Transcript 2009 CHIP Applicants Basic and Advanced

Community HOME Investment
Program
(CHIP)
2009 DCA CDBG/CHIP Applicants’ Workshop
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 not
HOME PJ’s
▪ List of Ineligible HOME PJ’s follows:
2009 CDBG/CHIP Applicants’ Workshop
Page 2
How to Apply for CHIP $$
Ineligible HOME PJ’s
• Albany, Atlanta, Macon, Savannah
• Roswell, Marietta
• Athens/Clarke County Consolidated
Government
• Augusta/Richmond County Consolidated
Government
• Columbus Consolidated Government
• Clayton, Cobb, Dekalb, Fulton and Gwinnett
Counties
2009 CDBG/CHIP Applicants’ Workshop
Page 3
How to Apply for CHIP $$
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
2009 CDBG/CHIP Applicants’ Workshop
Page 4
How to Apply for CHIP $$
Restrictions on Eligibility
• Prior Recipients of CHIP Funding
▪ Resolve outstanding audit/monitoring concerns
▪ Acceptable level of expenditure and
performance
2009 CDBG/CHIP Applicants’ Workshop
Page 5
How to Apply for CHIP $$
Eligible CHIP Activities
• Homeowner Rehabilitation
• Homebuyer Activities
• Rental Housing
2009 CDBG/CHIP Applicants’ Workshop
Page 6
How to Apply for CHIP $$
Ineligible Activities
• Project Reserve Accounts
• Tenant Based Rental Assistance
• Match for other federal programs, except
McKinney Act funds
• Operations or modernization of public
housing
• Pre-payment of low income mortgages under
24 CFR Part 248
• Double-dipping
2009 CDBG/CHIP Applicants’ Workshop
Page 7
How to Apply for CHIP $$
Ineligible Activities (continued)
• Reimbursement of State Recipient Owned
Property
• For property used for non-CHIP purpose
• For property in its inventory
2009 CDBG/CHIP Applicants’ Workshop
Page 8
How to Apply for CHIP $$
Ineligible Activities (continued)
• Cannot be used for rental assistance if
receipt of funds tied to occupancy in a
particular project – known as Project Based
Rental Assistance
• While HOME regulations allow tenant based
rental assistance, DCA does not allow tenant
assistance as an eligible CHIP activity
2009 CDBG/CHIP Applicants’ Workshop
Page 9
How to Apply for CHIP $$
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
2009 CDBG/CHIP Applicants’ Workshop
Page 10
How to Apply for CHIP $$
Basic HOME Rule – The Property
• Property Type (s)
▪ For Homebuyer Activities
•
•
•
•
•
Must be principal residence
Single-family
Two-to-four-unit property
Cooperative
Mutual housing project if recognized as
homeownership by state law
• Manufactured home/modular housing
2009 CDBG/CHIP Applicants’ Workshop
Page 11
How to Apply for CHIP $$
Basic HOME Rule – The Property
• Property Types (s)
▪ For Rehabilitation Activities
• Occupied by income eligible homeowner
• Must be owner’s principal residence
• Includes:
– A cooperative unit
– Mutual housing
– Traditional single-family housing owned in fee
simple
– A condominium unit
– Manufactured home/modular housing
2009 CDBG/CHIP Applicants’ Workshop
Page 12
How to Apply for CHIP $$
Basic HOME Rule – The Property
• Property Types
▪ For rental activities
• One or more buildings on a single
site, or multiple sites that are under
common ownership, management
and financing
2009 CDBG/CHIP Applicants’ Workshop
Page 13
How to Apply for CHIP $$
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
2009 CDBG/CHIP Applicants’ Workshop
Page 14
How to Apply for CHIP $$
Note on Manufactured Housing
Activity
• Maximum of $7,500 in CHIP for
reconstruction, down payment or second
mortgage assistance if “new” manufactured
housing unit
• Maximum total funding (both CHIP and other
funds) for manufactured housing
rehabilitation is $5,000
2009 CDBG/CHIP Applicants’ Workshop
Page 15
How to Apply for CHIP $$
Basic HOME Rule – The Property
• Property Value
• Homebuyer-Cannot exceed $200,160
• Rehabilitation-Cannot exceed $200,160,
after rehabilitation
• *Higher limits in MSA’s – See Appendix I
in Manual
2009 CDBG/CHIP Applicants’ Workshop
Page 16
How to Apply for CHIP $$
Basic HOME Rule – The Property
• Property Standards
▪ Must meet state and local codes
▪ Must have written rehabilitation standards
▪ New construction must meet Model Energy
Code
▪ Handicapped accessibility, if applicable
2009 CDBG/CHIP Applicants’ Workshop
Page 17
How to Apply for CHIP $$
Basic HOME Rule – The Property
• 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 Part 3280
• Must be installed to state and local codes
2009 CDBG/CHIP Applicants’ Workshop
Page 18
How to Apply for CHIP $$
Basic HOME Rule – The Applicant or
Beneficiary
• Annual gross income does not exceed 80% of
median income adjusted for family size
• Income limits are published by HUD annually by
county
2009 CDBG/CHIP Applicants’ Workshop
Page 19
How to Apply for CHIP $$
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
2009 CDBG/CHIP Applicants’ Workshop
Page 20
How to Apply for CHIP $$
Basic HOME Rule – Long Term Affordability
Home Investment Per Unit
Term
Less than $15,000
$15,000-$40,000
More than $40,000
New construction-rental
Refinancing of rental housing
5 years
10 years
15 years
20 years
15 years
2009 CDBG/CHIP Applicants’ Workshop
Page 21
How to Apply for CHIP $$
Basic Home Rule – Application of
Other Federal Requirements
•
•
»
»
»
2009 CDBG/CHIP Applicants’ Workshop
Historic Preservation
Citizen Participation
AFHM
MBE/WBE
Citizen Participation
Page 22
How to Apply for CHIP $$
Remember!
• Bonus points for CHIP in designated DCA
Revitalization Area
• ARMs or other variable rate or flexible
mortgages are discouraged
• Consider innovative concepts such as
appropriate designs for in-fill housing and
addressing special populations
2009 CDBG/CHIP Applicants’ Workshop
Page 23
How to Apply for CHIP $$
Matching Requirements
• There are no matching requirements for
CHIP
• DCA provides the non-federal match
2009 CDBG/CHIP Applicants’ Workshop
Page 24
How to Apply for CHIP $$
Pre-Award Costs
• Pre-award costs are ineligible
▪ Preparation of applications
▪ Cannot be reimbursed if awarded CHIP
2009 CDBG/CHIP Applicants’ Workshop
Page 25
How to Apply for CHIP $$
Procurement Procedures
• Applies to private consultants, engineers,
architects
• Does not apply to RDC’s/non-profits
• Must follow the Common Rule (24 CFR Part
85)
2009 CDBG/CHIP Applicants’ Workshop
Page 26
How to Apply for CHIP $$
Procurement Procedures
• Publicize the RFP
• Allow 30 days for responses
• Send letter with RFP to at least 7 known
providers
• Negotiate with at least 2 respondents
• Evaluate proposals and document
• Consult with counsel
• Gain full council/commission approval
• Sole source approval if only one response
2009 CDBG/CHIP Applicants’ Workshop
Page 27
How to Apply for CHIP $$
Developing and Request for Proposals
(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
2009 CDBG/CHIP Applicants’ Workshop
Page 28
How to Apply for CHIP $$
Administrative Fees
• Maximum of up to 5 percent of CHIP award
• Administrative Fee of $15,000 if awarded
$300,000 in CHIP
2009 CDBG/CHIP Applicants’ Workshop
Page 29
How to Apply for CHIP $$
Project Delivery Fees
• Up to $2,500 for stick-built rehabilitation or reconstruction
• Up to $1,500 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
2009 CDBG/CHIP Applicants’ Workshop
Page 30
How to Apply for CHIP $$
Lead Based Paint Project Delivery Fees
• $100 per unit for procurement and oversight
of lead inspection and/or risk assessment
• $300 per unit for procuring and overseeing
lead hazard reduction construction work
• $100 for procuring and overseeing clearance
2009 CDBG/CHIP Applicants’ Workshop
Page 31
How to Apply for CHIP $$
Professional Fees
• Primarily for new construction developments
▪ Engineering/Architectural at 7% of
construction cost if paid for with CHIP
▪ Developer Fee at 10%
▪ Real Estate Fee at 7%
▪ DCA can limit based on scope of
engineering/architectural fees
2009 CDBG/CHIP Applicants’ Workshop
Page 32
How to Apply for CHIP $$
Application Submission
• Application due:
▪
▪
▪
▪
▪
Must be postmarked no later than:
April 1, 2009
Or hand delivered by close of business:
April 1, 2009
If mailed, use certified or registered mail
2009 CDBG/CHIP Applicants’ Workshop
Page 33
How to Apply for CHIP $$
Application Submission
• Send original and 3 copies
• Original photographs in 2 of 4 copies
• If combining CDBG and CHIP, submit original
and 4 copies
2009 CDBG/CHIP Applicants’ Workshop
Page 34
How to Apply for CHIP $$
Mailing Address
• Mail applications to:
Administrative Secretary
Office of Community Development
Georgia Department of Community Affairs
60 Executive Park South, N.E.
Atlanta, Georgia 30329-2231
2009 CDBG/CHIP Applicants’ Workshop
Page 35
How to Apply for CHIP $$
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
2009 CDBG/CHIP Applicants’ Workshop
Page 36
How to Apply for CHIP $$
Instructions for Completing Application
Forms
• Application Summary – DCA 1
▪ Must be signed by Chief Elected Official
or person authorized in resolution
▪ If site-specific or targeted neighborhood,
check on line 24 of DCA - 1 that map is
enclosed
▪ County-wide or city-wide
▪ Targeted neighborhood
2009 CDBG/CHIP Applicants’ Workshop
Page 37
How to Apply for CHIP $$
DCA 2
• Proposed Accomplishments
Example
Activity
Measure
Housing
Rehabilitation
# of housing units
# of persons served
2009 CDBG/CHIP Applicants’ Workshop
Page 38
Accomplishments
15
35
How to Apply for CHIP $$
DCA 4
• Description of Needs to be Addressed
▪ Include documentation supporting type of
activity proposed
▪ What type of activity are you proposing?
▪ Why is this type of activity proposed?
▪ If applying for CDBG, a separate
description of needs is required for CHIP
2009 CDBG/CHIP Applicants’ Workshop
Page 39
How to Apply for CHIP $$
DCA 5 - Description of Activities
• Describe in detail the activity to be undertaken
with CHIP funds
• Identify each activity by name & activity number
• Give detailed description of the financial
techniques/cost summaries
• Additional resources
• Public /private partnerships
• Marketing strategies demand
• All supporting documentation
2009 CDBG/CHIP Applicants’ Workshop
Page 40
How to Apply for CHIP $$
DCA 6
Low and Moderate Income and Civil Rights
Benefit Calculation
Not required for CHIP
2009 CDBG/CHIP Applicants’ Workshop
Page 41
How to Apply for CHIP $$
DCA 7
• Budget Summary
▪ Review eligible activities
▪ Budget within appropriate line items
▪ Be consistent with cost summaries on
DCA-5, 7 and 8
2009 CDBG/CHIP Applicants’ Workshop
Page 42
How to Apply for CHIP $$
DCA 8
• Budget Analysis
▪ Backed up by credible estimates of costs
prepared by qualified individuals and
agencies
▪ For leverage contributions, attach letters
of commitments
▪ For other supporting actions, attach
letters of commitments
2009 CDBG/CHIP Applicants’ Workshop
Page 43
How to Apply for CHIP $$
DCA 9
• Environmental Review Checklist
▪ Floodplain and Wetland
▪ FEMA
▪ Georgia Department of Natural
Resources
▪ US Fish and Wildlife Service
▪ Local RDC or DCA
2009 CDBG/CHIP Applicants’ Workshop
Page 44
How to Apply for CHIP $$
DCA 9 – (cont.)
• Environmental Review Information
(continued)
▪ Cultural Resources
▪ Historic Preservation Division of
Department of Natural Resources
▪ RDC’s
2009 CDBG/CHIP Applicants’ Workshop
Page 45
How to Apply for CHIP $$
DCA 10
• Certified Assurances
▪ Signed by Chief Elected Official
▪ Or authorized person in resolution
▪ Be sure to reference and attach
information on potential conflicts of
interest
2009 CDBG/CHIP Applicants’ Workshop
Page 46
How to Apply for CHIP $$
DCA 11
Cooperating Agreement
If application is submitted jointly, this
form must be prepared.
2009 CDBG/CHIP Applicants’ Workshop
Page 47
How to Apply for CHIP $$
DCA 12
• Maps
▪ Must be included for CHIP if:
• Site-specific
• Targeting an area or neighborhood
2009 CDBG/CHIP Applicants’ Workshop
Page 48
How to Apply for CHIP $$
DCA 13
• CDBG Disclosure Report
▪ Complete Part I
▪ Answer the two questions on Part II
▪ If either answer is YES, complete
remainder of report (Parts III through VI)
2009 CDBG/CHIP Applicants’ Workshop
Page 49
How to Apply for CHIP $$
Elements of a Successful Application
Program Strategy TIPS to Remember!
• Leveraging
▪ Meet with lenders and 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
2009 CDBG/CHIP Applicants’ Workshop
Page 50
How to Apply for CHIP $$
Elements of a Successful Application –
Leverage Strategies
• Examples:
▪ Below market interest rates
▪ Waive PMI
▪ Longer Loan terms
▪ Lower Origination fees
▪ Finance closing costs and back taxes
▪ Reduced closing costs
▪ Homebuyer education
▪ City and Non-Profit Contributions
▪ Habitat Involvement
2009 CDBG/CHIP Applicants’ Workshop
Page 51
How to Apply for CHIP $$
Elements of a Successful Application
• Public/Private Partnerships
▪ Tell DCA who they are and the type of
partner
▪ Include their commitment letters with
terms and conditions
2009 CDBG/CHIP Applicants’ Workshop
Page 52
How to Apply for CHIP $$
Elements of a Successful Application
• Long-term Commitment to Affordable
Housing
▪
▪
▪
▪
▪
▪
▪
▪
Community’s recent program history
Housing types and number of units/dollars
Future commitment – strategic plans
Previous applications, even if not awarded
Community staff for housing
Local PHA or Non-profit Administrators
For-profit administrators
If administered by consultant, what is community’s
involvement
2009 CDBG/CHIP Applicants’ Workshop
Page 53
How to Apply for CHIP $$
Elements of a Successful Application
• Innovation
▪ Describe innovative features
▪ Use essential features to program
design
▪ Use unique features
▪ Special populations
2009 CDBG/CHIP Applicants’ Workshop
Page 54
How to Apply for CHIP $$
Elements of a Successful Application
• DCA Designated Revitalization Area
▪ Was new for FFY 2005 and still applies in
FFY 2009
▪ Bonus points for targeting CHIP
assistance in DCA Designated
Revitalization Area
2009 CDBG/CHIP Applicants’ Workshop
Page 55
How to Apply for CHIP $$
Elements of a Successful
Applications – Program Design
• Detailed description of overall program
• Program Administration
• Role of each entity – community,
consultant, non-profit sub-recipient
• Community’s role
2009 CDBG/CHIP Applicants’ Workshop
Page 56
How to Apply for CHIP $$
Program Design (cont.)
• Responsible party for reports, financial
accounting, application procedures, day-today operations
• Does design meet identified needs
• Proposed activities should conform to
needs
2009 CDBG/CHIP Applicants’ Workshop
Page 57
How to Apply for CHIP $$
Program Design (cont.)
• Waiting lists for each activity
• If proposing down payment assistance, give
proof of standard affordable housing on
market for sale
• Application in-take and processing
• Include all procedures
2009 CDBG/CHIP Applicants’ Workshop
Page 58
How to Apply for CHIP $$
Program Design (cont.)
▪
▪
▪
▪
▪
▪
▪
▪
Pre-screening/pre-application
Full application
1st come, 1st served
Client application documentation and
verification
Financial assistance with bank or other loan
Waiting lists
Development of new waiting lists
Mandatory homeownership counseling
2009 CDBG/CHIP Applicants’ Workshop
Page 59
How to Apply for CHIP $$
Program Design (cont.)
• 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
2009 CDBG/CHIP Applicants’ Workshop
Page 60
How to Apply for CHIP $$
Program Design (cont.)
• Financing Technique (cont.)
▪ Or do you customize CHIP loan based on the
gap financing needed
▪ Caution–some applicants will propose a single
financing plan for one activity, but propose to
address several activities
▪ A finance plan for each activity is required
2009 CDBG/CHIP Applicants’ Workshop
Page 61
How to Apply for CHIP $$
Program Design (cont.)
• Program Policies (to extent known)
▪ Describe the community’s required program
policies
▪ Include DCA and HOME requirements
2009 CDBG/CHIP Applicants’ Workshop
Page 62
How to Apply for CHIP $$
Program Design (cont.)
Construction Management
•
•
•
•
•
•
• Contracts
• Inspections, draws,
project completions
• Lead based paint
requirements
Contractor solicitations
Work write-ups
Negotiation or bidding
Bid packages
Pre-bid conference
Contractor
qualifications
2009 CDBG/CHIP Applicants’ Workshop
Page 63
How to Apply for CHIP $$
Cost Control and Reasonableness
• Describe maximum CHIP and minimum
required leverage
• Tell DCA total cost including CHIP and
leveraged funds
• Describe the costs for lead hazard reduction
separately
• Were preliminary cost estimates conducted?
(If so, indicate this in the application.) What is
basis of total project cost by activity?
2009 CDBG/CHIP Applicants’ Workshop
Page 64
How to Apply for CHIP $$
Cost Control and Reasonableness
(cont.)
• Need details to assure proposed outcomes
• Need specific information to assure costs are
reasonable for each activity:
▪
▪
▪
▪
▪
▪
▪
▪
Number of units
Average CHIP
Maximum CHIP
Minimum Required Other Funds
Average Other Dollars
Total Dollars
PDC/unit (regular)
PDC/unit (lead)
2009 CDBG/CHIP Applicants’ Workshop
Page 65
How to Apply for CHIP $$
Cost Control and Reasonableness
(cont.)
•
•
•
•
Itemize lead hazard reduction cost 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?
• What are your preliminary cost estimates based on?
▪ Based on previous program averages
▪ Existing per square foot costs in market place
▪ Verified, standard, affordable homes for sale
2009 CDBG/CHIP Applicants’ Workshop
Page 66
How to Apply for CHIP $$
Resource Commitment
• Tell DCA types of funding proposed as
leverage
• Show DCA the level of control you have
over committed resources
• Propose appropriate, reasonable PDC’s
for each housing activity
• Get dollar commitments for only what is
needed
• Show only needed amount on DCA-8
2009 CDBG/CHIP Applicants’ Workshop
Page 67
How to Apply for CHIP $$
Program Marketing/Demand
• What is the 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
2009 CDBG/CHIP Applicants’ Workshop
Page 68
How to Apply for CHIP $$
Lead Based Paint Requirements
• DCA recognizes HUD lead requirements are
costly
• DCA does not expect homeowners to pay for lead
with their funds or other funds
• DCA has provided for additional project delivery
fees for lead
• For budgeting purposes, estimate
• Total cost of regular rehabilitation without lead
▪ Apply your community’s finance plan to these costs
▪ Estimate separately the cost of lead
▪ Provide a total cost with lead
2009 CDBG/CHIP Applicants’ Workshop
Page 69
How to Apply for CHIP $$
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
2009 CDBG/CHIP Applicants’ Workshop
Page 70
How to Apply for CHIP $$
Pre-Funding Site Visits
• One unannounced site visit if:
▪ Site-specific
▪ Targeted area or neighborhood
2009 CDBG/CHIP Applicants’ Workshop
Page 71
How to Apply for CHIP $$
Questions?
2009 CDBG/CHIP Applicants’ Workshop
Page 72
How to Apply for CHIP $$