CHDO Program Changes October 30, 2012 Laurie Linden

1. CHDO Program Changes October 30, 2012Laurie Linden

2. Discussion Topics • Purpose for Proposed Rule • HOME Proposed Rule changes • CHDO Capacity • CHDO Re-designation Process

3. Purpose of Proposed Rule • Address CHDO capacity/performance issues • Improve monitoring/oversight of funded entities and projects • Facilitate troubled rental project workouts • Improve project underwriting and siting decisions • Clarify existing regulations

4. HOME Proposed Rule Changes • MFA is required to assess: • a developer’s capacity; • financial condition; • market need for the project; and • long-term viability before committing HOME funds • MFA will be required to certify that these assessments have been completed at the time of project funding in IDIS

5. HOME Proposed Rule Changes • Projects not completed within four years from the date of project commitment would be considered terminated • Repayment of HOME funds would be required for any unit that is not rented to eligible tenants within 18 months of project completion • Homebuyer units not sold within 6 months of completion of rehab or construction will be converted to rental units and operated as rental for the affordability period for rental projects (20 years for new construction)

6. HOME Proposed Rule Changes • FHA Single Family Mortgage Limit (203(b)) eliminated from regulations. PJs must use actual 95% of AMI for MSA/County as sales price/after rehab value limit

7. CHDO Capacity • Demonstrated Capacity requirement can no longer be met using consultants, volunteers, or person whose services are donated • CHDO capacity definition changed to mean that to qualify as a CHDO, organization must have paid staff with housing experience • PJ must certify organization meets definition of CHDO each time it commits funds • PJ must document that CHDO has capacity to own, develop, or sponsor housing each time it commits funds

8. CHDO Reservations and Expenditure Deadline • Makes several changes to the requirements of CHDOs and funding awarded to CHDOs. • General CHDO reservations would be eliminated and PJs would be required to commit CHDO set-aside funds to specific CHDO projects within 24 months. • HUD would deobligate CHDO set-aside funds not expended within five years of obligation to the PJ

9. Property Standards • New property standards for: • New Construction 92.251(a) • Rehabilitation: requires written standards 92.251(b) • Acquisition of Standard Housing 92.251(b) and 92.252(b) • Manufactured Housing • Ongoing property standards for Rental Housing • Capital needs assessment required for multifamily rental projects greater than 26 units 92.251(b)(iii)

10. On Site Inspections • Rental – must establish ongoing inspection procedures to meet 92.251 standards • Inspect within 12 months of completion • At least once every 3 years thereafter • Minimum standard will be UPCS*, not HQS • Must meet State/local code or UPCS, whichever is more stringent *UPCS = Uniform Physical Condition Standards

11. New Affirmation Checklist • Legal Status • CHDO Staff and Experience • CHDO Developer Capacity and Experience • Marketing Plan and/or managing rental units • Fiscal Soundness • Other factors

12. Legal Status • Provide all amendments to the organization’s articles of incorporation or by-laws or resolutions enacted by the organization’s board of directors since MFA’s most recent CHDO certification. If there are no changes, please indicate that no changes have been made.

13. Capacity – CHDO Staff and Experience a) Provide a list of paid staff engaged in organization’s housing development activities. • Indicate whether staff is full time, part time or consultant. • Staff must have relevant experience in one or more of the following housing activities: • Homeownership development • Rental Development • Other real estate development and management • Rehabilitation and other housing program administration. • For each staff member include job title, and number of years with organization in current capacity. • Attach resumes.

14. Capacity - CHDO Developer Capacity and Experience • b) Current Performance: • Provide name of project for which organization is currently receiving HOME development funds or MFA CHDO operating funds. • c) Past Performance: • Provide name of past projects for which organization received HOME development funds or MFA CHDO operating funds.

15. Capacity - CHDO Developer Capacity and Experience • d) Provide policies and procedures which govern agency’s development activities. • e) Provide current project pipeline. • f) Board Expertise/Skills: • Provide current Board List to include Board member’s name, employer, # of years on Board, term and which group is served (e.g. government, low-income or at-large sectors). • Provide resumes for all Board members • Provide Articles of Incorporation or By-laws that for Board oversight of planning and development.

16. Marketing Plan and/or managing rental units • Provide agency’s marketing plan if developing homebuyer units and or managing rental units. • Provide staff certifications for homebuyer counseling (if applicable).

17. Fiscal Soundness • Provide a copy of agency’s Fiscal Policies and Procedures. • Provide a copy of most current financial audit (dated no later than 2011). • Provide copy of last 6 months of financial statements.

18. Other factors • g) Identify organization’s service area (counties listed on original application for CHDO designation or on subsequent approved amendment to service area). • h) Low Income Participation • Provide a copy of section on organization’s bylaws that describes the formal process set for low income beneficiaries to advise organization on decisions. • Provide a copy of the minutes of meetings with low income beneficiaries or a narrative of the process, as applicable and in compliance with bylaws.

19. Timelines • CHDO re-affirmation letters being mailed November 1, 2012 • Responses are due back to MFA no later than December 15th. • Designations are for one calendar year (Jan 1 – Dec 31) regardless of when you initially applied for CHDO designation • Tentative release date for CHDO Ops RFP is January 16, 2013.