community home investment program (chip). staff brian williamson, director community development and...

Community HOME Investment Program (CHIP)

Staff

• Brian Williamson, DirectorCommunity Development and Finance Assistance Division

• 404 – 679 – 1587• Steed Robinson, Director

Office of Community Development404 - 679 – 3168

• Jane Keefe, Affordable Housing Programs Manager404 – 679 - 3167

• Kay Garrison, CHIP Consultant404 – 679 - 0573

• Angela Davis, Grants Management Specialist404 – 679 - 1591

History of the HOME Program

Created by the National Affordable Housing Act

• To provide decent affordable housing to lower-income households

• Expand the capacity of non-profit housing providers

• Strengthen the ability of state and local governments to provide housing

• Leverage private-sector partnerships

History of the HOME Program (continued)

• HOME funds are allocated by formula to States

• DCA used part of its allocation to fund the Community HOME Investment Program (CHIP) - $3 million - $6 million/year

• HOME regulations are at 24 CFR Part 92

CHIP Funding to Date

• To date, DCA has awarded over $42.4 million in CHIP funding

• $ 24.9 million has been expended by local governments on CHIP projects

• Other $17.5 million is actively at work today

Eligibility

• Eligible Local Government Applicants▪ Local governments not designated by HUD as

Participating Jurisdictions (PJ’s) under the HOME program

▪ Includes jurisdictions not eligible under DCA’s State Administered CDBG Program that are also not HOME PJ’s

▪ List of Ineligible HOME PJ’s follows

Ineligible HOME PJ’s

• Albany, Atlanta, Macon, Savannah• Roswell, Marietta• Athens/Clarke County Consolidated

Government• Augusta/Richmond County Consolidated

Government• Columbus Consolidated Government• Clayton, Cobb, Dekalb, Fulton and Gwinnett

Counties

Other Eligibility Requirements

• Compliance With State Planning and Financial Reporting Laws

▪ The Georgia Planning Act▪ The Service Delivery Act (HB 489)▪ The Local Government Audit Act▪ DCA Local Government Finance Report

Restrictions on Eligibility

• Prior Recipients of CHIP Funding

▪ Resolve outstanding audit/monitoring concerns

▪ Acceptable level of expenditure and performance

Eligible CHIP Activities

• Homeowner Rehabilitation

• Homebuyer Activities

• Rental Housing

Ineligible Activities

• Project reserve accounts

• Tenant Based Rental Assistance per DCA

• Match for other federal programs, except McKinney Act funds

• Operations or modernization of public housing

• Pre-payment of loan income mortgages under 24 CFR 248

• Double-dipping

Ineligible Activities (continued)

• Reimbursement of State Recipient Owned Property

• For property used for non-CHIP purpose

• For property in its inventory

• Cannot be used for rental assistance if receipt of funds tied to occupancy in a particular project – known as Project Based Rental Assistance

• While HOME regulations allow tenant based rental assistance, DCA does not allow tenant assistance as an eligible CHIP activity

Ineligible Activities (continued)

Basic HOME Rules

• Definition of a Project

• Form of Subsidy

• Amount of Subsidy

• Eligible Costs

• The Property

• The Applicant or Beneficiary

• The Long-term Affordability of Project

• Applicability of Other Federal Requirements

Basic HOME Rule – Subsidy Limits

• Must have a minimum of $1,000 per project not to exceed:

▪ $102,155 - 0 BR unit▪ $117,100 - 1 BR unit▪ $142,395 - 2 BR unit▪ $184,211 - 3 BR unit▪ $202,209 - 4 BR unit

Basic HOME Rule – The Property

• Property Type (s)▪ For Homebuyer Activities

• Must serve as principal residence

• Single-family

• Two-to-four-unit property

• Cooperative

• Mutual housing project if recognized as homeownership by state law

• Manufactured home


• Property Types (s)▪ For Rehabilitation Activities

• Occupied by income eligible homeowner• Must be owner’s principal residence• Includes:

– Traditional single-family housing owned in fee simple

– A condominium unit– A cooperative unit– Mutual housing– Manufactured home


• Property Types

▪ For rental activities

• One or more buildings on a single site, or multiple sites that are under common ownership, management and financing

Note on Manufactured Housing Activity

• Maximum of $5,000 in CHIP for reconstruction, down payment or second mortgage assistance if “used” manufactured housing unit

• “Used” manufactured housing unit can be no more than five (5) years old

Note on Manufactured Housing Activity

• Maximum of $7,500 in CHIP for reconstruction, down payment or second mortgage assistance if “new” manufactured housing unit

• Maximum total funding (both CHIP and other funds) for manufactured housing rehabilitation is $5,000


• Property Value

• Homebuyer -- Cannot exceed $200,160

• Rehabilitation -- Cannot exceed $200,160, after rehabilitation

• *Higher limits in MSA’s – See Appendix I in Manual


• Property Standards

▪ Must meet state and local codes▪ Must have written rehabilitation standards

similar to work specifications and generally describe the method and materials to be used when performing rehabilitation activities

▪ New construction must meet model energy code

▪ Handicapped accessibility, if applicable


• Property Standards (continued)

▪ Senate Bill 443 for New Single Family ▪ Site and neighborhood standards at 24 CFR

983.6(b) apply only to new construction of rental housing

▪ For manufactured homes:

• New manufactured housing must meet the construction and safety standards of 24 CFR 3280

• Must be installed to state and local codes

Basic HOME Rule – The Applicant or Beneficiary

• Only for low-income or very low-income families and individuals

• Only for those whose annual gross income does not exceed 80% of median by household size

• Income limits are published by HUD annually by county

• Other targeting required for HOME rental properties

Basic HOME Rule – The Applicant or Beneficiary

• Appling County Low Income Limits

1 person 2 person 3 person

$26,000 $29,700 $33,400

4 person 5 person 6 person

$37,100 $40,100 $43,050

7 person 8 person

$46,050 $49,000

Basic HOME Rule – Long Term Affordability

Home Investment Per Unit Term

Less than $15,000 5 years

$15,000 - $40,000 10 years

More than $40,000 15 years

New construction – rental 20 years

Refinancing of rental housing 15 years

Basic Home Rule – Application of Other Federal Requirements

HOME is subject to a number of

other federal requirements

Other DCA Requirements

• Historic Preservation

• Citizen Participation

General Award Information and Requirements

• $3 - $6 million in CHIP for FFY 2008

Maximum award of $300,000

Remember!

• Bonus points for CHIP in designated DCA Revitalization Area

• ARMs or other variable rate or flexible mortgages reviewed by DCA

• DCA-5 and DCA-8 forms to differentiate proposed number of units for manufactured housing units versus stick-built units by activity

• DCA-4 to differentiate need for type of housing being proposed (manufactured housing versus stick-built)

• Applications to include copy of local governing body resolution

• Consider innovative concepts in design for in-fill neighborhoods as a possible “innovation” to gain additional points

Matching Requirements

• There are no matching requirements for CHIP

• DCA provides the non-federal match

Pre-Award Costs

• Pre-award costs are ineligible

▪ Preparation of applications

▪ Cannot be reimbursed if awarded CHIP

Procurement

• Applicable to private consultants, engineers, architects

• Not applicable to RDC’s/non-profits

• Must follow the Common Rule (24 CFR Part 85)

Compliance with Common Rule

• Develop a RFP▪ Indicate level of importance of evaluation factors

• Capacity of organization

• Current workload of applicant

• Applicant’s previous CDBG or CHIP housing experience

• Qualifications of key personnel

• Level of services provided

• Mobility/proximity to project

• Cost to perform services

• Local government’s experience with applicant

Procurement Process

• Publicize the RFP• Allow 30 days for responses• Send letter with RFP to at least 7 known

providers• Negotiate with at least 2 respondents• Evaluate proposals and document• Consult with counsel • Gain full council/commission approval• Sole source approval if only one response

Appendix E

• Supplemental CHIP Information▪ Be sure and review this Appendix for helpful

hints in making your application more competitive and complete

▪ Requirements for single-family or rental development projects

▪ Lead based paint requirements▪ Down Payment Notices under URA

Administrative Fees

• Maximum of up to 5 percent of CHIP award

• Administrative Fee of $15,000 if awarded $300,000 in CHIP

Project Delivery Fees

• Up to $2,000 for stick-built rehabilitation or re-construction

• Up to $1,000 for stick-built down payment or second mortgage assistance

• Up to $750 for manufactured housing rehabilitation

• Up to $750 for other manufactured housing with long-term lease

• Up to $1,000 for other manufactured housing on land owned by unit owner

Lead Based Paint Project Delivery Fees

• $100 per unit for procurement and oversight of lead inspection and/or risk assessment

• $300 per unit for procuring and overseeing lead hazard reduction construction work

• $100 for procuring and overseeing clearance

Lead Project Delivery Fees

• If project administrator is completing lead inspection and/or risk assessment and clearance

▪ $300 PDC to Administrator

• Selecting, hiring, and overseeing– Lead construction contract and work

Professional Fees

• Primarily for new construction developments

▪ Engineering/Architectural at 7% of construction cost paid for with CHIP

▪ Developer Fee at 10%

▪ Real Estate Fee at 7%

▪ DCA can limit based on scope of engineering/architectural fees

Application Submission

• Application due April 1, 2008

▪ Must be postmarked no later than April 1, 2008

▪ Or hand delivered by close of business April 1, 2008

▪ If mailed, use certified or registered mail

Application Submission

• Send original and 3 copies

• Original photographs in all copies

• If combining CDBG and CHIP, submit original and 4 copies

Mailing Address

• Mail applications to:

Administrative Secretary

Office of Community Development

Georgia Department of Community Affairs

60 Executive Park South, N.E.

Atlanta, Georgia 30329-2231

Mapping

• If project is site-specific

• If project is in targeted neighborhood

DCA-12 Mapping is Required

Resolution

• Local Governing Body Resolution Required

▪ Authorizing the CHIP Application

▪ Authorizing person named in resolution to act on behalf of City for CHIP application

▪ DCA-1 must be executed by

• Chief elected official or• Person named in resolution to act

Instructions for Completing Application Forms

• Application Summary

▪ Must be signed by Chief Elected Official or person authorized in resolution

▪ If site-specific or targeted neighborhood, check on line 19 that Location Map is enclosed

DCA 2

• Proposed Accomplishments▪ Example

Activity Measure Accomplishments

Housing # of housing units 15

Rehabilitation # of persons served 35

DCA 3

Community-Wide Needs Assessment

No Longer Required

DCA 4

• Description of Needs to be Addressed

▪ Include documentation supporting type of activity proposed

▪ If also applying for CDBG, a separate description of needs is required for CHIP

DCA 5• Description of Activities

▪ Identify each activity by name and number▪ For each activity provide:

• Financial technique• Additional resources• Partnerships• Cost Summarizes• Marketing strategy• All other documentation in support of rating

and ranking

DCA 6

Low- and Moderate-Income and Civil Rights Benefit Calculation

Not required for CHIP

DCA 7

• Budget Summary

▪ Review eligible activities

▪ Budget within appropriate line items

▪ Be consistent with cost summaries on DCA-5

DCA 8

• Budget Analysis

▪ Backed up by credible estimates of costs prepared by qualified individuals and agencies

▪ For leverage contributions, attach clear commitments

▪ For other supporting actions, attach clear commitments

DCA 9

• Environmental Review Checklist

▪ Floodplain and Wetland

• FEMA• Georgia Department of Natural

Resources• US Fish and Wildlife Service• Local RDC or DCA

DCA 9

• Environmental Review Information (continued)

▪ Cultural Resources

• Historic Preservation Division of Department of Natural Resources

• RDC’s

DCA 10

• Certified Assurances

▪ Signed by Chief Elected Official

▪ Or authorized person in resolution for applying for CHIP

▪ Be sure to reference and attach information on potential conflicts of interest

DCA 11

• Not required for CHIP ▪ No CHIP Joint Applications

DCA 12

• Maps Must be included for CHIP if:

• Site-specific• Targeting an area or neighborhood

DCA 13

• CDBG Disclosure Report

▪ Complete Part I

▪ Answer the two questions on Part II

▪ If either answer is YES, complete remainder of report (Parts III through VI)

Note on Activity Numbering System

• Activity Numbers▪ Composed of prefix indicating purpose of activity▪ Composed of second component indicating activity

code▪ Used on:▪ DCA 5▪ DCA 6, if combined CDBG and CHIP▪ DCA 7▪ DCA 8

Application Review Process

• Overview of Rating and Selection System▪ Statewide Competition▪ DCA Housing Review Panel▪ Compared in terms of:

• Demographic Need

• Program Strategy

• Program Feasibility

Maximum Points for CHIP

• Maximum possible score is 400

▪ Demographic Need/# in Poverty 40▪ Demographic Need/% in Poverty 40▪ Demographic Need/Per Capital Income 40▪ Program Strategy 150▪ Program Feasibility 130

▪ Maximum Total Points 400

Final Ranking

• Points are totaled for each applicant

• Total scores ranked highest to lowest

• Funds awarded to extent available

• Applicant demonstrating greatest need breaks tie

Rating Factors

• Demographic Need

▪ Absolute number of people in poverty

▪ Percent of people in poverty

▪ Per Capita Income

Rating Factor

• Program Strategy

▪ Leveraged Resource Commitments

▪ Public Private Partnerships

▪ Long Term Commitment to Affordable Housing

▪ Innovative Approaches

▪ DCA Designated Revitalization Area

Rating Factor

• Program Feasibility

▪ Design Quality

▪ Cost Control and Cost Reasonableness

▪ Resource Commitment

▪ Marketing/Demand

Elements of a Successful Application – Program Strategy

• Leveraging▪ Obtain real commitments with terms and

conditions including estimated dollar amounts▪ Set forth examples by each activity for total

funds: CHIP, owner, and other funds▪ Meet with lenders and obtain real

commitments


• Meet with partners and obtain real commitments:▪ Below market interest rates▪ Waive MIP▪ Longer Loan terms▪ Lower Origination fees▪ Finance closing costs and back taxes▪ Reduced closing costs▪ Homebuyer education▪ City and Non-Profit Contributions▪ Habitat Involvement


• Public/Private Partnerships▪ Tell DCA who they are▪ Tell DCA the type of partner they are▪ Include their commitment letters with real

terms and conditions▪ Meet with these partners and obtain firm

commitments


• Long-term Commitment to Affordable Housing▪ Community’s recent program history▪ Housing types and number of units/dollars▪ Future commitment – strategic plans▪ Previous applications, even if not awarded▪ Community staff for housing▪ Local PHA or Non-profit Administrators▪ For-profit administrators▪ If administered by consultant, what is community’s

involvement


• Innovation▪ Describe innovative features▪ Use essential features to program design▪ Use unique features▪ Special populations


• DCA Designated Revitalization Area▪ Was new for FFY 2005 and still applies in FFY

2008▪ Bonus points for targeting CHIP assistance in

DCA Designated Revitalization Area

Elements of a Successful Applications – Program Feasibility

• Program Design▪ Present a quality program design▪ Detailed description of overall program▪ Program Administration▪ Role of each entity – community, consultant, non-profit

sub-recipient▪ Community’s role▪ Responsible party for reports, financial accounting,

application procedures, day-to-day operations▪ Does design meet identified needs▪ Proposed activities should conform to needs▪ Waiting lists for each activity▪ If proposing down payment assistance, give proof of

standard affordable housing on market for sale

Elements of a Successful Application – Program Feasibility

• Program Design (continued)▪ Application in-take and processing▪ Include all procedures▪ Pre-screening▪ Pre- application▪ Full application▪ 1st come, 1st served▪ Client application documentation▪ Verification▪ Assistance with bank/other loan▪ Waiting lists▪ Development of new waiting lists▪ Mandatory homeownership counseling


• Program Design (continued)

• Financing Technique▪ Maximum amount of CHIP by activity▪ Minimum required other or leveraged funds by activity▪ Basis for homeowner’s portion

• Every applicant does not need the same amount of assistance

• Very-low income vs. low-income• Very-low might require 75% leverage• Low-income might require 50% leverage


• Program Design (continued)• Financing Technique

▪ Or do you customize CHIP loan based on the gap financing needed after the first lender establishes the maximum loan amount

▪ Caution – some applicants in the past have set forth a financing plan for only one activity, but proposed several activities

▪ Finance plan for each activity is required


• Program Design (continued)

• Program Policies▪ Provide details▪ Set forth community’s required program

policies▪ Include DCA and HOME requirements


• Program Design – (continued)• Construction Management

▪ Contracting▪ Work write-ups▪ Bidding procedures▪ Negotiation or bidding▪ Bid packages▪ Minimum property standards▪ Pre-bid conference▪ Contractor qualifications▪ Contracts▪ Contractor solicitations▪ Inspections, draws, project completions▪ Lead based paint requirements


• Cost Control and Cost Reasonableness• Need specifics to assure proposed outcomes• Need specifics to assure costs are reasonable for each

activity▪ Number of units▪ Average CHIP▪ Maximum CHIP▪ Minimum Required Other Funds▪ Average Other Dollars▪ Total Dollars▪ PDC/unit (regular)▪ PDC/unit (lead)


• Cost Control and Cost Reasonableness (continued)

• Set forth maximum CHIP and minimum required leverage

• Tell DCA total cost including CHIP and leveraged funds

• Set forth costs for lead hazard reduction separately

• If completed preliminary cost estimates, tell DCA

• What is basis of total project cost by activity


• Cost Control and Cost Reasonableness (continued)• Set forth cost to conduct lead hazard reduction separately• Define minimum property standards for each activity• Set maximum CHIP $’s per type of housing activity• Set minimum required other or leveraged funds by activity• Are costs and PDC’s reasonable • Tell DCA specifics about preliminary cost estimates

▪ Based on previous program averages▪ Per square foot in market place▪ Verified, standard, affordable homes for sale

Repeat from previous page?


• Resource Commitment• Tell DCA types of funding proposed as leverage• Show DCA the level of control you have over

committed resources• Get firm, not loose, commitments• Propose appropriate, reasonable PDC’s for each

housing activity• Get commitments for only what is needed• Get dollar commitments• Show only needed amount on DCA-8


• Program Marketing/Demand• Tell DCA basic marketing strategy• Have all program applicants been pre-approved• Present a well defined and/or proven marketing strategy• Fair and open to all qualified applicants• Document that proposed activity is needed and appropriate

for community• Existing waiting lists• Proof of houses in standard condition on market at

affordable price range• Get details and documentation from real estate community

Lead Based Paint Requirements

• DCA recognized that HUD requirements are costly• DCA does not expect homeowner to pay for lead with their

funds or other funds• DCA does not expect grant administrator to cover added

cost • DCA has provided for additional project delivery fees for

lead• For budgeting purposes, estimate

▪ Total cost of regular rehabilitation without lead▪ Apply your community’s finance plan to these costs▪ Estimate separately the cost of lead▪ Provide a total cost with lead

Example of Estimating Cost of Rehabilitation and Lead

• Estimated Cost of Regular Rehabilitation is: $20,000

• Homeowner required to pay 25%

• Balance from CHIP, not to exceed $15,000▪ CHIP funds $15,000▪ Other funds $5,000▪ Total funds for regular rehab $20,000▪ Lead Hazard @ 25% of total $ 5,000▪ Grand total w/lead $25,000

Disposition of Applications

• Awards announced around August 15, 2008

• Denied applicants will receive notification

Pre-Funding Site Visits

• One unannounced site visit if:

▪ Site-specific

▪ Targeted area or neighborhood

Making Your Application Competitive

• A Closer Look at Rating Factors – Strategy• Leveraging

• Compared in terms of total funds versus other funds

• Compared by category of activity– Homeowner rehabilitation– Down payment or new construction– Combined program activities


• A Closer Look at Rating Factors - Strategy

▪ Public/private partnerships

• Partnerships proposed to enhance or carry out activities


• A Closer Look at Rating Factors – Strategy

▪ Long-term commitment

• Compared based on jurisdiction’s long-term commitment to affordable housing

• Recent program history• Future commitment



▪ Innovation

• Innovative features• Uniqueness of program design

– Serving special populations– Unique Design Concepts



▪ Bonus Points for Targeting CHIP in DCA Designated Revitalization Area


• A Closer Look at Rating Factors – Feasibility

▪ Design Quality

• Application in-take and process• Financing Techniques• Construction Management• Program Administration


• A Closer Look at Rating Factors – Feasibility▪ Cost Control and Cost Reasonableness

• Degree to which outcomes are assured• Costs are reasonable• Minimum Property Standards• Maximum CHIP Assistance• Basis of total costs• Lead Hazard costs• Project Delivery Fees



▪ Resource Commitment• Number of commitments• Type of funding commitments• Local government funding

commitments– Note: Amount of commitment is reviewed

under strategy.



▪ Marketing/Demand

• Well defined or proven plan• Feasible plan• Not defined or infeasible• Fair and open to all qualified

applicants

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community home investment program (chip). staff brian williamson, director community development and...

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