2019 LIHTC Mandatory Developer Training September 7, 2018 AGENDA - - PowerPoint PPT Presentation

2019 LIHTC Mandatory Developer Training

September 7, 2018

AGENDA

TIME SPEAKER TOPIC 9:00 am – 11:30 am Dave Vaske Karen Kulisky John Kerss Introduction and Qualified Allocation Plan (“QAP”) Review 10:30 am – 10:45 am Break 12:00 pm – 1:00 pm LUNCH Box lunches are available to pick up from 12:00pm to 12:30pm 1:00 pm – 2:30 pm Stacy Cunningham Appendix A – Pre-Application Instructions On-line Application Overview 2:30 pm – 3:15 pm Nancy Peterson Karen Kulisky John Kerss Appendix K – Exhibits including Common Errors 3:15 pm – 3:30 pm Questions and Answers

2019 QUALIFIED ALLOCATION PLAN REVIEW

2019 QUALIFIED ALLOCATION PLAN (QAP)

• Approved by the IFA Board on September 5, 2018
• Effective November 1, 2018
• Pre-Applications due on November 1, 2018 by 4:30

p.m. C.S.T.

• Overview of Changes

2019 APPENDIX A & ON-LINE APPLICATION REVIEW

WEBSITE REVIEW

www.iowafinanceauthority.gov

• Funding Round Specific

 Notices  Application  Exhibits  Appendices

• Link provided in Exhibits Tab of On-line

Application

APPENDIX A REVIEW

On-line Application Instructions – 2019 Appendix A

• Available on 2019 LIHTC webpage: 2019 On-line Application

 General Overview in Section A;  Pre-Application and Threshold Application in Section B;  Nonprofit and Supportive Housing for Families Set-Aside in Section C;  Scoring in Section D; and  Reminder

On-line Application Review

• A. Access and Roles

(On-line Application Training Guide Section A 1-3)

1) User Name

• Do not share user names and passwords

2) Roles

• Guest – Create with edit rights
• Reviewer – No edit rights

3) Granting Access

• The user name that creates an Application is responsible

for granting and removing access to other authorized users.

• View Tab, MYIFA Account, Authorized Users, Add New

Authorized User

 Refer to the On-line Application Guide for detailed instructions.

On-line Application Review

• B. General Information

(On-line Application Training Guide Section C.2)

1) Copying

• Prior year Applications cannot be copied.

2) Saving

• Save each tab before exiting. An error message in red at

the top of the screen may appear when saving a tab with missing information. This is to inform the user that required information is still needed. Information entered is still saved.

On-line Application Review

General Information (continued) 3) Error Messages

(On-line Application Training Guide Section A.4(b))

• Select Submit
• Green check mark vs. Red

On-line Application Review

HELPFUL HINTS

• If submitting more than one Application with the same QDT

members, create one application, name it, and then enter only the QDT members. Save. Copy the application and then re-name it to the other Project’s name;

• Don’t stress over a red x on a tab until all information has been

entered in each Application tab. There are multiple tabs that have coding tied to each other: Ownership Entity and Site Control and Qualified Development Team, Buildings and Project Description, Costs and Credit Calc. and Funding Sources are a few examples;

• Utilize the On-line Application Training Guide and Q & A’s – check

website often;

• If already familiar with the On-line Application, be sure to review

the On-line Application Training Guide, Section D. 2019 Overview of On-line Application Changes.

On-line Application Review

HELPFUL HINTS (continued)

• Have staff knowledgeable and involved in the project

development enter the application;

• Do not wait until the last minute;
• Don’t assume. If something is unclear, ask for assistance

prior to submission of the threshold Application; and

• Complete a thorough review of the Application and

uploaded exhibits prior to submission. This may help reduce the number of threshold deficiencies.

On-line Application Review

C. Pre-Application and Application Review (On-line Application Training Guide Section E.)

1. 2019 9% Training Application – Pre-Application InWork

• Project Name and Location Tab
• Project Description Tab
• Site Description Tab
• Ownership Entity Tab
• Qualified Development Team Tab – Developer(s)
• Project Amenities Tab
• Buildings Tab
• Exhibits Tab

 Exhibits: 11T, 12T, 3B, 4B, 5B

On-line Application Review

• 2. 2019 9% Training Application – Threshold InWork

a) Application Tab Review

i. Overview – Market Study Report  QAP Sections 3.3.1 – 3.3.1.4 ii. Construction Characteristics  QAP Appendix 1-G  Construction –related scoring elections iii. Project Amenities  Scoring  Mandatory Requirements

On-line Application Review

iv. Buildings  Units  Accessibility building level & unit level v. Cost and Credit Calc.  “Other” line items  Construction Costs and Onsite Work & QAP Section 6.4.4  Identity of Interest fees entered in QDT tab must match the specific fee in Costs and Credit Calc.tab  Boosts in Eligible Basis  Credit Calculation

On-line Application Review

iv. Exhibit Checklist  Links  Exhibit 7B

• vii. Financial Feasibility

 Underwriting Requirements  Calculations

• viii. Scoring

 Preliminary Score ix. Submit  Error Messages  Payment of Fees  Historical View

On-line Application Review

b) Qualified Development Team (On-line Application Training Guide Section E.8)

i. Mandatory Members  Developer, GP/MM, architect, tax attorney, management company, energy consultant, tax accountant  Enter Syndicator/Direct Investor as a team member  Contract should be entered if Identity of Interest ii. Developer/Co-Developer, GP/MM, Development Consultant iii. Identity of Interest & Fees iv. Organizational Structure

On-line Application Review QUESTIONS?

2019 APPENDIX K – EXHIBIT REVIEW

WEBSITE - 2019 PROGRAM PAGE

http://www.iowafinanceauthority.gov/Home/DocumentSubCategory/236

EXHIBITS IMPORTANT! Always use the current funding round exhibits. Do not use a prior year’s Application exhibit or an exhibit from a prior allocation round.

• Exhibits are posted in the 2019 LIHTC Program on

the website.

• Links to the website are available in the Exhibits

tab for IFA required exhibit forms.

APPENDIX K

Appendix K - Exhibit and Scoring Checklist

EXHIBIT SUPPLIED BY APPLICATION REFERENCE NARRATIVE DESCRIPTION WHEN REQUIRED

T = Threshold B = Building SA = Nonprofit Set Aside HSA = Supportive Housing Set Aside S = Scoring

Applicant Upload and/or On-line Application

Lists the Location(s) in the Application Description and Information All Proposed Projects; Projects applying for this Set Aside; If Applicable; etc…

EXHIBITS

1T – Application Certification & Acknowledgement (IFA REQUIRED FORM)

• Building Codes and Standards, Size and Cost of Land,

and Olmstead Goals

• Contractors
• Authorization to Verify Creditworthiness
• General Certifications and Acknowledgements
• Scoring Acknowledgements
• Ensure all required signatures are obtained for each signing

entity.

Common Errors Exhibit 1T:  Listing the incorrect entity name(s)  Having individual(s) sign that are not listed as an authorized signer in the Application.

EXHIBITS 2T – Current Real Estate Tax Assessment

• QAP Appendix 1-A.(2)(c)
• Provide a copy of the most current real estate tax

assessment(s).

EXHIBITS

3T Ownership Entity

3T(a) 3T(b) 3T(c) 3T(d) 3T(e) 3T(f)

All Ownership Types LP, LLP, LLLP LP, LLP, LLLP LC, LLC LC, LLC Project

IRS F.E.I.N. Letter File-Stamped Certificate of Limited Partnership Current Limited Partnership Agreement File-Stamped Articles of Organization Current Operating Agreement Organizational Structure Chart Must be in the Ownership Entity Name Ensure document provided is file-stamped Ensure the entity names and percent of

• wnership in

the LPA matches the Application and is fully Executed Ensure document provided is file-stamped Ensure the entity names and percent of

• wnership in

the OA matches the Application and is fully Executed Ensure entity and/or individual names match application

3Tf Organizational Chart

Owner Entity

• 3T’s

Owner Entity Tab GP/MM .01

• 4T’s

Qualified Development Team Entity Sole Member

• 4T’s if an Entity

If individual no upload Qualified Development Team Investor 99.99 No uploads required

EXHIBITS

4T Ownership Representative (General Partner/Managing Member )

4T(a) 4T(b) 4T(c) 4T(d) 4T(e) 4T(f) 4T(g)

LP, LLP, LLLP LP, LLP, LLLP LC, LLC LC, LLC Corporation Corporation Corporation File- Stamped Certificate of Limited Partnership Current Limited Partnership Agreement File-Stamped Articles of Organization Current Operating Agreement File-Stamped Articles of Incorporation By-laws Board Resolution Ensure document provided is file-stamped Ensure the entity names and percent

• f ownership

in the LPA matches the Application and is fully Executed Ensure document provided is file-stamped Ensure the entity names and percent

• f
• wnership in

the OA matches the Application and is fully Executed Ensure document provided is file-stamped Ensure current Ensure Board Resolution is completed prior to Application submission

Common Errors

Exhibit 3T(b,d) / 4T(a,c):  Not providing the file-stamped

• rganizational document

 Not providing the required

• rganizational documents for each

GP/MM level.  All levels of GP/MM not listed in Qualified Development Team Tab. Exhibit 3T(f):  Current Owner organizational chart not showing all levels and/or not matching the Application.

EXHIBITS

5T – Letters of Intent from lending institutions (on their letterhead) for construction and permanent financing

• The permanent financing letter’s content requirements set forth in QAP

Section 4.5.1 are term, fixed interest rate, amortization period, fees, prepayment penalties, anticipated security interest in the property and lien position. – The letter shall be valid for at least nine months beyond the Application due date.

EXHIBITS

6T – Commitment letters from all other funding sources

• Content requirements set forth in QAP Section 4.5.2 are: value of the

commitment, purpose the funds can be used for, and time limitations related to the commitment. – An Owner contribution must be an unconditional and non-expiring commitment to the Project. – A resolution adopted by the city council that allows the creation of a TIF district or an Urban Revitalization Tax Exemption (URTE), subject to the Project being award Tax Credits, is required.

– Includes existing debt to be assumed, grants, loans, tax credits, TIF, etc. – Shall be provided for the $100 minimum GP/mm contribution.

Common Errors Exhibit 6T:  Not providing a commitment letter for the GP/MM $100 minimum contribution.  Not providing a City Resolution adopted by the City Council allowing the creation of a TIF district or URTE subject to tax credit award.

EXHIBITS

FOR NON PROFIT ENTITIES: 6T(a) Nonprofit Board of Director’s Board Resolution Allowing Deferred Payment Obligation to the Project

• A resolution from the Board of Director’s stating approval

for a deferred payment obligation to the Project. Refer to QAP 4.4.

EXHIBITS

7T – Authorization of Release of Information – HUD, RD or PHA (IFA REQUIRED FORM)

• Complete the applicable form and upload to the

Application.

• Make sure the Project Description tab lists the project-based

rental assistance or HUD VASH Voucher information.

• If the HUD or Rural Development (RD) approved rents

exceed the LIHTC rent limit, check the box “exceed rent limit” on the Buildings Tab and enter the contract number.

EXHIBITS

8T – Tax Attorney Opinion As to a Project Acquisition Qualification (IFA REQUIRED TEMPLATE)

• QAP Section 5.12 (10-year rule).
• Required for Projects requesting acquisition credits to determine

eligibility for such credits, in accordance with Internal Revenue Code (“IRC”) Section 42(d) and IRC Section 179(d)(2).

• Shall be completed and signed by a tax attorney on the tax

attorney’s letterhead.

Common Errors

Exhibit 8T  Modifying the IFA template.  Attorney signed as the “firm” instead of his/her name.

EXHIBITS

9T – Executed Copy of Development Consultant Agreement

• Submit if the Project is using a Development Consultant.
• If the Development Consultant meets the requirements set forth

in QAP Section 5.3 - Qualified Development Team, the Agreement must include the Development Consultant’s participation in the Project through two years after the issuance

• f the IRS Form 8609.

 Common Error – The Agreement’s payment amount does not match the Cost & Credit Tab.

EXHIBITS

10T – Syndication or other Sale or Exchange of Tax Credit Interest to Investors Documentation

• All parties must execute prior to Application submission.
• Syndicator/Direct Investor information shall be entered in the

QDT tab.

• A Tax Credit investor who has an Identity of Interest with an

Owner Representative of the Project shall have a third party asset manager that is pre-approved by the IFA LIHTC Manager.

• A direct investor shall have a LITHC asset management

department with at least three years’ experience.

Common Errors Exhibit 10T:  Providing documentation that is not executed by both required parties.

EXHIBITS

11T – Utility Allowance Documentation

• Required Pre-Application exhibit.
• Provide in the Threshold Application, if necessary.
• Circle the applicable amounts on the Public Housing Authority

(“PHA”) utility allowance schedule per bedroom size.

• If the date on the PHA utility allowance schedule is over one year
• ld, provide a letter or email from the PHA stating it is still

current.

• If the Project has RD or HUD project-based rental assistance,

provide the approved RD utility allowance or the most current HUD Rent Schedule.

Common Errors

Exhibit 11T:  Providing the incorrect utility allowance form (type of building).  Not circling allowances used for the Project.  Entering incorrect information into the Application for the utility allowance.  Documentation is over 1 year old. Not providing email or letter from issuing housing program indicating the utility allowance has not changed and is the most current.

EXHIBITS

12T – Market Study Documentation

• Optional at the time of the Pre-Application.
• QAP Section 3.3.1 – 3.3.1.4.
• IFA recommends that Developers provide market information

they believe may be helpful in determining market feasibility of the Project including, but not limited to, an independently

• btained market study, information from proposed service

providers, or other market information.

EXHIBITS

15T – State Agency Performance Information and email to each state agency (IFA REQUIRED FORM)

• Review QAP Sections 5.3 - 5.3.4 and 5.20.1 - 5.20.4.5.
• Each individual/entity shall complete a separate 15T.
• Complete Parts 1-2 and email to the applicable allocating

state agency for completion of Part 3.

• Upload all 15Ts and the email sent each state allocating

agency as one pdf.

Common Errors Exhibit 15T:  Not providing for all applicable states.  Not identifying the proper Individual/entity names and IFA Applicant's Project Name.

EXHIBITS

16T – QCT/DDA MAP

• Provide a map from the HUD GIS website showing the entire

Project is located in a QCT or DDA and keep a copy for your records. (https://www.huduser.gov/portal/sadda/sadda_qct.html)

• 2018 QCT’s/DDA’s are currently used in the 2019 On-line
• Application. The new areas are anticipated to be published in

October 2018 with a January 1, 2019 effective date. The 2019 Application will be updated to the new areas in October 2018.

EXHIBITS

17T – Location Near Services

• Provide a Google map showing the Project’s Primary Address,

the name and address of the service, and the applicable

• distance. Refer to QAP Appendix 2 – Glossary for the

definition of each service.

• Projects located in an MSA shall be within the stated distance
• f two (2) of the services listed in QAP Section 5.4.2.
• Projects located in a Non-MSA shall be within the stated

distance of one (1) of the services listed in QAP Section 5.4.2.

EXHIBITS

18T – Concerted Community Revitalization Plan (CCRP) for Projects located within a Qualified Census Tract

• QAP Section 4.10.1.2

– Submit a copy of the CCRP. – The CCRP must have been formulated more than 6 months from the Application submission due date; clearly state defined geographical boundaries for the CCRP area; describe the revitalization needs of the area and revitalization efforts beyond housing; describe the need for housing that includes affordable housing; identify community partners and funding sources; include goals, measures, barriers, steps to overcome barriers; and include a description of community

• utreach and input that occurred in developing the CCRP.

EXHIBITS

19T – Scattered Site Project Google map

• QAP Section 5.6.
• Provide a Google map showing the Project is located within

a 20-mile radius.

• A Scattered Site Project shall be owned by the same

Ownership Entity and financed under the same agreement(s) with all Units qualified LIHTC Units.

EXHIBITS

20T – Income Averaging

• QAP Section 4.11.3. – 4.11.3.1
• Provide the floor plans for each building that includes the

unit size, unit number, and designated AMI% for all Units. Units and AMI levels are fixed.  Must not include more than 4 of the allowable AMI levels;  No other federal funds may be used;  Project shall be 100% LIHTC;  Must be one multiple building Project as referenced in line 8b of IRS Form 8609;

EXHIBITS

20T – Income Averaging (continued)

• Provide calculation that shows the Project meets the income

average test.  The average income/rent limit in the Property must be 60% or less of Area Median Income (AMI).

EXHIBITS

1B Evidence of Site Control (by Ownership Entity)

• Appendix 1-A.
• Sole fee simple title to the Property: Provide a properly executed and

recorded warranty deed, an Iowa attorney real estate title opinion, or an Iowa Title Guaranty Owner Certificate as evidence.

• Purchase Option or Contract: Provide an executed and exclusive

purchase option or contract that is valid for nine months following the date of the Application due date as evidence.

• Lease or Option on a Lease: Provide an executed lease or option on a

lease which as a term not less than the longer of the period the Project will be subject to the LURA or 35 years as evidence.

EXHIBITS

The evidence shall:

• Be binding on the contractor/lessor/optionor of the Property.
• Provide that the contractor/lessor/optionor cannot

unilaterally withdraw, revoke, or rescind the obligation to the sale or lease of the Property to the Applicant unless the Applicant is in default under the evidence.

• Include a complete and accurate legal description for all real

estate that will be the Project.

1B continued

EXHIBITS

• Include the location of all existing and proposed easements on the

site(s).

• Parking shall meet IFA’s site control requirements unless an exemption is

provided by the city.

• An Applicant must properly acquire any public right-of-ways needed for

private use (public easement or alley, street vacation) to meet IFA’s site control requirement. A city is not authorized to transfer unless all required notices and hearings have been completed and the City Council has approved the purposed action by the city.

• At the time of the Application submission, the Applicant shall have site

control. 1B continued

Common Errors

Exhibit 1B  The legal description in the Application and exhibits do not match.  Cost and Credit tab’s and Exhibit 1B’s acquisition costs are not the same.  Owner failed to properly acquire a public right-of-way needed for private use (public easement or alley, street vacation).

EXHIBITS

Exhibit 2B – Appraisal

• QAP Sections 5.8 and 5.9
• If land and buildings are acquired from a party with an Identity of

Interest, provide an appraisal by an MAI certified appraiser who is not a related party and is currently in good standing.

– The appraisal shall specify an allocation of value between land and buildings and shall be no more than 180 days old on the date the Application is submitted to IFA. – The Identity of Interest questions on Site Control Tab must be answered correctly for the on-line Application to require the appraisal. – IFA reserves the right to acquire an appraisal, at Applicant’s expense, if reasonable cause exists to question the fair market value of the land and/or buildings acquired.

EXHIBITS

The following exhibits are required in the submitted Pre-Application. Updates to these exhibits may be submitted in the Threshold Application. Exhibit 3B – Color Photos of Property & Adjacent Properties

• Refer to 2019 Appendix K for the specific requirements.

Exhibit 4B – Map with Site Locations & Plat Map

• Provide both maps and ensure each are legible.

Exhibit 5B – Site and Floor Plans

• Refer to 2019 Appendix K for specific requirements.

Common Errors Exhibit 4B:  Not providing both a legible city map showing the site location and a plat map. Exhibit 5B:  Not providing legible site plans and/or providing site plans that do not show the location of utilities and/or easements.  Inconsistent Project information between Application and plans.

EXHIBITS

Exhibit 6B(a) – Detrimental Site Characteristics Remediation Plan Exhibit 6B(b) – Detrimental Site Characteristics Budget to Make Site Suitable Exhibit 6B(c) – Map showing Detrimental Characteristics on Site Plan

• QAP Appendix 1-H.
• Required when the site(s) has Detrimental Site Characteristics.
• A Project site, or any part thereof, may be located in a 100-year

flood zone.

Common Errors Exhibits 6B(a–c):  Not providing the exhibits when there is knowledge of existing Detrimental Site Characteristics.

BUILDING (B) EXHIBITS

Exhibit 7B – Political Jurisdiction Certification (IFA REQUIRED FORM)

• QAP Appendix 1-A, Appendix 1-C, Appendix 1-D and Appendix 1-E.
• Generate from the Exhibits tab after completing the following

Application tabs: Project Name and Location, Site Description, Site Control, Ownership Entity, and Buildings/Unit.

– Shall be signed by the Political Jurisdiction and include the site plan reviewed. – Upload the signed Exhibit 7B and the site plan.

BUILDING (B) EXHIBITS

Exhibit 8B – Plans and Specifications

• QAP Appendix 1-F and Appendix 1-G.
• Shall show all proposed work at a minimum schematic

design level and ensure IFA’s Minimum Development Characteristics are included.

• Shall match the Application.

Common Errors Exhibit 8B:  Submitting plans and specifications that do not meet IFA’s minimum development characteristics.  Specifications don’t match the Application.

EXHIBITS

Exhibit 9B – Preliminary Costs and Scope of Work for All Projects (IFA REQUIRED FORM)

• QAP Section 5.10.
• Scope of Work shall include a cost estimate for the Hard

Construction Costs.

• Use IFA’s form.

Common Errors Exhibit 9B:  Not including all costs or not separating specific costs out.  Costs inconsistent with the costs listed in the Application.

NONPROFIT SET-ASIDE EXHIBITS

Submit through the Nonprofit Set-Aside Tab in the Application no later than November 30, 2018 4:30 p.m. C.S.T.

• Exhibit 1SA – IRS Letter Stating the Nonprofit is a Qualified Nonprofit
• Exhibit 2SA – Attorney’s Opinion Regarding the Nonprofit (IFA REQUIRED

TEMPLATE)

• Exhibit 3SA – Nonprofit Articles of Incorporation & 2-Year Requirement
• Exhibit 4SA – Nonprofit Resume
• Exhibit 5SA – IRS website print-out confirming continued IRS qualified Nonprofit
• status. IRS Nonprofit website

HOMELESS SET-ASIDE EXHIBITS

Exhibit 1HSA – Qualified Service Provider Capacity Determination Form

(IFA REQUIRED FORM)

• 2019 Appendix M & QAP Section 2.2.2.
• Submit through the Supportive Housing for Families Set-Aside

Application tab no later than November 30, 2018, 4:30 p.m. C.S.T. Exhibit 2HSA – Continuum of Care Review Form

(IFA REQUIRED FORM)

• Submit with the Supportive Housing for Families Set-Aside

Threshold Application.

SCORING EXHIBITS

All scoring exhibits submitted in the Threshold Application by the Application due date are evaluated. IFA does not allow modification to scoring items in the Application after Threshold Application submission. Exhibit 1S – Capital Needs Assessment (Acq/Rehab and Rehab Projects Only): Review QAP Section 6.4.5. Exhibit 2S – Appendix G – Iowa Rose Program Requirements (IFA REQUIRED FORM & Owner’s Plan): Review QAP Section 6.1.4. and 2019 Appendix G. Exhibit 4S – Environmental Site Assessment: Provide a Phase I Environmental Site Assessment, performed within 2 years of Application submission, that meets requirements set forth in QAP Section 6.4.6.

SCORING EXHIBITS

Exhibit 6S – Historical Significance Documentation

• Provide information from the State Historic Preservation Officer

showing all buildings within the Project are on the National Register

• f Historic Places or are determined eligible for the National

Register.

– If the box is checked on the Project Description Tab to request these points, State and Federal Historic Tax Credits shall be listed in the Funding Sources tab. – Ensure all buildings are listed as Historic on the Buildings tab. – Applicants requesting points for historical significance shall use the maximum amount of state and federal tax credits as awarded by the appropriate allocating agency.

SCORING EXHIBITS

Exhibit 7S – Authorization of Release of Information – HUD, RD, or PHA

• QAP Section 6.3.3.
• Provide the applicable signed form.
• Complete the Rental Assistance Section on the Project Description
• tab. All Units must be entered in the Buildings tab and the rental

assistance information entered for the preliminary scoring points to be shown on the Scoring tab.

– Not eligible for QAP Section 4.10.3.1 and 4.10.3.2 (eligible basis boost for serving lower AMI’s). – Not eligible for QAP Section 6.1.2 Market Rate Incentive. – Owners of Projects with project-based rental assistance may not elect the Income Average Test for the Minimum Set-Aside.

2019 QAP & ON-LINE APPLICATION QUESTIONS Submit questions to the Q&A on the 2019 IFA website. Answers will be posted weekly until the week prior to the Application submission due date. http://www.iowafinanceauthority.gov/Home/Document SubCategory/236

2019 Q & A

Common Errors 2019 Q & A  Not checking the Q&A periodically.  Not reviewing the Application prior to submission.  Not submitting questions.

2018 LIHTC Mandatory Developer Training FINAL QUESTIONS?