CDBG Applicant’s Workshop Housing Session (Basic)

1. CDBG Applicant’s WorkshopHousing Session (Basic) WELCOME!

2. CDBG Housing • Types of Grants • Single Activity: • Housing Activities Only • Multi-Activity: • Housing PLUS Infrastructure Activities Note: Both Single-Activity and Multi-Activity are eligible for Revitalization Area Bonus Points

3. CDBG Housing • Assessing Needs • What are the needs community wide? • Are there concentrations of substandard housing? • Are there infrastructure needs in the same area? • Determine the project area and type…

4. Single Activity • Only Addresses Housing Activities • May Include Several Activities • Rehabilitation • Reconstruction • Acquisition • Relocation • Demolition

5. Single Activity • Limit of $500,000. • May be City/County Wide, Target Area, Targeted to a Specific Group • Elderly • Handicapped • Working Families with Children

6. Multi- Activity • Traditionally Includes Housing AND Public Facilities Activities • Can include Economic Development Activities • Limit of $800,000. • Inter-related Activities

7. Multi- Activity • Same Target Area • Comprehensive (Meets all/most of the Needs in the Target Area) • Reasonable Distribution of Funds Between Activities

8. Eligible ActivitiesCDBG Single Activity HousingMaximum $500,000. • Rehabilitation – Of substandard housing • Reconstruction – Where Unfeasible to Rehab

9. Eligible ActivitiesCDBG Single Activity HousingMaximum $500,000. • Acquisition - of Real Property • Disposition – Costs Incidental to Disposing of Property Acquired with CDBG Funds • Code Enforcement

10. Eligible ActivitiesCDBG Single Activity HousingMaximum $500,000. • Clearance – Of Dilapidated Structures, out-buildings, and Other Items • Interim Assistance • Relocation – Temporary or Permanent • Removal of Architectural Barriers

11. Eligible ActivitiesCDBG Single Activity HousingMaximum $500,000. • Home Ownership Assistance • Down Payment • Closing costs NOTE: DCA policy mandates use of fixed rate mortgages on all CDBG funded projects

12. Eligible ActivitiesCDBG Single Activity HousingMaximum $500,000. NOTE: New Construction is NOTeligible unless as “last resort” OR approved Community Based Development Organization is used.

13. Eligible Activities Multi-Activity Can Include Public Facility/Economic Development ImprovementsMaximum $800,000. • Water Improvements • Sewer Improvements • Street Improvements • Economic Development • Job creation/retention • Redevelopment of Slum & Blight

14. Eligible Activities Multi-Activity Can Include Public Facility/Economic Development ImprovementsMaximum $800,000. • Drainage Improvements • Limited Recreation Facilities • “Tot Lots” • Playgrounds

15. Eligible ActivitiesRevitalization Area Strategy Maximum $800,000. • Officially adopt a local Redevelopment Plan in accordance with the Urban Redevelopment Act O.C.G.A. 36-61. • Eligible area of Census Block Group(s) of 20% or greater poverty level. • Develop strong local partnerships focusing local resources within the Revitalization Area. • Submit application for designation to DCA. • Must be designated by DCA.

16. CDBG HousingApplication Review Process • Application Read and Reviewed by the Housing Panel • Rank and Score based on: • Feasibility of Project • Strategy Proposed • Impact of Project

17. Feasibility Considerations • Property Standards • Outside Services and Resources • Lead Based Paint • Funding Sources and Commitments • Operation Oversight • Maps and Overview • Selling Your Project • Costs

18. Feasibility Considerations If Infrastructure improvements are requested, Include preliminary engineering report • Describe infrastructure needs and work to be performed • Include cost estimates

19. Minimum Property Standards • Realistic Minimum Property Standards – you determine what standards you want in your community. • Property Standards and Construction Standards. • Code Violations and Incipient Violations. • First priority should be given to Health, Safety, and ADA compliance.

20. Outside Services and Resources • Architects, Engineers, Abatement Specialist, Environmental and Soils Specialist, etc. • Identify service required and what service will be rendered. • Establish estimated cost. • Procure a FIRM commitment letter specifying on-going services on a cost-per-hour or per project basis.

21. Lead Based Paint (LBP) • LBP testing is required on any structure built before 1978. • Testing and remediation services are licensed and certified by the state. • Abatement can be costly, budget 25% of estimated rehab cost. • Be prepared to seek services outside your local area. Consider travel and other expenses when preparing your estimate.

22. Funding, Partnerships, Other Resources • Obtain FIRM commitment letters from all parties. • Ensure that the commitment letters are issued and signed by authorized individuals. • Pledges of support without commitment letters will not be considered. • Indicate how each will be applied, at what point will these funds be released. • Owner contributions if required. • General Property Improvements (GPI) are not funded by CDBG. • Secure firm, convincing documentation of participation from investor-owners.

23. Schedules and Time tables • Who will provide oversight? • Develop and show a schedule of start and completion dates. Indicate milestones and inspection points.

24. Contracting and Construction • Very problematic area. • Qualifying contractors: guidelines and criteria. • “Pre-Bids” and “Scope of Work”. • Bidding process and bid acceptance protocol. • Contract negotiations. • Change Orders protocol. • Draw Request and approval process.

25. Maps and Photos • DCA Form 12 spells out what is required on map. • Prefer map to be in common scale. • Show details: existing structures, street names, subject area(s), schools, etc. • Must include key to photographs. • Indicate status of structure (e.g. occupied, vacant, absentee owner/rental, non-targeted structure. • Indicate rehab or reconstruction. • INCLUDE FINANCIAL PLAN FORM (EXHIBIT H)

27. Maps and Photos (cont.) • Photographs. • Show all 4 elevations if possible. • Interior photos should clearly represent condition of structure and problems described in narrative. • Photographs of the owner, his or her family, children, in-laws, family pets, automobiles, etc. are not required.

28. Unit # 10 Roof Leak

29. Unit #10 Roof Leak Damage

30. Selling it to DCA • Exactly WHAT this project will achieve. • Exactly WHY do you need this project. • Exactly WHO will the project impact. • Exactly HOW you will accomplish the project. • Exactly WHERE the target area(s) are located. • DATA, we love data! • BE SPECIFIC!

31. Feasibility Considerations(Lead Based Paint) • Lead-Based Paint • Regulation Applies to all Housing Built Prior to 1978 • Demonstrate understanding of regulation requirements

32. Feasibility Considerations • Financing Technique(s) BE SPECIFIC • Deferred Payment Loans • Leveraged Loans/Interest Buy Downs • Who are your partners • Include participation formula • Know your community! Be realistic with participation formula

33. Feasibility Considerations • Confirmation of proposed resources and partners • Compliance with Applicable Laws • Investor Owner Eligibility • Financing: 50%, DPL at full term. • Rent Regulatory Agreement • Timetable for proposed accomplishments

34. Feasibility Considerations • Unit by unit analysis of proposed activity • Include per unit cost estimate • Include description of proposed work needed with pictures illustrating problems (exterior and interior) • Complete “Financial Plan” Form (Appendix H) • Descriptive map of all units targeted

35. Strategy Considerations • Describe Severity of problems • Demonstrate needs in narrative AND with Pictures • Alternatives to Strategy • Discuss other possible strategies and why the strategy proposed is best for problems described

36. Strategy Considerations • Discuss plan to prevent re-occurrence of problems addressed in grant proposal • Adoption of policies or ordinances • Code enforcement • Ongoing maintenance

37. Strategy Considerations • Multi-Activity Projects Describe how the project will affect stabilization and/or revitalization of: • Target Area • Community as a whole

38. Strategy Considerations • Marketing of Program • Who has expressed interest in Program? • How will interest be generated? • Are residents supportive of the program? • Document Commitment from Owner Occupants and Investor Owners!

39. Impact Considerations • Impact Of Project • Document severity of need • Describe the effect the proposed project will have on the identified needs as well as the community as a whole • How many persons will benefit • Overall CDBG Cost per person

40. Successful Strategies Owner Financial Participation Percent of Rehab Cost: • Required participation is fixed percentage of estimated rehab cost: “Participants will be required to pay 10% of the cost of their rehab” • Rehab cost = $20,000 • Required Participation = $2,000

41. Successful StrategiesFinancial Participation Percent of Rehab Cost Sliding Scale of Income: • Required participation is based upon income level: “Participants whose income is below 30% of AMI are required to pay 3% of the cost of their rehab…” • Rehab cost = $20,000 • Required Participation = $600

42. Successful StrategiesFinancial Participation Percent of Rehab Cost …for higher income level: “Participants whose income is between 30% and 50% of AMI are required to pay 7% of the cost of their rehab.” • Rehab cost = $20,000 • Required Participation = $1,400

43. Successful StrategiesFinancial ParticipationPercent of Rehab Cost …for highest income level: “Participants whose income is between 50% and 80% of AMI are required to pay 11% of the cost of their rehab.” • Rehab cost = $20,000 • Required Participation = $2,200

44. Successful StrategiesFinancial Participation • Percent of Income: • Required participation is fixed percentage of Annual Income “Participants will be required to pay 8% of their annual income” • Annual Income = $9,000 • Required Participation = $720

45. Successful StrategiesFinancial Participation - Percent of Income Percent of Income (cont.): “Participants will be required to pay 8% of their annual income multiplied by the term of the DPL” • Annual Income = $9,000 • 8% of Annual Income = $720 • X 5 (length in years of DPL)=$3,600

46. Successful StrategiesFinancial Participation - Percent of Income Percent of Income (cont.): “Participants will be required to pay 5% of their annual income multiplied by the term of the DPL” • Annual Income = $9,000 • 5% of Annual Income = $450 • X 5 (length in years of DPL)=$2,250

47. Successful StrategiesFinancial Participation - Percent of Income Add a sliding scale of income to percent of income… Required participation is a fixed percentage of income based on income level: “Participants whose income is below 30% of AMI are required to pay 3% of their annual income…”

48. Successful StrategiesFinancial Participation - Percent of Income …for higher income level: “…Participants whose income is between 30% and 50% of AMI are required to pay 6% of their annual income…”

49. Successful StrategiesFinancial Participation - Percent of Income …for highest income level: “…Participants whose income is between 50% and 80% of AMI are required to pay 9% of their income…”

50. Successful StrategiesFinancial Participation - Percent of Income Another option would be to add “…over the term of the DPL.” to some/all of the previous examples DPL - (Deferred Payment Loan)