1. COMMUNITY ENHANCEMENT AND ECONOMIC DEVELOPMENT FUND (CEED PROGRAM) A HUD SECTION 108 LOAN PROGRAM Indiana Office of Community and Rural Affairs 2014 Regional Conference

2. Darin Edwards Kathleen Weissenberger daedwards@ihcda.in.gov kweissenberger@ocra.in.gov daedwards@ihcda.in.gov kweissenberger@ocra.in.gov  @OCRAIndiana  #INOCRAconf Office of Community and Rural Affairs Indiana Housing and Community Development Authority

3.  @OCRAIndiana  #INOCRAconf What is Section 108 Financing tool that allows States and Entitlements to make loans up to 5 times their annual CDBG allocation All activities must meet CDBG requirements and loan terms must meet Section 108 underwriting criteria Notes are repaid with revenue from the project first. If project fails, loan collateral will be liquidated, finally the States yearly allocation of CDBG funds will be the last source of repayment. Office of Community and Rural Affairs Indiana Housing and Community Development Authority

4.  @OCRAIndiana  #INOCRAconf Office of Community and Rural Affairs Indiana Housing and Community Development Authority

5.  @OCRAIndiana  #INOCRAconf Indiana’s CEED Program In August 2013, the State was notified by the U.S. Department of Housing and Urban Development (HUD) that we were approved for up to $30 million of Section 108 Loan Assistance. The State has up to 5 years to allocate loan funds from the $30 million loan pool. Office of Community and Rural Affairs Indiana Housing and Community Development Authority

6.  @OCRAIndiana  #INOCRAconf CEED Program Eligible Applicants Borrower State of Indiana non-entitlement jurisdictions Counties (except Lake and Hamilton) Cities (except those with direct CDBG allocation) Incorporated Towns End Borrower Businesses Non-profits Housing developers Office of Community and Rural Affairs Indiana Housing and Community Development Authority

7.  @OCRAIndiana  #INOCRAconf Advantages of CEED Program Long-term, Fixed-rate Financing AAA rates Not considered a general obligation note Enables non-entitlement community to do a larger, cost effective project Office of Community and Rural Affairs Indiana Housing and Community Development Authority

8.  @OCRAIndiana  #INOCRAconf CEED Eligible Projects Housing Development Affordable Housing Acquisition/Rehab Senior or Family Occupancy Economic Development Job Creation Equipment Purchase Facility Acquisition/Rehab Community Development Public Improvements Brownfield Remediation Office of Community and Rural Affairs Indiana Housing and Community Development Authority

9.  @OCRAIndiana  #INOCRAconf CEED Regulatory Requirements Compliance with all CDBG regulations: National Objective/Eligible Activity Low Moderate Income: Job creation/retention Area Benefit Limited Clientele Slum/Blight Area Spot Urgent Need Office of Community and Rural Affairs Indiana Housing and Community Development Authority

10.  @OCRAIndiana  #INOCRAconf CEED Regulatory Requirements cont. Income Targeting LMI / Income Qualification & Verification for Housing Environmental & Historic Review Labor Standards (Davis Bacon) Uniform Relocation Act Fair Housing/Civil Rights/504 Accessibility Office of Community and Rural Affairs Indiana Housing and Community Development Authority

11.  @OCRAIndiana  #INOCRAconf CEED Regulatory Requirements cont. Financial Management/Procurement Construction Contract Requirements & Bonding Requirements Section 3 Lead Based Paint Office of Community and Rural Affairs Indiana Housing and Community Development Authority

12.  @OCRAIndiana  #INOCRAconf CEED Application Process Initial Contact Housing – IHCDA Non-Residential – OCRA Liaison Checklist and Eligibility State receives and reviews the proposed project eligibility State works with Local HUD office to determine eligibility. State may request meeting with applicant. Ongoing process. Office of Community and Rural Affairs Indiana Housing and Community Development Authority

13.  @OCRAIndiana  #INOCRAconf CEED Application Process cont. Application Underwriting State reviews project viability after receipt of all required application documentation Approval Application will be submitted to National HUD office for approval. Can take up to 40 days Consent State legal opinion to HUD submitted Commitment letter for financing to borrower. Around 55 days. Office of Community and Rural Affairs Indiana Housing and Community Development Authority

14.  @OCRAIndiana  #INOCRAconf CEED Application Process cont. State/ HUD Closing State to execute HUD debt instruments and HUD advances funds to LUG. Around 60 days Project Closing & Funding Funding to take place after receipt of all appropriate supplemental documentation and legal documents are executed. Around 45-60 days Office of Community and Rural Affairs Indiana Housing and Community Development Authority

15.  @OCRAIndiana  #INOCRAconf CEED Application Process cont. Ongoing Servicing Ongoing loan servicing by IHCDA to include servicing accounts, payment reminders and remittance, submitting appropriate reports to State, etc. Office of Community and Rural Affairs Indiana Housing and Community Development Authority

16.  @OCRAIndiana  #INOCRAconf CEED Financing Minimum Loan Amount - $500,000.00 Maximum Loan Amount - $7,000,000.00 Term Maximum 20 years residential Maximum __ years non-residential (variable) Interest Rates Interim – variable interest rate Permanent – fixed interest rate Office of Community and Rural Affairs Indiana Housing and Community Development Authority

17.  @OCRAIndiana  #INOCRAconf Interim Financing Interim loan available until public offering Interest rate: Variable 90 day London Inter Bank Offered Rate (LIBOR) +250 basis points, paid quarterly HUD guarantees repayment of borrower’s loan to investors Interim Lender currently a Money Market Fund Office of Community and Rural Affairs Indiana Housing and Community Development Authority

18.  @OCRAIndiana  #INOCRAconf Permanent Financing Permanent – fixed interest rate Public offering provides long-term, fixed-interest rate financing “Public offering” conducted occasionally by HUD Section 108 underwriting team Interest rates—fixed; benchmarked on U.S. 10-year Treasury note of equivalent maturity +250 basis points Office of Community and Rural Affairs Indiana Housing and Community Development Authority

19.  @OCRAIndiana  #INOCRAconf Permanent Financing cont. Permanent – fixed interest rate Fees—includes underwriting, legal and printing costs Loans serviced by IHCDA Office of Community and Rural Affairs Indiana Housing and Community Development Authority

20.  @OCRAIndiana  #INOCRAconf Office of Community and Rural Affairs Indiana Housing and Community Development Authority Community and Economic Development Questions

21.  @OCRAIndiana  #INOCRAconf Office of Community and Rural Affairs Indiana Housing and Community Development Authority Housing Development Questions Matt Rayburn mrayburn@ihcda.in.gov 317 233 9564 Darin Edwards daedwards@ihcda.in.gov 317 233 4611

22.  @OCRAIndiana  #INOCRAconf Questions? Office of Community and Rural Affairs Indiana Housing and Community Development Authority