Transcript Escrow Reserve Policy Training Presentation

Replacement Reserve
Escrow Disbursement
Process Training
April 2012
CHFA – The Connecticut Housing Finance Authority
999 West Street, Rocky Hill, CT 06067
1
Replacement Reserve Escrow Revision:
Intent
 Goals:
1. Reduce the time between review and
approval for owners
2. Establish a formalized process for review of
various projects
3. Eliminate capital replacement review on HUD
insured properties
2
Replacement Reserve Escrow
Revision: Outcome
1.
2.
3.
4.
5.
6.
Eliminates Technical Services review for properties
w/o CHFA debt
Eliminates CHFA reviews for HUD insured
properties
Created Appendix G to CHFA Standards of Design
and Construction – establishing classifications for
review certifications
Created Capital Improvements Guidelines (CIG)
Revised the Replacement Reserve Policy
Created Capital Improvement Schedule
3
No CHFA Financing
 Technical Services’ review will not be
required for properties that do not have CHFA
financing.

Examples:
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DECD transferred grants
Certain TCAP, Exchange
CDBG Grants, Green Retrofit Program
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HUD Insured Projects
 Eliminates CHFA reviews for HUD insured
properties

CHFA will rely on HUD authorizations for
project review and escrow disbursement.

9250 will be acceptable verification

Electronic copies will be acceptable
5
CHFA Standards of
Design & Construction
 Goal: Develop affordable, safe housing, with
as much quality, energy efficiency, durability,
comfort, air quality, and environmental
sustainability as the marketplace, resources
and need will permit.
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Volume I – Project Planning and Technical Review
Process
Volume II – Health, Safety and Sustainability
Standards and Guidelines
Volume III – Appendices
CHFA Capital Improvement Guidelines (CIG)
Section 00054 & Appendix G
 Volume I – Section 00054: Capital Improvements –
Repairs/Replacements/Installations

References Appendix G and Capital Improvement
Guidelines (CIG)

Written description of review/approval process
 Appendix G: CHFA Capital Improvement Project
Classifications for Repairs/Replacements/ Installations
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
Classifications A, B.1 & B.2 and C
Project classifications describe the level of required
certification of conformance to CHFA Standards for
repairs/replacements/installations, as determined by the
complexity and costs of the project(s).
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Classification A

If the Owner will be completing “A” projects,
the Owner may certify that work has been
completed according to CHFA Standards of
Design and Construction
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Examples: Carpet, Storm Doors, Appliances
Owners must submit Request for Pre-Approval
(HM 6-21) if ≥$10,000
Owners must submit Request to Release
Escrow Funds (HM 6-24) for reimbursement
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Classification B

If the Owner will be completing “B” projects

B.1: Less than 20K – Owner may self-certify
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B.2: Greater than or equal to 20K – A Building Design
Professional (BDP) must determine scope of work and
certify completion
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Examples Roofing/Siding/MEP Repairs/Replacements
BDPs: CT-licensed/insured Building and/or Home
Inspector, HUD-approved Inspector, insured FHA 203K
Compliance Consultant, Architect, Professional Engineer,
Licensed Environmental Consultant, or Approved Vendor
Owners must submit Request for Pre-Approval (HM 6-21) if
≥$10,000
Owners must submit Request to Release Escrow Funds
(HM 6-24) for reimbursement
9
Classification C

If the Owner will be completing “C” projects

Tech Services (TS) review and acceptance of scope,
final bid documents and contract required
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May require a Field Observer (determined by TS)
Building Design Professional certification required
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Examples: Site utility work, structural repairs and
heat/smoke/fire detection/suppression/elevator repairs
BDPs: CT-licensed/insured Building and/or Home
Inspector, HUD-approved Inspector, insured FHA 203K
Compliance Consultant, Architect, Professional Engineer,
Licensed Environmental Consultant, or Approved Vendor
Owners must submit Request for Technical Services Review
and Approval (HM 6-21TS)
Owners must submit (HM 6-21) & (HM 6-24) as required
under Classification A & B
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Capital Improvement Guidelines
 “CIG” – created to assist Owners, Property
Managers, Developers and internal CHFA staff
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Provides general guidelines for repair and replacement
projects identified in Appendix G
Divided into three sections (Classifications A, B &C)
with specific project examples
Includes documentation requirements
Includes “Questions to Consider” – suggested related
issues and conditions
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References to related Standards section(s)
Energy-efficient measures and suggestions
Project-specific questions and related issues to consider
11
Replacement Reserve Observations
 Observation and verification policy change:
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Observations will occur as determined by scope of work and
may include one or more observations by Building Design
Professional (Classification B) and or Technical Services
(Classification C).
Asset Management will observe a sampling of the work
completed or items purchased at the next scheduled site
visit.
Asset Management reserves the right to require
observations prior to release of funds for any reason.
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Capital Improvement Schedule
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Capital Improvement Schedule (HM 6-xx) submitted with
annual budget
For owners to estimate when work will be completed
throughout fiscal year…
…and costs associated with the work
Provides Asset Management, Finance and Technical
Services with a schedule to forecast potential workload
demands
Standardized for potential electronic analysis via MFaSys
Owners may revise during fiscal year
Y:\Common Area\TSAM Committee Items\Capital Improvement Schedule.xls
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Process & Forms
 Technical Services Review and Approval (HM6-21TS) - NEW
 Escrow Release Pre-Approval (HM6-21) - Revised
 Request To Release Escrow Funds (HM6-24) - Slight
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Revision
Authorization to Release Escrow (HM6-20) - Revised
Replacement Reserve Descriptive Codes (HM6-22) - Slight
Revision
Residual Receipts & General Operating Descriptive Codes
(HM6-23) – No Change
Escrow Disbursement Policy - Revised
Capital Improvement Schedule (HM 6-xx) - NEW
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Classification A: Scenario 1
 Owner intends to install 30 storm doors. The
total cost is less than $10,000.
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Storm doors are on Capital Improvement
Schedule submitted with annual budget.
Owner does not need to seek pre-approval.
Following completion of installation, the
Request to Release Escrow Funds is
submitted.
Y:\Common Area\TSAM Committee Items\Sample Forms for PP\PP Scenario 1.xls
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Classification A: Scenario 2
 Owner intends to rehab 4 kitchens by replacing
cabinets and plumbing for $15,000.
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Owner reviews Appendix G to determine certification
requirements.
Project falls under Classification A; Owner can certify
but must obtain Asset Management pre-approval.
Owner submits Escrow Release Pre-Approval form
with Recommended Vendor, Scope of Work, and 3
quotes attached.
Asset Manager gives pre-approval; Owner completes
work and submits HM 6-24.
Y:\Common Area\TSAM Committee Items\Sample Forms for PP\PP Scenario 2.xls
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Classification B: Scenario 3
 The community building roof needs replacing at a
total cost of $9,000.
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Owner reviews Appendix G to determine certification
requirements and the guidance provided in the CIG.
Project falls under Classification B.1; Owner or Building
Design Professional (BDP) must certify.
Owner completes work and submits HM 6-24.
Y:\Common Area\TSAM Committee Items\Sample Forms for PP\PP Scenario 3.xls
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Classification B: Scenario 4
 Owner intends to pave entire parking area at a cost of $50,000.
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Owner reviews Appendix G to determine certification
requirements and the guidance provided in the CIG.
Project falls under Classification B.2
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Owner submits Escrow Release Pre-Approval form (HM 621) with Scope of Work and 3 quotes attached.
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Owner retains BDP to certify compliance with Standards, scope
of work & construction
Pre-Approval form must be signed by Owner and BDP
Asset Manager gives pre-approval; Owner completes work
and submits HM 6-24.
Y:\Common Area\TSAM Committee Items\Sample Forms for PP\PP Scenario 4.xls
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Classification C: Scenario 5
 Owner intends to replace a boiler at a cost of $50,000.
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Owner reviews Appendix G to determine certification
requirements and the guidance provided in the CIG.
Project falls under Classification C
 Owner retains BDP to certify compliance with Standards,
scope of work & construction
 TS/AM & BDP meet and review proposed scope
 Technical Services requires at least a 2 week turnaround
time for review of plans and specs
Owner submits CHFA Technical Services Review &
Approval form (HM 6-21TS) with scope of work, plans,
drawings
 Asset Manager sends to Technical Services for review
Y:\Common Area\TSAM Committee Items\Sample Forms for PP\PP Scenario 5.xls
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Classification C: Scenario 5
Continued
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Technical Services communicates directly with
BDP during the review process
Technical Services signs off and notifies Asset
Management
Owner obtains 3 quotes and submits Escrow
Release Pre-Approval (HM 6-21) to Asset
Manager
 Technical Services reviews and accepts
 Asset Manager approves and notifies Owner to
proceed
 Owner completes work and submits HM 6-24
 Owner & BDP sign HM 6-24 for certification of
standards
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Owner Benefits
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More direct input and control of construction
project
Compresses timeline by eliminating CHFA
review time for Classifications A & B
Defines Capital Improvement process
For HUD insured properties, eliminates review
and inspection, shortening the escrow release
time
Consolidates escrow disbursement processes
Provides clear & direct guidelines for specific
projects
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Conclusion
No Technical Services Participation:
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Properties with no CHFA funding
HUD Insured Developments
All projects under Classifications A & B
Technical Services Participation:
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Any projects under Classification C
CNA Review
Loans, Refinancing, Workout and Preservation
Environmental Testing Review
Emergency Participation
Any Asset Management inquiries
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Questions & Comments
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