2012 qualified allocation plan forum september 1, 2011
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2012 Qualified Allocation Plan
Forum
September 1, 2011
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2012 Qualified Allocation Plan Forum
WELCOME
&
INTRODUCTIONS
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2012 Qualified Allocation Plan Forum
Agenda
9:05 – 9:35 am The New Real Estate Department
9:35 – 10:15 am
2012 – 2013 QAP Changes
10:15 – 10:30 am
Networking Break Presented by NEF
10:30 – 11:30am
What Makes a Good Market Study, Indiana Style
11:30 – 1:00 pm
Lunch (On Your Own)
1:00 – 1:50 pm Legislative Update
2:00 – 2:45 pm Debt Financing For Housing Credit Developers
2:45 – 3:00 pm Networking Break Presented by AHAIN
3:00 – 4:00 pm Dialogue With The Equity Experts
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IHCDA Real Estate Department
Community Development
Multifamily
Real Estate Department
Production
Underwriting
Design & Construction
Review
Compliance & Asset
Management
Business Development
& Special Projects
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Real Estate Department
J. Jacob SipeCREDO
Brian PhilpsBusiness Dev. & Special Projects
Adrienne SchmetzerDesign & Const.
ReviewJeff IsaacsDeputy Director of
Production
Larry GrubbsUnderwriting
Matt RayburnCompliance &
Asset Mgt.
LaTrina AkinsCoordinator
Ryan SplichalSystem
Specialist
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Real Estate Department
Programs Administered by RED:• Qualified Allocation Plan
• Section 42 – Rental Housing Tax Credits• HOME & Development Fund
• Tax Exempt Bond Financing
• Strategic Investment Process• HOME Investment Partnership Fund• Community Development Block Grant & Disaster• Indiana Development Fund
• Neighborhood Assistance Program (NAP)
• Home Again• Money Follows The Person
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Production DivisionJeff Isaacs, Deputy Director of Real Estate Production
Qualified Allocation Plan
Strategic Investment Process
Matt Hutchinson, Real Estate
Production Analyst, Northwest
Talisha Bradley, Real Estate
Production Analyst, North Central
Megan Coler, Real Estate
Production Analyst, Northeast
Alan Rakowski, Real Estate
Production Analyst, Southwest
Carmen Lethig, Real Estate
Production Analyst, Southeast
Greg Majewski, Homeless Prevention
and Housing Specialist
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Underwriting Division
Underwriting
Jennifer MillikenRegion IReal Estate Investment Underwriter
Susan ShepherdRegion II Real Estate Investment Underwriter
Closing
Jack PowellClosing Agent
Larry GrubbsManager
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Adrienne SchmetzerManager
Design and Environmental
ReviewPhysical Inspection
Doug NewportDavid Pugh
Architectural Design & Construction Review Division
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Compliance & Asset Management Division
Closeout Audits
Mike Recker Sr. Compliance
Auditor
Devyn Smith Compliance
Auditor
Ongoing Complianc
e
Jeff Ivory Sr. Compliance
Auditor
Anika Davis Compliance
Auditor
George McMannis
Compliance Auditor
Matt Rayburn, Compliance & Asset Manager
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2012-2013 QAP Process
1. Application Deadline: November 1st – 5 p.m.
2. Within 14 days you will receive a memo outlining the anticipated important dates:1. CNA Site Visits 2. IHCDA LUG Notification3. Clarification/Technical Correction Letters4. Underwriting Letters
1. Financial Analysis2. Letters of Interest
5. Market Study Clarification Letters6. Preliminary Score Sheet7. Reservations: February 23, 2012
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2012-2013 QAP Sections
1. Housing Priorities
2. Set Aside Categories
3. Threshold Requirements
4. Evaluation Factors
5. Miscellaneous
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2012-2013 QAP Housing Priorities
Comprehensive Community Development
Aging In Place
Ending Homelessness
High Performance Building
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2012-2013 QAP Set Aside Categories
% of Available RHTC’s
Set Aside Category
10% Not-for-Profit
10% Community Impact
10% Elderly
10% Large City
10% Small City
10% Rural
20% Preservation
10% Housing First
10% General
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2012-2013 QAP Set Aside Categories
CHANGES:
• Page 7 – USDA Rural Development Properties are required to follow the definition of elderly per Appendix 1 to HB-1-3560.
• Page 8 – Eligible Housing First applicants who complete the Indiana Supportive Housing Institute may apply during the open round as defined in Section H.1:Miscellaneous – Application Dates.
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2012-2013 QAP Threshold
CHANGES:
• Page 12 – Applicants must notify IHCDA at least 30 days prior to the application submittal (Monday, Oct. 3), submitting Form C to IHCDA electronically via: [email protected].
• Page 13 – The market study must be no more than six months old at the time of submission to IHCDA.
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2012-2013 QAP Threshold
CHANGES:
• Page 13 – All additional documentation (e.g. certifications, letters, etc.) requested by the Authority must be issued/dated within six months prior to the application deadline.
• Page 16 – Development site information must include current photographs, including images looking out toward each of the cardinal directions. Rehabilitation projects must include images of each façade of theexisting structure(s) as well.
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2012-2013 QAP Threshold
CHANGES:
• Page 20 – Fair market appraisals must be completed no earlier than 6 months from the application deadline.
• Page 22 – Underwriting Guidelines: Replacement Reserve is required for all developments and must be included in the operating budget, but is not included as part of the operating reserve.
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2012-2013 QAP Threshold
CHANGES:
• Page 24 – The amount of RHTCs reserved for allocation to any person, entity, owner, developer or applicant may not exceed $1,500,000.
• Page 26 – Contractor Fee Limitations: The Authority will permit saving in a particular Contractor Fee line item to offset overruns in other Contractor Fee line items; provided, however, that total ContractorFees do not exceed 14%.
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2012-2013 QAP Threshold
CHANGES:
• Page 26 – Architect Fee Limitations: Site work included with total hard costs, general requirements, overhead, profit, and construction contingency.
• Page 26 – Related Party Fees: The applicant, owner, and consultant must disclose all related party fees within the initial application budget.
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2012-2013 QAP Threshold
CHANGES:
Minimum Development Standards
• Page 27 – Vinyl siding must be at least Residential Grade (.042 mm) in thickness.
• Page 28 – All new construction developments must be built in accordance with the accessibility requirements of the Fair Housing Amendments Act of 1988.
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2012-2013 QAP Threshold
CHANGES:
Minimum Development Standards
• Page 28 – Developments receiving federal funds or HUD Program funding must be built and designed in accordance with Section 504.
• Page 28 – For rehabilitation of buildings constructed of masonry shell, option of coating with materials that prevent air movement.
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2012-2013 QAP Threshold
CHANGES:
Performance Violation
• Pages 30-31 – Fines, Negative Points, Reduction of Credits, Suspension and/or Debarment.
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2012-13 QAP Threshold
Threshold Pitfalls to Avoid
1. Notice to IHCDA (Form C) is not submitted at least 30 days prior to application submittal.
2. Documents are not properly labeled and placed in the correct tabs.
3. Documents are more than 6 months old.4. Not including affidavits from all development
team members.5. Failing to identify the specific location of the
accessible units.
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2012-2013 QAP Evaluation Factors
1. Rents Charged 28 Points
2. Development Characteristics 93 Points
3. High Performance Housing 21 Points
4. Financing & Market 29 Points
5. Other 33 Points
Total 204 Points
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2012-2013 QAP Evaluation Factors
Changes:
• Page 31 – Applicants must score a total of 110 or more.
• Page 37 – Universal Design Features: Blue Ribbon (4 universal design features) shall be awarded 5 points.
• Page 41 – Development Historic in Nature: Additional detail on required documentation.
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2012-2013 QAP Evaluation Factors
Changes:Infill
• Page 43 – IHCDA defines infill housing as the process of developing vacant or underused parcels of land within existing urban areas that are already largely developed or previously developed.
• Page 43 – Four Infill Attributes with points attached to each; description of how the site will return vitality to the neighborhood.
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2012-2013 QAP Evaluation Factors
Changes:
Local Redevelopment Plan
• Page 46 – Plan must include a narrative listing the location and page number of all required items within the plan.
• Page 46 – Required documentation must include a brief description of the community engagement process.
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2012-2013 QAP Evaluation Factors
Changes:
Off Site Improvement, Amenity and Facility Investment
• Page 48 – Minimum cost for improvement based on development location.
• Large City - $100,000• Small City - $50,000• Rural - $25,000
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2012-2013 QAP Evaluation Factors
Changes:
• Page 49 – Phased Developments: At least one or more phases must have received an allocation of RHTCs or at least one phase has begun construction.
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2012-2013 QAP Evaluation Factors
Changes:
• Page 54 – Previous Funding within a Local unit of Government: Inclusion of 1602.
• Page 55 – Certified Tax Credit Compliance Specialist: Property management consultants or subcontractors do not qualify as an eligible Management Entity.
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2012-2013 QAP Evaluation Factors
Changes:
Minority Business Enterprise and Women Business Enterprise
• Page 56 – Inclusion of Federal Disadvantaged Business Enterprise (DBE) Participation, Veteran-Owned Small Business (VOSB), and Service Disabled Veteran Owned Small Business (SDVOSB).
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2012-2013 QAP Evaluation Factors
Changes:
Minority Business Enterprise and Women Business Enterprise
• Page 57 – Non-profit entity can receive points as an Owner/Developer or Management Entity if at least 51% of the Board are minorities, females, or persons with disabilities (evidence required).
• Page 57 – Eligible firms/entities include professional services, contractor, sub-contractors, owner/developer, and management entity (minimum 2 year contract).
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2012-2013 QAP Evaluation Factors
Changes:
Minority Business Enterprise and Women Business Enterprise
• Page 58 – Points based on percentage of total development cost.
• Page 58 – Must provide all applicable contracts and certifications at the time of final application which demonstrate the commitment of percentage has been met.
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2012-2013 QAP Evaluation Factors
Changes:
• Page 59 – Unique Features: Points range from 7 to 0.5.
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2011 QAP Threshold
Scoring Pitfalls to Avoid
1. Unit Size – floor plans do not contain the exact total square footage or is not legible.
2. Unique Features – not described in the narrative summary.3. Supporting documentation in the wrong tab.4. Form C is not signed by the highest elected official or
authorized designee.5. Loss of 4 points and $150 fine for not submitting a Semi
Annual Progress Report by June 31 and December 31(applicable to all developers with a pending 8609 development including 2011 reservations).
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Application Best Practices
1. Submit a copy of all documents on CD-Ra) Organize in application orderb) PDF, legible format
2. Self-score sheetsa) Show your work for calculationsb) Include notes if score sheet suggests
(desirable site)
3. One file per application
4. Label all documents with development name
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2012-2013 QAP Miscellaneous
Program Application Deadline Anticipated Reservation Date
Rental Housing Tax Credit November 1, 2011
November 1, 2012
February 23, 2012
February 28, 2013
Housing First Rental Housing Tax Credit
March 12, 2012 until September 3, 2012
March 11, 2013 until September 2, 2013
60 days from the application submission
Private Activity Bond Round
March 12, 2012 until June 8, 2012
March 11, 2013 until June 10, 2013
60 days from the application submission
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2012-2013 QAP Miscellaneous
1. IHCDA Supplemental Application Fee is $500 (regular application fees remain the same).
2. 150 Day Documentation must include certification that the owner has obtained a username and password at www.ihcdaonline.com.
3. Carryover Allocations – On or before the first Monday in July; on or before the first Monday in November for reservations after June 1st.
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2012-2013 QAP Miscellaneous
4. IHCDA Rental Housing Tax Credit Compliance Seminar Certificate – Owners not issued an 8609 from IHCDA within the last three years must successfully complete the IHCDA On-Demand Owner Training.
5. Exchange of credits will require payment of a nonrefundable reservation fee of 4% of the annual amount of RHTCs for the development
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Underwriting Guidelines
• Review for compliance to underwriting guidelines published in 2012-2013 QAP, pages 21-23.
• % of Developer Fee elected to be deferred; is this reflected in proforma and can it be repaid during 15 year
compliance period?
• Permanent debt amount and terms; verify that debt service reflected in proforma is correct.
• Determine if additional IHCDA funds request is necessary; is DCR on high side; is cash flow such that request
could be reduced and/or deferred developer fee be increased; should requested terms be revised?
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Underwriting Guidelines
• Evaluate project’s “cost reasonableness” based on third party estimating software.
• Evaluate market studies submitted by the applicant.• Work with RPRG to follow up with applicant on
any concerns identified from the market demand analysis.
• Provide an opinion on project demand and potential impacts on vacancy rates and reserves, as well as relationship to existing IHCDA properties.
.
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Underwriting Guidelines
• Issue Financial Analysis Letter to applicant to:• Confirm requested tax credit amount and any
requested additional IHCDA funding. • Request clarification of items outside guidelines
and industry norms.• Request any additional information to complete
review.
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Underwriting: Final Applications & 8609s
• Underwriting also reviews all Final Applications and re-underwrites the project to ensure that the final budget still meets IHCDA underwriting guidelines.
• Issue 8609s• Watch for an upcoming RED notice on “Tips for
Completing Final Applications” and a revised Final Application.
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Application Submission Guidelines:Schedule G
Changes:• Tabs A-U will now be submitted electronically (Tab A
requires paper and electronic submission)• All documents need to be save as a PDF• All documents should be placed in an electronic
folder, labeled accordingly• All folders (A-U) should be saved on either a CD-ROM
or a flash drive and turned in with your application