1. HRR Administrators’ Workshop June 8, 2009

2. Greetings and Introductions Minnesota Housing HOME Team Members Sue Morrison Central & SE Territories Tere Hopponen WC, NW & SW Territories Julie LaSota Team Lead / Program Manager Meg Stinchcomb Program Coordination Renee Dickinson MF Asset Management – Compliance Guest Speaker Lisa Marvin Essence Properties

3. Our Partners in the Field Your name and the housing organization you work for How many years you have administered the HOME Rental Rehab Program

4. The Essentials Restrooms Lunch will be provided Handouts

5. Today’s Objective A better understanding of HOME requirements and local administrator responsibilities A stronger partnership through communication and cooperation to achieve our common mission of preserving affordable housing for underserved persons and families.

6. 2009 Administrators’ Workshop- AGENDA June 8, 10:00am-2:00pm 10:00amWelcome ▪ Introductions ▪ Summary of 2008 accomplishments ▪ Allocations and Timing for 2009 Funding Round 10:15amProgram Changes for 2009 10:45amChanges to HOME forms 11:00amAffirmative Marketing Fair Housing Training 11:45pmLunch- 30 min. break. Box lunches and beverages available

7. 2009 Administrators’ Workshop- AGENDA (continued) 12:15pmAdministrator Responsibilities ▪ Changes in Administrator Agreements ▪ Policy for Administrator-owned Properties ▪ Record Retention 12:45pmSetting up Owners for Compliance Success 1:00pmGeneral Q & A Summary of Transition to State-funded program CHDO set aside 2:00pmAdjourn

11. 2008 Program Accomplishments

12. 2008 HOME Rental Rehab Activity 56 HOME Projects Loans totaling $6.9MM ($130,500 average loan) 496 HOME-assisted units 8 Federally Assisted properties preserved

13. HOME Program Portfolio 209 HOME Projects in their Compliance Periods Loans totaling slightly more than $35MM 2,682 HOME-assisted units 44 Federally Assisted properties preserved

14. 2009 Allocations and Timing 2009 Allocation Spreadsheet No funds available above your allocation Program restructure- looking forward

15. HRR 2009 Funding Round Program Changes and Updates

16. HRR- 2009 Funding Round Program Changes and Updates »Production and Loan Processing »Design and Construction Standards »Rents & Incomes, Property Management »Review of Compliance and Monitoring Procedures

17. HRR- 2009 Funding Round Production and Loan Processing »Please ensure your application packages are complete ▪ Review application ▪ Title work ▪ 2 – bids from licensed prime general contractors ▪ Junior Lien Approval/Intent to subordinate

18. HRR- 2009 Funding Round ▪ Section 3 ▪ Davis Bacon – bids must have wage determination and 4010 attached ▪ If a Phase I was required, review summary section

19. HRR- 2009 Funding Round Production and Loan Processing »Documents required at application: ▪ $1,000,000 in general liability insurance ▪ EPLS printouts for General Contractor and Subcontractors receiving over $20,000.

20. HRR- 2009 Funding Round Production and Loan Processing »Completion Documentation: ▪ No Post-Rehab Energy Audit required ► Certify items with 7 years or less payback included in scope of work

21. HRR- 2009 Funding Round Production and Loan Processing »Completion Documentation: ▪ No application (HOME Form 1) required ▪ Break down of all soft costs, including Administrator Fee, in Sworn Construction Statement

22. HRR- 2009 Funding Round Closing Documentation and Process »Ensure package is complete!!

23. HRR- 2009 Funding Round Design and Construction Standards »Use HQS standards for all projects »LBP Relocation review – 24 CFR 35.1345 »Carbon Monoxide Detectors ▪ Effective August 1, 2009, all units must have CO detectors in compliance with MN Statute 299F.50.

24. HRR- 2009 Funding Round Rents & Incomes »2009 HOME Rent & Income Limits- effective April 27, 2009

25. HRR- 2009 Funding Round Rents & Incomes- Income Eligibility »For Initial income certifications: Tenants in HOME units must meet the 60%AMI threshold. In properties with 5 or more HOME units, 20% of HOME-eligible tenants must be at or below 50% AMI, and 10% of HOME-eligible tenants may have incomes as high as 80% AMI. »Also applies to any tenant household to move into a HOME unit that was vacant at project completion and has been vacant since.

26. HRR- 2009 Funding Round Rents & Incomes- Income Eligibility »For certifications After the initial income certification: Tenants in HOME units—including move-ins— must meet the 80% AMI threshold. This means a tenant household can be over 60% AMI at move-in, as long as they are at or below 80% AMI. In properties with 5 or more HOME units, 20% of HOME must be at or below 50% AMI. »SEE RENT & INCOME CHART FOR REFERENCE

27. HRR- 2009 Funding Round Units Vacant at Project Completion »Must rent to tenant at Initial Income Certification limits »Perform Income verification »Upon move-in, submit a revised HOME Form #15 (Rental Completion Report)

28. HRR- 2009 Funding Round Rent Increase Clarification For existing tenants in HOME units: »No rent increases are allowed from application date to one year after development completion. »Limited to 5% per year after the first year, and must be within reasonable limits For lease-up of a previously vacant unit, or at unit turnover: »Rents may be increased over 5%

29. HRR- 2009 Funding Round Rent Increase Clarification- All HOME Units All increased rents must remain within HOME Program limits. All rent increases must receive written approval by the local administrator. Borrower must submit written request for a rent increase accompanied by a schedule of current rents and proposed rents by unit size and bedroom type. Tenants must have 30 day notice. All rent increases must be in accordance with lease terms and applicable laws.

30. HRR- 2009 Funding Round Rent Increases due to Temporary Non-Compliance Cannot conflict with the lease 30 day notice

31. HRR- 2009 Funding Round Termination of Tenancy- Review: »Must have just cause to terminate a tenant. »30 day notice required, even if tenant is in violation of the lease or engaged in illegal activity. »Crime-Free Housing Policies do not apply.

32. HRR- 2009 Funding Round Remind owners to not discriminate against tenants based on their status as voucher- holders, or for receiving any other type of public assistance.

33. HRR- 2009 Funding Round Program Changes- Compliance Monitoring »Late or Missing Compliance Documentation

34. Changes to HOME Forms

35. Application (HOME Form 1) Property Inspection Report (HOME Form 3) Tenant Survey (HOME Form 5) Renovate Right (HOME Form 6) List of Improvements/Sworn Construction Statement (HOME Form 9)

36. Changes to HOME Forms Forgivable Loan Submission Checklist (HOME Form 13) Deferred Loan Submission Checklist (HOME Form 14) Rental Completion Report (HOME Form 15)

37. Changes to HOME Forms Lease (HOME Form 21) – deleted Lease Addendum (HOME Form 22) Tenant Occupancy Form (HOME Form 23) Owner Checklist (HOME Form 24) HOME Unit Designation (HOME Form 25)

38. Affirmative Fair Housing Marketing Guest Speaker – Lisa Marvin, Essence Properties

39. Administrator Responsibilities

40. Changes in Administrative Agreements All current Administrative Agreements have been extended, by letter, through June 30, 2009 2009 Administrative Agreements will be revised to include an inventory of all properties within their compliance periods Local Administrator Funding Allocations will be by a letter agreement this year

41. Policy for Administrator Owned Properties Contact Minnesota Housing Region Rep MN Contracts with other Administrator Then you may proceed with the application

42. Records Retention Administrator Recordkeeping Responsibilities »Project records – 5 years after completion »Tenant records – 5 years after the affordability period terminates

43. Records Retention Marketing Efforts »Administrators must demonstrate steps taken to assist borrowers and document the borrowers’ actions in affirmatively marketing vacant units, including the use of the Equal Housing Opportunity logo on all marketing materials

44. Records Retention Owner Recordkeeping Responsibilities »Individual tenant income verifications, project rents and project inspections must be retained for 5 years after the affordability period terminates.

45. Records Retention Marketing Efforts »Owners must demonstrate steps taken in affirmatively marketing vacant units, including the use of the Equal Housing Opportunity logo on all marketing materials

46. Setting up Owners for Compliance Success

47. Keeping Properties in Compliance Understand & communicate all restrictions Ensure owner & manager have updated program information & all loan documents and covenants Ensure owner & manager understand the income certification process & timelines Issue timely notices of noncompliance Follow up to ensure compliance

48. Understand & Communicate all Restrictions Compliance restrictions can be confusing Programs do not always work well with others – must follow each program’s rules Important to involve management company and share all compliance requirements early in development process An ounce of prevention is worth a pound of cure

49. Understand Income Certification Process Owners are responsible for renting to qualified households Timely recertifications are essential Assist owners in keeping organized tenant files and required record retention Important to have internal controls for quality – document all follow-up

50. Notice of Noncompliance Provide written notice of noncompliance and details of violations – 30 day notice to correct Copy Minnesota Housing on notices of noncompliance Track due dates to ensure owners respond timely

51. Reviewing Correction of Noncompliance Review owner’s response to ensure owner responds to all violations Document outcome of corrective action Copy Minnesota Housing on letter to owner with results Minnesota Housing will take further action on uncorrected noncompliance

52. Noncompliance Clarified Noncompliance »Clarifies that unit/building/property is actually in compliance Corrected Noncompliance »Corrective action was satisfactory but unit/building/property was out of compliance for a time Uncorrected Noncompliance

53. Transition to State Funded Rental Rehab Program

54. State- Appropriated Program Rental Rehabilitation funds for your communities Maintaining an accessible funding source for smaller property owners Less restrictions, less paperwork, more marketable in your communities

55. State- Appropriated Program No subordination requirement No minimum # of units Forgivable Loans for less than $100,000 Administrator-based selection and review process

56. State- Appropriated Program Income Limits: 80%AMI (Section 8), adjusted for family size. Applies only to assisted units. Rent Limits: lower of 30% of 80%AMI or FMR, adjusted for family size. Applies only to assisted units. Properties can have a mix of assisted and non- assisted units. Rehab costs will be pro-rated to fund only assisted units.

57. State- Appropriated Program Income eligibility: self-certified at both initial occupation. (no source documentation or third party verification) No re-certifications. Rents and Incomes monitored annually. Assisted units must meet HQS and will be monitored with on a rotating basis, along with the rest of Minnesota Housing’s deferred loan properties.

58. State- Appropriated Program No Environmental Review, Davis Bacon, Section 3, Uniform Relocation Act, or Subsidy Layering!

59. CHDO Set Aside By federal statute, 15% of our HOME funds must go towards CDHO sponsored activities. 15% of the HOME funds in 2010 and later years will be set aside and offered through the Consolidated RFP on an annual basis and will likely be coupled with Housing Tax Credits or other Agency programs

60. Wrap Up and General Question and Answers

61. It’s All About the People…

62. For More Information Contact Sue Morrison (651) 215-1083 sue.morrison@state.mn.us sue.morrison@state.mn.us 400 Sibley Street, Suite 300 St. Paul, MN 55101 651-296-7608 * 800-657-3769 * TTY 651-297-2361 www.mnhousing.gov

63. For More Information Contact Tere Hopponen (651) 297-5709 Tere.hopponen@state.mn.us 400 Sibley Street, Suite 300 St. Paul, MN 55101 651-296-7608 * 800-657-3769 * TTY 651-297-2361 www.mnhousing.gov

64. For More Information Contact Julie LaSota 651.296.9827 Julie.lasota@state.mn.us 400 Sibley Street, Suite 300 St. Paul, MN 55101 651-296-7608 * 800-657-3769 * TTY 651-297-2361 www.mnhousing.gov

65. For More Information Contact Meg Stinchcomb 651-296-3683 Meg.stinchcomb@state.mn.us 400 Sibley Street, Suite 300 St. Paul, MN 55101 651-296-7608 * 800-657-3769 * TTY 651-297-2361 www.mnhousing.gov

66. For More Information Contact Renee Dickinson (651) 296-9491 Renee.dickinson@state.mn.us 400 Sibley Street, Suite 300 St. Paul, MN 55101 651-296-7608 * 800-657-3769 * TTY 651-297-2361 www.mnhousing.gov