Departmental Policies. a. Not less than 60 days prior to construction loan closing, the Sponsor shall provide updated financial documents including, but not limited to the development budget, development sources and uses, schedule of rents and unit mix, operating budget and 15-year cash-flow analysis, which are acceptable to the Department and demonstrate compliance with all applicable Program regulations or guidelines and the Uniform Multifamily Regulations (UMR). All proposed changes to the project, including but not limited to project financing, rents and unit mix, scope of work to be performed or ▇▇▇▇▇▇▇▇’s organizational structure must be submitted to and approved by the Department in writing. b. The Sponsor who garnered the experience points at the application stage must be the Sponsor who controls the borrowing entity at construction, through permanent close of escrow, and into management and operation of the project. Organizational documents demonstrating that the experienced Sponsor has the authority to exercise control of the borrowing entity in compliance with Section 8301(s) of the Uniform Multifamily Regulations (UMR) must be submitted to the Department for review and approved by the Department prior to execution of the Standard Agreement. c. Sponsor(s) and Borrower are acknowledging the Project as submitted and approved is the Project that is to be funded and built. Any bifurcation would make that award null and void, as the awarded Project is no longer feasible as originally submitted and approved. Any Department awarded funds are unable to be assumed or assigned. d. The Department retains the right and discretion to disencumber awards where awardees have failed to make sufficient progress in meeting applicable milestones and deadlines subject to Administrative Notice 2022-02 dated March 30, 2022 (“Notice 2022-02”), and any future amendments. Such determination will be on a case-by-case basis and may use the enumerated criteria set forth in Notice 2022-02 when making such decisions. The disencumbrance policy is applicable to HCD state funded multifamily housing programs. For awards made prior to July 1, 2022, the 24- month period shall begin on July 1, 2022. For awards made on or after July 1, 2022, the 24-month period will begin as of the date of the initial program funding awarded to the project, unless changed by amendment to Notice 2022-02. e. The Department will assess Negative Points, as applicable, to Sponsor(s)/ Applicant(s)/Recipient(s) subject to Administrative Notice 2022-01, dated March 31, 2022 (“Notice 2022-01”), and any future amendments. The Negative Points policy is applicable to all HCD state and federal funding programs – loans and grants, administered by HCD’s Divisions of State and Federal Financial Assistance. Negative points will be calculated based on the criteria outlined in Notice 2022-01 and will be applicable to all Notices of Funding Availability issued on or after the original date of Notice 2022-01 for the previous 5-year period, except when noted or amended. Such determination will be on a case-by-case basis and may use the enumerated criteria set forth in Notice 2022-01 when making such decisions. In addition, the Department reserves the right, in its sole discretion, to revoke an entity’s eligible Sponsor/Applicant/Recipient status at any time based on documented serious issues with the operation, maintenance or implementation of project or program funds. f. Administrative Notice 23-01 (“Notice 23-01”) sets forth and establishes the Department’s Pooled Transition Reserve Fund Policy (“Transition Reserve Policy” or “Policy”) applicable to all HCD state and federal multifamily loan programs, except in cases where this Policy conflicts with federal requirements, implementing statutory changes made under SB 948 (Chapter 667, Statutes 2002) applicable to Health and Safety Code Section 60468. Notice 23-01 takes effect as of January 1, 2023, and amends any active program guidelines and Notices of Funding Availability. Notice 23-01 applies to all HCD-awarded rental housing projects which have federally originated rental assistance or operating subsidies, or rental subsidies operated by the City and County of San Francisco and the City of Los Angeles which will close permanent financing on or after January 1, 2023. Prior to permanent loan conversion, the Sponsor shall provide updated financial documents including, but not limited to the development budget, development sources and uses, Project Based Rental Vouchers or Subsidies, Operating Subsidy, operating budget and 15- year cash-flow analysis, which are acceptable to the Department and demonstrate compliance with the Policy. g. No loans requiring a balloon payment prior to full amortization are allowed unless permitted by regulation, in which case the Department’s affordability provisions must be in a senior lien position to the lender’s deed of trust. The terms of senior loans must comply with all the underwriting standards of UMR 8310. h. Pursuant to Section 7305(a)(2) of the Multifamily Housing Program Final Guidelines effective March 30, 2022, as may be amended from time to time, any land lease payments shall not exceed the fair market rental value of comparable property and any funds set aside, borrowed, or applied to cover future land lease payments shall be discounted to the present value of these payments. i. Prior to permanent loan closing, the Applicant shall provide documentation, satisfactory to the Department that verifies the Project is constructed to accommodate broadband service with at least a speed of 100 megabits per second for downloading and 20 megabits per second for uploading (100/20). j. Prior to demolition of the structures currently present on the site, all lead-based paint shall be removed or encapsulated as required to comply with federal lead safety regulations. In addition, all asbestos-containing material shall be removed or encapsulated in compliance with federal and State regulations. k. No greater than 60 days after award, Applicant to provide an executed agreement with the Locality or Transit Agency that has jurisdiction of the proposed offsite infill components. The agreement should include confirmation that the offsite work will adhere to all applicable rules, regulations, codes, policies and plans enforced or implemented by the Locality or Transit Agency. l. No later than construction loan closing, the Applicant shall provide documentation evidencing the Recipient has the right of way or easement of sufficient duration to meet Program requirements. If the STI is within the public right of way or on public land, the Recipient shall provide an executed encroachment permit for construction of any improvements or facilities. Documentation provided is subject to Department review and approval prior to the execution of the Department grant documents, including but not limited to the Covenant. m. Commercial Leases. All commercial leases are subject to the Department’s approval. One Hundred percent of the commercial income from the end user must flow through the project. Project leases must be at fair market value except for project service providers as approved by the Department. Borrower must fully identify the use of leased space and the tenants thereof. No HCD funds may be used to finance commercial space. For clarity, “fair market value”, as that term is used in this Condition means: “The price that a willing lessor would accept on the open market and that a willing lessee would pay on the open market, to lease the property, in the absence of compulsion or inside dealing, and assuming that both the lessor and the lessee are reasonably knowledgeable about the property in question.”
Appears in 1 contract
Sources: Ahsc Program Terms and Conditions
Departmental Policies. a. Not less than 60 days prior to construction loan closing, the Sponsor shall provide updated financial documents including, but not limited to the development budget, development sources and uses, schedule of rents and unit mix, operating budget and 15-year cash-flow analysis, which are acceptable to the Department and demonstrate compliance with all applicable Program regulations or guidelines and the Uniform Multifamily Regulations (UMR). All proposed changes to the project, including but not limited to project financing, rents and unit mix, scope of work to be performed or ▇▇▇▇▇▇▇▇’s organizational structure must be submitted to and approved by the Department in writing.
b. The Sponsor who garnered the experience points at the application stage must be the Sponsor who controls the borrowing entity at construction, through permanent close of escrow, and into management and operation of the project. Organizational documents demonstrating that the experienced Sponsor has the authority to exercise control of the borrowing entity in compliance with Section 8301(s) of the Uniform Multifamily Regulations (UMR) must be submitted to the Department for review and approved by the Department prior to execution of the Standard Agreement.
c. Sponsor(s) and Borrower are acknowledging the Project as submitted and approved is the Project that is to be funded and built. Any bifurcation would make that award null and void, as the awarded Project is no longer feasible as originally submitted and approved. Any Department awarded funds are unable to be assumed or assigned.
d. The Department retains the right and discretion to disencumber awards where awardees have failed to make sufficient progress in meeting applicable milestones and deadlines subject to Administrative Notice 2022-02 dated March 30, 2022 (“Notice 2022-02”), and any future amendments. Such determination will be on a case-by-case basis and may use the enumerated criteria set forth in Notice 2022-02 when making such decisions. The disencumbrance policy is applicable to HCD state funded multifamily housing programs. For awards made prior to July 1, 2022, the 24- month period shall begin on July 1, 2022. For awards made on or after July 1, 2022, the 24-month period will begin as of the date of the initial program funding awarded to the project, unless changed by amendment to Notice 2022-02.
e. The Department will assess Negative Points, as applicable, to Sponsor(s)/ Applicant(s)/Recipient(s) subject to Administrative Notice 2022-01, dated March 31, 2022 (“Notice 2022-01”), and any future amendments. The Negative Points policy is applicable to all HCD state and federal funding programs – loans and grants, administered by HCD’s Divisions of State and Federal Financial Assistance. Negative points will be calculated based on the criteria outlined in Notice 2022-01 and will be applicable to all Notices of Funding Availability issued on or after the original date of Notice 2022-01 for the previous 5-year period, except when noted or amended. Such determination will be on a case-by-case basis and may use the enumerated criteria set forth in Notice 2022-01 when making such decisions. In addition, the Department reserves the right, in its sole discretion, to revoke an entity’s eligible Sponsor/Applicant/Recipient status at any time based on documented serious issues with the operation, maintenance or implementation of project or program funds.
f. Administrative Notice 23-01 (“Notice 23-01”) sets forth and establishes the Department’s Pooled Transition Reserve Fund Policy (“Transition Reserve Policy” or “Policy”) applicable to all HCD state and federal multifamily loan programs, except in cases where this Policy conflicts with federal requirements, implementing statutory changes made under SB 948 (Chapter 667, Statutes 2002) applicable to Health and Safety Code Section 60468. Notice 23-01 takes effect as of January 1, 2023, and amends any active program guidelines and Notices of Funding Availability. Notice 23-01 applies to all HCD-awarded rental housing projects which have federally originated rental assistance or operating subsidies, or rental subsidies operated by the City and County of San Francisco and the City of Los Angeles which will close permanent financing on or after January 1, 2023. Prior to permanent loan conversion, the Sponsor shall provide updated financial documents including, but not limited to the development budget, development sources and uses, Project Based Rental Vouchers or Subsidies, Operating Subsidy, operating budget and 15- year cash-flow analysis, which are acceptable to the Department and demonstrate compliance with the Policy.
g. No loans requiring a balloon payment prior to full amortization are allowed unless permitted by regulation, in which case the Department’s affordability provisions must be in a senior lien position to the lender’s deed of trust. The terms of senior loans must comply with all the underwriting standards of UMR 8310.
h. Pursuant to Section 7305(a)(2) of the Multifamily Housing Program Final Guidelines effective March 30, 2022, as may be amended from time to time, any land lease payments shall not exceed the fair market rental value of comparable property and any funds set aside, borrowed, or applied to cover future land lease payments shall be discounted to the present value of these payments.
i. Prior to permanent loan closing, the Applicant shall provide documentation, satisfactory to the Department that verifies the Project is constructed to accommodate broadband service with at least a speed of 100 megabits per second for downloading and 20 megabits per second for uploading (100/20).
j. Prior to demolition of the structures currently present on the site, all lead-based paint shall be removed or encapsulated as required to comply with federal lead safety regulations. In addition, all asbestos-containing material shall be removed or encapsulated in compliance with federal and State regulations.
k. No greater than 60 days after award, Applicant to provide an executed agreement with the Locality or Transit Agency that has jurisdiction of the proposed offsite infill components. The agreement should include confirmation that the offsite work will adhere to all applicable rules, regulations, codes, policies and plans enforced or implemented by the Locality or Transit Agency.
l. No later than construction loan closing, the Applicant shall provide documentation evidencing the Recipient has the right of way or easement of sufficient duration to meet Program requirements. If the STI is within the public right of way or on public land, the Recipient shall provide an executed encroachment permit for construction of any improvements or facilities. Documentation provided is subject to Department review and approval prior to the execution of the Department grant documents, including but not limited to the Covenant.
m. Commercial Leases. All commercial leases are subject to the Department’s approval. One Hundred percent of the commercial income from the end user must flow through the project. Project leases must be at fair market value except for project service providers as approved by the Department. Borrower must fully identify the use of leased space and the tenants thereof. No HCD funds may be used to finance commercial space. For clarity, “fair market value”, as that term is used in this Condition means: “The price that a willing lessor would accept on the open market and that a willing lessee would pay on the open market, to lease the property, in the absence of compulsion or inside dealing, and assuming that both the lessor and the lessee are reasonably knowledgeable about the property in question.”for
Appears in 1 contract
Sources: Ahsc Program Terms and Conditions