Program Small Rental Development Initiative (SRDI) Application Technical Assistance Webinar Questions and Answers 1. Question: Are there subsidy caps similar to HTF? Or just the max subsidy limits? The total amount of funds that an applicant may request is not capped, but there is a limit on the amount of HOME subsidy per unit based on the HOME Maximum Subsidy Limits. 2. Question: Can you provide confirmation that design guidelines are not in effect? HTFC Design Guidelines do not apply. HOME Property Standards do apply. 3. Question: Accessibility points. The RFP states that Developer-owners are encouraged to produce visitable and/or units that incorporate universal design features and will receive extra points for developing accessible units. Can HTFC clarify the # of additional points? As listed in the RFP, it is 5 points. 4. Question: Will this include both units for those with mobility impairments as well as sensory impairments? Any units that serve or are visitable by persons with impairments will be counted. 5. Question: To meet Section 504, can we just provide units for those with mobility impairments? If your project consists of 5 or more units of new construction or 15 or more units of substantial rehabilitation, all Section 504 requirements must be met. There are requirements for units adaptable for persons with sensory impairments as well. 6. Question: How are the 5 points allocated? If you propose to create accessible units, 5 points will be added into your overall score. 7. Question: If an organization also needs CIF funds, should the organization also submit an open window CIF application? If you need the funds to wholly improve your proposed SRDI project, then yes. Under HOME rules, all other sources must be committed before HOME funds can be committed. CIF funds 1
would need to be committed ASAP in order to work within SRDI time frame for commitment. Please contact CIF to discuss timeline for possible commitment. 8. Question: SRDI requires an energy audit prior to the application s submission. Our Organization provides energy audits. Would it be preferred that we seek out an energy audit from an outside vendor rather than using our in-house staff? It is ok for your agency to perform the energy audit. 9. Question: If an organization also has housing rehabilitation specialists on staff would it be preferred that we use outside vendors as well? It is ok to use your in-house staff/housing rehabilitation specialists. 10. Question: If we develop units in multiple sites, do we have to complete separate budget pro-forma for each site? Yes, applicants should submit a pro-forma budget workbook for each site/building, as no two sites are the same. The Project Management Plan also requires scopes of work to be separate for each site/building. Applicants should submit an individual pro forma for each site and also an overall pro forma for the whole project that matches with the total amount requested in the application (by adding the numbers from the individual site pro forma). 11. Question: In terms of the project area for the age of the housing stock and poverty rates, can we use the county if we are looking at projects in multiple villages? Yes, you can use the county. 12. Question: Are you able to assist me in locating the construction order of priority? They are listed in Section 2.33 of the Project Management Plan located at http://www.nyshcr.org/funding/srdi/. 13. Question: Can we use the actual utility bills for the units instead of a projection (HUSM Model) that may or may not be accurate? Post-rehab utility costs are expected to be lower than pre-rehab costs. For this reason, applicants must use HUD Utility Schedule Model (HUSM) as listed in the Project Management Plan, to determine utility allowances. If you are awarded SRDI funds, as a part of contract negotiations, we may allow another source to be used to determine the utility allowance. 2
14. Question: Can this program be utilized for acquisition of a newly rehabilitated mixed use building? Does there have to be a capital improvement component to the application? SRDI requires rehabilitation of existing housing, so yes, there does have to be a need for housing rehabilitation as a component of the project and application. 15. Question: Can a non-profit owned rental project of 34 units access SRDI funds to complete items such as door & window replacements; repair the building foundations; and install gutters? No, SRDI is targeted to small rental projects. The maximum SRDI project size is 25 units. 16. Question: Is a private, for profit-company or Investor in Housing able to apply for SRDI funds? A private, for profit business does not qualify to apply under SRDI. However, HOME Local does offer Investor owned Rental Rehabilitation funds in our annual request for proposals as a regularly funded activity. 17. Question: If we have a project with 15 years left in the extended affordability period, would we have to add on an additional 15-20 years? If this question is related to a project that had tax credit funding in the past and is under an extended use tax credit regulatory agreement, the answer is no, the tax credit regulatory agreement would not be extended. However, a new HOME regulatory agreement would be executed for the SRDI HOME funds. If the project is currently under a HOME Regulatory agreement and period of affordability, the project is not eligible to apply for SRDI funds. 18. Question: Is the 0% loan forgiven? Does it decline? It just says "pay it back on sale". The HOME funds are deferred and forgiven only at the end of the full affordability period. The outstanding balance does not decline during the affordability period because the full HOME funds are at risk of repayment to HUD for the full affordability period. If the developer-owner manages the rental units in compliance throughout the required period of affordability (typically 15 to 20 years), then the mortgage lien placed against the property will be satisfied. If the developer-owner does not manage the units in compliance at any time during the affordability period, the entire mortgage amount must be re-paid. If the property is sold during the affordability period, the entire mortgage lien must be re-paid. The mortgage lien may be assumable by a new purchaser under certain conditions, as approved by the HTFC. The Regulatory Agreement that enforces long term rental management requirements runs with the land and is not satisfied until completion of the period of affordability, regardless of ownership. 19. Question: In this area, a contingent purchase offer is what is traditionally used, not a purchase option. Is a purchase offer contingent on funding and NEPA/SHPO review acceptable like it is in Capital Projects? 3
A contingent purchase offer and or purchase option (or other term used for this purpose) can be acceptable if the cost is for a nominal portion of the purchase price and is contingent on SRDI funding and the environmental approval for the NEPA, SEQRA and SHPO reviews. See 24 CFR 58.22(d) and the HUD guidance at: https://www.hudexchange.info/resources/documents/hud-memo-guidance-on-options-and- Conditional-Contracts-for-Purchase-of-Real-Property-for-Environmental-Reviews-Conductedby-a-Responsible-Entity-under-24-CFR-58.pdf. 20. Question: What does "under common ownership" mean. If doing a scattered site development, do all purchase have to be from a common source? The HOME Rule states that a project may consist of multiple sites (more than one building) only if all sites are owned or will be owned under a single ownership entity with unified financing and rental management. 21. Question: Income is up to 80% of AMI. However, is % of AMI scored? Is "the lower the target income the better"? If so, what % of AMI gets full points? Yes, all SRDI tenants may be qualified as eligible if they are under 80% AMI. If the project has 5 or more units, then 20% of those units must serve renters under 50% AMI. Both the application and pro forma budget workbook have areas to target specific incomes to be served. Percent of income and serving the lowest income renters is important and will be taken into consideration when scoring the applications. In order to receive full points, the project must serve all tenants under 60% AMI. 22. Question: If Phase I and II environmental reviews have already been completed for an existing property that is being developed, are they eligible for reimbursement if funded? Having a Phase I and Phase II completed for your proposed SRDI project already is great, however, the cost for these reviews is not eligible to be reimbursed by SRDI unless they were started and completed after March 15, 2017. 23. Question: Lead ABATEMENT rules will probably apply. Does temporary relocation due to lead abatement go as a lead cost (hard cost) or as real cost (soft cost)? If lead hazard control activities must be undertaken, then the cost of temporary relocation is an eligible HOME soft cost. 24. Question: Can a nonprofit in a local participating jurisdiction apply for a project that is in that participating jurisdiction? Yes, there are no geographic restrictions. All eligible applicants may apply, even if project is located in the target area of a local HOME Participating Jurisdiction. 4
25. Question: Will you make the entire webinar slide set available on line for further review? Where will this slideshow be posted after it's over? Yes, the power point slides will be available on the website at http://www.nyshcr.org/funding/srdi/ sometime next week. 26. Question: Can the applicant (organization) pay for the weatherization cost? Absolutely, if the applicant has funds eligible to be accessed for a SRDI project and able to be committed in the application, use of other funds is encouraged. 27. Question: The RFP states projects must be ready to go by August 2017. What exactly do you need to commence by Aug 2017 if we have 3 years to complete? The HOME Rule permits a commitment of HOME funds to a project only if all necessary financing has been secured, a budget and schedule have been established, underwriting has been completed, and construction is scheduled to start within twelve months of the agreement date. To meet HOME commitment requirements, contracts are expected to be executed around August 2017 with a conditional commitment pending environmental review (ER) and approval for NEPA, SEQRA & SHPO. Upon ER approval, actual development/construction may begin. The HTFC works with environmental consultants that will assist the awardee to complete the ER process on a faster pace. Some projects may be able to begin construction as soon as late fall of 2017. 28. Question: Can an agency submit for two different projects, for example one rental rehab and another purchase rehab? Yes, SRDI has no restrictions on the number of applications submitted by any one eligible applicant. Capacity to successfully manage both projects is important. The Applicant should list a preference in the project summary for which of the two projects is in the most immediate need of funding. 29. Question: What is the definition of a "unit?" A unit is a legal (code, zoning, etc.) residential housing space which can be occupied and rented by a low income HOME eligible tenant. Please request additional information if question is related to eligible zero bedroom units, SRO s or Group Homes. 30. Question: You mentioned in your introduction about flexibility in the types of rental developments that were eligible. For clarity, are single family dwellings allowable? In our area, multi-family developments are rare. 5
Yes, single-family (1-4 unit) rental dwellings are eligible. 31. Question: Please clarify if existing projects that are operational but in need of housing rehabilitation are eligible? Yes, however the project may not be under a current HOME regulatory agreement and period of affordability. If the project was not previously funded by HOME, but was funded from some other federal or state affordable housing funds, be sure that those notes and mortgages/regulatory agreements would allow a new HOME SRDI note and mortgage and regulatory agreement to be placed on the project. 32. Question: Is a PNA required? A typical Physical Needs Assessment (PNA) based on a large scale multi-unit rental project is not required. However SRDI applicants are asked to perform a useful life analysis of the major structure and systems. Any structural or major system item that would require repair within the next 5 years must be repaired in the SRDI scope of work. Applicants must also follow the construction order of priority listed in the Project Management Plan when determining the SRDI scope of work. 33. Question: How recent do cost estimates for energy efficiencies, abatement, construction costs, etc. need to be? Estimates need to be in real time to be accurate. The more recent, the more accurate. Estimates no older than 6 months prior to application for SRDI funds will be accepted. If estimates are more than 6 months old, they should be updated for the SRDI application. 34. Question: Can project based rental assistance be requested with the rehab funding request? No, SRDI does not offer project based rental assistance. 35. Question: Can existing units at one site be renovated, along with new units developed at a second site? The intent of SRDI is to do either rehabilitation or new construction, however applicants may apply for both to be included in one SRDI project. Keep in mind, this is a higher development risk for the HTFC and the applicant must show strong capacity to include both in the SRDI project. 36. Question: Are architect's drawings required to be uploaded? 6
No, architect s drawings, plans, specifications, scopes of work, cost estimates, etc. do not need to be uploaded as a part of the application. However, they will be reviewed as a part of the contract execution process. 37. Question: Is a partnership between two not-for-profits acceptable as an owner operator? Or can one not for profit with limited development experience hire another not for profit to manage the property? The SRDI project cannot be co-owned with another entity. The SRDI Developer-owner can hire/contract with another non-profit to handle the long term management. 38. Question: Will there be any recording fees associated with the filing of the HOME deed restriction? The HOME Regulatory agreement and note and mortgage will be publicly filed on the project site (could be single site or multiple sites). The HTFC will provide an affidavit of exemption for recording fees for SRDI, allowing recording fees to be exempt. However, there are other legal fees that may be applicable. Applicants are urged to include funds in the budget for overall legal fees related to the SRDI project. 39. Question: Under Section 2B-1 of CDOL I am unable to select the activities to be provided or to indicate if the staff is being paid with HOME funds. Those two sections are grayed out and will not accept any data. The items in 2B-1 are grayed out intentionally. Please refer to the CDOL Application Instructions pages 13 and 14 posted on http://www.nyshcr.org/funding/srdi/. 2B. Program Administration, 2B-1. Key Staffing & Activities: Complete this section for each key staff member who will be responsible for the activities listed on the page. 1. Enter the name of the person responsible for one of the listed activities. 2. Enter the person s title. 3. Select the person s employer from the drop-down menu. 4. Qualifications - Describe Developer-owner specific staff experience or training relevant to the implementation of the proposed project. Include qualifications, licenses and certifications. Provide estimate of time to be committed in support of the proposed project. 5. Activities check list, Other Activities box, and Paid with HOME Funds do not need to be completed and are not able to be selected. 40. Question: Our project is located in one county, but there are two sites with two different municipalities. In the CDOL 1C-1 Counties/Municipalities, which municipality should we select or is there a way to choose both? Please refer to the CDOL Application Instructions pages 11 and 12 posted on http://www.nyshcr.org/funding/srdi/ with the other SRDI application documents. 7
1C. Program Detail Information, 1C-1. Counties/Municipalities 1. Project County: Select the county from the drop-down menu. 2. Countywide: Indicate whether the project proposed is scattered site or will serve the entire county. 3. If yes is selected for the above question, click submit and go on to the next page. If no is selected, choose the municipality to be served from the drop-down Municipality menu. Click submit. The page will be redisplayed with the county name and selected municipality in a grid. If multiple municipalities are to be served, add another municipality by clicking the add button at the bottom of the grid. The county and municipality drop-downs will become available again. Select the county and municipality and click submit. Repeat this step until all project municipalities have been added. 4. If the project will serve multiple counties: Complete the steps outlined above. To add another county, click the add button. When the page is redisplayed, select another county from the drop-down menu. 41. Question: For a multiple site application, do we submit one budget covering all sites? As no two sites are the same, we suggest applicants submit a pro-forma budget workbook for each site/building. The Project Management Plan also requires scopes of work to be separate for each site/building. Applicants should submit an individual pro forma for each site and also an overall pro forma for the whole project that matches with the total amount requested in the application (by adding the numbers from the individual site pro forma). 42. Question: Can a project include demolition of an existing dilapidated building and new construction of another, assuming it can be completed in the three year time frame? The intent of SRDI is to do either rehabilitation or new construction, however applicants may apply for both to be included in one SRDI project. Keep in mind, this is a higher development risk for the HTFC and the applicant must show strong capacity to include both in the SRDI project. 43. Question: Regarding ownership: we are a non-profit and sole owner of our HDFC. Can the non-profit own one site and the HDFC own the other two? Answer No, all sites included in the SRDI project must be owned by the applicant, under common ownership, financing and management. 44. Question: In preparing the Management Plan questions, do we insert our responses or can we provide attachments? For example, should we attach our Affirmative Marketing Plan and Tenant Selection Plan? We have developed these for our other projects, so can we update them and attach to the Management Plan questions. No, please refer to the Project Management Plan Question directions which request a 1 page maximum summary of the proposed plans: all responses (14 questions to respond to in total) 8
are limited to a 1 page maximum, typed in 12 point, Arial font with moderate margins. For all responses, please list the question asked before the written response. Do not upload Plans, only the summary. 45. Question: I am preparing an application for a property for which the ownership entity is an affiliate organization the essentially just holds the property. All management activities and staff that support its operation are part of the parent not-for-profit. Should the SRDI application for the property be submitted by the parent or the ownership entity? If applicant is a CHDO, then the applicant must be the ownership entity, as the HOME funds must be provided to the entity that owns the project. If the applicant is not a CHDO, then the entity that is in control of the common ownership, financing and management may be the applicant. Applicant/Ownership Requirements: From the RFP, the following are eligible applicants: Non-profit Corporations incorporated under State Non-profit Corporation Law, Community Housing Development Organizations (CHDOs), Public Housing Authorities and Non-profit subsidiaries, known as the developer-owner in SRDI documents. The Developer-owner must be the sole and exclusive owner of the property during development and the required POA, typically 15 to 20 years. The project cannot be coowned with another entity. All sites included in the SRDI project must be owned by the nonprofit applicant under common ownership, financing and management. The Developer-owner must own or will own the project in fee simple absolute title or have a long term ground lease that is at a minimum, equal to the term of the period of affordability. Non-profit Subsidiary Ownership Requirements: Rental housing that is sponsored by the non-profit applicant that is owned by a subsidiary of the non-profit such as a limited partnership of which the non-profit applicant or its subsidiary is the sole general partner, or a limited liability company of which the non-profit applicant or its subsidiary is the sole managing member must be a single purpose, wholly owned entity of the non-profit applicant. 46. Question: Can SRDI funds be used to rehabilitate occupied buildings? Answer Yes, however you must address rules regarding Relocation in federally funded projects, if necessary. See the Project Management Plan for more details. 47. Question: Can you do rehabilitation with tenants in place? It depends on the work to be performed. An applicant should know what is specifically required in regard to an occupied building and housing rehabilitation. For example, tenants may need to be relocated temporarily due to lead based paint or asbestos work. 9
48. Question: Is Westchester County eligible for NYC maximum HOME limits? Yes. 49. Question: If a project elects to serve a special needs population, is there a certain percentage of the total number of units that qualifies as meeting the special needs for this application/program? The RFP describes the rating factors and maximum point values. Projects serving Persons with Special Needs targeted receive up to 10 points. For scoring, the more units that are targeted to special needs populations, the more points the application will receive. There is no minimum percentage of units that must be targeted to persons with special needs. In order to receive full points, the project must serve 100% special need populations. 50. Question: Will you verify/clarify when the choice limiting action clock begins as it pertains specifically to SRDI? For all SRDI applicants, the clock begins on the release date of the RFP, March 15, 2017. Although this is more restrictive than the date of application requirement, it has been approved by the HCR Environmental Analysis Unit (EAU). 51. Question: Can PHAs qualify and can apply for SRDI as stand-alone entities without a not-for-profit subsidiary? Yes, PHA s are not required to have a non-profit subsidiary and can apply themselves, as the PHA, as a stand-alone entity. 52. Question: How do I assess how much in HOME funds can be spent on common areas in the project? Proration is based on square footage. The square feet of the HOME assisted units is divided by the total residential square feet of the project yields the percentage of common costs that may be paid with HOME funds. 10