Application Training / Overview Questions and Answers July 10, 2018 1. Does community outreach of 500 feet need to be done before the application submittal? A. The City encourages that community outreach, as required on page 7 of the Application, be conducted before submitting an application; however, given the July 25, 2018 deadline, all Community Housing Development Organizations and Qualified Participating Developers shall have until August 22, 2018, 5:00 pm, to submit evidence of the outreach. When the information is available, please submit it at dallasulbdp@dallascityhall.com. 2. If I propose to purchase a set of lots, can I mix the income ranges or do all the lots have to be in a certain income range? A. Proposals should provide a mix of income bands in accordance with the Objectives of the Urban Land Bank Demonstration Program, for for-sale and rental, found on page 3 of the Application. 3. What if property values increase in the neighborhood where we purchased a Land Bank lot--can we sell the home for more than originally proposed? What determines the sales price? A. The sales price must be the fair market value at the time of sale, as determined by an appraisal. During the application process, the applicant must identify the income band of the homebuyer it will sell to, in addition to projecting the mortgage the homebuyer may qualify for without exceeding 30% of their income on housing costs. To the extent that property values increase or decrease, a Community Housing Development Organization and Qualified Participating Developers may need to explore additional resources to allow a homeowner within the specified income band to be able to purchase the home, such as the Dallas Homebuyer Assistance Program. 4. What happens if once a house is built and it doesn t sell as proposed? Can that property become a rental? A. That s a possibility, subject to modifying the application from for-sale to rental, submitting a Material Change Fee of $50.00 in order to for staff to re-underwrite, and prepare its recommendation for Council s consideration. Page 1 Prepared: July 19, 2018
5. When purchasing land bank lots to create a community garden, what are the requirements? Also, are adjacent owners able to purchase land bank lots? A. Adjacent Owners may acquire land bank side lots that are determined to be undevelopable. If interested in acquiring non-developable land bank lots, Adjacent Owners must complete Exhibit K of the Application. When proposing a community purpose type project, i.e. Community Garden, the builder must include the cost and design of it. Most importantly, it must demonstrate its ability to operate and maintain the community garden long term. 6. Are non-profit developers required to purchase land bank lots at fair market value? Who determines the fair market value? A. Land bank lots will be sold at fair market value to Qualified Participating Developers regardless of whether they are organized as a non-profit or for profit entity and to Community Housing Development Organizations. The fair market value will be determined based on the Comparative Market Analysis. When selling land bank lots to Adjacent Owners, the sales price will be the lesser of the fair market value as determined by the Dallas Appraisal District, or as recorded in the Annual Plan. 7. What occurs if lots on the list are purchased and, a year or two later, the dynamic of the market in the area where the lots are located changes (ex. a higher rental vs. homebuyer market)? A. Applicants are responsible for understanding the market conditions and conducting a market assessment that will assist in narrowing the demand (need) for that community. However, once the application is approved for a specific product type and income band, then it may not change without processing a Material Change to the Application. 8. Will there be opportunities for development subsidy in areas where land values have increased in value to provide affordable housing across the city? A. Currently, the Land Bank program does not provide a development subsidy. However, a land value discount may be available if determined through underwriting. 9. What is the current income limits for low income families? A. Income Limits for low-income households are based upon household size. The 2018 income limits are available for your review on the Land Bank Program s website: https://dallascityhall.com/government/meetings/dch%20documents/senior-affairscommission/fy%202018%20hud%20income%20limits.pdf Page 2 Prepared: July 19, 2018
10. How often do the income limits change? A. Income limits change annually, and it is the responsibility of the Community Housing Development Organizations and Qualified Participating Developers to monitor changes to the income limits. 11. Does the City have a list of prospective buyers? A. Our Dallas Homebuyer Assistance Program team works with different participating lenders and they often times have potential homebuyers that are income eligible. You may find the list of participating lenders list here: https://dallascityhall.com/departments/housing-neighborhoodrevitalization/dallasmap/pages/retail_and_broker_lenders.aspx 12. What happens if the home is pre-sold and the homebuyer receives an income increase before the home is sold? A. Homebuyers must qualify at the time of sale. Community Housing Development Organizations and Qualified Participating Developers must anticipate any changes in income if looking to pre-sell homes. 13. Will housing inspections for land bank lots be performed by the Department of Housing & Neighborhood Revitalization or Department of Building Inspection, or both? When both are involved it can delay the projected completion date and be a cause for property vandalism. A. Both City Department inspectors will perform inspections. However, the Housing & Neighborhood Revitalization Department is planning to assign inspectors by geographical area as a means of helping to facilitate timely inspections. 14. Can Community Housing Development Organizations and Qualified Participating Developers exchange a privately-owned lot with an existing improvement for a vacant land bank lot? A. Lots with improvements are not comparable to land bank lots, which are typically vacant. It is important that when considering a lot exchange, Community Housing Development Organizations and Qualified Participating Developers review Lot Exchange requirements found on page 7 of the Application. 15. What does Reserved mean on the Land Bank Lot Inventory table? A. The Land Bank Inventory Lot table has an identifier of Reserved, which means that the sale of those particular lots to a particular purchaser went through at least one but not all of the steps necessary for the sales contract to be finalized. For these lots, staff has approached the applicable Community Housing Development Organizations and Qualified Participating Developers and granted them an opportunity to submit a new application subject to the new application requirements. Should a Community Housing Page 3 Prepared: July 19, 2018
Development Organization or Qualified Participating Developer desire not to pursue the purchase of a reserved lot under the new requirements, the lot will be made available for sale to all Qualified Participating Developers and Community Housing Development Organizations (without right of first refusal). 16. If the Land Bank Board previously approved the sale of certain lots to Community Housing Development Organizations or Qualified Participating Developers, must they submit a new application? A. Yes, all Community Housing Development Organizations and Qualified Participating Developers must submit a new application for lots that went through at least one but not all of the steps necessary for the sales contract to be finalized. If you were invited to submit an application for the reserved lots, please be aware that you ll have until July 25, 2018 to submit a new application under the new requirements. If an application is not received by the deadline, the lots will be made available for sale to all Qualified Participating Developers and Community Housing Development Organizations (without right of first refusal). 17. Are the land bank lots available to all Community Housing Development Organizations and Qualified Participating Developers or only to those who had previously submitted a proposal? A. Land bank lots are available to all Community Housing Development Organizations and Qualified Participating Developers, with the exception of the reserved lots. Therefore, the Community Housing Development Organizations and Qualified Participating Developers are being granted the opportunity to submit a new application under the new requirements. If an application is not received by the July 25, 2018 deadline, the lots will be made available for sale to all Qualified Participating Developers and Community Housing Development Organizations (without right of first refusal). 18. If a land bank lot on the Land Bank Lot Inventory table does not indicate Reserved, does that mean it is available to any Community Housing Development Organization or Qualified Participating Developer? A. Yes, if not indicated Reserved then the lot is available for purchase by any Community Housing Development Organization or Qualified Participating Developer. 19. Are Community Housing Development Organizations and Qualified Participating Developers who currently have Reserved lots able to request other lots not listed as Reserved as part of the new application? A. Yes, Community Housing Development Organizations and Qualified Participating Developers may seek to purchase non-reserved lots, in addition to the Reserved lots. Page 4 Prepared: July 19, 2018
20. How long will it take before the Land Bank notifies the public whether any of the Reserved lots are no longer Reserved? A. The City has requested for Community Housing Development Organizations and Qualified Participating Developers who have a Reserved lot to submit their application by July 25, 2018. If an application is not received by the deadline, then the Land Bank Lot Inventory Table will be updated soon after the July 25 deadline. 21. Will the Land Bank process applications once a year or quarterly? A. The Land Bank Program will process applications year-round, to the extent lots are available for sale. The Lank Bank intends to process all applications submitted for current inventory, including reserved lots, within the next 2-3 months. A revised list of available lots will be made available by September 28, 2018 for any future interests. 22. What are the locations of lots that are to be processed for foreclosure? A. New lots will be referred for foreclosure in accordance with the City s Comprehensive Housing Policy, which prioritizes landbanking in Stabilization and Emerging Market Reinvestment Strategy areas. http://citysecretary.dallascityhall.com/resolutions/2018/05-09-18/18-0704.pdf 23. Can a Community Housing Development Organization or Qualified Participating Developer build a duplex on a lot, or have 2 homes on one lot? A. The number of units that can be feasibly be built on any one land bank lots will depend on the zoning requirements. We encourage you to check with the Department of Planning and Urban Design before committing to the production of units. 24. How can Community Housing Development Organizations and Qualified Participating Developers access Planning and Building Inspections requirements for land bank lots? A. Information related to the Sustainable Development and Construction Department, which includes both Planning and Building Inspections, can be obtained at: https://dallascityhall.com/departments/sustainabledevelopment/planning/pages/defa ult.aspx. 25. Can developers submit one application for multiple lots? A. Yes, it is preferred that Community Housing Development Organizations and Qualified Participating Developers submit one application for all the lots they wish to purchase. 26. Is there a minimum or maximum number available lots Community Housing Development Organizations and Qualified Participating Developers may request to purchase? Page 5 Prepared: July 19, 2018
A. No, there is not a maximum or minimum set of lots a Community Housing Development Organization or Qualified Participating Developer may request at one given time. However, the developer s experience and financial capacity to build on all of the lots in a timely manner will be considered as part of the underwriting process. 27. Does the City possess information on environment or flood plain issues on land bank lots? A. Yes, staff will be able to share environmental information and flood plain maps with Community Housing Development Organizations and Qualified Participating Developers as requested. Please make your requests at dallasulbdp@dallascityhall.com. 28. How is the City conveying title for the lots? A. Lots are conveyed via a Deed without Warranty. 29. At time of closing, can a Community Housing Development Organization or Qualified Participating Developer get a title policy on the lot? A. Per state law, the maximum redemption period for a tax-foreclosed property expires 2 years after the judgment is filed. We encourage persons seeking to purchase lots from the Land Bank to consult with a title company regarding available title policies. 30. If a Community Housing Development Organization or Qualified Participating Developer privately own two lots and then purchases a land bank lot next door, can the lots be combined to make a larger size lot? A. Community Housing Development Organizations and Qualified Participating Developers are responsible for confirming with the Department of Planning and Urban Design the zoning requirements for the area. Keep in mind that the program s goals include converting distressed properties into affordable housing units that serve low income households. 31. Will there be an overview/training for House Bill 110 lots? A. Yes, given that HB 110 have a distinct set of requirements (for example, only nonprofits are eligible purchasers), the City will conduct training sessions regarding that program as well. The City is currently working on the HB 110 program application and anticipates rolling it out by the end of July or early August 2018. 32. Are you able to pay cash for the lots? A. Yes, you will be able to submit a cashier s check to escrow or the City when closing on the lot. Page 6 Prepared: July 19, 2018
33. Is it the Land Bank Program s mission to generate and increase revenue for the City? A. To the contrary, currently, the Land Bank Program is not self-sustaining and requires an infusion of the City s General Obligation Bonds and General funds. It s important that the Land Bank Program generate sufficient sales revenue to operate; that includes but is not limited to paying maintenance fees, consultant expenses, and administrative overhead costs. 34. Since land bank lots are being purchased at fair market value, does it decrease the effectiveness of selling to low income families? A. No, in fact selling at fair market value helps the City not unintentionally suppress the value of surrounding lots. If determined (via underwriting) that a land sale price discount is necessary to serve the proposed income band, then the discount will be issued as a credit. 35. What is the timeline for building? A. Community Housing Development Organizations and Qualified Participating Developers who purchase Land Bank lots will have 18 months to begin construction from the date of recording the Deed without Warranty. 36. Is there a sample application and pro forma available for Community Housing Development Organizations and Qualified Participating Developers to review? No, a sample application and pro forma are not available. 37. Is there a down payment assistance program for homebuyers? Can homebuyers receive assistance in the form of a gift? A. A homebuyer may receive a monetary gift from their family for use towards the home purchase. They may also apply for the City s Dallas Homebuyer Assistance Program. Details of the program may be found at: https://dallascityhall.com/departments/housing-neighborhoodrevitalization/dallasmap/pages/default.aspx. 38. How often are the available Land Bank lots updated and posted? A. The Land Bank Lot Inventory table will be updated regularly and is located at: https://dallascityhall.com/government/meetings/dch%20documents/senior-affairscommission/inventory_5_29_18_market_areas_values.pdf Page 7 Prepared: July 19, 2018
39. If a Community Housing Development Organization or Qualified Participating Developer has more financial capacity than others, will they have priority to purchase? A. Financial capacity will not be the sole evaluating factor during the City underwriting process. The City will also be assessing the Community Housing Development Organization s and Qualified Participating Developer s development experience, compliance standing, and the details of the proposed project. The criteria that will be evaluated is found on page 10 and 11 of the Application. Page 8 Prepared: July 19, 2018
Questions Emailed 40. What are some examples of professional certifications and/or licenses of developer staff? A. Examples of professional certifications and/or licenses include, but are not limited to, real estate or architect licenses, housing development and finance certifications, etc. 41. What financial statements are acceptable for the Application? A. The last three years of annual audited financial statements are required. To the extent they are not available for this application, tax returns and unaudited financials will be accepted. An explanation for the failure to submit audited financial statements must be included. Additionally, keep in mind that future participation in the Land Bank Program will require audited financial statements to be provided. 42. Must I list all currently owned properties that are undeveloped, including company partners, and principals in any location? A. Yes, please list all undeveloped owned properties (in Dallas or outside) by the Applicant, Partners and Principals within the past three years. This will enable the City to better understand the Community Housing Development Organization s and Qualified Participating Developer s capacity. 43. Must Community Housing Development Organizations and Qualified Participating Developers get site plans and surveys completed before the lots are purchased or reserved? A. Yes, a conceptual site plan for the proposed lot must be included. It s an essential part of the Community Housing Development Organization s and Qualified Participating Developer s due diligence and ability to understand the limitations to the site buildout. A survey plan is also recommended to understand the existing infrastructure and potential development costs. 44. Why does the Land Bank need a list of all ongoing projects or projects completed in the past 3 years that required contract extensions or renegotiation of financing? A. Projects that required extensions or renegotiations of financing for acquisition and/or construction closings must be disclosed. This information will help City understand the Community Housing Development Organization s and Qualified Participating Developer s development experience. Page 9 Prepared: July 19, 2018
45. What is required in the pro forma for rental properties? A. Rental projects require: sources and uses, total development budget, rent schedule, annual operations detail, and 20-year cashflow. Please note that the rent schedule must be very specific on the unit and affordability mix. 46. What is required in the pro forma for home sales? A. For sale projects require: sources and uses, total development budget, and sales cashflow. 47. What is needed for #1 of Market Data, as it relates to for-sale homes? A. A third-party market analysis should be commissioned to describe the supply and demand of the product type in the community in which the lot(s) will be developed. Analysis should also describe the community demographics and the potential absorption of the product. 48. What information is needed for financial projections related to conventional sales of for-sale homes? A. Applicants must provide assumptions of the loan mortgage type, terms and amount of loan that homebuyers can obtain, given the requirements of the program. If a gap exists, then applicants must provide details on the source(s) that will be sought to close the gap. 49. Does a letter from our bank that provides interim and mini-perm financing satisfy item #2 under Underwriting/Financial Projections? A. Commitment letters from lenders are acceptable; however, it important that the letters include the terms, and that any costs associated with the financing be included in the total development budget. 50. Under Insurance Item #8 where it asks for either a performance bond or letter of credit, is this requirement applicable after the purchase of the land bank lots or when we submit the application? A. The requirement for a performance bond or letter of credit will be required at the time of purchase. Page 10 Prepared: July 19, 2018