1. 2011 Qualified Allocation Plan Forum September 16, 2010

2. 2011 Qualified Allocation Plan Forum WELCOME & INTRODUCTIONS

3. 2011 Qualified Allocation Plan Forum Agenda 2011 QAP Changes: 9:00 – 10:30am Networking Break: 10:30 – 10:45am Intergenerational Communities: Seniors and Downtown Living Lunch: 11:45 – 1pm Debt Financing For Housing Credit Developments: 1 – 2pm Networking Break: 2 – 2:15pm Dialogue With Indiana Housing Credit Experts: 2:15 – 4pm

4. 2011 QAP Changes 1.Housing Priorities 2.Set Aside Categories 3.Threshold Requirements 4.Evaluation Factors 5.Miscellaneous

5. 2011 QAP Housing Priorities 1.Comprehensive Community Development a)Partnerships b)Adopted plans 2.Aging In Place a)Accessible Units ratio points b)Universal Design feature levels 3.Ending Homelessness a)Tailored Services b)Permanent Supportive Housing open round 4.High Performance Housing a) LEED certification requirement b)Energy efficient construction

6. 2011 QAP Set Aside Categories CHANGES: Community Impact 10% Set-Aside created Housing First Set-Aside increased to 10% USDA 515 Set-Aside removed Rural Set-Aside increased to 10% “Rural” re-defined Special Needs Set-Aside removed and made a Threshold requirement

7. 2011 QAP Set Aside Categories CHANGES: Community Impact Set-Aside Site Visit Documentation 1.Narrative One page, demonstrating how development meets set-aside requirements 2.Directions to site 3.2 – 3 photos of site, with labels of direction in which they were taken

8. 2011 QAP Threshold CHANGES: Page 10 – Submitting Satisfactory Evidence of Site Control Page 11 – Development Site Information Page 11 – Only the lender letter of interest will still be required for Threshold. The equity letter will be required with the150 day documents.

9. 2011 QAP Threshold CHANGES: Page 13 – Tab J Development Team Member Affidavits: not really a change but a notable issue during Threshold reviews. Page 14 – Rehab (hard costs) per unit - $20,000. If competing in Preservation set-aside $30,000 per unit. Page 15 – Displacement/Relocation Plan – MORE DETAILED.

10. 2011 QAP Threshold CHANGES: Underwriting Guidelines Page 15 – Replacement Reserves Added: Single Family units & Historic Rehab units Page 16 – Stabilized Debt Coverage Ratio Broken down by Large/Small City & Rural Also, small change if deal has NO HARD DEBT.

11. 2011 QAP Threshold CHANGES: Developer Fee Limitations: (page 17 – 18) On a per unit basis for New Construction & Rehab. Consultant fees are considered part of the developer fee.

12. 2011 QAP Threshold CHANGES: Page 18 - Contractor Fee Limitations: NO INCREASE permitted higher than the stated percentage limitations in the fee chart. Page 19 – Architect Fee Limitations: If proposing more that 3%, guidelines must be followed in Schedule H. Page 19 – Consultant Fee Limitations

13. 2011 QAP Threshold CHANGES: Page 19 – Reasonableness of Project Costs: IHCDA may require additional info or documentation to substantiate the reasonableness of costs. Page 19 - MINIMUM DEVELOPMENT STANDARDS: All new construction developments must have energy efficiency certification

14. 2011 QAP Threshold CHANGES: Page 20 – Minimum amenities for Elderly developments: % of ADA adaptable & accessible for both new construction and rehabilitation. Page 20 – Special Housing Needs: Now THRESHOLD requirement

15. 2011 QAP Threshold CHANGES: Page 21 – Returned Credits = Scoring Deduction Credits Returned Within:Deduction in Points 30 – 59 Days from the date of Carryover 2 Point Deduction 60 – 89 Days from the date of Carryover 4 Point Deduction 90 – 119 Days from the date of Carryover 6 Point Deduction 120 or more Days from the date of Carryover 10 Point Deduction

16. 2011 QAP Threshold Threshold Pitfalls to Avoid 1.Development Team All team members are not identified – now required Affidavits are not signed, notarized, or QAP language missing 2.Consultant fee isn’t backed out when determining Developer Fee 3.Relocation Plan is deemed “N/A” for a property with tenants 4.Documents are more than 12 months old 5.CDBG-D &/or 1602 sources identified on application

17. 2011 QAP Evaluation Factors 1.Rents Charged28 Points 2.Development Characteristics91 Points 3.High Performance Housing21 Points 4.Financing & Market32 Points 5.Other28 Points Total 200 Points

18. 2011 QAP Evaluation Factors Changes: -Total possible points increased from 150 points to 200 points. -Minimum score to pass threshold increased from 60 points to 100 points (90 points for 4% credit Applications) -Removed “Constituency Served”

19. 2011 QAP Evaluation Factors Changes (cont.): -Added points for ADA Type A Accessible Units -For percentage greater than the minimum threshold requirements. Accessible Unit Point Designation 1 Point2 Points3 Points4 Points Family Developments Rehabilitation6.0%-6.9%7.0% - 7.9%8.0% - 8.9%9.0% or more New Construction 7.0% - 7.9%8.0% - 8.9%9.0% - 9.9%10.0% or more Elderly Developments Rehabilitation7.0% - 7.9%8.0% - 8.9%9.0% - 9.9%10.0% or more New Construction 8.0% - 8.9%9.0% - 9.9%10.0% - 10.9%11.0% or more

20. 2011 QAP Evaluation Factors Changes (Cont.): -Universal Design Features -Now Using a “Ribbon Color” system -Applicant to select ribbon color based on amenities as set forth in development schematics -Grey Ribbon – applicant will meet all minimum IHCDA threshold requirements only. No additional design features from Column A, Column B, or Column C. 0 points -Green Ribbon – in addition to meeting all minimum IHCDA threshold requirements, applicant commits to adopt a minimum of one (1) universal design feature from each Universal Design Column. 1 point

21. 2011 QAP Evaluation Factors Changes (Cont.): -Universal Design Features (cont.) -Yellow Ribbon – in addition to meeting all minimum IHCDA threshold requirements, applicant commits to adopt a minimum of two (2) universal design feature from each Universal Design Column. 2 points -Red Ribbon – in addition to meeting all minimum IHCDA threshold requirements, applicant commits to adopt a minimum of three (3) universal design feature from each Universal Design Column. 3 points -Blue Ribbon – in addition to meeting all minimum IHCDA threshold requirements, applicant commits to adopt a minimum of four (4) universal design feature from each Universal Design Column. 4 points

22. 2011 QAP Evaluation Factors Changes (cont.): -Vacant Structure -Added commercial as an eligible use. -Decreased number of points: -50% of Total Development 1 point -75% of Total Development 2 points -100% of Total Development3 points -Eligible structures must contain a rental housing tax credit unit in a qualified rental housing tax credit building.

23. 2011 QAP Evaluation Factors Changes: -Infill Housing (7 points) -Must be surrounded on at least 2 sides with adjacent development -Must maximize use of existing utilities and infrastructure; -One side of the development must be adjacent to occupied residential development, operating commercial development, active public space or another active community amenity. Agricultural Land does not qualify as Infill Housing for this scoring category.

24. 2011 QAP Evaluation Factors Changes: -Adaptive Reuse (5 Points) -Proposed development is an adaptive reuse of an entire existing building and constitutes a significant part of the development as a whole. -Change in use of a major building (not already part of an existing multifamily development) for residential use or as a community building. -Possible 3 points for a adaptive reuse of part of a building.

25. 2011 QAP Evaluation Factors Changes: -Brownfield (4 points) -Site where EPA, IDEM, or other environmental regulatory agency has defined the site as a Brownfield site and has determined the applicable guidelines for the cleanup required for residential use.

26. 2011 QAP Evaluation Factors Changes: -Promotes Neighborhood Stabilization (10 points) -Recognized by the local government as assisting in the stabilization of a neighborhood by demolishing or redeveloping property that has been: -Foreclosed Upon -Mortgage or tax foreclosure must be complete -Title of the property must be transferred from the former homeowner in some form of foreclosure proceeding or “in lieu of foreclosure.”

27. 2011 QAP Evaluation Factors Changes: -Promotes Neighborhood Stabilization (10 points) (cont.) -Abandoned -Mortgage or tax foreclosure proceedings have been initiated on the property; -No mortgage or tax payments have been made by the property owner for at least 90 days; and -Property has been vacant for at least 90 days.

28. 2011 QAP Evaluation Factors Changes: -Promotes Neighborhood Stabilization (10 points) (cont.) -Blighted -Considered “blighted” if 2 or more of the following are meet: -Uninhabitable, unsafe, or abandoned; -Inadequate provisions for ventilation, light, air, or sanitation; -An imminent harm to life or other property caused by a natural catastrophe in which the Governor has declared a state of emergency or has certified need for disaster assistance; provided that the owner has failed to take reasonable measures to remedy the harm.

29. 2011 QAP Evaluation Factors Changes: -Promotes Neighborhood Stabilization (10 points) (cont.) -Blighted (cont.) -Site identified by FEMA as a Superfund site, or environmental contamination to an extent that requires remedial investigation or a feasibility study; -Repeated illegal activity on the individual property of which the property owner knew or should have known; - Property maintenance is below state, county, or municipal codes for at least one year after notice of code violation

30. 2011 QAP Evaluation Factors Changes: -Promotes Neighborhood Stabilization (10 points) (cont.) -Blighted (cont.) -Site is partially built with no work on the property for a period of at least six months; and/or full debt service payments have not been made for a period of at least 90 days; and the lender and/or local government provides a letter outlining the effect the property has on the surrounding community; -Property that was acquired for redevelopment by a government entity or community organization that were foreclosed, abandoned, or blighted when acquired.

31. 2011 QAP Evaluation Factors Changes: -Promotes Neighborhood Stabilization (10 points) (cont.) -Greyfield Redevelopment -Previously developed retail or other commercial (non- residential) center; -Suffers from a lack of reinvestment due to abandonment of tenants; and -Has underlying utilities and paved infrastructure; -Must be: -Vacant, abandoned, or 90% of total sq. ft. is unused; and -With 25% of site comprised of associated parking areas.

32. 2011 QAP Evaluation Factors Changes: -Local Redevelopment Plan (11 - 14 points) -Adopted redevelopment or community revitalization plan that clearly targets specific neighborhood in which the project is located. -Must include: -Clearly delineated target area that includes the proposed project site; -Detailed policy goals, which include rehabilitation or production of affordable rental housing; -Implementation measures with specific, current, and ongoing time frames; -The proposed development must support at least one of the goals of the redevelopment or revitalization plan; and -An assessment of the existing physical structures and infrastructure of the community.

33. 2011 QAP Evaluation Factors Changes: -Local Redevelopment Plan (11 - 14 points) -The following are not eligible: -Short-term work plans; -Consolidated plans, municipal plans, or land use plans; or -Plans that do not reflect the current neighborhood conditions. If the plan has been adopted by a local unit of government, and meets all the previous requirements an additional 3 points will be awarded for a total of 14 points.

34. 2011 QAP Evaluation Factors Changes: -Federally Assisted Revitalization Award (5 points) -Proposed Project is a phase or component of a : -PHA sponsored HOPE VI or Choice Neighborhoods revitalization effort; or -Revitalization initiative, in which a PHA is a central sponsor and funder, but does not included HOPE VI or Choice Neighborhoods funding; or -HUD funded Promise Neighborhoods or Sustainable Communities initiative; or -New Market Tax Credit Development -Must Have: -Affordable Units for an extended period of 30+ years; -Part of a mixed income phased community with a significant market component;

35. 2011 QAP Evaluation Factors Changes: -Federally Assisted Revitalization Award (Cont’d.) -Must Have: -Facilitate the de-concentration of poverty; and -Provide for community improvements or amenities, which may include: - New or improved infrastructure; - Green-space; - Improved transportation, - Quality of life enhancements; or - Other improvements benefiting the community.

36. 2011 QAP Evaluation Factors Changes: -Off Site Improvement, Amenity, and Facility Investment (10 points) -Third party investment of resources is provided that will result in off-site improvements adjacent to the project site, and/or the development of parks, green space and shared amenities, recreational facilities and improvements adjacent to the proposed project site that will serve the tenant base for the subject property. -Must be: -Committed prior to the proposed placed in service date; -Costs and sources for improvements, amenities and/or facilities must be excluded from the cost and sources of funding for the proposed development; and -Be at least $100,000 and paid in full by third party.

37. 2011 QAP Evaluation Factors Changes: -Phased Developments (3 points) -Project is part of a larger, multi-phased development project, where: -At least one or more phases must have received an allocation of RHTCs and at least one phase has already began construction; -Part of a community revitalization effort; and -Originally designed to be one total development with multi- phased developments.

38. 2011 QAP Evaluation Factors Changes: Removed points for: -High Performance Housing Characteristics: -Energy Star Certified Building Envelopes; -Energy Star Rated refrigerators in every unit -Sustainable Development Characteristics: - Removed points for - Re-Cycled Content - Low Volatile Organic Compounds - Low Impact Construction Practices - Low Impact Procurement Practices - Owner Paid Utilities

39. 2011 QAP Evaluation Factors Changes: -Building Certification (6 points max.) -All buildings must receive at least one (1) energy efficiency certification -Buildings can receive more than 1 certification to maximize points. LEED Green Building Standard Energy Star HERS Rating

40. 2011 QAP Evaluation Factors Changes: -Desirable Sites -Removed points for desirable sites that are located ½ - 1 mile from the development -NOTE: To receive points, applicant must place a map in Tab Q containing: -Location of site including an indication of major access roads; -* Indication of distances with a ¼ mile radius indicated on the map; -Areas of residential development adjacent to or near the site; -Indication of any significant industrial or commercial development; and -All desirable facilities or activities.

41. 2011 QAP Evaluation Factors Changes: -Financing & Market -Revised wording to “Public Funds” with a firm commitment that does not require any further approval -Must enhance and/or create significant cost savings for the development -Increased percentage of public funds to total development costs required to receive points % of Total Dev. CostPoint(s).50% to.99%1 point 1.00% to 1.99%2 points 2.00% to 2.99%2.25 points 3.00% to 3.99%2.5 points 4.00% to 4.99%2.75 points Greater than 5.00%3 points

42. 2011 QAP Evaluation Factors Changes: -Credit Reduction (Max 5 Points) -1 point for each percent that a project reduces the amount of RHTCs requested versus the maximum allowable credit amount. -Committed funds must be part of the permanent sources for the development and remain in place for a min. of 10 years. Example: Total Development Costs: $10,000,000 $787,700 Eligible Basis: $9,000,000 Applicable Fraction: 100% $810,000 Applicable Percentage: 9% Max. Allowable Credit: $810,000 97% * Credits Requested: $787,700 *Constitutes a 3% reduction in the amount of RHTCs requested for 3 points.

43. 2011 QAP Evaluation Factors Changes: -Subsidized Housing Waiting List -Must now complete and execute Form L to receive points -Community Revitalization Preservation -Must be located within the corporate limits of a City or Town; and -Must not have been used as agricultural land within the past five years.

44. 2011 QAP Evaluation Factors Changes: -Tenant Investment Plan (Max. 8 Points) -Level 1: Programs/Classes -Requires ongoing tenant participation and/or program management -i.e. discounts, referrals, educational resources -Range from 1 – 3 points -Level 2: Behavioral/Health Services -Targets services for specific tenants -i.e. treatment, prevention, or assistance based on specific special need -Range from 1 – 4 points

45. 2011 QAP Evaluation Factors Changes: -Tenant Investment Plan (Max. 8 Points) (cont.) -Level 3: Community Enhancement to encourage Aging in Place -Requires both extensive tenant participation, as well as management maintenance. -i.e. case manager, resident liaison, monthly activities programs -Range from 1 – 6 points -Level 4: Permanent Supportive Housing -Reserved for applicants building Permanent Supportive Housing developments -Services must be in line with or match the philosophy of the Housing First description -Range from 1 – 8 points

46. 2011 QAP Evaluation Factors Changes: -Tenant Investment Plan (Max. 8 Points) (cont.) -Must Submit a Tenant Investment Summary which includes: -Tenant Investment Plan checklist; -Brief TIP narrative identifying an annual budget, the role of the TIP Coordinator, and how the services will meet the needs of the tenants; -Form M must be filled out for each Service Provider/Agent/Organization and signed by all parties in agreement; -A TIP Exhibit A must be attached to each agreement; and -Exhibit B listing any “Other” services being offered that may not be listed.

47. 2011 QAP Threshold Scoring Pitfalls to Avoid 1.Lack of required documentation/required language. 2.Desirable sites: ¼ mile radius on map. 3.RHTCs as part of the overall financial structure = 10 year credit amount ÷ Total Development 4.Unit Size: Must include a floor plan with exact total net square footage printed clearly for each for each unit type/size. 5.Unique Features: Use a bullet point list with a description of each unique feature.

48. Application Best Practices 1.Submit a copy of all documents on CD-R a)Organize in application order b)PDF, legible format 2.Self-score sheets a)Show your work for calculations b)Include notes if score sheet suggests (desirable site) 3.One file per application 4.Label all documents with development name

49. 2011 QAP Miscellaneous 1.Housing First Open Round 2.New Fees a)Each additional threshold requirement b)Extension request for any deadline 3.Conditional Commitment Equity Letter 4.Carryover Allocation Date – On or before July 5 th, 2011