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Title:
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2022-23 Federal HOME Investment Partnerships Program Call for Interest
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Title
2022-23 Federal HOME Investment Partnerships Program Call for Interest
Description
Request City Council approval of the Housing Department's 2022-23 HOME Investment Partnerships Program (HOME) Call for Interest (CFI), Community Priorities for the HOME CFI, and the associated revisions to the Affordable Housing Loan Program (AHLP) and Underwriting Guidelines. The HOME Program is a federally funded program provided by the U.S. Department of Housing and Urban Development.
Report
Summary
The AHLP's Community Priorities (Priorities) and Underwriting Guidelines allow the City to be proactive in communicating housing needs to developers of affordable and/or special needs housing. On Nov. 17, 2021, the City Council approved the Priorities as follows, and the Housing Department recommends continuing with these Priorities for the 2022-23 CFI:
Acquisition, rehabilitation, and/or new construction of properties that focus on homeless or special needs populations and that provide appropriate services to assist and sustain these populations; and
Acquisition, rehabilitation, and/or new construction of properties where the developer qualifies as a Community Housing Development Organization (CHDO) as defined by the HOME Program.
The total allocation available for the 2022-23 CFI is approximately $7 million in HOME funding, of which $972,277 must be awarded to CHDOs. The funds will allow for an estimated three to four affordable housing project awards with a maximum award of $2 million per project. The Housing Department may utilize HOME-ARP funds with this solicitation if proposals meet the HOME-ARP special population criteria and HUD approves the HOME-ARP Allocation Plan before the CFI deadline.
Procurement Information
The CFI will be available through the City's website on or about Nov. 21, 2022, with proposals due on or about Feb. 6, 2023. A selection committee will convene to evaluate proposed projects for the CFI identified Priorities, based on the criteria listed below. The committee will be made up of representatives from City departments and community partners with housing development expertise who are not competing for the funding. Formal recommendation for the CFI award(s) will be presented to the City Council for approval.
Applicants must meet the following Threshold Criteria prior to moving forward for evaluation and scoring by the selection committee:
Application submitted before the deadline;
Development team is not on the HUD Debarment List;
Compliance with existing city loans;
Property management experience, minimum three years; and
Complete application as specified in the CFI.
The applications that do not meet the threshold criteria will be rejected and will not move forward for evaluation.
Evaluation criteria for selection will include the following below.
Developer Experience (260 points) - Capacity and prior experience of the organization; its staff member and consultant experience in planning and completing projects similar to the proposed project; property management experience of those who will manage the proposed property; including compliance with federally subsidized units.
Project Merits (430 points) - Project need; proximity to services; sustainability as demonstrated in energy efficient design; location near transportation; amenities included in the project design; site plans and elevations; accessibility; experience of the General Contractor; project readiness and timeline.
Financial Feasibility (260 points) - Includes development financing plan; funding commitments; mitigation of identified risks; leverage of City funds.
Project Impact (50 points) - How likely the project is to succeed, accomplish its goals and serve the intended population; and demonstration of financial feasibility and project readiness.
Underwriting Guidelines Revisions
The City first adopted the AHLP Underwriting Guidelines (Guidelines) in October 2005. Since then, the Guidelines have been periodically updated to reflect current City priorities, federal funding regulations and changes in lending practices. The Guidelines were last updated in November 2021. The goals of the Guidelines are to:
Provide long-term housing affordability;
Outline clear guidelines for quality, well-constructed or rehabilitated housing;
Create predictable, clear underwriting and approval process; and
Manage risk and encourage high performing projects.
Proposed revisions to the AHLP Guidelines include the following clarifications: revise the current definition of surplus cash flow to allow for the deferred developer fee to be included as a required payment before surplus cash is calculated. Previously the deferred developer fee was an exclusion in the definition. This change aligns with the Arizona Department of Housing Low Income Housing Tax Credit Program.
There were no revisions to scoring, evaluation criteria and threshold for this CFI.
Financial Impact
There is no impact to the General Fund. HOME is a federally funded program.
Department
Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Housing Department.