DMMHA Development Fund Guiding Principles Presentation on Proposed Guiding Principles to benefit Affordable Housing in Des Moines and Polk County October 25, 2010

History of Fund $13.5 million On February 23, 2004, by Roll Call No. 04-341, the Municipal Housing Governing Board: Approved Policy for Use of Proceeds from the Disposition of Public Housing Units. The results of this action has generated $12.9 million in sale proceeds and $900,000 in interest earnings for a total of: $13.5 million

Agenda Conversion of Endowment Fund to Revolving Loan Development Fund ($10 million) Future use of interest earnings from Revolving Loan Development Fund Support of Central Iowa Shelter & Services ($3.5 million)

Revolving Loan Development Fund Establish a Low Risk Revolving Loan Development Fund dedicating $10 million of the existing principal to support low-income housing developments within Des Monies and Polk County.

Revolving Loan Development Fund - Recommendations Establishment of Revolving Loan Development Fund to support low-income housing developments in Des Moines and Polk County Partner with existing lending agencies Provide direct loan service administration through the City Designate initial $10 million principal which may include a $1 million loan loss protection Investment shall meet all HUD regulatory requirements and approvals Administration/Service fee - 1% origination fee

Goal of Designated Principal Development funds are a critical long-term asset to the DMMHA, City of Des Moines and Polk County Recycling $10.0 million principal balance at 3% over 40 years will generate approximately: $40.5 million in recycled principal for development of new low-income housing $6.5 million in interest earnings for loans or grants for affordable housing Continued development and use earnings

Use of Interest Earnings Public Housing unit acquisition, rehabilitation, maintenance and physical improvements – 24CFR 970.19(e)(2)(i) Leverage to support new low-income housing or Section 8 - 24CFR 970.19(e)(2)(ii) Establishment of a Rental Assistance Program - 24CFR 970.19(e)(2) Expansion of Supportive Services for Public Housing and Section 8 participants - 24CFR 970.19(e)(2) Support of homeownership programs/services - 24CFR 970.19(e)(2)(i)

Budget Review and Approval Process Development of annual budget by DMMHA Budget review and recommendations: Polk County Housing Continuum Board Public Housing Board Municipal Housing Board Submittal/approval of annual budget to HUD Annual report on the investment and use of the funds at end of year.

Next Steps – Affordable Housing Development Fund Upon consensus support of Affordable Housing Guiding Principles, staff will initiate the HUD review and approval process. Upon HUD approval or denial, staff shall report back the Municipal Housing Governing Board with a final recommendation.

Central Iowa Shelter & Services (CISS) Capital Funding Support: $3.5 million A portion of the Designated Investment Fund may be used towards the development of efficiency units at the CISS project in an amount proportionate to the number of dedicated voucher units Funding Source: Affordable Housing Development Fund

Central Iowa Shelter & Services (CISS) Operating Funding Support: Project Based Section 8 vouchers (RFP process) may be used to support permanent supportive housing efficiency units within CISS in an amount equal to or greater than the capital support Funding Source: DMMHA Section 8 voucher pool

CISS Next Steps Meet with CISS to evaluate cost estimates Work with CISS to seek alternative funding streams Finalize RFP for Project Based Vouchers

DMMHA Development Fund Guiding Principles Questions?