2016 Affordable Housing Program

Webinar Agenda AHP overview AHP step-by-step AHP online registration/access Scoring review Feasibility review Post AHP award Questions

Helping Your Community Grow: Real Life Story Pittston, PA: People’s Security Bank and Trust Company “The AHP funding through Peoples Security Bank and Trust was a key component in allowing us to complete this project that offers intensive supportive services for residents.” – Michael Hanley, Chief Executive Officer United Neighborhood Community Development Corporation

AHP Overview AHP is a subsidy program that supports the development of affordable housing Targets households at or below 80 percent of area median income (AMI) Direct subsidy (grants) or subsidized advance up to $650,000 AHP funds are applied for by a participating FHLBank member on behalf of a project sponsor Applicant = FHLBank member Sponsor = Nonprofit, for-profit, public entity

AHP Overview Project-Specific Thresholds: Rental Projects: Owner-Occupied Projects: At least 20 percent of units targeted for households at or below 50 percent AMI 15-year retention period with acceptable retention agreement At least one unit targeted for households at or below 80 percent AMI 5-year retention period with acceptable retention agreement Project meets Fair Housing requirements AHP subsidy requested must be less than or equal to the $650,000 maximum AHP funds must be used for an eligible purpose

AHP Overview Eligible Uses of AHP Funds: Homeownership or rental For-sale ownership or owner-occupied rehab Multifamily or single-family Acquisition, new construction, rehabilitation Scattered site or single site Down payment and/or closing costs

AHP Overview Scoring Feasibility Disbursement 100 point scoring against the Bank’s established priorities Feasibility Application is underwritten against the Bank’s feasibility guidelines Disbursement Awarded projects request disbursements of AHP funds once costs have been incurred Compliance and Monitoring Completed projects subject to long-term monitoring and compliance requirements

Adaptive Reuse: From Blight to Bright Eisenhower Dept. Store: Monesson, PA Standard Bank Units: 13 AHP Grant: $500,000 Total Development Cost: $1.3 million Sponsor: Mon Valley Initiative

AHP Step-by-Step Review Review AHP Implementation Plan Access online resources Partner Establish partnership with FHLBank member Communicate roles/milestones Prepare Prepare AHP application Submit application to FHLBank member

AHP Step-by-Step: Meet and Plan Meet/Plan Input Submit Score Feasibility Award Post Award AHP Step-by-Step: Meet and Plan Complete Due Diligence Review AHP Implementation Plan for scoring and feasibility criteria as they relate to your project Access online forms, guides and technical assistance Identify a member partner or take advantage of the member/sponsor match service provided by FHLBank Pittsburgh Complete online registration for the funding round

AHP Online Registration/Access Meet/Plan Input Submit Score Feasibility Award Post Award AHP Online Registration/Access Registering for the Funding Round AHP Online application Register for the funding round: www.fhlb-pgh.com

Submit AHP Application Meet/Plan Input Submit Score Feasibility Award Post Award Submit AHP Application Round Opens June 6 Applications must be: Sponsor approved and Member approved by Thursday, August 11, at 5:00 p.m. EST

AHP Process: 2015 Funding Round Results 11 scoring categories: 100-point scoring system See AHP Implementation Plan, Attachment C Points Awarded on Scored Applications: 76.5 163 submitted 60: Last approved score 65 approved Unapproved $24.6 million committed; approximately $388,000 average AHP subsidy per project

2016 Scoring Categories Scoring Categories Point Allocation Meet/Plan Input Submit Score Feasibility Award Post Award 2016 Scoring Categories Scoring Categories Point Allocation Use of Donated Properties 5 (fixed) Sponsorship by Nonprofit or Government Entity Targeting 0-22 (variable) Housing for the Homeless 6 (variable) Promotion of Empowerment 0-10 (variable)

Member Financial Participation Meet/Plan Input Submit Score Feasibility Award Post Award 2016 Scoring Categories Scoring Categories Point Allocation Special Needs 8 (variable) Rural 5 (fixed) Member Financial Participation 3 (fixed) Readiness to Proceed 8 (fixed) Subsidy per Unit 0-8 (variable) Community Stability 0-20 (variable)

Scoring: Community Stability Meet/Plan Input Submit Score Feasibility Award Post Award Scoring: Community Stability Local Planning – up to 3 points Project Impact – up to 17 points Community designation Distressed communities Homeownership rate Owner-occupied rehab Blighted property Brownfield sites Adaptive reuse Historic preservation Preservation of subsidized housing Mixed-income housing Land bank/reuse agency properties Architectural compatibility Creation of community assets Creation of visitable units Project consistency with the plan Project meets targeted priorities identified in the plan Project Impact Score + Local Planning Score = MAXIMUM SCORE 20 POINTS 0-20 variable

Owner-Occupied Rehab Projects Meet/Plan Input Submit Score Feasibility Award Post Award Owner-Occupied Rehab Projects 10 points 5 points 75% of properties in the project must be: Fully/comprehensively inspected by qualified individual Certified that all hazardous or uninhabitable conditions are corrected at project completion Certified that all major systems have reasonable (5 years) remaining useful life at project completion Qualified individual certification must include: Detailed inspection process Qualifications of individual Property receives needed rehabilitation and/or accessibility improvements on specific components Project does not meet the criteria outlined under 10 points

Feasibility Review Factors Meet/Plan Input Submit Score Feasibility Award Post Award Feasibility Review Factors Projects may score well but must also pass the feasibility review to be awarded an AHP commitment Review project feasibility guidelines in Attachment B of the AHP Implementation Plan Feasibility factors: Need for subsidy and viability Cost reasonableness Readiness to proceed Development team capacity Market demand

Feasibility Review: Subsidy Need and Viability Meet/Plan Input Submit Score Feasibility Award Post Award Feasibility Review: Subsidy Need and Viability Owner-occupied and rental projects must demonstrate that a funding gap exists that cannot be filled by conventional debt Rental projects must demonstrate viability throughout the 15-year compliance period

Feasibility Review: Cost Reasonableness Meet/Plan Input Submit Score Feasibility Award Post Award Feasibility Review: Cost Reasonableness Cost reasonableness determinations vary based on project type: Marshall and Swift analysis Possible 10 percent cost exception with valid third-party justification for excess cost “Local usual and customary costs” (owner-occupied projects) Costs validated by third party and/or commit to bidding process Approval of rental projects will be conditioned on submission of Third-Party Plan and Cost Review Form prior to, or with, the request for disbursement of funds

Feasibility Review: Readiness To Proceed Meet/Plan Input Submit Score Feasibility Award Post Award Feasibility Review: Readiness To Proceed eeS Development Capacity: Project Site: Scale and complexity of the proposed project Role of each team member Relative experience of team members Control Zoning Environmental Market and Demand: Project Financing: Market study requirements 12+ units (owner-occupied) 20+ units (rental) Less than 12/20 units and other exceptions Sources identified Commitments

Project awards announced December 15, 2016 Meet/Plan Input Submit Score Feasibility Award Post Award AHP Awards Project awards announced December 15, 2016

Gap Financing Uptown Lofts: Pittsburgh Northwest Savings Units: 47 AHP Grant: $250,000 Total Development Cost: $13.3 million Sponsor: ACTION-Housing, Inc.

Post-Award Responsibilities Meet/Plan Input Submit Score Feasibility Award Post Award Post-Award Responsibilities Activity Member Sponsor Execute AHP Tri-Party Agreement x Draft and submit AHP retention documents Review and sign the monitoring acceptance letter Start and complete project in timely manner and in accordance with approved AHP application, including any conditions of grant award Semi-annual progress reporting Activity Member Sponsor Sign AHP Tri-Party Agreement x Start and complete project in timely manner and in accordance with approved AHP application Semi-annual progress reporting Request/Approve AHP subsidy disbursements Draft and submit AHP retention documents

Post-Award Responsibilities Meet/Plan Input Submit Score Feasibility Award Post Award Post-Award Responsibilities Activity Member Sponsor Request/Approve AHP subsidy disbursements x Complete AHP Household Income Calculation Form and income documentation Comply with all commitments and representations made in conjunction with application scoring or feasibility criteria Long-term monitoring of rental projects

Next Steps Visit the AHP webpage: www.fhlb-pgh.com Identify a partner - Member/sponsor match service Check registration status Online technical assistance resources Downloadable mini-webinar for Community Stability Guide to Complete AHP Online Application Sponsor and Member System Guide Request project-specific technical assistance Go to AHP website, click on technical assistance link and complete TA request form Submit completed form via email Community Investment staff will initiate contact upon receipt of forms

Key Dates Start Early! June 6 – Online application opens July 29 – Technical assistance ends August 11 – Applications due (must be in “member approved” status by 5 p.m. Eastern time) December 15 – Grant awards announced

Maximize FHLBank Resources: CLP If your project needs construction financing and/or can support debt service and needs permanent financing, consider the Community Lending Program (CLP): CLP offers a flexible source of funding to FHLBank member institutions for qualified projects Affordable housing projects that meet AHP targeting will qualify for CLP CLP benefits: Readily available, simple, noncompetitive application process Provides for fixed-rate financing up to 30 years Quick approval process and no monitoring required How to apply: All CLP projects must meet member lending standards; member submits CLP application on behalf of the project If you have questions, contact Kate Swanson at kate.swanson@fhlb-pgh.com

Community Investment Contacts Megan Krider (AHP Program Manager) Email: megan.krider@fhlb-pgh.com Ann Killian Email: ann.killian@fhlb-pgh.com Laura Rye (Western Pennsylvania and West Virginia) Email: lrye@fhlb-pgh.com David Buches (Eastern Pennsylvania and Delaware) Email: dbuches@fhlb-pgh.com