1. HOME RHD Application, Compliance and Monitoring, and Updates

2. HOME RHD Applications HOME RHD Funding Process Amount Timetable Threshold criteria Scoring criteria Getting started

3. HOME RHD Applications HOME RHD has funding for low-income rental housing in Wisconsin! Per project HUD  State of Wisconsin  Developers/CHDOs $$$

4. HOME Rental Housing Development (RHD) Funding HOME funds may be used for acquisition, new construction or rehabilitation of affordable rental housing. The developers or owners of the rental housing may be small scale property owners, for-profit developers, nonprofit housing providers, CHDOs or the local government, redevelopment organizations or public housing authorities. HOME RHD Applications

5. Funding amount depends on number of factors, such as: Number of HOME units Number bedrooms/unit CMI setaside CHDO/non-CHDO status of applicant

6. HOME RHD Applications Racine Dane County Green Bay Eau Claire Rock County Consortium Kenosha La Crosse Madison Milwaukee Milwaukee County Consortium Home Consortium (Waukesha, Washington, Jefferson, Ozaukee counties) WI Division of Housing HOME RHD funds all areas of Wisconsin not covered by PJs (areas marked by X):

7. HOME RHD Applications 3 funding rounds: 2 competitive, 1 first-come, first-serve June round: Open to all for- and non-profit, CHDO and HA’s applicants October 15 th round: For CHDO’s, non-profit developers and supportive housing projects Rolling round: For any small, rural project (< 20 units), or supportive housing project (of any size) Funding will be awarded as long as funds last to projects that meet threshold and score at least 30 points

8. HOME RHD Applications Threshold items U.S. Congress and HUD enacted a series of measures* so that HOME funds only go into projects that have undergone underwriting, due diligence, and subsidy layering review to assure financial sustainability over the long-term. *2012 Appropriations bill and HOME Final Rule 7/2013

9. HOME RHD Applications Long term financial viability as demonstrated by s/u, 15 year proforma with minimum of 1.05 DCR, income/expense spreadsheet and development budget CHDOs will be certified at time of application and must submit documentation at that time (this will go into effect as of November 1, 2013 No debarment of development team entities CHDO’s must submit all CHDO certification documentation with application Demonstration of market demand (market study) WI DFI document of “good standing” Readiness to proceed: zoning, site control, financing commitments/LOIs (1) 30% CMI HOME unit and 20% of HOME units at 50% CMI (balance at 60%) Threshold items

10. HOME RHD Applications Scoring items: 100 possible points Energy efficiency and sustainable features: maximum 10 points Preservation of any subsidized property, including at least $20k/HOME unit of rehab: 20 points > 50% visitable HOME units: 10 points Number of 30% HOME units OR Number of HOME units for homeless populations with services OR Number of HOME units for supportive housing/section 811 units (non-homeless): maximum 40 points Green building standards Energy star appliances Resource conservation HOME $/HOME unit: maximum 20 points

11. HOME RHD Applications We can help walk you through the application process: review your financial projections, make suggestions, etc. We enjoy talking about developing or acq/rehabbing rental housing – it’s our passion! Take a look at the HOME RHD Guide, browse through it, then call us. We want new developers to explore HOME funding!

12. HOME RHD Monitoring

13. Projects with HOME RHD funding monitored by Division of Housing or WHEDA staff Requirement of funding Projects monitored at least every three years Physical building inspection Administrative inspection

14. On-site Monitoring: HOME RHD Monitoring 3 years Project completion Some projects may have WHEDA physical inspections and DOH desk (paperwork) monitoring Construction monitoring

15. HOME RHD Monitoring Documentation Requested For requested HOME units: Leases (current) Tenant income documentation (most recent recertification) Income calculations for tenant qualification (original and most recent recertification) Original application with signed release of information and original income verification

16. HOME RHD Monitoring Documentation RequestedFor the project: Certified rent roll with designated HOME units specified, CMI designation, actual percentage of CMI, and current rent. Subsidy type for units (LIHTC, Section 8, RD, etc.) with income/rent limit documentation for each - could be part of rent roll or separate. Project LURA with stated HOME units and income restrictions.

17. HOME RHD Monitoring Documentation RequestedFor the project: Unit inspection records Copy of Tenant selection process with approval/denial/appeal process described Utility allowance calculations, if any, with source of the allowance Marketing efforts including MBE/WBE, Section 3, Fair Housing labeling, etc.

18. The most you can charge for rent for a HOME unit. Includes the utility allowance HOME RHD Monitoring Basic Rent Roll: Information that should be captured Income for household Section 8 voucher + utility allowance + rent paid by tenant List put out by Housing Authority. Add numbers for all utilities the tenant pays on their own. Amount paid by cash/check to landlord each month.

19. Building inspection Building exterior Interior HOME units Common areas HOME RHD Monitoring Remember to give tenants notice of entry! HOME will be moving to UPCS inspection standards. HUD will issue more guidance on the change On-site Monitoring

20. HOME RHD COMPLIANCE

21. Project Set-Up, Payment Request, Completion Reports: Used during the construction/rehab phase Inservice Report: due April 21 st each year RHD Data Compliance Report: due December 21 st each year

22. Regularly check the DOH website to ensure you are using the most current forms! Where to find HOME forms: www.Housing.wi.gov

23. Project Set-Up Payment Requests Completion Reports HOME RHD COMPLIANCE DURING CONSTRUCTION/REHAB Set-up is used to identify key aspects of the project such as total anticipated costs and sources of funds, this is completed prior to the first payment request. Payment requests must be accompanied by back- up documentation justifying the expenses. The number of payment requests will be identified in your contract. Completion report is done when the HOME units are fully leased and you may draw your remaining 5%. This reviews final sources of funds and provides us with tenant information.

24. HOME RHD COMPLIANCE Allows us to monitor the health of your project What is required: An operating budget for the current year and your projected budget for the upcoming year Your audited/reviewed financials for the project, or your entity if the project does not have independent financials Computation of the Debt Coverage Ratio (DCR) Certification that you carry insurance for the project that names DOH as the mortgagee, or an “additional interest” if the funds were provided as a grant or the mortgage has been satisfied Inservice Report Due April 21st

25. HOME RHD COMPLIANCE Ensures HOME units compliant with HUD rent and income limits Covers period of October 1 – September 31 Lists all tenants who resided in HOME units in this time period. HOME RHD Data Compliance Report Due December 21st Designation of the HOME unit (30% CMI, 50% CMI, 60% CMI) Date of move-in Rent: current and move-in Utility allowance if utilities paid by tenant: current and move-in Rent subsidy amounts and sources (if applicable): current and move-in Tenant income: current and move-in HOME unit rent, income limits: current and move-in Information collected: We are here to trouble shoot and provide solutions!

26. HOME RHD COMPLIANCE Electronic form includes helpful notes and makes calculations easier Compares tenant information with HUD limits Rent limits are based on the county, number of bedrooms and the initial designation of the HOME unit (30%, 50%, 60% or SRO) Income limits are based on the county, household size, and initial designation of the HOME unit (30%, 50% or 60%) Call RHD staff if you are having trouble completing the form

27. % of CMI Calculation Use Excel or other software to calculate % of CMI for all HOME unit households HOME RHD COMPLIANCE

28. Actual % of CMI (The tricky one!) CMI = “County Median Income” How to manually calculate household’s % CMI. Information needed: 1.Annual HUD listed 50% income limit for your county and the household size. Also called the “very low income” limit 2.Gross annual income Double the 50% income limit and divide by the household’s income Income 100% CMI = Household % CMI

29. HOME RHD COMPLIANCE Actual % of CMI Step 1: $23,450 * 2 = $46,900 (or 100 % CMI) Step 2: $18,600 / $46,900 = 39.7 % CMI e.g. 2 person household in Bayfield County earns $18,600 per year OK for “High unit” (<60% CMI) OK for “Low unit” (<50% CMI) Too much for “Sub unit” (<30% CMI)

30. Verification of Income and Assets Third-party verification required Initial application Every 6 years Keep third-party income documents and income calculations in tenant files HOME RHD COMPLIANCE

31. Wage statements (at least 2 months) Interest statements Social Security payments Unemployment compensation statements Third-party Verification Examples: Employers Banks U.S. Social Security Administration Public assistance agencies HOME RHD COMPLIANCE With signed release, can contact Verification of Income and Assets

32. 24 CFR Part 5 HOME Community Development Block Grant Program (CDBG) Section 8 Program Public housing programs Low Income Housing Tax Credit Program (LIHTC) HOME RHD COMPLIANCE = Gross annual income http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/affordablehousing/training/we b/calculator/definitions/part5#background What income to include? Whose income to include? Check HUD guide

33. Note: Passbook rate set by HUD Sept 2013 = 2% Show income calculations for each household. Different formats are OK under HOME HOME RHD COMPLIANCE Verification of Income Available at: http://portal.hud.gov/hudportal/HUD?src=/pr ogram_offices/comm_planning/affordablehou sing/library/forms “Sample Format for Calculating Part 5 Annual Income”

34. Other years, tenants may provide signed income statement HOME RHD COMPLIANCE Verification of Income Must verify income every year OK to third-party verify every year Income can increase up to 80% CMI Over-income tenant pays lesser of 30% adjusted annual income or FMR Expection: when additional LIHTC, RD, Project-based Section 8 funding

35. HOME RHD COMPLIANCE Utility Allowance Utility allowance is included in the HOME rent limit Entered on a per unit basis HOME utility allowance amounts for new calculations should come from HUD Utility Schedule Model $ 456 Tenant rent $ 65 Utility allowance $ 521 Total HOME rent

36. HOME RHD COMPLIANCE Utility Allowance http://www.huduser.org/resources/util model.html The new HUD Utility Schedule Model HOME is moving away from using PHA data Considers age, type of housing as well as location IRS uses this model to determine utility allowances for LIHTC Use for new leases starting now Need help? Let us know!

37. Updates, Resources, and HOME Final Rule Information

38. Real-Time Housing Locator with Call Center Support Free Wisconsin-based Call center support - multilingual Property providers advertise unlimited units free of charge Landlords - 24-hour access to adding and updating listings. Listings can highlight amenities and include photos. Start adding listings in October Prospective tenants - search for free according to needs like affordability, proximity to medical facilities, public transit, and schools. WHEDA launching WIHousingSearch.org ! Resources Website launch: November 19, 2013 WHEDA Conference, Monona Terrace wheda.com

39. Resources Website launch: November 19, 2013 WHEDA Conference, Monona Terrace WIHousingSearch.org

40. Resources UW-Madison Applied Population Lab mapping and analysis tool WHIM Contact Wisconsin DOH for software access http://doahousing.apl.wisc.edu/login.php Unemployment Area housing age Income Poverty Rental and owner-occupied housing costs

41. WHIM Mapping a variable: Counties

42. WHIM Mapping a variable: Census tracts

43. WHIM Mapping other variables

44. WHIM Mapping variables: Shelters

45. WHIM Mapping variables: Query tool

46. WHIM Downloads

47. Updates Updated statement: Certify that the units are “habitable, safe and sanitary” HOME RHD Inservice form is available on housing.wi.gov http://doa.wi.gov/category.asp?linkcati d=1079&linkid=212&locid=173 HOME RHD Inservice form:

48. Projects are considered “completed” (which allows the affordability period to start) as of the COO - not necessarily when all HOME units are rented Beneficiary data should be provided to DOH as HOME units are rented Updates Changes to HOME Final Rule (August, 2013)

49. Updates Inspections - We (or a contracted 3 rd party inspector) will perform on-site inspections before commitment of funds (closing), with each draw and at completion. Draw requests - For each request for payment we will require that a spreadsheet be submitted showing all sources and their draw status 18 month deadline - All HOME units in a project must meet the 18 month initial rental occupancy deadline (from time of project completion)– or funds must be paid back for those units not meeting the deadline COI - Immediate family members of an officer, employee, agent, elected or appointed official or consultant of an owner, developer or sponsor are prohibited from occupying a HOME assisted affordable housing unit in a project. Changes to HOME Final Rule (August, 2013)

50. Updates CHDO changes CHDO’s must submit certification application and documentation at time of application DOH needs to get a description of the uses for the CHDO operating funds (detail the type of operating expenses, administrative costs, etc.) CHDO Agreements with DOH will now be two contracts – one for the activity funds and one for the CHDO operating funds Officers/employees of for-profit and governmental agencies that “parent” a CHDO may not also be officers/employees of the CHDO. The exception is the allowed 1/3 of the CHDO Board membership. Changes to HOME Final Rule (August, 2013)

51. Links OneCPD HUD Resource Exchange www.onecpd.info HOME Final Rule https://www.onecpd.info/home/home-final-rule WI Division of Housing HOME RHD homepage http://doa.wi.gov/category.asp?linkcatid=1079&linkid=212&locid=173 HOME income limits http://www.hud.gov/offices/cpd/affordablehousing/programs/home/limits/income http://www.hud.gov/offices/cpd/affordablehousing/programs/home/limits/income HOME rent limits http://www.hud.gov/offices/cpd/affordablehousing/programs/home/limits/rent Utility calculation worksheet http://www.huduser.org/resources/utilmodel.html WHEDA http://www.wheda.com HOME forms (including income calculation worksheet) http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/affordableho using/library/forms WHIM UW Applied Population Lab housing software http://doahousing.apl.wisc.edu/login.php

52. Questions? Kate Blood Program ManagerJoanna Balsamo-Lilien Kate.blood@wisconsin.govjoanna.balsamolilien@wi.gov 608.264.7838608.264.7839 Laura Detert LauraS.Detert@wisconsin.gov 608.267.6912 HOME RHD Division of Housing Department of Administration PO Box 7970 101 E. Wilson Ave. Madison, WI 53707-7970 These slides are available at: