To All Members and Project Sponsors:
We have revised our Affordable Housing Program (AHP) Implementation Plan. The following changes to the competitive AHP are effective immediately:
Previously Awarded Projects Applying for Additional Subsidy (Section II, C, 3)
Effective beginning with AHP 2012 Round A, if an incomplete project with an existing AHP award needs additional subsidy, the existing subsidy award must be canceled and any previously disbursed subsidy must be repaid before the member and sponsor may submit a new application for the project for the full amount needed.
Processing of Disbursement Requests (Section II, D, 2)
The Bank has extended the timeline for the processing of subsidy disbursements from 30 to 45 calendar days. If the Bank is unable to complete the disbursement request within 45 calendar days because of missing information or unresolved questions, the request will be returned to the member for resubmission.
Scoring Guidelines – Points for Promotion of Empowerment, Subsidy per Unit, and Community Stability (Attachment B, Scoring Criteria, Section V, Section VIII and Section IX)
The maximum score available for Promotion of Empowerment has been reduced, from 10 to 6 points. To receive the full 6 points in the Empowerment category, applicants will need to commit to only one empowerment feature instead of two.
- The maximum score available for Subsidy per Unit has been increased from 8 to 12 points.
- The definitions of “Sustainable or Smart Growth” features, found under question 11 in the Community Stability category, have been expanded.
Feasibility Analysis Standards – Benchmarks for Tax Credit Sales Price, Rental Development Cost per Unit, and Ownership Cash Costs to Construct Homes (Attachment A, Financial Review Guidelines, Exhibit 1)
- Sponsors using financing from Low-Income Housing Tax Credits must assume a sales price consistent with the Tax Credit Sales Price Assumptions Guidelines included in the application package, which will be revised prior to each competition to reflect current market conditions. Alternatively, if available, a sponsor may submit an investor’s letter of intent showing the contracted purchase price.
- The former benchmark for Development Cost per Unit applicable to rental projects has been replaced by the new benchmark, Cash Cost per Unit, defined as the total development cost, excluding costs associated with land, permanent financing, reserves, tax credit application, tax credit syndication, and legal fees. In order to comply with this benchmark, the project’s costs on a per unit basis should be no greater than the maximum limits established by the HUD section 221(d)(3) program or the Low-Income Housing Tax Credit Program guidelines as applicable to the project’s location and the number of bedrooms per unit. The applicant must provide evidence of the applicable program cost guidelines.
- The maximum benchmark for “Cash Costs to Construct Homes” applicable to ownership projects will be the limit for 1-4 family loans established by the Federal Housing Administration as applicable to the project’s location. The applicant must provide documentation of the FHA loan limits as part of the application submission.
The Bank has also made several clarifying changes to the IP; these changes can be reviewed in a redline version of the IP that will be available online until February 29, 2012.
The revised AHP Implementation Plan is posted on the Bank’s website. If you have any questions about the AHP or the revised IP, please email Community Investment or call (415) 616-2542.
James E. Yacenda
Vice President and Community Investment Officer