Community Investment Products - Housing Alliance of PA.org · 2017-03-17 · Case Study: JBJ Soul...
Transcript of Community Investment Products - Housing Alliance of PA.org · 2017-03-17 · Case Study: JBJ Soul...
FHLBank Pittsburgh
To learn more about how your institution can benefit from one of our products, contact:
Laura Rye – [email protected] ̶ Dave Buches – [email protected]
Starting Soon:
Affordable Housing Program
Blueprint Communities®
Capacity-building for
communities in need of
revitalization
First Front Door
Down payment and
closing cost assistance,
up to $5,000, for income-
qualified, first-time
homebuyers
Community Lending Program
Low-cost liquidity
and match
financing for
community
development
Banking On Business
Gap financing and
equity for small
business start-up
and expansion
Up to $650,000 in subsidy
for affordable housing
development
Community Investment Products
Affordable Housing Program (AHP)
Megan Krider
March 17, 2017
FHLBank Pittsburgh
AHP Community Benefits
Housing
Creates employment opportunities
Contributes to local property
tax base
Serves as a catalyst to
larger projects
– Flexible funding
– Can support a variety of
projects
FHLBank Pittsburgh
Success Story
Six new-construction homes in
South Philadelphia. The project
received an AHP subsidy
award of $123,499. The newest
homeowners, Aisha and Sekou,
devoted more than 350 hours of
“sweat equity” in lieu of a down
payment and have the financial
stability to repay a zero-percent
interest, 30-year mortgage.
Cross & Greenwich
Philadelphia, Pa.:Santander Bank &
Habitat for Humanity Philadelphia
Since 1990, in Pennsylvania,
FHLBank Pittsburgh has
awarded over $145 million in
AHP subsidy to more than 790
projects, leveraging over $2
billion in total development
costs.
FHLBank Pittsburgh
Webinar Agenda
• AHP overview
• AHP step-by-step
• Scoring review
• Feasibility review
• Awards
• Post-award responsibilities
• Next Steps and 2017 Timeline
• Maximizing FHLBank Pittsburgh resources
• Questions
FHLBank Pittsburgh
What is AHP?
• 1989 – FIRREA, Congress created AHP which requires FHLBanksto contribute 10 percent of its previous net earnings
• FHLBank Pittsburgh provides subsidy under its competitive application program, up to $650,000 per project, to support affordable housingdevelopment
• Members partner with a sponsor (developer) to submit AHPapplications for review
Project Types Income Requirements
• Rental
• Lease-purchase
• Owner-occupied purchase
• Owner-occupied rehabilitation
• Rental – at least 20% of units must
be reserved for those with incomes
at or below 50% area median
income (AMI)
• Families or individuals with
incomes at or below 80% of AMI
- 80% AMI for family of four:Charleston, WV: $46,250
Dover, DE: $50,300
Pittsburgh, PA: $56,950
Philadelphia, PA: $64,250
Uses
• New construction
• Rehabilitation
• Acquisition
FHLBank Pittsburgh
AHP Overview
Project-Specific Thresholds:
Rental Projects: Owner-Occupied Projects:
At least 20 percent of units
targeted for households at or
below 50 percent AMI
15-year retention period with
acceptable retention agreement
At least one unit targeted for
households at or below 80
percent AMI
5-year retention period with
acceptable retention agreement
Project meets Fair Housing requirements
AHP subsidy requested must be less than or equal to the
$650,000 maximum
AHP funds must be used for an eligible purpose
FHLBank Pittsburgh
AHP Overview
• AHP Implementation Plan
• Scoring – Attachment C of the Implementation
Plan
• Feasibility – Attachment B of the Implementation
Plan
Applications
are submitted
Applications
are scored
High-scoring applications undergo feasibility
Applications underwritten against Bank’s feasibility guidelines
Projects with highest score that pass feasibility are awarded funds
FHLBank Pittsburgh
AHP Overview
• Scoring
– 100 point scoring against the Bank’s established priorities
• Feasibility
– Application is underwritten against the Bank’s feasibility guidelines
• Disbursement
– Awarded projects request disbursements of AHP funds once costs have been incurred
• Compliance and Monitoring
– Completed projects subject to long-term monitoring and compliance requirements
FHLBank Pittsburgh
Case Study:
JBJ Soul Homes
Formerly Fairmount Gardens
FHLBank Pittsburgh
Case Study: JBJ Soul Homes
• Sponsor: Project H.O.M.E.
• Member: PNC Bank
• AHP Subsidy Award: $250,000
• Total Development Cost: $13,902,706
• Total Units: 55
• Location: Philadelphia, Pa.
• Description: Four-story, mixed-use development with retail offices and 55 apartments for formerly homeless and low-income individuals with access to supportive services
FHLBank Pittsburgh
AHP Step-by-Step
Review
• Review AHP Implementation Plan
• Access online resources
Partner
• Establish partnership with FHLBank member
• Communicate roles/milestones
Prepare
• Prepare AHP application
• Submit application to FHLBank member
FHLBank Pittsburgh
AHP Step-by-Step: Meet and Plan
Complete Due Diligence
• Review AHP Implementation Plan for scoring and
feasibility criteria as they relate to your project
• Access online forms, guides and technical assistance
• Identify a member partner or take advantage of the
member/sponsor match service provided by FHLBank
Pittsburgh
• Complete online registration for the funding round
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
AHP Step-by-Step: Online Registration/Access
• AHP Online application
• Register for the funding round: www.fhlb-pgh.com
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
AHP Step-by-Step: Online Registration/Access
• Start the process now
• Members have a different registration process than sponsors:– AHP role in the system given by member “CSA”
– For CSA name, contact: • Product Delivery Service Center at 800-288-3400, option 2
• Community Investment department at 800-288-3400, option 4
• You are already registered if you:– Submitted an AHP application in 2010-2016 funding rounds
– Submitted an AHP funding request online
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
AHP Step-by-Step: Submit AHP Application
Round Opens June 6
Applications must be:
Sponsor approved
and
Member approved
by
Thursday, August 10, at 5:00 p.m. EST
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
2016 AHP Funding Round Results
50
approved
63: Last approved score
unapproved
164 Submitted
Scored Applications:
76: Highest approved score
$23.1 million committed;
approximately $461,800 average AHP
subsidy per project
FHLBank Pittsburgh
Scoring Categories Point Allocation
Use of Donated Properties 5 (fixed)
Sponsorship by Nonprofit or
Government Entity5 (fixed)
Targeting 0-22 (variable)
Housing for the Homeless 6 (variable)
Promotion of Empowerment 0-10 (variable)
2017 Scoring Categories
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
Meet/Plan Input Submit Score Feasibility AwardPost
Award
2017 Scoring Categories
Scoring Categories Point Allocation
Special Needs 8 (variable)
Rural 5 (fixed)
Member Financial Participation 3 (fixed)
Readiness to Proceed 8 (fixed)
Subsidy per Unit 0-8 (variable)
Community Stability 0-20 (variable)
FHLBank Pittsburgh
Scoring: Serving Homeless Populations
Creation of transitional housing (excluding overnight shelters) for
homeless households permitting a minimum of six months’ occupancy
6 points 3 points
Reserve > 50% of total units
for homeless households
Reserve 20% to <50% of total units
for homeless households
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
Scoring: Serving Homeless Populations
Definition of “Homeless”
• Persons who are sleeping in places not meant for human habitation
• Persons sleeping in emergency shelters
• Persons graduating from a transitional housing program specifically for homeless persons
• Persons being discharged from an institution or foster care with no permanent residence available
• Persons who would be discharged from an institution if they had a permanent residence available
• Victims of domestic violence
• Persons who are “doubled-up” and are in a situation of overcrowding, defined as:
Unit Size Number of People
Efficiency 3 or more
1 Bedroom 4 or more
2 Bedrooms 6 or more
3 Bedrooms 8 or more
4 Bedrooms 10 or more
FHLBank Pittsburgh
Scoring: Serving Populations with Special Needs
Creation of units reserved for
persons with special needs defined
as:
8 points
4 points
• Physically and/or mentally disabled
• Developmentally disabled
• Recovering from domestic abuse
(physical abuse)
• Recovering from domestic abuse
(emotional abuse)
• Recovering from chemical dependency
• Persons with HIV/AIDS
Reserve > 50% of total units
for households with special needs
Reserve 20% to <50% of total units
for households with special needs
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
Owner-Occupied Rehab Projects
10 points 5 points
• Property receives needed
rehabilitation and/or accessibility
improvements on specific
components
• Project does not meet the criteria
outlined under 10 points
75% of properties in the project
must be:• Fully/comprehensively inspected
by qualified individual
• Certified that all hazardous or
uninhabitable conditions are
corrected at project completion
• Certified that all major systems
have reasonable (5 years)
remaining useful life at project
completion
• Qualified individual certification
must include:– Detailed inspection process
– Qualifications of individual
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
Case Study:
Silver Anniversary
Scattered Sites Project
24
FHLBank Pittsburgh
Case Study: Silver Anniversary
• Sponsor: Almost Heaven Habitat for Humanity
• Member: Pendleton Community Bank
• AHP Subsidy Award: $110,000
• Total Development Cost: $404,800
• Total Units: 3
• Location: Franklin, W.Va.
• Description: Celebrating 25th Anniversary,
project provided three new energy-efficient
homes to low-income households, financed with
zero interest rate, affordable mortgages
FHLBank Pittsburgh
• Projects may score well but must also pass the
feasibility review to be awarded an AHP commitment
• Review project feasibility guidelines in Attachment B of
the AHP Implementation Plan
• Feasibility factors:– Need for subsidy and viability
– Cost reasonableness
– Readiness to proceed
– Development team capacity
– Market demand
Feasibility Review Factors
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
Feasibility Review: Subsidy Need and Viability
• Detailed financial information required:
– Sources and uses (all projects)
– Construction cost breakdown (all projects)
– Gap analysis (owner-occupied only)
– Sponsor Financing Worksheet (owner-occupied only)
– Rental Income Worksheet (rental only)
– Operating pro forma (rental only)
– Building Information Form (rental only)
– Owner-Occupied New Construction Form (owner-occupied only)
– Scope of Rehabilitation Form (rental rehabilitation only)
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
• Homeownership and rental projects must demonstrate
that a funding gap exists that cannot be filled by
conventional debt
• Rental projects must demonstrate viability throughout the
15-year compliance period
Feasibility Review: Subsidy Need and Viability
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
Feasibility Review: Cost Reasonableness
Cost reasonableness determinations vary based on project
type:
• Marshall and Swift analysis
– Possible 10 percent cost exception with valid third-party
justification for excess cost
• “Local usual and customary costs” (owner-occupied projects)
• Costs validated by third party and/or commit to bidding
process
• Approval of rental projects will be conditioned on submission
of Third-Party Plan and Cost Review Form prior to, or with,
the request for disbursement of funds
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
Project awards announced December 14, 2017
AHP Awards
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
Post-Award Responsibilities
Activity Member Sponsor
Sign AHP Tri-Party Agreement x x
Start and complete project in timely manner and in accordance with approved AHP application
x
Semi-annual progress reporting x
Request/Approve AHP subsidy disbursements x x
Draft and submit AHP retention documents x x
Activity Member Sponsor
Execute AHP Tri-Party Agreement x x
Draft and submit AHP retention documents x x
Review and sign the monitoring acceptance letter x
Start and complete project in timely manner and
in accordance with approved AHP application,
including any conditions of grant award
x
Semi-annual progress reporting x
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
Post-Award Responsibilities
Activity Member Sponsor
Request/Approve AHP subsidy disbursements x x
Complete AHP Household Income Calculation Form
and income documentationx
Comply with all commitments and representations
made in conjunction with application scoring or
feasibility criteria
x
Long-term monitoring of rental projects x
Meet/Plan Input Submit Score Feasibility AwardPost
Award
FHLBank Pittsburgh
Next Steps
Visit the AHP webpage: www.fhlb-pgh.com
Identify a partner- Member/sponsor match service
Check registration status
Online technical assistance resources- Downloadable mini-webinar for Community Stability
- Guide to Complete AHP Online Application
- Sponsor and Member System Guide
Request project-specific technical assistance- Go to AHP website, click on technical assistance link and complete
TA request form
- Submit completed form via email
- Community Investment staff will initiate contact upon receipt of
forms
FHLBank Pittsburgh
AHP 2017 Timeline
March 31Forms and resources available on
website
April 12AHP 101 and Community Stability
webinars
June 6 Round opens
July 28Last day to request technical
assistance
August 10, 5 p.m. Round closes
December 14 AHP awards announced
FHLBank Pittsburgh
Maximize FHLBank Resources: CLP
If your project needs construction financing and/or can support
debt service and needs permanent financing, consider the
Community Lending Program (CLP):
• CLP offers a flexible source of funding to FHLBank member institutions for
qualified projects
• CLP benefits:
– Readily available, simple, noncompetitive application process
– Provides for fixed-rate financing up to 30 years
– Quick approval process and no monitoring required
• How to apply:
– All CLP projects must meet member lending standards; member submits CLP
application on behalf of the project
– If you have questions, contact a member institution, or Kate Swanson at
FHLBank Pittsburgh
Maximize FHLBank Resources: FFD
If your project involves for-sale homeownership for first-time
homebuyers, consider the First Front Door (FFD) program:
• AHP can be used to write down the home mortgage to achieve affordability
• FFD can offer additional subsidy for down payment and closing cost up to
$5,000 for eligible homebuyers
• How to apply:
– Homebuyers must meet participating member lending standards for first
mortgage; member submits FFD homebuyer registration on behalf of eligible
homebuyers
– FFD subsidy available on a first-come, first-served basis
– For a list of participating members, go to www.firstfrontdoor.com
FHLBank Pittsburgh
FHLBank Pittsburgh Contacts
https://www.fhlb-pgh.com/ahp
Megan Krider AHP Product Manager [email protected]
David Buches Del. & Eastern PA [email protected]
Laura Rye WVa. & Western PA [email protected]
Community Investment Department