Slide 1

Avoiding Technical Corrections

2012-2013Qualified 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 dont 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 (datedbefore 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 yearNew Construction: $250 per unit per yearSingle Family Units: $420 per unit per yearHistoric 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 3rd 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 siteMap of nearby amenities must have and mile radiusAll forms must be signed and dated by all necessary partiesRedevelopment plans must show evidence of community participation and inputCredit reduction calculated correctlyUnique features dont be modest!

Avoiding Technical Corrections General Reminders

Follow the submission guidelines in Schedule G

Form C due to IHCDA by October 1st

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

3rd Week of November IHCDA will notify the highest elected official of the local jurisdiction of tax credit applications

1st Week of December CNA report completed and provided to the applicant

1st Week of January Notification of Technical Corrections and any concerns regardingMarket Studies

Avoiding Technical Corrections 2013A-C Tentative Timeline - Continued

4th 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 Authority30 S. Meridian Street, Suite 1000Indianapolis, IN 46204(317) 232-7777