2019 Qualified Allocation Plan (QAP) Changes under consideration - - PowerPoint PPT Presentation

Virginia Housing Development Authority

2019 Qualified Allocation Plan (QAP)

Changes under consideration

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2019-2020 QAP Schedule

1/3-1/8 & 1/18 QAP Discussions in multiple locations 2/15/2018 QAP Discussion Forum – The Westin, Richmond 4/10/2018 Present possible QAP Changes to Board 5/22/2018 2019 QAP Changes released for Public Comment 7/16/2018 2019 QAP Focus Group 7/18/2018 2019 QAP Public Hearing/Close Comment Period 8/15/2018 VHDA Board of Commissioners approve 2019 QAP

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2019-2020 QAP Discussion Items with Partners across Virginia

• Green Certification, Building Amenity Changes
• Cost limits
• Timing
• Fees
• Additional Items
• Note: throughout the discussions that the QAP pertains to both 9% and 4%

allocations

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VHDA Green Focus Group

• Purpose is to give recommendation on Green building

requirements and energy efficiency items for 2019 QAP

• 14 Non-VHDA members to include General Contractors,

engineers, property management, and Developers

• Met once a month since October for 4 hours each time
• Had presenters from 6 Green Certification programs

– EarthCraft Homes, LEED, EnergyStar, Passive House, National Green Building Standard (NGBS), and Enterprise Green Communities

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Current Green Certification and Energy Efficiency Incentives

• LEED- Silver (15 pts), Gold (35pts), Platinum (45 pts)
• EarthCraft- Certification (15 pts), Gold (35 pts) with Benchmarking (add 10 pts)
• Dehumidification hookups and systems ($750 and $1,500 cost increases)
• Energy Star Kitchen, Laundry Appliances, Windows and Glass doors
• Heat/AC-SEER-AFUE High performance
• Sub-metered water expense
• WaterSense faucets, showerheads and toilets
• High speed internet service
• Energy efficient water heaters
• New Construction only: EPA Energy Star qualified bath vent fans
• R-3+ wall sheathing insulation

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• Add baseline energy performance requirement

– Focus Group suggestion

• New Construction – EnergyStar Certification
• Rehab and Adaptive reuse – % Increase in performance or HERS rating
• Add more options for Green Certifications and have all

certifications at same point amount, lower points

– Focus Group Suggestion

• Add NGBS, Enterprise Green Communities
• Passive House (possible future points)
• Keep Benchmarking
• Remove some existing amenities considered “double dipping”

– Points for Energy Star appliances because EnergyStar certification would be required

Potential Green Building Changes

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Potential Changes to Amenities

• Brick
• Simplify Calculation
• Consider point reduction due to cost, timing and availability of other low

maintenance exterior materials

• Dehumidification points for entire building
• Points for Wi-Fi
• Community Room
• Entire Property
• Points for solid core doors
• Revisit the fire suppression and fire prevention points
• Recycling Plan/Program
• Bath Fans points for all (previously only NC)
• Innovation category
• Remove R-3 Sheathing and Sub metering points

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Current Cost limits

• Broken into 3 geographic areas adjusted in 4th Quarter by

regional Marshall and Swift factor for that quarter

• Inner Northern Virginia
• Prince William County, Loudoun County, & Fauquier County
• Balance of State
• Specific limits for New Construction/Adaptive Reuse and

Rehabilitation with extra added for Structured parking

• At 8609, costs are held to Reservation limits with a possible

5% overage allowed without penalty

• Total Development Costs (TDC) are calculated as all soft

costs, hard costs, developer fee, and acquisition/land costs

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Potential Cost Limit Changes

• Assign a square footage cost based on construction

class (A,B,C,D)

• Adjust for select amenities (e.g. elevators)
• Localize with Marshall & Swift multipliers
• Potentially remove certain development costs from

TDC calculation (land, reserves)? Cost limits would be deal specific.

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Current Timing Issues

• Currently the Accessible Supportive Housing (ASH) and

New Construction Pools receive forward allocations

• Some forward allocations receive carryforward

documents in February

• Creates requirement to meet a 10% cost test in February of following

year

• Results in a few deals having different due dates than all other deals –

complicates tracking

• ASH Pool- Applications accepted starting in July
• Requires an additional Board Meeting for review and approval
• Creates separate documentation due dates

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Potential Timing Changes

• Alignment of Schedules/Carryforwards to run concurrently

with other competitive deals within each year (all 2018 credits issued at the same time)

• ASH pool to include simultaneous timing with competitive

round (two applications for the same deal not allowed)

• Forward allocations- Consider increasing the number of deals

receiving forward allocations

• RAD/Rural Deals – should we forward allocate these deals or

require more executed contracts upfront?

• Credit Refresh - for deals with threat of not placing in service
• n time offer a credit refresh option (NC method)

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Fees

• Restructure VHDA’s complex developer fee structure
• Currently Tiered
• Consider a flat rate(s), or maximum (Pa. has a $1,500,000 developer fee cap no matter

the size of the deal)

• Consideration of developer fees on a per unit basis
• Currently based on TDC
• Reduce 20% developer fee for 4% deals with EarthCraft
• Reduction of professional fees (or incentives for lower

intermediary fees)

• Currently no restriction on professional fees
• Potential increases if targeting harder to serve populations ( e.g.

5% increase if doing PSH, held in escrow and could cover

• perating costs)

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15 minute break

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Additional Topics

• Qualified Contracts (QC) – Currently no restriction on both 9% and 4%
• Insert language to waive QC
• Offer current incentives for those willing to present a contract on

existing QC deals

• Future penalties/banned from program if seeking a QC
• Planned Foreclosures – Currently no language in QAP
• Add language to prohibit and/or intervene if aware of “planned

foreclosures”

• Areas of Opportunity – Current incentive is to Census tracts with less than

12%, 10%, and 3% poverty

• adequately addresses?
• Limiting/not limiting Intermediaries – Currently Only Market Analysts are

restricted at 15 deals each

• same for consultants, attorneys, architects, engineers?

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Additional Topics

• Preservation Pool – Currently no pool
• Creation of an additional pool set aside for rehab/preservation deals only

(Stats regarding flood of incoming deals)

• Not like previous Non-Competitive Preservation Pool from 2006- 2009
• Balance of state parties have indicated no interest, instead want ability to do

new deals

• Revitalization – Should QAP require that the Qualified Census Tract (QCT)

be also part of a larger revitalization plan per recommended best practices Currently no requirement for QCT

• 9/4 Status –Solicited input regarding this point option and ways

to strengthen it (Va is one of 10 states doing 9/4 hybrids)

• Closing timing challenges - April 1 this year is a problem with TE Bonds and

ability to get HAP contract through HUD

• Developers have expressed need to tweak timing.

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Additional Documentation

• General Contractor (GC) Cost Certification – Currently only

require Auditors report and an Owner’s Cost Certification

• Provide a GC cost certification in addition to total development

cost certification

• Capital Needs / Physical Needs Assessment – Currently only

require Unit by Unit write up in Reservation application

• For credits awarded to rehab projects require a capital needs

assessment by a competent/ licensed third party

• Best practices also recommend this include a Phase I

Environmental Study

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Additional Considerations

• Restructure Accessible Supportive Housing Pool (ASH) – Current requirement is

25% accessible units with project based vouchers.

• Require either PSH or DOJ preference to qualify for pool
• Reduce accessibility and disability requirement to 10% of units
• Require that services be provided
• Cap requests to maximize deals that can get funded ($500k?)
• Deals can either apply directly into the ASH pool or roll into the ASH pool

from the geographic pools if PSH and/or DOJ with documented services is being provided

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Additional Considerations

• Incentivize Tenant Services – Currently only incentivize services

in permanent supportive housing.

• Require MOU with providers.
• Non-profit involvement- Current structure does not evaluate

non-profit’s participation or financial stability

• Tiered structure for Non-profit involvement based on ties to

the locality and likelihood of exercising Right of First Refusal (ROFR) Purchase Option.

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Other thoughts

• Flexible language relative to numbers and processes
• utlined in the QAP
• Add language that basis boost will be removed if

deal is financially feasible without it

• Remove disqualifications - insert curing period
• Required site visit