Developers Workshop Agenda Welcome & Introductions Property Events Appendix B & Common Mistakes Draft 2018 QAP Questions

Draft 2018 QAP

Disclaimers Not covering every topic Focusing on significant changes and what you need to know before submitting an application Applicants are responsible for knowing rules If questions are not covered, ask today or follow up with staff Opportunity to ask questions on topics not covered at the end of the presentation Questions are also welcome during the presentation – If you have a question, please raise your hand and Tara or Suma will bring a microphone

QAP Status First draft released July 31 Public Hearing was held September 14 10 comments were made during the Hearing Second draft was released October 10 Anticipate final approval in next several weeks Application will be available in early December All comments received are posted on web site

Fund Availability LIHTC – approximately $24.6 million; $613K increase over 2017 WHLP - $20 million (same as 2017) RPP – was $16 million in 2017; amount not yet finalized for 2018 but hope to be similar to 2017

National Housing Trust Fund Is another source of RPP Only available in High income counties Project must commit to at least 25% of units at or below 30% of AMI $2,952,212 was available for 2017 (funded 4 projects); 2018 amount will be $3,990,025 (approximately 5 projects) Agency can adjust awards to insure all money has been allocated

Workforce Housing Loan Program $20 million appropriation for 2018 All counties are eligible; available for 9% projects only Funds split between regions using same percentages as credits Maximum loan is the lesser of calculated amount or statutory maximum; any amount can be requested up to the maximum loan amount Requesting WHLP may result in an application being ineligible due to inadequate funds; same as RPP or credits

Workforce Housing Loan Program Statutory maximums are set by the legislature, not the Agency Statutory Maximums: - High Income county: $250,000 - Moderate Income county: $1,500,000 - Low Income county: $2,000,000

QAP Topics Site Scoring Credits per Unit Average Applicant Bonus Point Charts A and B Number of Awards Bond Cycle

QAP Changes There were 18 significant changes to the 2018 QAP Of those, 13 were suggestions from development partners during Listening Sessions, written comments or phone calls

Site Scoring - Amenities Double or triple-counting an establishment is permitted. For example: Walmart Supercenter or Super Target can count as Grocery, Shopping and Pharmacy Harris Teeter with a pharmacy can count as Grocery and Pharmacy

Site Scoring - Maps The drivable route must be shown in map format using Google Maps Must have a separate map showing route for each amenity Make certain pins are dropped at entrance to the amenity and entrance to the site Map should be the satellite view and clearly show both entrances A photo of each amenity must be provided

Example Map

Site Scoring Bonus & Negative Points Site Bonus Points will be awarded to best overall site or sites in the state (if any) Points will be awarded during site scoring review and reflected in the final site scoring Site Negative Points will be deducted for any site deemed unsuitable for housing (if any) Points will be deducted during site scoring review and reflected in the final site scoring Expectation is both of these categories will be used rarely, if at all

Credits per Unit Average Points will be awarded based on a project’s per unit credit request as it relates to the average per unit credit request for a given region All full application projects in a region will be used to calculate the average, including those that may be determined to be ineligible for award Average is derived by taking per unit credit request for each project in a region, then determining the average of those amounts within a given region Chris

Credits per Unit Average - Points Change for 2018 will be to award points as follows: 4% to 8% below the average: 3 points Between the average and 4% below the average: 2 points No more than 4% above the average: 1 point More than 8% below or 4% above the average: 0 points

Credits per Unit Average Rationale In 2017, a project requesting $11,941 per unit in credits scored more points than a project requesting $9,768 Change rewards Applicant for efficient use of the credit within reasonable levels Using 10% rather than 8% would have affected 6 out of 104 applications in 2017 Conversely, using 6% rather than 8% would have affected 3 out of 104 applications

Credits per Unit Average Rationale Max score in 2016: 97 Plus or minus 3 points for credit per unit average 61 out of 100 applications had scores between 93 and 97 (with a CPU score of 0 to 3) – 5 point spread 97 – 6 96 – 6 95 – 9 94 – 27 93 – 13 Max score in 2017: 98 2 points for credit per unit average 77 out of 104 applications had scores between 96 and 98 – 3 point spread 98 – 15 97 – 40 96 – 22

Applicant Bonus Point 1 point per Applicant or Principal No application can receive more than 1 bonus point Election will be made at full application Should an Applicant / Principal place a bonus point on 2 or more applications, the Agency will determine which application receives the bonus point. Assumption should be the point will be placed on the lowest scoring project.

Charts A and B 2017 amounts: $68,000 and $79,000 ($2,000 increase over 2016) Average per unit cost of all 2017 new construction apps: $65,761 2018 first draft amounts: $70,000 and $81,000 Multiple comments at public hearing that amounts in first draft were not sufficient; we asked folks to tell us what the correct amounts should be; Received no comments, emails or phone calls with proposed number before release of second draft 2018 second draft amounts: $73,000 and $84,000 7.35% increase over 2017 maximums and 11.01% over the 2017 application average of $65,761 Removed building permits as part of calculation for 2018 Chris

Number of Awards 46 awards in 2016 when awarding points for requesting the least amount of credits per unit 32 awards in 2017 when awarding points for having a credit request within 5% or 10% of the average Additional credits for 2016 projects equated to approximately 5 projects and 271 units 2016 credit per unit average: $7,867 2017 credit per unit average: $10,827 With policies in the second draft QAP, we expect 34-38 awards in 2018 Chris

Bond Cycle First cycle: follows same time line as 9% beginning in January Second cycle: preliminary application can be submitted any time between May 1 and October 1 Schedule for project milestones will be developed once preliminary application is submitted Expect time between milestones to be similar to 9% round Preliminary application submission date will determine whether Applicant receives 2018 or 2019 volume cap Chris

Questions?