Los Angeles Housing Department Affordable Housing Trust Fund Notice of Funding Availability 2010 Round 3 Douglas Guthrie General Manager Helmi HisserichTim Elliott Assistant General Manager Major Projects Division September 15, 2010

Los Angeles Housing Department Los Angeles Affordable Housing Trust Fund 2010 Round 2 NOFA NOFA Round 1 “ High Leverage Program” $22.1 Million Announced November 24, 2009 Application DeadlineDecember 21, 2009 LAHD Awards March 01, 2010 TCAC DeadlineMarch 26, 2010 Applications Received 29$128 M Selected7$ 22.1 M NOFA Round 2 “High Leverage &$35 Million Permanent Supportive Housing” Announced March 24, 2010 Application DeadlineApril 24, 2010 LAHD Awards June 30, 2010 TCAC DeadlineJuly 7, 2010 Applications Received 19$84.2 M Selected7$ 35 M

Los Angeles Housing Department PROPOSED … NOFA Round 3 “Neighborhood Stabilization & Energy Efficiency” $47 Million (Estimated) Announced September __, 2010 Application DeadlineNovember __ 2010 LAHD Awards December / January NSP Expenditure Dec 2011 EEBG Committed Jan 2011

Los Angeles Housing Department TODAY’s DISCUSSION SHOULD LAHD PURSUE 2011 NOFAs IN THE SAME WAY AS 2010? QUESTIONS ABOUT PROPOSED CHANGES TO ROUND 3 NOFA

Los Angeles Housing Department RECAP OF 2010 AHTF ROUND 2 26 applications requested $85 million $35.5 million in commitments awarded Family projects 2 Seniors projects 5 Special Needs 6 Total 13 Applying for MHP 2 (Seniors) Received 9% Tax Credit 4 Family projects 1 Seniors projects 0 Special Needs 3

AVAILABLE RESOURCES – 2010 ROUND 3 $8 million in HOME funds $35 million in Neighborhood Stabilization Program 2 (NSP2) funds $4.7 million in Energy Efficiency Block Grant (EEBG) funds Four City-owned properties for acquisition/rehabilitation

Los Angeles Housing Department CHANGES FOR 2010 Round 3 ELIGIBLE PROJECTS/PROPOSALS Mixed income, privately funded projects Projects in NSP2 target areas Existing affordable housing projects that propose energy efficiency increases of % Proposals for the acquisition and rehabilitation of four City-owned properties

Los Angeles Housing Department Mixed Income Projects Ineligible projects include: Projects with more than 50% of the total units to be income restricted Projects with less than 50% of the LAHD assisted units with fewer than two bedrooms (excluding seniors) Projects with fewer than 15 units to be restricted by LAHD Projects requesting subsidy for units subject to affordability covenants

Los Angeles Housing Department Mixed Income (Cont.) Maximum subsidy shall be the lesser of the 1.Value of the covenant 2. Adjusted loan limits 3. $4.0 per project Applications will be ranked according to the highest ratio of the value of the covenant relative to the maximum eligible subsidy

Los Angeles Housing Department VALUE OF THE COVENANT Example: A mixed-income project in a high cost area proposing a 30-year affordability covenant (the required minimum): Equivalent market rent per month for proposed unit:$1,700 Proposed HOME 50% AMI:- 818 Rent Reduction per Month:S882 x 12 monthsx 12 Annual Income Reduction$10,584 /.07 current market cap rate (open market rate of return) .07 = Value of Covenant per unit$151,200

Los Angeles Housing Department Subsidy Limits Unit Size LAHD Limits Limits with 5% Boost Limits with 10% Boost Limits with 15% Boost 0-Bdrm$100,000$100,500$110,000$115,000 1 bedroom$107,500$112,875$118,250$123,625 2 bedroom$115,000$120,750$126,500$132,250 3 bedroom$115,000$120,750$126,500$132,250 4 bedroom$115,000$120,750$126,500$132,250

Los Angeles Housing Department Subsidy Boosts  Historic Properties (10% boost) - NEW  Extended Affordability Covenants (5% for each 10-year increment beyond the 30 year minimum, up to 15%) - NEW  Projects located in Balanced Communities (5%)  Projects with New Generation Fund (NGF) acquisition loans (5%)  Projects located in Transit-Oriented Districts (5%)  Projects located in South Los Angeles (5%)

Los Angeles Housing Department Subsidy Adjustments Occupied units within mixed-income projects that are not subject to the City of Los Angeles Rent Stabilization Ordinance (RSO) are limited to 75% of the maximum subsidy Occupied units subject to the RSO are limited to 40% of the maximum subsidy limits

Los Angeles Housing Department NOFA Maximum Subsidy vs. Value of Covenant BedroomsUnitsMax. Base Subsidy per unit Adjusted Max. Subsidy (addl. 5% for high cost boost) Total 1 bedroom20$107,500$112,875$2,257,500 2 bedroom21$115,000$120,750$2,535,750 NOFA Max Subsidy$4,793,250 Value of Covenant41$151,200$6,199,200

Los Angeles Housing Department Ranking – Mixed Income Projects Value of Covenant$6,199,200  Maximum NOFA Subsidy$4,793,250 = Ranking Ratio or 129% Actual loan amount $4.0 Million

Los Angeles Housing Department Neighborhood Stabilization Program (NSP-2) $35 Million in NSP2 funds is being made available through the American Recovery and Reinvestment Act of 2009 (ARRA). All NSP2 funds awarded under this NOFA must be expended by December 31, 2011 to meet the first ARRA expenditure deadline

Los Angeles Housing Department NSP-2 Target Area Project must be located in an NSP-2 Target Area and in, or immediately adjacent to, a residentially designated land use area. Search Map

Los Angeles Housing Department Neighborhood Stabilization Program Projects submitted under NSP 2 should be structured utilizing 4% Low Income Housing Tax Credits as applicable. All units financed with NSP2 must be restricted for occupancy by households whose incomes are at or below 50% AMI (LH25 households)

Los Angeles Housing Department NSP Acquisition Properties must be purchased from a foreclosing entity that has clear title, or Where foreclosure proceedings have been completed and title has been transferred to servicer that is not an end user. HUD definition of “abandoned” must demonstrate that seller has site control and sales approval from all lien holders.

Los Angeles Housing Department Vacant Properties Up to $10 million in funds can be used for non- foreclosed vacant properties in NSP2 areas. NSP2 funds may be used for acquisition, construction or rehabilitation. If using funds are to be used for acquisition costs, the vacant property must have been acquired after the City’s NSP agreement was executed.

Los Angeles Housing Department NSP Acquisition Foreclosed or transferred properties: If any member of the applicant/ sponsor entity is a member of the current ownership entity, the project does not qualify for NSP funding. Project sponsors must not acquire foreclosed or abandoned property until after the funding is committed and the property has received environmental clearance from LAHD.

Los Angeles Housing Department NSP funds for homeless households Priority for the first 20 percent (20%) of NSP funds shall be given to projects providing permanent supportive housing to homeless households and individuals. Projects must have rental or operating funding commitments from federal, state or local governmental sources. Rental assistance must be sponsor-based or project based and shall apply to no less than fifty percent (50%) of the units in the proposed project.

Los Angeles Housing Department Purchase Price Maximum allowable purchase price must be at least 1% below the as-is appraised value. Appraisal prepared by a California State Certified General Appraiser not more than 60 days prior to the date of the site control document. Appraiser must use the HUD forms and follow the requirements in NSP Exhibit 2.

Los Angeles Housing Department Maximum Subsidy NSP subsidy will be based on 200% of base limits exclusive of any boosts or adjustments.

Los Angeles Housing Department Energy Efficiency and Conservation Block Grant (EECBG) The City has been awarded funding under the 2009 ARRA through the U.S. Department of Energy (DOE) $4.7 million has been allocated to LAHD for the Energy Efficiency Retrofit Pilot Program The goal is to improve energy and water efficiency in approximately 10 existing affordable multi-family housing developments by awarding a maximum of $500,000 per project

Los Angeles Housing Department Eligible Projects - EEBG Properties with affordability covenants of an initial term of 30 years minimum, that can achieve a 20% to 40% improvement in energy efficiency

Los Angeles Housing Department Energy Audit EEBG applicants that pass the initial screening will be invited to submit an Energy Audit Energy audit must be conducted by a certified professional satisfactory to LAHD The audit will determine baseline energy usage and establish a scope of work Projects that cannot achieve a minimum 20% improvement may be deemed ineligible for funding

Los Angeles Housing Department EEBG Applications Applicants must submit utility bills for the most recent 24 months of occupancy. Enterprise Community Partners will assist with initial screening. Funding for energy audits for non-profits may be available through Enterprise.

Los Angeles Housing Department Sale of City-owned Properties LAHD is requesting proposals for the acquisition and rehabilitation of four City-owned properties. Selected applicants will enter into an Exclusive Right to Negotiate leading to a Disposition and Development Agreement, which will contain the loan amount and terms. Rehabilitation financing is available through other funding sources listed in this NOFA.

Los Angeles Housing Department City-owned properties Applicants may acquire the following sites for long-term affordable multi-family rental housing: AddressUnits 2516 Eastlake Av. and ½ Altura Walk 819 W. 4th Street W. 81st Street Rampart Blvd. 1

Los Angeles Housing Department LAHD Financing of City-owned Properties Rehabilitation financing is available from applicable funding sources under this NOFA. Applicants should assume the LAHD’s current appraised value. Acquisition cost will be included in residual receipts financing.

Los Angeles Housing Department Application Submittal Applications must be delivered to one of the following addresses: Prior to application deadline: On application deadline From 9:00 A.M. to 4:00 P.M.Los Angeles Housing Department Affordable Housing Trust Fund1200 West 7th Street Attention: Sergio Tejadilla, ManagerLos Angeles, CA West 7th Street, Rm. 805 Los Angeles, CA Telephone (213) APPLICATION DEADLINE TO BE ANNOUNCED

Los Angeles Housing Department For More Information Los Angeles Housing Department: West Seventh Street, 9 th Floor, Los Angeles, CA Question and Answer: Douglas Guthrie, General Manager Los Angeles Housing Department (213) Tim Elliott, Acting DirectorSergio Tejadilla, Acting Manager Major Projects Affordable Housing Trust Fund (213) (213)