Avoiding Technical Corrections Qualified Allocation Plan Forum September 5, 2012

Avoiding Technical Corrections Overview 67 developments applied for tax credits in the 2012 Round 14 projects were awarded credits Importance of maximizing points – 4 points could be the difference between getting an award or not!

Avoiding Technical Corrections Common Technical Corrections Financial statements from principals – don’t leave anyone out Site plan does not include placement of accessible units Units plans do not have square footage Affidavits missing from development team members (see Form A, pages 21-22) Exceeding fee limitations (i.e. architect, contractor) Phase 1 does not include FEMA floodplain map and wetlands map

Avoiding Technical Corrections “Silly” Technical Corrections Lender Letter of Interest – lacking the required language Not submitting the supplemental application fee for HOME or Development Fund - $500 for each Missing a signature (i.e. Form C, Form K) Missing a form (i.e. Form K) Submitting documents more than 6 months old (dated before May 1, 2012) Making assumptions (i.e. no need for CNA) Copy and paste – wrong development name Document filed/saved in the wrong folder

Avoiding Technical Corrections Underwriting Technical Corrections DOUBLE CHECK CALCULATIONS!! Operating Reserves - between four to six months (Operating Expense plus debt service) or $1,500/unit (whichever is greater). Replacement Reserve minimum contributions must be used: Rehabilitation: $350 per unit per year New Construction: $250 per unit per year Single Family Units: $420 per unit per year Historic Rehabilitation: $420 per unit per year Replacement Reserves must escalate at a rate of 3% per year.

Avoiding Technical Corrections Underwriting Technical Corrections Rental Income Growth – 0-2% per year. Operating Expense Growth – 1-3% per year. IHCDA requires operating expense growth to be at least 1% higher than rental income growth. Management Fee maximum - 5-7% of “effective gross income” (gross income for all units less Vacancy Rate). If outside of IHCDA guidelines, please provide explanation!!

Avoiding Technical Corrections All applicants will be required to use a 20% basis boost and 9% to calculate the maximum 9% credit request. 20% basis boost to be utilized for Scoring Criteria Credit Reduction Section G.4(b). Reservation letters will designate a 30% basis boost. This is to ensure adequate basis to support credits awarded, in the event of the loss of the 9% flat rate New 3 rd Party Market Study Reviewer Ribbon Demographics & M.E. Shay & Co. Submit all items listed on Market Study Checklist

Avoiding Technical Corrections Scoring Pitfalls to Avoid All maps need to clearly show the project site Map of nearby amenities must have ¼ and ½ mile radius All forms must be signed and dated by all necessary parties Redevelopment plans must show evidence of community participation and input Credit reduction calculated correctly Unique features – don’t be modest!

Avoiding Technical Corrections General Reminders Follow the submission guidelines in Schedule G Form C due to IHCDA by October 1 st Applications due by 5:00 PM in the IHCDA office on Thursday, November 1, 2012 Semi-Annual Progress Reports – If pending 8609, these are due by 12/31/12

Avoiding Technical Corrections 2013A-C Tentative Timeline November 5, 2012 – Applicant list posted on the website 3 rd Week of November – IHCDA will notify the highest elected official of the local jurisdiction of tax credit applications 1 st Week of December – CNA report completed and provided to the applicant 1 st Week of January – Notification of Technical Corrections and any concerns regarding Market Studies

Avoiding Technical Corrections 2013A-C Tentative Timeline - Continued 4 th Week of January – Issuance of Preliminary Score Sheets February 28, 2013 – Recommendations made to IHCDA Board of Directors March 28, 2013 – Reservation fees due for awarded developments

Avoiding Technical Corrections Thank You and Good Luck! Indiana Housing and Community Development Authority 30 S. Meridian Street, Suite 1000 Indianapolis, IN (317)