Pre-Conference Short Course - Florida Housing Coalition · Pre-Conference Short Course Building a Successful Nonprofit Affordable ... Uniform Relocation ... articles of incorporation,

Prepared by the Florida Housing Coalition, Inc. Page 1

Pre-Conference Short Course

Building a Successful Nonprofit Affordable

Housing Business Sponsored by TD Bank

Host: Marilyn Drayton, Community Development South Region Group Manager

Trainers

Wight Greger, Principal, WsG and Partners, LLC

Gladys Schneider, Technical Assistance Director, Florida Housing Coalition

AGENDA

1:30 Welcome and Introductions

1:45 Where’s the housing money? Gladys Schneider 2:00 Overview of Grant Management and Grant Writing Tips Gladys

Schneider 2:30 What is the capacity of your nonprofit? Gladys Schneider

3:00 Responding Successfully to RFP’s. Wight Greger From Advocacy to working with the RFA

Case study and group exercises 4:45 Q&A and Discussion

5:00 Adjourn


GRANT MANAGEMENT AGREEMENTS, UNDERWRITING, REPORTING AND REGULATIONS

THE GRANT CYCLE

Rule Making Follow public hearing process, Read the Regulations, application and schedule Attend the Hearings, take notes, provide input

Notice of Funds Availability (NOFA)

Read the NOFA thoroughly Draft a response schedule leaving time for corrections and additions before the last minute

Request for Proposal Read the RFP throughout before beginning Note any modifications since the rule making process Assign sections to team responsible Make list of needed information Meet frequently Adhere to your timeline

Response to Request for Proposal

Submit on time! See Grant Writing Tips below

WRITTEN AGREEMENTS

Grant Award Agreement Read it thoroughly, read it together with Grantor, have legal counsel review it. Typical components of written agreement:

1. Use of Funds 2. Affordability 3. Reports and Records 4. Duration of Agreement 5. Enforcement 6. Conditions for religious organizations 7. Disbursement Procedures 8. CHDO provisions 9. Property Standards 10. Other Program Requirements

UNDERWRITING

Capacity of Organization Use checklists and do frequent tune-ups

Feasibility of Project Perfect the financial pro forma, identify cash needed for development, cash flow during operation. Are all costs reasonable? See underwriting checklist.

Market Conditions Select area for analysis; specify target populations; identify supply and demand for your type of housing or service; Make data driven decisions!

REPORTING AND RECORD KEEPING

Regular Reporting See grant agreement. Check with Grantor for specific formats. Don’t be late!


Final Report Show cumulative progress and completion to grant agreement criteria.

Audit See grant agreement; Choose auditor with public grant auditing experience. Try to have project related expenditures complete by the audit time so all can be included in current audit

Post Completion Requirements

See grant agreement for long term affordability requirements, monitoring plan, treatment of program income, lien and loan satisfaction schedule

Financial Management

All costs must be reasonable and the nonprofit must have financial accounting systems in place. Cost principles - OMB Circular -122 for nonprofits; OMB Circular A-133 for audits

Record Keeping In general minimum is 5 years. Check regulations and grant agreement.


CROSS CUTTING FEDERAL REQUIREMENTS

Other federal requirements

Apply to home buyer/rental programs?

Special issues/considerations

Regulatory citations and references

Non-– discrimination and equal access rules

Fair Housing and Equal Opportunity

Yes PJs must affirmatively further fair housing. Particular attention should be paid to signs of discrimination and sale of properties.

92.202 and 92.250

Title VI of Civil Rights Act of 1964 ( 42 U. S. C. 2000d et seq.)

Executive Order 11063 (amended by Executive Order 12259)

Age Discrimination Act of 1975, as amended (42 U.S.C. 6101)

24 CFR 5.105(a)

Affirmative Marketing Yes, for all projects of five or more HOME assisted units.

PJ must adopt affirmative marketing requirements and procedures. Owners must comply.

92.351

Handicapped Accessibility

Multi-family Single family by local code or program requirements

New projects must be designed and constructed in accordance with applicable standards. Rehabilitated properties may require accessibility modifications.

Section 504 of the rehabilitation act of 1973 (implemented at 24 CFR part eight)

for multi-family buildings only, 24 CFR 100.205 (implements the Fair Housing Act)

Employment and contracting rules

Equal opportunity employment

Yes Contracts and subcontracts for more than $10,000 must include language prohibiting discrimination

Executive Order 11246 (implemented at 41 CFR Part 60)

Section 3 economic opportunity

Yes, if amount of assistance exceeds $200,000 or contract or subcontract exceeds $100,000

Includes section 3 clause in contracts and subcontracts

Section 3 of the Housing and Urban Development act of 1968 (implemented at 24 CFR Part 135)


Minority/Women Employment

Yes PJ must develop procedures and include in all contracts and subcontracts

Executive orders 11625, 12432 and 12138

24 CFR 85.36(e)

Davis-Bacon Yes, if construction contract includes 12 or more units that are home – assisted

If applicable, requirements apply to the whole project, not just the home – assisted units. Include language in contracts and subcontracts. Requirements do not apply to volunteers or sweat equity.

92.354

Davis – Bacon Act (40 USC 276a -276a-5

24 CFR part 70

Copeland Anti-Kickback Act (40 USC 276c)

Conflict of Interest Yes PJ should ensure compliance – house and when using sub recipients

92.356

24 CFR 85.36

24 CFR 84.42

Debarred contractors Yes PJs should check HUD list of debarred contractors tab

24 CFR part five

Environmental Requirements

Environmental reviews Yes Categorically excluded not subject to 58.5 buildings to be constructed in the future require a compliance review

92.352

24 CFR part 58.35 B5

national environmental policy act of 1969

Flood insurance Yes if city or county.

Must obtain flood insurance if located in a FEMA designated 100 – year floodplain community must be participating in FEMA’s flood insurance program

Section 202 of the flood disaster protection act of 1973 (42 USC 4106)

Site and Neighborhood Standards

Multifamily only 24 CFR 893.6 (b)

Lead-Based Paint Yes for pre- 1978 units. Notice to purchasers and tenants. Visual assessment must be performed. Paint stabilization must be completed if applicable. Safe work practices and clearance. Provisions included in

92.355

Lead-Based Paint Poisoning Prevention Act of 1971( 42 USC 4821 et seq.)

24 CFR Part 35

982.401(j) except paragraph 982.401(j)(1)(i)


all contracts and subcontracts.

Relocation Yes. Required notifications to tenants. Required language and offers or contracts for acquisition of property.

92.353

Uniform Relocation Assistance in Real Property Acquisition Policies Act of 1970 (URA) (42 USC 4201-4655)

49 CFR Part 24

24 CFR Part 42 (subpart B)

section 104 (d) “Barney Frank Amendments”


GRANT WRITING TIPS

Whether your nonprofit is responding to a Request for Proposal from your local government or if you

are seeking an award from foundation, submitting a well written, professional and responsive

application can dramatically increase your chance of success. Here are some tips.

Read the Full Application and Instructions Carefully read the entire grant application and make notes of the key requirements. Applications can sometimes be confusing so it’s important that you understand exactly what information is being requested, what documents should be attached, how many copies are needed, how the response should be organized. Make sure your project meets the goals of their grant offer. Follow all of the instructions. Use the correct software and filenames if using a digital application. Understand the charts and how to complete them. Appearances matter First impressions are important! With few exceptions, most funding applications can be completed in Word, fillable PDF or submitted on line. Do NOT handwrite your response. It can give the reviewer the impression that your organization does not care enough to put forth a professional looking response, causing funders to perceive that you may not manage their grant funds in a professional manner either. Timeliness Pay close attention to submission deadlines and leave yourself plenty of time to complete the application and have it delivered prior to the deadline. It is unprofessional to ask for extensions and in many cases, a late submission will be disqualified. Watch for email confirmations. Write succinctly Grant reviewers typically have many responses to review, so an application that is clear, well written and provides the information requested will be appreciated. Do not submit extraneous information- more is not necessarily better. Most applications begin with an invitation to describe the nature of the program or project for which you are requesting funds. Use this opportunity to open with a simply stated request such as: “ABC nonprofit is requesting $100,000 to partially fund the construction of a 10 unit affordable rental property in the XYZ neighborhood of Anytown, Florida.” Make sure your opening statements confirm that your project represents what the funder wants to support and represents their mission. A reviewer can use this information to quickly determine that your project meets the basic requirements of the grant so they can move on to the details of the submission. Answer all of the questions but don’t provide information that was not requested. Make sure all of the pages are named and numbered. Acronyms If you use acronyms, make sure you include the full name the first time it is used. For example: “We intend to leverage these funds with a Community Development Block Grant (CDBG) provided by Anytown Housing Department”. The next time you mention this funding source you can use the


acronym. Sometimes grant applications are reviewed by people with limited knowledge of the details of your business so also make sure you briefly explain technical terms and concepts. Review Always have someone else proof read your response. A good proof reader with a fresh eye should be able to catch grammatical errors, inconsistencies, duplications and misspellings that you may have overlooked. This may be a task a Board Member would be willing to do. Include attachments Funders may request additional exhibits to the application such as financial statements, audit reports, organizational charts, project timelines, etc. Make sure they are properly labeled and organized so they are easy for a reviewer to locate. Make sure the copies are legible and easy to read. Do not include anything that was not specifically requested. Seek Help If you feel your organization does not have sufficient capacity to submit a professional and responsive application, you may consider engaging a qualified grant writer to assist. Grant writers frequently work on a contract basis paid by the hour. When a grant writer first comes on board, they begin with familiarizing themselves with your organization and work, so using the same person or firm on a regular basis is cost effective.


SAMPLE CREDIT UNDERWRITING

CHECKLIST The Applicant is required to submit the following items to the credit underwriter within the timeframe specified in the invitation in order to underwrite the loan request. If the credit underwriter determines the information submitted is not sufficient, additional information may be required and requested under separate cover. Upon completion of the review, the credit underwriter provides the Issuer with an analysis of the Development and a recommendation on the funding of the proposed loan. A. APPLICANT INFORMATION

___ 1. Identity of Applicant entity and Principals and the ownership structure (i.e. identify principals and officers/general partners, percentage of ownership and responsibilities in partnership/organization).

___ 2. Copy of documentation creating the Applicant entity (i.e. partnership agreement, certificate of limited partnership, articles of incorporation, bylaws, certification of good standing, and any other corporate documents for the Applicant and any corporate general partner).

___ 3. Resume and trade references for each Principal of the Applicant, including a description of experience in the development, ownership and management of multifamily properties. References must include addresses, contact names and telephone numbers.

___ 4. Signed credit authorization forms completed by Applicant entity and all Principals (form provided by credit underwriter).

___ 5. Completion by Applicant and Principals of the Certification of Previous Multifamily Housing Experience form (provided by credit underwriter).

___ 6. Completion of Deposit and Mortgage Verification forms by Applicant entity and all Principals along with banking references including account-numbers, addresses, contact names and telephone number (forms provided by credit underwriter).

B.1 PROPERTY INFORMATION

___ 1. Detailed Property description. ___ 2. Legible location map, showing the Property and surrounding area, including

commercial/shopping facilities, schools, competitive projects, and its proximity to the areas central business district.

___ 3. Survey indicating the exact boundaries of the Property, any flood hazard area(s), all ingress and egress to the Property, all utilities, and the Property’s legal description.

___ 4. Site Plan ___ 5. Zoning compliance. ___ 6. Copy of the most recent Title Report for the Property.


___ 7. Evidence of Site Control (i.e., copy of Ground Lease Analysis, Sales or Purchase Agreement and most recent Deed to the Property, or Ground Lease to include all attachments and addendum. Closing Statement if purchase has occurred within past 24 months).

___ 8. Color photographs of the subject Property. ___ 9. Aerial photograph of the Property and immediate surrounding area, if available. ___ 10. Evidence of availability of utilities. ___ 11. Building plans and specifications for the rehab of site and buildings. ___ 12. Soil test report. ___ 13. Building permits, if available. (Loan closing contingency). ___ 14. Feasibility Study / Market Study. ___ 15. Appraisal with resume and references of appraiser. ___ 16. A Plan and Cost Review or Engineering and Property Condition Report (to be

order by the credit underwriter at the Applicant’s expense). ___ 17. Phase I environmental review, including history of Title to the Property, with

resume and references of environmental auditor. ___ 18. Evidence of Insurance including, but not limited to, General Liability, Workmen’s

Comp., Builder’s Risk, Auto Liability. B.2. THE FOLLOWING ADDITIONAL ITEMS ARE REQUIRED FOR EXISTING PROJECTS

___ 1. Statement of All Outstanding Obligations against the Property, ___ 2. Certification of Project Rent Roll, executed by Owner. To be completed prior to

loan submission. ___ 3. Current project rent roll. Rent roll must include unit number or identification,

tenant’s name, unit type, monthly rent subsidies (if applicable), rent controlled or rent stabilized (if applicable), concessions, rebates or discounts given to tenant, furnished or unfurnished status, lease commencement date, lease expiration date, arrearages owed by tenant, if any, and amount of security deposit(s) held.

___ 4. The actual Income and Expense Statements on the Property for the current year-to-date, and the year end statements for the previous three (3) years (certified by the Applicant). In addition, subsequent monthly year-to-date statements must be submitted each month no later than the tenth day of the following month while the loan request is in processing. Also, if any major capital improvements have been made to the Property within the past three (3) years, and the costs are included in the operating statement(s) as expense items, provide a break-out of said cost(s) and item(s). (Example: new roof, new heating system, replacement of appliances, replacement of carpet, etc.)

___ 5. Historical occupancy and rent roll information. ___ 6. Statement(s) indicating what costs, if any, are shared with other properties. ___ 7. Copies of all service contracts. ___ 8. If there is a Laundry Lease within or associated with the Property, the seller must

include a copy of any laundry lease relating to the proposed Mortgaged Premises. All laundry leases must be subordinated to the lien of the proposed mortgage.


___ 9. If there are Commercial Leases within or associated with the Property, provide the following:

(a) Complete copies (with all amendments) of all Commercial Leases; (b) Commercial Tenant’s Estoppel Certificates.

___ 10. Personal Property Certification, listing all personal property associated with the applicable real estate, completed and executed by the Applicant as being true and correct as of the date signed.

C. FINANCIAL INFORMATION

___ 1. Current signed financial statements of Applicant entity and each Principal, General Partner, General Contractor and Credit Enhancer or Guarantor. All statements should be audited or prepared by a third party CPA or professional accountant. Audited financial statements must include a statement of financial changes and all notes. If audited financial statements are not available, the statements must be certified as complete and accurate by the party whose finances are summarized by the statement.

___ 2. Most recent three years' tax returns for Applicant entity; all Principals, General Partners, General Contractor and Credit Enhancer or Guarantor, with all supporting notes and schedules.

___ 3. Applicant and Principals Analysis of Cash Flows and Contingent Liabilities, certified as complete and accurate by the party whose finances are summarized by the statement. This must include a detailed schedule of all real estate owned by the Applicant, Corporate General Partner, and the Principals of the Applicant, and/or Corporate General Partner showing the type of property owned, ownership percentage, property value, mortgage balance, amount of income, expenses, debt service and debt service coverage for the past year and through the most current month of the present year.

___ 4. Monthly income and operating expense projections until stabilization, showing absorption, occupancy analysis, and supporting terms and conditions for interest reserve calculations and operating reserves.

___ 5. Fifteen year income and expense pro forma (detail operating expense items). Rents must increase 3% per year and expenses must increase 4% each year.

___ 6. For tax exempt developments, commitment letter from placement agency outlining terms of financing requested. If credit enhanced, commitment letter from Credit Enhancer including Credit Enhancer’s resume with references.

___ 7. Schedule of Proposed Secondary Financing or grants, if any, supported by commitment letters.

___ 8. For housing credit developments, copy of the executed syndication commitment agreement.

___ 9. Copy of an executed first mortgage loan commitment outlining the terms of financing.

___ 10. If a refinance, the mortgage loan payment record for the past three (3) years. ___ 11. Detailed Sources and Uses of Funds Statement. ___ 12. Section 8 HAP Contract (if applicable).


D. MANAGEMENT AGENT INFORMATION

___ 1. Management Agent’s resume and references, to include number of years in business, number and location of other properties/units managed, and brief resume of key Principals.

___ 2. Executed Management Agreement, including documentation of program requirements; i.e., income and rent restrictions.

___ 3. Management Plan. ___ 4. Copy of standard tenant lease.

E. CONSTRUCTION INFORMATION

___ 1. Detailed project cost breakdown highlighting breakout of hard construction costs (including contingencies, general requirements, and all overhead and profit figures) and soft costs. Please detail calculation of interest reserves, operating and working capital reserves, and builder’s fee.

___ 2. Proposed Construction Contract and General Contractor's license. ___ 3. Resume, banking and trade references (include bonding company) on the

General Contractor, including a description of experience in the development of multifamily properties.

___ 4. Signed Credit Authorization form for General Contractor (form provided by credit underwriter).

___ 5. Copy of Architect’s Contract, Current License, and resume which list experience with this type of Development. (Executed contract required prior to loan closing).

___ 6. Copy of Engineering Contract, Current License, and resume which list experience with this type of Development. (Executed contract required prior to loan closing).

___ 7. Construction Draw Schedule (for loan programs). ___ 8. Termite inspection report and/or a termite bond (or other acceptable evidence

of damage/repair coverage).


CHDO Staff Experience and Organizational Capacity Checklist

CHDO Staff and Experience Documentation Comments

CHDO has paid staff to manage project: o Paid full time staff o Paid part time staff o Contracted staff

Payroll, w-2, w-4 Payroll, w-2, w-4 Contract, w-9, 1099

Name (job title) has relevant experience in the following: Repeat for each key staff member

o Homeownership development o Rental development o Other real estate development and

management o Rehabilitation and other housing

program administration o Other relevant experience:

.

Resume, project lists, inventory of properties developed, owned or managed

CHDO Developer Capacity and Fiscal Soundness

o HOME/CHDO project performance o Past development performance o Housing program and federal grant

management performance

Document previous projects

Developer Capacity

o Organizational structure to support development

o Management structure to support development

o Current pipeline/backlog o Staff capacity- consultant training

staff? o Board Expertise and oversight o Skills/capacity to market (for sale)

or manage (rent) units

Org Chart Resumes of key management staff List of current projects and status List of consultants and qualifications Certifications, resumes

Developer Capacity- Development Team

o All development team roles filled with qualified firms/persons

o Partners/consultants enhance CHDO capacity

o Prior experience- team successfully developed other projects

o Team has demonstrated capacity to work together

Org chart with duties List of partners and qualifications Previous and ongoing projects lists

Fiscal Soundness

o Financial management o Financial stability o Liquidity o Audit and reporting o Portfolio and corporate liabilities

Accounting systems Financials- balance sheet, P&L, current and past budgets, audits and responses past 3 years


Other Factors

o Community relations o PJ relations o Lender relations o Project specific skills/capacity

Reports, media, awards, support letters, commitments

Certification Signature and date

This community housing development organization has documented that its staff with development experience and it has the organizational capacity and the development team to implement the proposed CHDO project.

Documents

Pre-Conference Short Course - Florida Housing Coalition · Pre-Conference Short Course Building a Successful Nonprofit Affordable ... Uniform Relocation ... articles of incorporation,