1. 1 Capital Fund U.S. Department of Housing and Urban Development Office of Public and Indian Housing (PIH) Washington, D.C. Presented By: Kevin Gallagher and Deana McCormick CFFP Specialists Office of Capital Improvements

2. 2 CAPITAL FUND FINANCING PROGRAM (CFFP)  Authorization and Need  QHWRA of 1998 Section 9 – Allowed for financing as eligible use of CFP Section 9 – Allowed for financing as eligible use of CFP Section 30 –Mortgages and Security Section 30 –Mortgages and Security  Modernization Backlog Current backlog estimated at $18 billion Current backlog estimated at $18 billion Annual accrual $2 billion Annual accrual $2 billion Current appropriation funding $2.4 billion Current appropriation funding $2.4 billion

3. 3 CAPITAL FUND FINANCING PROGRAM (CFFP)  Program Overview  Bond Issuance or Direct Loan  Individual PHAs or Pools  PHA uses a portion of CFP for debt service  Future CFP pledged as collateral  Direct LOCCS Payments  Bond Holder/Bank: Appropriations Risk and Performance Risk

4. 4 CAPITAL FUND FINANCING PROGRAM (CFFP)  Program Uses  Proceeds considered as CFP funds: all public housing laws and regulations apply  Should address long-term planning needs  Modernization  New Development

5. 5 CAPITAL FUND FINANCING PROGRAM (CFFP)  Program Requirements  Debt Service - Generally no more than 33% annual Capital Fund  Term – Generally no more than 20 years  Management Assessment of PHA capability  Fairness Opinion on reasonableness of financing  PHAS High or Standard Performer

6. 6 CAPITAL FUND FINANCING PROGRAM (CFFP)  Program Requirements-Cont.  Work based on Physical Needs Assessment  Declaration of Trust on all covered properties  Approved PHA Plan: including use of CFP for debt service and use of proceeds  PHA Board Resolution

7. 7 CAPITAL FUND FINANCING PROGRAM (CFFP)  Proposal Development  Contact OCI for latest CFFP documents Term Sheet Term Sheet Scope of work for Management Assessment and Fairness Opinion Scope of work for Management Assessment and Fairness Opinion Sample Debt Service Schedule Sample Debt Service Schedule Sample Annual Statement Sample Annual Statement  CFFP Staff (202)708-0614 Kevin Gallagher x4192 Kevin Gallagher x4192 Deana McCormick x4228 Deana McCormick x4228 Tom Shelton x4799 Tom Shelton x4799

8. 8 CAPITAL FUND FINANCING PROGRAM (CFFP)  Proposal Development  Procurement All professional services must be procured according to Procurement Regulations All professional services must be procured according to Procurement Regulations  Pool Structure Lead PHA Lead PHA Partnership with State Housing Finance Agency Partnership with State Housing Finance Agency Non-profit Non-profit

9. 9 CAPITAL FUND FINANCING PROGRAM (CFFP)  Proposal Development  Key Players Underwriter Underwriter Underwriter’s counsel Underwriter’s counsel Bond Counsel Bond Counsel PHA Counsel PHA Counsel Issuer Issuer Trustee Trustee Rating Agency Rating Agency Financial Advisor (optional) Financial Advisor (optional)

10. 10 CAPITAL FUND FINANCING PROGRAM (CFFP)  Proposal Submission  Submission requirements Cover Letter request to Assistant Secretary Cover Letter request to Assistant Secretary Term Sheet with attachments Term Sheet with attachments Debt Service Schedule and other financial schedules Debt Service Schedule and other financial schedules Loan Documents Loan Documents  Proposal Submission Three copies sent to Office of Assistant Secretary Three copies sent to Office of Assistant Secretary One copy sent to PIH Field Office Director One copy sent to PIH Field Office Director

11. 11 CAPITAL FUND FINANCING PROGRAM (CFFP)  HUD Approval  HUD Review OCI, FO and OGC review OCI, FO and OGC review 3-6 month review process 3-6 month review process Development and demolition approvals required before approval Development and demolition approvals required before approval  Approval Stumbling Blocks Declaration of Trust Declaration of Trust Annual Plan Submission and Approval Annual Plan Submission and Approval Annual Statement/Five-Year Action Plan – CFP Annual Statement/Five-Year Action Plan – CFP Annual Statement – Use of Proceeds Annual Statement – Use of Proceeds

12. 12 CAPITAL FUND FINANCING PROGRAM (CFFP)  Success  40 transactions approved  $2.4 billion in capital provided  Assisted 102 PHAs  Pools in Alabama, Kentucky, Maryland, California, New Jersey, Illinois  Multiple issuances to Philadelphia, Washington, D.C.  Challenges  Danbury, CT

13. 13 Approved Proposals

14. 14 Approved Proposals