental Units Homebuyer Purchase Assistance With or Without Housing Rehabilitation Manufactured Housing Replacement Homebuyer Development Projects Tenant Based Rental Assistance (TBRA) Thursday, 10/10/18 2pm Tuesday, 10/09/18 2pm Thursday, 10/11/18 2pm Wednesday, 10/10/18 10am Friday, 10/12/18 10am
Homebuyer Development Projects Local Program Administrators (LPAs) & Community Housing Development Organizations (CHDOs): Funds may be requested to assist a CHDO/LPA Developer to acquire an existing, vacant, substandard single-family (1-4 unit) home that will be substantially rehabilitated and sold to a HOME eligible home buyer.
Homebuyer Development Projects Or, to build a new construction home that will be sold to a HOME eligible buyer. Funds for demolition of an existing vacant, substandard property is eligible if new construction will start within 12 months. Maximum Award up to $750,000 Maximum Per-unit up to $75,000
General Requirements LPAs may assist HOME eligible homebuyers making less than 80% of Area Median Income (AMI) for the service area where the project is located. There is no requirement that the homebuyer be a first-time homebuyer, however, the applicant must not own a home at the time of application for assistance. If the project will include assisting homebuyer properties with rental units, Chapter 4 of the Project Management Plan (PMP) applies.
Site Control Applicants must have site control or executed purchase options for site control at application. For purchase options, Awardees must obtain full site control after contract execution, completion of environmental review and the Authority to use Grant Funds (ATUGF) is issued by HUD.
Choice Limiting Actions From the date of the issuance of RFP through when HCR EAU notifies of environmental clearance, only project planning and other exempt activities may be conducted. Developer cannot execute a purchase contract for acquisition of property during the time from the release of the RFP through the completion of the environmental clearance, however preexisting contracts are ok.
Sales Price Limits HUD s way of ensuring HOME funds are used in affordable, non-luxury housing. Maximum sale price and after-rehab value. HUD sets limits on the sales price based on what the home is worth after rehab. The determination of how the sales price will be calculated must be proposed and approved by HTFC. PMP lists methods to determine value.
Pre-sale Determining the Sales price Pre-sale of the homebuyer units is highly recommended. Describe the plan for selling the units and how the sale price will be determined.
Waiting List Does the Applicant have a current waiting list of prospective homebuyers that have been qualified as ready to proceed to purchase a home, if yes, how many? The CHDO/LPA may use an already established wait list from a prior program, however, all applicants must have been pre-qualified to be on the list within the past 6 months.
Priorities or Preferences The HTFC may approve CHDO/LPA to design eligible program activities that may limit beneficiaries to veterans, the elderly, the physically disabled, and/or give preferences to persons in certain occupations, such as police officers, firefighters, or teachers. If the program elects to serve a special needs population, the CHDO/LPA must have a current service provider agreement that will send direct referrals of clients in the special needs population to be served in the HOME assisted program.
Property Standards All units must meet HOME Local property standards and NYS and/or Local Code upon completion of housing rehabilitation or new construction activities.
Housing Rehabilitation Describe how the Applicant will determine the order of priority for housing rehabilitation. Describe how the scope of work and in-house cost estimate will be prepared. See PMP: order of priority for housing rehabilitation, energy efficiency and/or weatherization measures, HTFC housing rehabilitation standards and construction progress inspections.
Energy Efficiency and Green Building Practices CHDOs and LPA housing developers will receive points based on the extent to which the program will incorporate green building practices and energy efficiency measures for the HOME assisted unit. Additional points will be awarded for projects that agree to certify the homes in a green building rating system such as LEED for Homes or Enterprise Green Communities Criteria.
Subsidy Describe the amount of HOME funds to be invested per unit as development subsidy and/or direct homebuyer assistance. How much do you need in HOME funds to fill the gap in development when it costs more to rehab than the house will be sold for? How much direct assistance is appropriate to the homebuyer?
Right Sizing the Assistance Every housing rehabilitation or new construction project will vary in the price of development, the amount of subsidy to fill in the gap between the cost to develop and sales price and the amount of direct homebuyer subsidy that may be needed. Every homebuyer will not need the same amount of assistance, only fund what is needed to close the deal affordably and provide sustainable homeownership.
Right Sizing the Assistance The buyer must have sufficient post-closing cash and income to be able to handle all obligations with respect to homeownership including mortgages, taxes, insurance, utilities and maintenance for at least the POA. How do you plan on right sizing the amount of assistance on an individual case-by-case basis?
Underwriting and Subsidy Layering HOME funding the amount of HOME funding (in consideration of all available sources, including other public sources) is reasonable and necessary to provide quality housing that is sustainable throughout the POA and is not excessive, and is within stated program guidelines. The home buyer is qualified (or expected to be qualified) for a first mortgage and/or the purchase price under project underwriting guidelines as listed in the PMP.
Qualifying Ratios HOME regulations require maximum housing and total debt ratios, the PMP lists the program qualifying ratios. Use the qualifying ratios to help determine the maximum affordable purchase price for the homebuyer.
Sources and Uses Analysis Before committing funds to a project, the CHDO/LPA must ensure that no more HOME funds are invested than needed to provide quality, affordable, and financially viable housing throughout POA. Sources all project funding must be reviewed to determine that all sources are firmly committed. Uses all project costs must be reviewed and determined to be necessary and reasonable.
Written Agreements & Legal Documents Describe where the LPA will incorporate the HTFC note and mortgage terms and conditions into the program materials and ensure the homebuyer understands the terms and conditions. Describe your in-house process How and when will you inform prospective homebuyer of HOME assistance & terms?
Sustaining Future Homeownership How will you determine if the homebuyer can afford the home in the future? The admin plan discusses how to assess a homebuyer to ensure the ability to sustain future homeownership.
Homebuyer Counseling The homebuyer must receive a Certificate of Completion for pre-purchase housing counseling from a HUD- Certified counselor working for an agency approved to participate in HUD s Housing Counseling program. The prospective homebuyer must be deemed by the counselor as ready to proceed to purchase a home. The Agency approved to participate in HUD s Housing Counseling program may have funds from Federal sources other than HOME that will pay the cost for prepurchase counseling. If so, the cost may not be charged to the HOME program.
Developer Role and Staffing The LPA/CHDO must meet the developer role definition in the HOME Program and must be the owner and developer of the housing during the construction period, arrange for all project financing and be in sole charge of the construction and sell the assisted units to HOME eligible buyers. The LPA/CHDO must document that it has the staff experience and financial capacity for completion of similar size and scope projects within the expected time frame. Consultants may not administer the project on behalf of a CHDO.
CHDOs A CHDO project must receive CHDO Certification as a part of the application process. The CHDO will be certified based on the proposed project. Most of the buyer assistance will occur as pass-thru of the development funds initially provided to the CHDO. HOME regulations permit a maximum of only 10% of the CHDO set-aside funds are able to be used for direct homebuyer assistance and not originally used in the development process. However, this does not limit total amount of assistance to the buyer.
CHDOs No admin or project delivery. Up to 18% as a developer fee, invoiced to the HTFC based on the below draw schedule: At the start of construction 25% During construction: 25% Upon executed purchase contract with the homebuyer: 25% At completion and upon final close out of the unit in IDIS: 25%
CHDOs The CHDO may be able to keep net sales proceeds as permitted by the HTFC on a project by project basis. The CHDO may propose that, upon completion of the final unit, any net sales proceeds remaining be used as CHDO Proceeds in compliance with the HOME rule at 92.300(a)(6)(ii), which requires that the proceeds be used for HOME or other low income housing activities, as approved by HTFC.
CHDOs HOME funds provided to any unit may not exceed $75,000 per unit, inclusive of all hard and soft costs. HTFC may allow for an increase in the per unit assistance limits, based on the CHDOs documented need and as approved by the HTFC.
Homebuyer Properties with Rental Units Prefer whole house approach to rehabilitate all units and common areas if the homebuyers and all rental units qualify for HOME assistance, then all units should be HOME assisted as a single undertaking. Assisted rental units are subject to the HOME occupancy, affordability and lease up requirements as described in the PMP, throughout the POA.
Helpful Hints Please ask for Technical Assistance!!! We can answer all question you may have through the deadline of November 16 th at 4pm. After that, staff will be scoring applications and will no longer be able to address issues related to this RFP. The main documents you must be familiar with are the RFP, CDOL Application Instructions (the two go back and forth with each other), Administrative Plan, Budget Policy and Budget worksheets.
Helpful Hints See the table of contents in the PMP to get the overall format. Read the PMP before responding to the questions. Meet with staff and program partners to discuss and determine how the project will be managed. The how must be decided in order to respond to the questions about the PMP.
Question and Answer Session
Wrap Up Please submit all questions on the content of this presentation to: OCRinfo@nyshcr.org Please include HOME Local Application in the subject line of your e-mail. See Q&A spreadsheet with questions from this webinar answered by HOME Local staff, to be posted on the HCR website. Thank you! We welcome your applications to develop affordable single-family housing with HOME Local Program funds!