MANUFACTURED HOME PARK LOAN PROGRAM TERM SHEET Description: The Manufactured Home Park Loan Program provides permanent financing for the acquisition of mobile home parks (MHPs) by organizations interested in preserving the parks as affordable housing. Acceptable Borrowers: Acceptable Property Types: Minimum Affordability: Resident owned co-op (95% minimum membership participation); non-profit or public entities. Manufactured home parks of five or more units. The MHP shall be 95% or more occupied by residents who own their own home (no investor owned rentals). Affordability to be guaranteed for the original term of the loan. At least 51% of the rental units are rented to households earning 80% of less of median income as defined by HUD; or At least 40% of the rental units are rented to households earning 60% of less of median income as defined by HUD; or At least 20% of the rental units are rented to households earning 50% of less of median income as defined by HUD. NOAH shall use data published periodically by the Department of Housing and Urban Development (HUD) as a guideline for measuring median income levels in specific regions of the state, and further for determining affordability levels for those regions. Loan Amount: Maximum LTV: Minimum Debt Service Coverage Ratio (DCR): Recourse to Borrower: Security: Interest Rate: Term: Amortization: $300,000 minimum (generally) and up to $10,000,000 maximum, subject to Borrower concentration limits. 80% of the stabilized as improved market value; soft debt from public sources or grants are considered equity 1.20x for NOAH first mortgage payment, 1.10x on all scheduled debt service payments. Fully recourse to the Borrower. First lien deed of trust on the secured property, assignment of rents and leases, and pledge of reserve accounts. 2.75% over the 10-year Treasury; current floor rate is 5.5%. The interest rate may be reduced if Oregon Affordable Housing Tax Credits are awarded to the project. Not to exceed 20 years. Not to exceed lesser of: 30 years or the remaining economic life less 5 years.
Payments: Pre-Payment: Monthly amortizing principal and interest payments in addition to escrows for taxes and insurance (as applicable) and monthly deposit to capital replacement reserve. 10 year FNMA Yield Maintenance and 1% thereafter. Fees: Origination Fee of 1% to 2% of the loan amount (minimum $6,500) Good Faith Deposit of $500 to $1,500 Document Preparation Fee of $500 Borrower is responsible for all transaction costs. Maximum Forward Commitment: Initial Term of Commitment: Commitment Extension: Term 24 months 15-18 months Up to Maximum Forward Commitment term, with payment of a fee of.25% of the loan amount Standard Reserves: Operating reserve equal to 3 months of project revenue calculated based on a 95% occupancy. Capital Replacement Reserve initial deposit and on-going contribution based on the Capital Needs Assessment and scope of the planned rehabilitation. Property Management: Required Third Party Reports: NOAH will require a professional property management firm or agency be engaged to manage the property. In addition, if co-op ownership, a Technical Assistance Advisor, acceptable to NOAH, will be required for the term of the loan, funded by property operations. FIRREA compliance Appraisal, ordered by NOAH, setting forth as-is and asimproved market values. Appraisal review if loan exceeds $500,000. Environmental Review, preparer must have $1,000,000 errors and omissions insurance Capital Needs Assessment which addresses compliance with the Americans with Disabilities Act. Market Study (if not included in the appraisal). Loan Requirements: All funding sources will be subordinate and acceptable to NOAH. Project demonstrates compliance with ADA requirements. Evidence that the project has achieved a minimum debt service coverage ratio of 1.20x for NOAH debt service and a minimum physical occupancy of 90% for the 3 months immediately prior to loan closing.
Borrower equity sufficient to meet LTV requirements. All space leases in the MHP shall be subordinate to the NOAH loan. NOAH receipt and satisfactory review of all Borrower organizational documents and Community Rules. Co-Op Requirements The Co-op shall provide a certified rent roll at closing that shall confirm that at least 60% of the residents within the MHP are members of the Cooperative. Evidence that the project will achieve, as of closing based on executed leases, a minimum debt service coverage ratio of 1.20x and a minimum physical occupancy of 90% for the month immediately prior to loan closing. The Co-op shall provide a written certification that a minimum of 30% of the park residents have incomes at or below 80% AMI for the county where the MHP is located. Required only if the OAHTC s were awarded. Receipt and satisfactory review of an Attorney Opinion letter. Underwriting Checklist: 1. Signed Letter of Interest 2. Good Faith Deposit 3. Preliminary Title Report with copies of all exceptions 4. Financial Pro forma inclusive of Income and Expense Statement and Statement of Sources and Uses 5. Sponsor / General Partner financial information a. Borrower Certification b. Financial Statements for the last three fiscal years inclusive of Income and Expense Statement, Balance Sheet and Statement of Cash flows (preferably audited) c. Year-to-date Financial Statement inclusive of Income and Expense Statement and Balance Sheet (dated within last three months) d. Current year budget and projected budget for next year (if available) e. Statement of Contingent Liabilities f. Schedule of Real Estate Owned (Form Attached) 6. Market Study 7. Appraisal 8. Capital Needs Assessment 9. Plans and Specifications 10. Environmental Phase I from consultant with $1 million in E&O Insurance 11. Environmental Engineer E & O Insurance Certificate evidencing $1 million in coverage 12. Environmental Reliance Letter (NOAH to provide form) 13. Environmental Questionnaire or OHCS Environmental Review Checklist with Certification (NOAH to provide forms) 14. Subsidy Documents from Non-OHCS Funding Sources 15. Evidence of property tax exemption 16. Information about property management agent/plan 17. Development team information 18. Borrower organizational documents and Community Rules.
19. Consolidated Funding Cycle Application a. Reservation from Oregon Housing and Community Services b. OAHTC: Oregon Affordable Housing Tax Credit Program Low Income Housing Project Reservation letter c. HOME: Home Investment Partnership Program Grant Agreement and Home Investment Program Declaration of Land Use and Restrictive Covenants d. Trust Fund/GHAP: Grant Program Project Use Agreement, Or, Loan documentation if structured as a loan e. Weatherization Grant: Project Use Agreement, Declaration of Restrictive Covenants and Equitable Servitude, Low-Income Weatherization Program 20. BOLI Determination Letter 21. Operating Statements for the last three fiscal years and year-to-date. Please be advised that this term sheet is provided for informational purposes only, does not constitute a commitment or any offer from NOAH and is subject to change at any time. Please contact NOAH for questions related to your request or if you require additional information. 7/12/2016
OREGON HOUSING ACQUISITION FUND (OHAF) MANUFACTURED HOME PARK PRESERVATION LOAN TERM SHEET Description: Acceptable Borrowers: Acceptable Property Types: Minimum Affordability: Loan Amount: Maximum LTV: Minimum Debt Service Coverage Ratio (DCR): Recourse to Borrower: Security: Interest Rate: Term: Amortization: The Oregon Housing Acquisition Fund Loan Program (OHAF), in part, provides short term financing for the acquisition of manufactured home parks. Resident owned co op (60% minimum membership participation); nonprofit or public entities. Manufactured home parks of five or more spaces. For Co ops, the MHP shall be 90% or more occupied by residents who own their own home. Parks to be owned and operated by a non profit or public entity will not be limited in the number of park owned homes. Affordability to be guaranteed for the original term of the loan. 51% or more of the units/spaces are to be rented to households earning 80% or less of median income as defined by HUD; or 40% or more of the units/spaces are to be rented to households earning 60% or less of median income as defined by HUD; or 20% or more of the units/spaces are to be rented to households earning 50% or less of median income as defined by HUD. $300,000 minimum and up to $8MM. Up to 95% of the as is market value. 1.20x NOAH first mortgage payment; 1.10x on all scheduled debt payments. Fully recourse to the borrower. Sponsors will be required to provide a full payment and performance guaranty if a single asset entity owns, or will own, the property. First lien deed of trust on the secured property, security interest in parkowned homes, assignment of rents and leases, pledge of reserve accounts, and pledge of any membership fee account over $25M. Between 5% and 7%. Calculated by NOAH based on its blended cost of funds plus a margin. Current rate is 5%. Up to 36 months. Extension of up to 12 months, not to exceed 48 month maximum loan term. N/A
Payments: Pre Payment Premium: Fees: Maximum Forward Commitment: Standard Reserves: Monthly interest only payments with principal due at loan maturity. In addition, escrows for taxes and insurance (as applicable and a monthly deposit to the maintenance reserve. None. Origination fee of 1% of the loan amount ($6,500 minimum); Document preparation fee of $500. Good Faith Deposit of $1000. Borrower is responsible for all transaction costs. 12 months. Operating reserve equal to a minimum of 3 months of project revenue. Capital Replacement Reserve initial deposit and on going contribution based on the Capital Needs Assessment and scope of the planned rehabilitation at a minimum of $500 per unit. Property Management: Required Third Party Reports: NOAH will require a professional property management firm or agency be engaged to manage the property. In addition, if co op ownership, a Technical Assistance Advisor, acceptable to NOAH, will be required for the term of the loan, funded by property operations. FIRREA compliant Appraisal, ordered by NOAH, setting forth as is and as improved market values. Appraisal review if loan amount exceeds $500,000. Phase I Environmental Report; preparer must have $1,000,000 errors and omissions insurance. Capital Needs Assessment which addresses: overall condition of the park; any water and sewer systems; life/safety issues; and, compliance with Fair Housing and the Americans with Disabilities Act, for structures open to the public (as defined in the Act). Other reports as requested by NOAH. Loan Requirements: ALTA Lender s Title Insurancei policy insuring 1st lien position or such other lien position as set forth in the Loan Request and approved by Loan Committee. All other funding sources will be subordinate with terms acceptable to NOAH. Flood Hazard Determination (obtained by NOAH) Evidence of insurance for casualty, public liability, rental interruption, boiler and machinery; and, if applicable, flood.ii
Operations and Maintenance plans as required per the environmental review. Immediate repair reserve required for any Life/Safety issues identified in the Capital Needs Assessment which will not be addressed prior to OHAF loan closing. Reserve amount to be established at 110% of the cost of the estimated repairs. Read and rely letter from the environmental consultant/engineer. Borrower equity sufficient to meet LTV requirements. All long term space leases in the MHP shall be subordinate to the NOAH loan; not required for month to month leases. NOAH receipt and satisfactory review of all Borrower organizational documents and Community Rules. Greater of actual or 25% vacancy on revenue from RV s. Minimum 6 month lease terms for RV tenants if applied towards revenue. Maximum cap of 25% of park revenue from RVs. Minimum equity of 5%, with soft debt or grants from foundations or public sources included. Co Op Requirements: The Co op shall provide a certified rent roll at closing that shall confirm that at least 60% of the residents within the MHP are members of the Cooperative. Evidence that the project will achieve, as of closing based on executed leases, a minimum debt service coverage ratio of 1.20x and a minimum physical occupancy of 90% for the month immediately prior to loan closing. Receipt and satisfactory review of an Attorney Opinion letter. Underwriting Checklist: 1. Signed Letter of Interest and Deposit 2. Fee Deposit 3. Preliminary Title Report with copies of all exceptions 4. Financial Pro forma inclusive of Income and Expense Statement and Statement of Sources and Uses for: Interim OHAF period Long term take out scenario with timeline 5. Sponsor / General Partner financial information Financial Statements for the last three fiscal years inclusive of Income and Expense Statement, Balance Sheet and Statement of Cash flows (preferably audited) Year to date Financial Statement inclusive of Income and Expense Statement and Balance Sheet (dated within last three months)
Schedule of Real Estate Owned 6. Property information, including: Operating Statements for the last three fiscal years and year todate, including rent rolls Capital Needs Assessment Pest and Dry Rot Inspection Operations and Maintenance plans for properties with Asbestos and/or Lead Based Paint Evidence that project contractor is licensed lead abatement activities, if the project was constructed prior to 1978 Zoning Letter/Evidence of current zoning 7. Market Study, if available 8. Appraisal 9. Plans and Specifications (as applicable) 10. Environmental Phase I from consultant with $1 million in E&O Insurance 11. Environmental Engineer E & O Insurance Certificate evidencing $1 million in coverage 12. Environmental Reliance Letter (NOAH to provide form) 13. OHCS Environmental Review Checklist with Certification, if applicable 14. Subsidy Documents from Non OHCS Funding Sources, if applicable 15. Information about property management agent/plan 16. Development team information 17. Consolidated Funding Cycle Application and reservation of funding from Oregon Housing and Community Services (as applicable) Borrower Reporting Requirements: During the first year of the loan: Quarterly Project Status reports detailing actions taken to obtain needed public and private subsidies in addition to other development activities. Quarterly operating statements and rent rolls for the project Annual Borrower financial statements and/or tax returns Annual Sponsor financial statements and/or tax returns Annual Guarantor financial statements and/or tax returns, if applicable. Thereafter; Quarterly Project Status reports detailing actions taken to obtain needed public and private subsidies in addition to other development activities. Annual operating statements and rent rolls for the project Annual Borrower financial statements and/or tax returns Annual sponsor financial statements and/or tax returns Annual Guarantor financial statements and/or tax returns, if applicable. NOAH reserves the right to request more frequent reporting or such additional documentation as it deems necessary to adequately monitor project operations.
Please be advised that this term sheet is provided for informational purposes only, does not constitute a commitment or any offer from NOAH and is subject to change at any time. Please contact NOAH for questions related to your request or if you require additional information. 7/12/2016
MANUFACTURED HOME Fact Sheet ENERGY TRUST OF OREGON MANUFACTURED HOME REPLACEMENT PILOT Background Oregon has over 170,000 manufactured homes, representing about 10 percent of total residential building stock. Nearly 80,000 of these homes were built before 1990, when federal standards for energy efficiency were minimal or non-existent. These older manufactured homes have less insulation in the ceiling, walls and floor than manufactured homes build in 1990 or after; have significant air leakage; and have inefficient windows and heating systems. As a result, residents of these homes spend about 70 percent more on energy per square foot than residents of site-built homes according to the U.S. Energy Information Administration. These higher energy costs disproportionately affect those with lower incomes. Retrofitting older manufactured homes with efficiency measures can be ineffective and expensive. Attics and walls are usually narrow and/or inaccessible, making it difficult to increase insulation levels. Some older manufactured homes are deteriorating to the point that they cannot be made more efficient. The cost of improvements frequently exceed the home s value and remaining useful life. Objective To deliver durable savings to a segment of the rural housing stock where few practical, lasting options exist, Energy Trust launched a pilot program to retire aging manufactured homes and replace them with codeexceeding energy-efficient new manufactured homes. In addition to refining the costs and benefits, the pilot aims to build partnerships to establish a replicable model that integrates energy, poverty alleviation and affordable housing investments. Pilot design Energy Trust, in partnership with Oregon Housing and Community Services, CASA of Oregon, Neighborworks Umqua, St. Vincent de Paul of Lane County, and regional Community Action Agencies, will identify qualified homes/ parks, seek additional funding opportunities and monitor the impact of retiring and replacing older (pre-1990) manufactured homes with new, energy-efficient models. This innovative approach will benefit manufactured home occupants and communities for decades. It can also provide non-energy benefits such as healthier living conditions and greater economic security. The new manufactured homes in this pilot will meet the standards of the Northwest Energy Efficient Manufactured Home Program (NEEM), delivering the maximum costeffective efficiency benefit. Incentives available to the customer for qualified products are based on the NEEM 1.1 specification; additional incentives are available for homes reaching NEEM 2.0 specification. The estimated energysavings benefits and incentives are as follows, based on replacement of a single-wide home, with a like-sized, single-wide home:
Energy savings and incentives for replacing older manufactured homes Year built Pre- 1976 1976-1989 Climate zone Energy savings Minimum Energy Trust Incentive West of Cascades 5,766 kwh $9,000 East of Cascades 12,764 kwh $15,000 West of Cascades 4,398 kwh $7,000 East of Cascades 7,524 kwh $9,000 Savings estimates for the manufactured home retirement pilot were established by Energy Trust utilizing NEEA s Regional Building Stock Assessment, Northwest Energy Works and NEEA s technical specifications for NEEM credentialed homes, county-level property tax enrollment and Energy Trust data. Over a two-year period from 2017 to 2019, Energy Trust intends to retire and replace 20 to 40 manufactured homes. Evaluation efforts will examine pre- and post-pilot home characteristics. The evaluation efforts will: Analyze pre- and post-replacement energy bills Collect basic home characteristics during program recruitment to continually update and refine assumptions pertaining to existing home stock Conduct pre- and post-replacement participant interviews to capture the qualitative benefits and/or challenges to replacing homes Evaluation activities will help Energy Trust understand energy and non-energy benefits achieved from the replacement homes. The evaluation and anonymized participant interview results will be made publically available to assist program administrators nationally. Pilot funding structure Energy Trust is seeking affordable housing solutions that cost no more than 30 percent of a household s income after grants, incentives and other funding. Within manufactured home parks, housing costs include both debt service on a home purchase along with lot space rental or cooperative dues. The financing package will likely include third-party loans to qualified consumers to purchase homes and/or loans to park owners to purchase homes for use as affordable housing. Energy Trust is engaged with public, nonprofit and private sector lenders to explore accessible and affordable loan options for manufactured home replacements. Get involved This pilot s success depends on the collaboration and engagement of many organizations and individuals, including participants, funding partners and lenders. To date, recruitment efforts have targeted parks owned and operated by nonprofits or member-owned cooperatives. Energy Trust seeks to work in parks with stable ownership, a demonstrated record of prioritizing resident needs and critical capital improvement needs. + If you know of interested homeowners, property managers or manufactured home parks within Energy Trust service territory that have potential to benefit for participation in this pilot, we want to hear from you. Email Mark Wyman at mark.wyman@energytrust.org or call 503.445.2950. Energy Trust of Oregon 421 SW Oak St., Suite 300, Portland, OR 97204 1.866.368.7878 energytrust.org Energy Trust of Oregon is an independent nonprofit organization dedicated to helping utility customers benefit from saving energy and generating renewable power. Our services, cash incentives and energy solutions have helped participating customers of Portland General Electric, Pacific Power, NW Natural, Cascade Natural Gas and Avista save on energy costs. Our work helps keep energy costs as low as possible, creates jobs and builds a sustainable energy future. Printed on recycled paper that contains post-consumer waste. 8/17