109.04.12 Ark. Code R. 004
The Arkansas Development Finance Authority ("ADFA" or the "Authority") is charged with the responsibility of administering federal low-income housing tax credits ("Housing Credits") for the State of Arkansas (the "State"). ADFA is also charged with the responsibility of promulgating rules and regulations concerning the allocation of the Arkansas low-income housing tax credit (the "State Housing Credits") pursuant to Ark. Code Ann. § 26-51-1701 et seq. The Tax Reform Act of 1986 created the Housing Credit to encourage the private sector to invest in the construction and rehabilitation of rental housing for low and moderate-income individuals and families. Section 42 of the Internal Revenue Code of 1986, as amended ("IRC" or the "Code"), mandates that housing credit agencies adopt a Qualified Allocation Plan ("QAP") for allocation of the Housing Credit to low-income rental developments throughout their respective states. Low-income housing tax credits shall be allocated in accordance with this plan and any amendments thereto.
The Code requires that ADFA determine "the [Housing Credit] dollar amount allocated to the development will not exceed the amount the housing credit agency determines is necessary for the financial feasibility of the development and its viability as a qualified low-income housing development throughout the credit period." Housing Credits will be limited to the amount the Authority, in its sole discretion, deems necessary. Housing Credits are not intended to provide the primary or principal source of financing for a development, but are intended to provide financial incentives sufficient to fill "gaps" which would otherwise exist in developing affordable rental housing for low-income households.
The base amount of annual credit authority is currently calculated at $2.20 per capita. This per capita amount is based upon population estimates released each year by the Internal Revenue Service.
The maximum amount of Housing Credits that may be reserved for allocation to one individual development shall be no more than $600,000 of the annual Housing Credits available in the calendar year. HOWEVER, the maximum amount of Housing Credits that may be reserved for allocation to one individual development:
Pursuant to Section 42(d)(5)(B)(v) of the IRC, the Authority designates that the eligible basis of any qualified low-income new building will be increased by thirty (30%) if:
Ark. Code Ann. § 26-51-1702 provides that a taxpayer owning an interest in a low-income development qualifying for Housing Credits will be eligible for State Housing Credits equal to twenty percent (20%) of the allocated federal amount. The State statute limits the allocation of State Housing Credits to $250,000 in any one taxable year. Recognizing the limited availability of the State Housing Credits and with a desire to assign those credits where they are most needed, the applicant shall demonstrate need on the Housing Credit application. Based on demonstrated need in the application, the Authority will give a priority allocation of State Housing Credits to those developments that are in designated low-income counties under the State's Consolidated Plan submitted to the federal Department of Housing and Urban Development. The list of these counties is contained in Points Criterion #1 of this Qualified Allocation Plan. The allocation of State Housing Credits will be as follows:
The Authority will annually notify the Arkansas Department of Finance and Administration of those developments that have been allocated State Housing Credits. The Arkansas Department of Finance and Administration will be notified of any revocation of State Housing Credits.
The Affordable Neighborhood Housing Tax Credit Act of 1997, (the "ANHTC Act"), codified at Ark. Code Ann. § 15-5-1301et seq., provides that any business firm engaging in the provision of affordable housing assistance activities in the State of Arkansas may be entitled to receive Affordable Neighborhood Housing Tax Credits ("ANHTCs"). "Affordable housing assistance activities" is defined to include any "money, real, or personal property expended or devoted to the construction or rehabilitation of affordable housing units developed by or in conjunction with any governmental unit or not-for-profit corporation." The ANHTC Act limits the total allocation of ANHTCs to $750,000 in any taxable year.
The Authority and the Arkansas Department of Finance and Administration have determined that, in the best interest of affordable housing in Arkansas, "affordable housing assistance activities" must be devoted to those low-income housing developments which qualify for Housing Tax Credits pursuant to Section 42 of the Internal Revenue Code through the Authority's federal low-income housing tax credit or tax-exempt bond programs for residential rental housing. Thus, any business firm seeking allocation of ANHTCs must do so in conjunction with an application for federal low-income housing tax credits or tax-exempt bonds to develop affordable housing units by or in conjunction with any governmental unit or not-for-profit corporation.
A proposal for ANHTCs must be submitted with a Multi-Family Housing Application for federal low-income housing tax credits. In its Multi-Family Housing Application for federal low-income housing tax credits, the applicant will include a commitment from each business firm providing "affordable housing assistance activities" to the proposed low-income housing development. Each such commitment must:
* The ANHTC Act limits the amount of tax credits allowable to a business firm to thirty percent (30%) of the total amount invested. If the affordable housing assistance activity is other than money, the business firm must provide an appraisal certifying the value of the property invested.
If the business firm commits its "affordable housing assistance activities" to a governmental unit, a not-for-profit organization, or a "neighborhood organization", as defined within the ANHTC Act, which is not the applicant on the Multi-Family Housing Application, the applicant must submit with its Multi-Family Housing Application the following from such governmental unit, not-for-profit organization or "neighborhood organization":
For each proposal of "affordable housing assistance activities" submitted with a Multi-Family Housing Application, the applicant must certify in writing that it will expend or devote the "affordable housing assistance activities" committed to the construction or rehabilitation of affordable housing units within the development.
Based on demonstrated need in the Multi-Family Housing Application, the Authority will give a priority allocation of ANHTCs to those developments that are in designated low-income counties under the State's Consolidated Plan submitted to the federal Department of Housing and Urban Development.
The list of these counties is contained in Points Criterion #1 of this Qualified Allocation Plan. The allocation of ANHTCs will be as follows:
The Authority will reserve and allocate ANHTCs in conjunction with its reservation and allocation or issuance of federal low-income housing tax credits. With its issuance of IRS Forms 8609 for federal low-income housing tax credits, the Authority will issue a Certificate of Allocation certifying the amount of ANHTCs allocated to the business firm entitled to such allocation. The Authority will annually provide the Arkansas Department of Finance and Administration with a copy of each Certificate of Allocation for ANHTCs allocated that year.
ADFA will reserve all Housing Credits available for allocation in one eligibility cycle. Credits that are not reserved will carry forward to the next year. Applicants shall apply during the eligibility cycle to receive a credit allocation for that calendar year.
The closing deadline for submitting the 2013 Multi-Family Housing Application for the 2013 Low-Income Housing Tax Credit ("LIHTC") Cycle is as follows:
APPLICATION DEADLINE IS 4:30 P.M., FRIDAY, FEBRUARY 1, 2013 ("APPLICATION DEADLINE") |
The applicant must use ADFA's 2013 application, which is available on ADFA's website. A tabbed, 3-ring bound hardcopy of the application plus all attachments and exhibits must be
delivered to adfa no later than 4:30 p.m., Friday, February 1, 2013. The tabbed, 3-ring bound hardcopy shall be delivered to adfa at the following address:
Arkansas Development Finance Authority
Attn: Multi-Family Housing Department
900 w. Capitol, Suite 300
Little Rock, ar 72201
Or
p.o. Box 8023
Little Rock, Arkansas 72203-8023
Telephone Number: 501-682-5900
adfa will not accept facsimile submissions.
In addition to the 3-ring bound hardcopy, the applicant must electronically submit the application as a SAVED (not scanned) file, in the same format as the adfa 2013 application is posted, via email to:
Jason.McVay@adfa.arkansas.gov
Applications. Applications are reviewed for COMPLETENESS as required in this QAP. No contact with ADFA staff or members of the ADFA Board of Directors regarding pending 2013 applications is allowed after submission of application and during the ADFA review period, which concludes when the ADFA Board of Directors approve successful applicants. Any such contact is grounds for immediate disqualification of an application(s). Applications are scored based solely upon that information and documentation submitted in and with the application by the Application Deadline. Based upon that review, ADFA staff will provide the applicant with a written Notification of Deficiencies, including necessary Additional Requirements for a Complete Application pursuant to this QAP and an Initial Score if the application has met all Threshold Requirements as set forth in this QAP.
APPLICATIONS FAILING TO MEET ALL THRESHOLD REQUIREMENTS AS SET FORTH IN THIS QAP BY THE APPLICATION DEADLINE WILL NOT RECEIVE AN INITIAL SCORE AND WILL NOT BE CONSIDERED FOR AN AWARD OF FEDERAL OR STATE LOW-INCOME HOUSING TAX CREDITS. |
ADFA staff will review and evaluate the application, as submitted by the Application Deadline, and notify the applicant of deficiencies and scoring, or of threshold failure, in accordance with the schedule below.
Dates For Review of Applications and Reservation Process | |
Application Deadline | February 1, 2013 4:30 p.m. |
Applicants sent Notification of Deficiencies and Initial Score or, if applicable, Notice of Threshold Failure | April 9, 2013 |
Applicants notified of Final Score | May 7, 2013 |
Successful applicants approved for reservation of Housing Credits by ADFA Board of Directors | May 16, 2013 |
2013 Housing Credit reservation letters mailed to successful applicants | June 4, 2013 |
ADFA may modify the dates set forth above if necessary. All such changes shall be posted on the ADFA web-site, under Publications and Forms, Multi-Family, or other highly visible location on the ADFA web-site.
Application fees are:
For-profit applicants - developments with 50 units or less | $1,000 |
For-profit applicants - developments with 51-100 units | $2,000 |
For-profit applicants - developments with 101+ units | $3,000 |
Non-profit applicants | $300 |
The following Threshold Requirements must be met by the application deadline. Failure to meet these Threshold Requirements as set forth herein by the application deadline will terminate the application from consideration for federal low-income housing tax credits.
A letter dated within six (6) months of the Application Deadline must also be submitted, which states that a formal application for permanent financing is under serious consideration. The letter must contain all information stated above.
Neighborhood Housing Tax Credits, any applicant requesting either credit must provide alternate financing.
Applications must evidence compliance with the investor's requirements, if stricter than ADFA's requirement.
ADFA reserves the right to correspond with Applicant regarding the financial commitment and to accept, only upon ADFA's request, supplemental or revised financial commitments.
Applicant must submit written documentation from the utility allowance entity selected which clearly marks the allowance for each type utility usage applicable for each type of unit to be constructed. The supporting documentation must be signed and dated by an authorized representative of the utility allowance entity. Failure to have the utility allowance signed, dated and clearly marked by each type of utility usage applicable for each type of unit to be constructed may result in rejection of the application.
The utility allowance documentation must be dated within six (6) months prior to the Application Deadline.
If evidence of site control is by Purchase or 99-year leasehold Option, Contract or Agreement, the applicant must submit a copy of the recorded deed evidencing the Seller's or Lessor's ownership.
The Option, Contract or Agreement must be in the name of an existing entity or person that is in a position of control over the applicant. The Option, Contract, or Agreement must indicate that the existing entity or person, is in a position of control over applicant, and that such entity or person has the exclusive right to purchase or lease the property for a period not to expire prior to December 6, 2013.
The purchase price must be equal to or less than the appraised cumulative value of the land and buildings.
Verification of Arm's Length Transactions shall be included.
If the seller of land or buildings included in the application is an entity, applicant must obtain knowledge of and disclose the identity of all members, partners, or shareholders of the entity. Applicant is responsible for obtaining the consent of the seller entity to disclose this information in the application for housing tax credits.
For all acquisition/rehabilitationdevelopments, the application shall include documentation for each building claiming acquisition credits that:
The Purchase Option, Contract, or Agreement must state the amount of the purchase price allocated to the land and the amount of the purchase price allocated to the buildings, if applicable.
The applicant must produce evidence of site ownershipor a 99-yearleasehold on the site at the earlier of:
ADFA reserves the right, in its sole and absolute discretion, to independently evaluate the need for additional affordable rental housing in the proposed geographic market area and to not award credits to any development if, in ADFA's sole determination, the proposed location's market is weak, the proposed development will detrimentally affect other affordable housing in the area, or the proposed location is or nearly is saturated, or other negative impact or projection, even if the proposed development is otherwise eligible and even if the market study's conclusions do not indicate any negative impact or projection.
ADFA shall have no liability for determinations of the presence or absence of a sufficient market. An award of tax credits by ADFA does not constitute a determination by ADFA that a sufficient market exists for the proposed units so as to provide financial feasibility. ADFA shall not be liable for any costs incurred, profits lost, or other damages that may result from ADFA's determination of market conditions, award of tax credits or denial of tax credits.
Applicant must submit evidence that it has provided notification of the application to the highest elected official in the jurisdiction where the development is or will be located.
Applicant must also submit a letter, or cause a letter to be submitted, from either the highest elected local official in the jurisdiction where the development is or will be located or from the majority of the jurisdiction's governing body. A development located within a city's limits shall have a letter from its Mayor or the City Council. A development located outside of a city's limits shall have a letter from the County Judge or the county's Quorum Court. The letter shall be dated within six (6) months of the Application Deadline.
The letter of support, at a minimum, shall address the need for affordable housing in the area and support for the specific development. The letter of support is required as of the time the application is submitted. Rescission of the letter after the tax credit application is submitted will not automatically disqualify a development from eligibility for tax credit award if otherwise eligible and recommended; however, the ADFA Board of Directors may consider the rescission as a factor in its decision regarding award of tax credits.
ADFA will provide written notification to the State Representative and Senator who represent the area where the development is or will be located.
In addition, to be considered for the "Non-Profit Set-Aside":
Any material changes must be submitted to Board Housing Review Committee for approval, and the fee for change requests must be submitted prior to review. Material changes, including but not limited to change in number of units, unit configuration, development team members, or site location must be approved by the Board Housing Review Committee prior to implementation of such change(s). If a material change is implemented prior to Board Housing Review Committee review, Applicant and developer are subject to appropriate remedial action by ADFA, including but not limited to penalties on future applications or suspension from the tax credit program in Arkansas for a set period of time.
Multi-Family Housing Minimum Design Standards. Construction of the development must be in accordance with ADFA's "Multi-Family Housing Minimum Design Standards", as well as all applicable local, state and national building codes. The applicant's architect must complete and execute the "Multi-Family Housing Minimum Design Standards Checklist", Attachment G of the MFHA. Applicant must certify that all features, standards and specifications acknowledged in Attachment G, certified by the architect, will be incorporated and complied with in the construction or rehabilitation of the proposed development. The general contractor must execute an acknowledgment of Attachment G before a Notice to Proceed will be issued.
When plans and specifications conflict with the "Multi-Family Housing Minimum Design Standards Checklist", Attachment G of the MFHA, the certification by the architect or licensed engineer reflected on Attachment G shall control and applicant shall be held to the representations set forth in Attachment G.
When the development consists of both new construction and the rehabilitation of units and buildings, two sets of plans and specifications must be submitted: one set evidencing the plans and specifications for the new construction and one set evidencing the plans and specifications for the rehabilitation of units.
For rehabilitation developments, if structural constraints prohibit adherence to ADFA's "Multi-Family Housing Minimum Design Standards", applicant may seek a waiver from ADFA for the standard concerned. Such waiver request must be in writing, must be included with the application (separate from Attachment G, but Attachment G must evidence the waiver request, and include the following:
A certification from the design architect or licensed engineer will be required to be submitted confirming compliance with ADFA's "Multi-Family Housing Minimum Design Standards", as amended for the development by any approved waivers, prior to the issuance of IRS Form 8609.
A report, dated within six (6) months of the Application Deadline, of all components examined and analyzed in the assessment must be submitted with the application.
The report must include a physical inspection of the interior and exterior of EACH UNIT AND EACH BUILDINGand must specifically identify the scope of work and estimated costs necessary to:
Failure by the report to meet the requirements set forth herein will result in a rejection of the Capital Needs Assessment submitted thereby terminating the application from consideration for federal low-income housing tax credits.
All rehabilitation development applicants must submit a statement that the scope of rehabilitation will include all capital needs of the development as set forth in the Capital Needs Assessment.
For all new construction, and all rehabilitation developments that do not receive project based rental assistance:
For all rehabilitation developments that receive or will receive project based rental assistance:
AND
The operating and replacement reserve accounts shall be incorporated into the 2013 Multi-Family Housing Application. These amounts must be funded by the date the development is placed in service and evidenced in the final cost certification.
The Replacement Reserve shall be maintained, and yearly deposits shall be made equal to the above requirement, for the entirety of the affordability period. The applicant shall identify the name of the financial institution where each reserve will be held. A copy of the December bank statement for the operating reserve account and the replacement reserve account must be submitted by the Owner to ADFA by February 1 of each year. If the December bank statements do not evidence a year-end summary of each month's balance, copies of bank statements for all twelve (12) months, for the operating reserve and the replacement reserve, shall be submitted to ADFA by February 1 of each year. The ending balance of each reserve account must total the amounts required under (a) and (b), whether the accounts are replenished from operating income or by the general partner of owner or member, shareholder or partner of general partner, as deemed appropriate by ADFA.
All withdrawals from the operating deficit reserve must be approved, in writing, by ADFA prior to withdrawal. Owner must submit with the withdrawal request supporting documentation evidencing the need for the funds, written evidence that insufficient funds exist in the primary operating account, and a written guaranty by the general partner of owner or member, shareholder or partner of general partner, as deemed appropriate by ADFA, will deposit sufficient funds into the operating deficit reserve account so that at the end of the year the total funds in the operating deficit reserve account equal the amount required under (a) as modified herein for Rural Development projects.
Rural Development-funded developments:
In the event that Rural Development requires a capital outlay reserve in an amount greater than ADFA's operating deficit reserve, ADFA's required operating deficit reserve under (a) above must be funded. In the event that RD requires a capital outlay reserve in an amount less than ADFA's operating deficit reserve required under (a) above, ADFA will credit the amount of reserves required by Rural Development to the total amount of reserves required under (a) and (b) above, but in no event shall the totalamount of reserves be less than that required under (a) above. (For example, if under (a) $50,000 is required and under (b), $10,000, and Rural Development requires $20,000 of capital outlay reserve, the owner must fund a separate operating deficit reserve account, withdrawals from which must be approved by ADFA, in the amount of $30,000. Using the same amounts except that RD requires a $70,000 capital outlay reserve, the owner must fund a separate $50,000 operating deficit reserve.)
A copy of the December bank statement for the operating reserve account and the replacement reserve account must be submitted by the Owner to ADFA by February 1 of each year. If the December bank statements do not evidence a year-end summary of each month's balance, copies of bank statements for all twelve (12) months, for the operating reserve and the replacement reserve, shall be submitted to ADFA by February 1 of each year. The ending balance of the operating deficit reserve account plus the development's ending cash balance per RD Form 3560-7, plus the balance of RD's capital outlay reserve must total the amounts required under (a) and (b); thus, general partner of owner or member, shareholder or partner of general partner of owner may have to deposit funds into the separate operating deficit reserve account to total this amount.
ADFA acknowledges that RD shall have authority over the capital outlay reserve account and that RD will review and approve or deny all withdrawal requests by owner from such account. ADFA shall have approval authority over the separate operating deficit reserve account. Owner shall not make any withdrawals from the operating deficit reserve account without express, written, prior approval from ADFA. Owner must submit with the withdrawal request supporting documentation evidencing the need for the funds, written evidence from RD that the use is not eligible from or that insufficient funds exist in the RD capital outlay reserve account and operating account, and a written guaranty by the owner or general partner of owner, as deemed appropriate by ADFA, will deposit sufficient funds into the ADFA operating deficit reserve account so that at the end of the year the total funds in the operating deficit reserve account equal the amount required under (a) as modified herein for Rural Development projects.
For all acquisition and rehabilitation applications, and all rehabilitation applications, applicant must submit an appraisal, dated within one (1) year of the Application Deadline, which supports the purchase price of the development.
Acquisition credits will be based upon the lesser of the purchase price for the buildings only or the appraised value of the buildings in the development. Applicant may include in the development budget and eligible basis no more than the lesser of the purchase price for the buildings only or the appraised value of the buildings in the development.
Developer Fee - Deferral. Any portion of the developer's fee that is deferred and included as a source of funds will be underwritten to ensure payment by the end of the 15-year compliance period. Eligible basis will be reduced by that amount of deferred developer fee that is not payable within the 15-year compliance period. If any portion of the developer's fee is deferred in the form of a loan, then ADFA will consider any interest payable on such loan to the developer as part of the developer's fee for computing compliance with the developer fee standard(s) set forth above.
"Net Development Costs" is defined as the total uses of funds, less syndication-related costs, developer's fee and development reserves.
For purposes of applying the developer's fee to eligible basis, eligible basis must be proportioned separately reflecting that amount of the developer's fee attributed to the acquisition of existing property from that amount attributed to the rehabilitation costs. The amount attributed to the acquisition of existing property must be equal to or greater than the percentage that the total acquisition costs of existing property is to the total development costs.
Applicant must disclose in its application or an attachment thereto all persons and entities that will receive any portion of the developer fee proposed in the application. For all such entities, all members, partners and shareholders of such entities shall be disclosed and the respective portion of the amount of developer fee to be received by the entities shall be identified. If after time of application, there is any proposed change in the person(s) or entity/entities that shall receive any portion of the developer fee, all revised parties and amounts must be disclosed in writing to ADFA.
All policies regarding economic interest shall be applicable to the proposed replacement member. If the proposed replacement would cause more than three (3) applications with a development team among which there is an economic interest to have been funded in one year's cycle, such proposed replacement will be denied, or if the economic interest becomes known to ADFA at a later time, ADFA may terminate the award, terminate the carryover allocation, deny issuance of credits via IRS Form(s) 8609, suspend all responsible persons and entities from the tax credit program for a period of time determined by the ADFA Board of Directors, or take other action reasonable under the circumstances as determined by ADFA.
The Authority will limit the contractor's profit to ten percent (10%) of the development's hard costs plus its general requirements' costs. The Authority will limit the contractor's overhead to four percent (4%) of the development's hard costs plus its general requirements' costs. ADFA reserves the right to determine whether costs included in the contractor's overhead and contractor's profit calculations are appropriate and reasonable.
Applicant must disclose in its application or an attachment thereto all persons and entities that will receive any portion of the contractor's profit proposed in the application. For all such entities, all members, partners and shareholders of such entities shall be disclosed and the respective portion of the amount of contractor's profit to be received by the entities shall be identified. If after time of application, there is any proposed change in the person(s) or entity/entities that shall receive any portion of the contractor's profit, all revised parties and amounts must be disclosed in writing to ADFA.
All policies regarding economic interest shall be applicable to the proposed replacement member. If the proposed replacement would cause more than three (3) applications with a development team among which there is an economic interest to have been funded in one year's cycle, such proposed replacement will be denied, or if the economic interest becomes known to ADFA at a later time, ADFA may terminate the award, terminate the carryover allocation, deny issuance of credits via IRS Form(s) 8609, suspend all responsible persons and entities from the tax credit program for a period of time determined by the ADFA Board of Directors, or take other action reasonable under the circumstances as determined by ADFA.
The per unit cost cap for qualified Assisted Living developments and developments whose structure(s) are individually listed in the National Register of Historic Places or have been determined to contribute to a Registered Historic District is limited to $158,400.
"Per unit cost" is calculated by dividing the total development cost, excluding land cost and infrastructure costs, by the total number of units. Applications that represent on the face of the application a higher cost per unit than the allowable cost per unit stated herein may be rejected from further consideration for an award of federal or state housing tax credits. Applications that represent costs within the allowable costs stated herein but which ADFA reasonably determines to inaccurately reflect actual costs per unit are subject to rejection from further consideration for an award of federal or state housing tax credits.
ADFA shall have the discretion to determine reasonableness of all costs stated in the proposed development budget regardless of whether the costs per unit comply with the maximum costs per unit limitation set forth above. ADFA may, within its discretion, deny applications based upon failure to meet threshold due to unreasonableness of costs, regardless of whether the costs per unit comply with the maximum costs per unit limitation set forth above. If ADFA rejects an application for threshold failure due to unreasonableness of costs, ADFA shall set forth the reasons for such determination in writing. Applicants may provide justification and supporting documentation for the costs at the request of the ADFA staff. ADFA will review such submitted written justifications and supporting documentation and make a final determination in writing of whether the application will be further considered, if otherwise eligible to be further considered for an award of housing credits.
"Debt coverage ratio" is defined as the ratio of a development's net operating income (rental income less operating expenses and reserve payments) to total debt service obligations. The applicable minimum debt coverage ratio must be evidenced by the Multi-Family Housing Application and supporting documentation.
A development's DCR may not be projected to be below the DCR required herein at any time during the compliance period. If the application or ADFA's underwriting, evidences that the development will fail to meet the requisite DCR at any time during the compliance period, the application may be rejected from further consideration for an award of housing tax credits.
After a development is placed in service, the DCR will be monitored by ADFA's Compliance Department and/or ADFA's Multi-Family Programs Department.
*Developments financed with tax-exempt bonds.
Applicants for tax-exempt bond financing subject to private activity volume cap may:
This section is not intended to prohibit an independent third-party professional from rendering services on behalf of more than three (3) proposed developments. However, this section will apply to such service provider if the service provider has an economic interest as defined below in addition to its provision of services to the proposed development.
ADFA retains the discretion to determine when this rule regarding economic interest should apply in circumstances other than those specifically referenced above. In addition to the limitation of three (3) funded applications for any applicant or applicants among which ADFA determines an economic interest to exist, ADFA may impose special conditions and limitations upon applications, applicants and development team members.
Applicant must identify all members, partners and shareholders of the applicant, contractor, architect, management company, consultant and developer of the proposed development. If any such identified members, partners or shareholders are entities, then all members, partners and shareholders of such entities must be identified. All development team members must be identified at time of application.
No changes can be made in the composition of the development team without ADFA's approval. Applicant must identify to ADFA all members, partners and shareholders of the proposed replacement member. If any such identified members, partners or shareholders are entities, all members, partners and shareholders of such entities must be identified. All policies regarding economic interest shall be applicable to the proposed replacement member. If the proposed replacement would cause a development team member or related person or entity to have an economic interest in more than three (3) applications funded in one year's cycle, such proposed replacement will be denied, or if the economic interest becomes known to ADFA at a later time, ADFA may terminate the award, terminate the carryover allocation, deny issuance of credits via IRS Form(s) 8609, suspend all responsible persons and entities from the tax credit program for a period of time determined by the ADFA Board of Directors, or take other action reasonable under the circumstances as determined by ADFA.
An economic interest exists in the context of tax credit applications and developments when:
Economic interest shall not include a contractual relationship whereby a development team member provides services that are within its ordinary course of business and receives reasonable payment for such services. For example, an architect contracting with a development owner to prepare plans and specifications for the rehabilitation of a development in exchange for a contractual sum shall not constitute an economic interest.
For the purposes states herein, "development team member" shall include but not be limited to all persons and entities stated in the tax credit application as members of the development team.
Applicant must disclose all identities of interest that exist among all persons or entities acting as a development team member whether or not expressly named as a development team member.
Applicant shall include with its tax credit application a verified statement from all development team members in which each discloses all economic interests in the development. ADFA may deem a person or entity as a development team member if ADFA reasonably determines that such person or entity is acting as a development team member.
HUD Section 8 supported developments: In the event that Department of Housing and
Urban Development ("HUD") or Rural Development anticipates granting a waiver, or other process, whereby HUD or RD has agreed to underwrite an existing HUD or RD-assisted development based upon rents that it has agreed will be charged after rehabilitation and rental assistance amounts that it has agreed to provide after rehabilitation, ADFA may also underwrite such proposed developments based upon such rents and rental assistance (which must be supported by a market study). It is within ADFA's sole discretion, on an application by application basis, to determine whether utilization of such future rents and rental assistance in its underwriting is reasonable and appropriate.
Any award of tax credits under such circumstance is conditioned upon the development obtaining the waiver or approval. If the waiver or approval is not obtained by the carryover allocation application deadline, ADFA may terminate the tax credit award and no carryover allocation will be issued by ADFA for the development.
A senior development located, or proposed to be located, adjacent to a family development, or proposed development, shall not be considered phases of the same development.
ALL ASSISTED LIVING DEVELOPMENT APPLICATIONS MUST SUBMIT THE FOLLOWING REPRESENTATIONS FROM THE APPLICANT:
The following documentation, in addition to the Threshold Requirements as required in Section VI.B. of this QAP above, must be submitted in order for the application to be considered COMPLETE.
If the following documentation is not submitted by the APPLICATION DEADLINE, ADFA staff will notify the applicant of each deficiency. The applicant must submit the deficient documentation within five (5) business days of request. Failure to submit all necessary documentation requested will terminate the application from consideration for federal low-income housing tax credits
In addition, one (1) point will be deducted from the application score for each missing or incomplete document that is submitted after the application deadline in order for the application to be considered COMPLETE. Applicants will be notified of the point(s) deduction in the Notification of the Final Score.
The applicant must submit a copy of the above notice with its application to the Authority.
Capacity Standard. It is within ADFA's sole discretion to evaluate the capacity of any development team member to undertake performance on any development. A determination by ADFA that any development team member does not have the capacity to undertake performance on any development may result in a disqualification of the application.
"Minimum required experience" is met when either the applicant, consultant, or developer held a development team position on a previous development that received a reservation of Housing Credits from ADFA and whose owner was issued IRS Form 8609(s).
Minimum required experience does not encompass persons employed or previously employed by an entity that meets the minimum required experience unless a request for a determination of whether such person shall be considered by ADFA to meet the intent of this requirement. This request must be submitted in writing to ADFA at least sixty (60) days prior to submission of an application for which the minimum required experience is dependent upon such waiver. However, ADFA will also accept such requests before such sixty (60) day period. The request must detail the position held by the person, the duties performed by the person in association with housing tax credit developments, the names and locations of all developments on which the person performed such duties, the year of allocation and placement in service of all such developments, and all other information requested to be considered by ADFA in making its determination.
Applicant must receive a determination in writing from ADFA finding that the minimum required experience is met on behalf of the development by such person prior to submitting any application for housing tax credits.
In addition, ADFA will review the previous performance of the applicant, its consultant and each development team member under all affordable housing programs with ADFA or other State Housing Finance Authorities, including the HOME Program, the Housing Credit program, Tax-Exempt Bond program, and any other affordable housing loan program, including disbursements, payment history, compliance history and any findings. Unsatisfactory performance, as determined by ADFA's Board Housing Review Committee, on previous developments or delinquencies in payments will result in disqualification of an application by the ADFA Board Housing Review Committee, regardless of scoring.
An application may be disqualified based upon the Criminal Background and Disclosure, within the discretion of the ADFA Board of Directors.
by the Application Deadline.
Each application will be awarded points based upon the Points Criteria outlined below. To be awarded points, the applicant must submit the information and documentation EXACTLY as stated below by the APPLICATION DEADLINE. Failure to submit the information exactly as required will result in no points for the point category and the applicant will be given no opportunity beyond the Application Deadline to submit the required information and documentation.
POINTS CRITERIA
1 | LOCATION | MAXIMUM 15 Points |
a. Development is located in the following low-income counties designated in the 2010-2014 State Consolidated Plan: Bradley, Chicot, Crittenden, Desha, Fulton, Jackson, Lafayette, Lee, Monroe, Newton, Phillips, Polk, St. Francis, Sharp, Stone and Woodruff b. Development is located in a Qualified Census Tract (QCT) or a Difficult to Develop Area (DDA); a copy of the QCT map for the development must be submitted with the application and complete census tract information must be submitted with the MFHA c. Development is located in one of the following counties in which a tax credit award has not been made in the past three (3) years: Ashley, Boone, Calhoun, Carroll, Clay, Cleburne, Cleveland, Columbia, Conway, Cross, Dallas, Drew, Franklin, Fulton, Grant, Greene, Hempstead, Hot Spring, Howard, Independence, Jackson, Lafayette, Lawrence, Lincoln, Little River, Lonoke, Madison, Marion, Montgomery, Nevada, Perry, Pike, Poinsett, Polk, Prairie, Scott, Searcy, Sevier, Union, Van Buren, White, Woodruff and Yell | 15 5 10 | |
2 | DEVELOPMENT OF SPECIAL NEEDS HOUSING a. Single room occupancy housing - must be operated by a governmental or non-profit entity b. Transitional housing for the homeless - must be operated by a governmental or non-profit entity c. Elderly housing (housing for older persons as defined at 42 USC 3607(b)(2) and Ark. Code Ann. § 16-123-307(d)(1) d. Scattered site housing as defined in this QAP e. Assisted Living housing as defined in this QAP f. Supportive housing for disabled persons as defined in this QAP: Applicant must submit a statement: 1. Describing the design and construction of the development that will meet the needs of the | MAXIMUM 15 Points |
disabled population served; 2. Describing the on-site support services that will meet the needs of the disabled population served; 3. That the supportive services will be optional to the disabled population served (see 26 C.F.R. § 1.42-11(b)) The proposed service provider must submit a statement describing: 1. The disabled population to be served; 2. The needs of the disabled population to be served; and 3. The service to be provided to the disabled population served, including the frequency of provision g. Housing for large families (3 bedrooms or larger) Points for the above are allocated based upon percentage of tax credit units providing such special needs housing: | ||
100% of tax credit units 25% of tax credit units 10% of tax credit units (minimum of three (3) units) | 13 8 4 | |
h. Housing that markets to a tenant population of single parent/single guardian with children - majority of units must be a minimum of two (2) bedroom units | 1 | |
i. Housing intended for eventual tenant ownership 1. Pursuant to 26 U.S.C. § 42(i)(7), eventual tenant ownership is when the tenant exercises a right of first refusal after completion of the Compliance Period. 2. Applicant must submit the proposed right of first refusal contract to be offered for eventual tenant ownership. | 1 | |
3 | Proposed development involves acquisition/rehabilitation of existing structures. | 7 |
Proposed development involves rehabilitation only of existing structures (points are awarded based on the percentage of units) rehabilitated in the development. | 5 |
4 | Development has a commitment letter for funding or assistance from USDA Rural Development or HUD. Points are awarded as follows: USDA-HUD-PUBLIC HOUSING 1. USDA transfer funds commitment 2. USDA construction or rehabilitation funds commitment 3. USDA rental assistance contract 4. USDA loan guarantee with interest credit buy down HUD 1. Project based rental assistance contract 11-20 years 2. Project based rental assistance contract 6-10 years 3. Project based rental assistance contract 1-5 years 4. Loan guarantee with interest reduction payments PUBLIC HOUSING 1. Public Housing Waiting Lists | 1 1 1 1 3 2 1 1 1 |
5 | Proposed development involves rehabilitation of structures that are individually listed in the National Register of Historic Places or have been determined to contribute to a Registered Historic District. | 3 |
6 | Developer Fee, including consultant fees, are 10% or less of net development costs as defined in this QAP. Applicant must submit a statement of its election to limit its combined developer and consultant fees to 10% or less of net development costs and such limitation must be evidenced in the MFHA's Development Budget. | 5 |
7 | MARKET RATE UNITS To be eligible for market rate unit points, a minimum of 20% of the total residential units in the development must be market rate units. The market rate units must be evenly distributed throughout the buildings in the development, and if a single building, throughout the floor(s) of the building. The distribution of the market rate units must be reflected on the plans and Attachment E, the Building and Unit Designation submitted with the MFHA. | 5 |
8 | AMENITIES Owner provides amenities such as but not limited to, universal design concept exceeding that required, covered parking beyond that required, individual storage units, microwave, dishwasher, supplied in-unit washer and dryer, furnished exercise room, furnished in-unit, high-speed internet access at no cost to the tenant, furnished computer lab with high speed internet access at no cost to the tenants. Applicant must submit a statement of amenities that will be included in the development with the MFHA and all amenities must be indicated on the plans and specifications. No points will be given for swimming pools. A signed certification from the design architect or licensed engineer confirming the installation of the amenities will be required prior to the issuance of IRS Form(s) 8609. The certification shall be included in the cost certification request submitted to ADFA. | MAXIMUM 10 Points |
9 | ADVANCED ENERGY EFFICIENCY FEATURES Points will be awarded for energy features certified by the development's architect that exceeds ADFA Minimum Design Standards and directly benefit the tenants of the development. | MAXIMUM 5 Points |
10 | SUPPORT SERVICES PROVIDED BY TAX-EXEMPT ORGANIZATION An authorized official of each tax-exempt organization involved must provide a signed acknowledgement of participation or participating, describing the supportive services offered. In addition, the acknowledgement must state: 1. That the organization's charter or by-laws authorize the service(s) to be provided; 2. Describes how the services provided are appropriate for the development's tenants; 3. That the services will be provided at no cost to the tenants; 4. That the services will be provided at least quarterly at the development site. The applicant must submit a statement that: | 5 |
1. Quarterly notice of the proposed services will be provided to the tenants; 2. A verification of the provision of the services, signed by representatives of the development and the service provider, will be maintained by the development owner. The applicant must submit a copy of the Articles of Incorporation/Charter and By-Laws of the tax-exempt organization that will be providing the support services. | ||
11 | SITE VISIT The site location will be evaluated for accessibility and proximity to services appropriate to the type of housing proposed (e.g. grocery stores, schools, medical facilities, and public transportation). The application should identify the name, driving directions, and distance to the nearest grocery store, medical facility and pharmacy. Scoring considerations will also include, among other things, site suitability regarding topography (grade, low-lying area, flood plain, or wetlands); proximity to nuisances (e.g., railroad tracks, highly travelled roads, streets, highways, or interstates, manufacturing/production plants) and environmental issues. A road, street or highway that is not an interstate will be considered "highly travelled" if its average daily traffic is 10,000 or above, as determined by the most recent State, County and City Annual Average Daily Traffic Maps published by the Arkansas State Highway and Transportation Department. An interstate is per se "highly travelled." | MAXIMUM 10 Points |
12 | MARKET NEED A Market Study shall be submitted which adequately demonstrates need for the rental housing units proposed. Fifteen (15) points will be awarded for capture rates of 20% and below and for capture rates exceeding 20%, points will be awarded based upon 5% increments of the capture rate, up to and including 90%. Points shall be weighted based upon number of units. Zero (0) points will be awarded when the capture rate is 91% to 100%. The application will be rejected if the market study fails to show need for any bedroom size | MAXIMUM 15 Points |
proposed based upon the targeted income group for that bedroom size. ADFA may substitute its own market analysis, in its discretion, and may reject applications as a result. | ||
13 | CHDO A CHDO is part of the ownership structure of Applicant, and the Applicant is requesting HOME CHDO funds. The CHDO must be an existing CHDO certified by ADFA, i.e., application cannot be made for CHDO certification simultaneously with the application for tax credits. The application for CHDO certification must not be pending with ADFA. | 10 |
14 | SERVES LOWEST INCOME GROUP POSSIBLE Special priority will be given to developments with units dedicated to serve households whose incomes are 30% or less of the area median income. Rents must be restricted accordingly. The number of units must be at least 5% of the total number of residential rental units in the development. Applicants for developments that will receive, or do receive and it is anticipated will continue to receive, rental assistance are not eligible for these points. These units cannot be used to satisfy low HOME requirements. Applicant must submit a signed statement with the application stating the number of units to be set-aside for the very low-income tenants and such set-aside must be evidenced in the rent schedules of the application. | 3 |
15 | EXTEND DURATION OF LOW-INCOME USE Applicant must submit a signed statement which indicates the number of years, which must be a minimum of five (5) years, the period of affordability will be extended. | 4 |
16 | COMMUNITY REVITALIZATION PLAN Points are available to a development that is located in a Qualified Census Tract if it contributes to a concerted community revitalization plan. Applicant must submit with its application a copy of the Community Revitalization Plan and such Plan must specifically address a need for affordable housing. | 3 |
17 | NEGATIVE POINTS FOR NON-COMPLIANCE ADFA's Compliance Department will calculate a Non-Compliance Score for each applicant based upon non-compliance by existing developments of which members, partners or shareholders of the applicant, General Partner of applicant or members, partners, or shareholders of General Partner of applicant, or members of applicant or members, partners, or shareholders of members of applicant were or are part of the development team or otherwise involved in the operation of the development as determined by ADFA. A Non-Compliance Score will be calculated based upon the percentage of units monitored that are out of compliance, as evidenced by IRS Forms 8823. Points equal to five (5) times the Non-Compliance Score will be deducted from the application's score. Percentage Non-Compliance Score Negative Points | |
Greater than 10% 1 5 | ||
Greater than 20% 2 10 | ||
Greater than 30% 3 15 | ||
Greater than 40% 4 20 | ||
Greater than 50% 5 25 | ||
Points may be deducted, up to 25 points, for life threatening non-compliance issue for which an IRS Form 8823 has been issued to the developer, applicant or other member of the development during the previous calendar year(s), i.e., for the 2013 funding cycle. All IRS Forms 8823 issued from January 1, 2011 through December 31, 2012 will be considered and utilized to calculate the non-compliance score. |
Each application will be ranked according to the score awarded. In the event that some applicants score the same and are ranked the same, the Authority may use discretionary judgment in establishing a final award. The Authority reserves the right to disapprove or reduce the Housing Credits for an allocation during any stage, regardless of ranking under the priorities and point ranking outlined above. For any allocation not made in accordance with the established priorities and selection criteria of the Authority, a written explanation shall be made by the Authority to the general public.
ADFA reserves the right to disapprove any development for an allocation of Housing Credits, regardless of the ranking under the priorities and point ranking outlined above. ADFA reserves the right,
in its sole and absolute discretion, to suspend or bar any applicant from the Housing Credit program, which ADFA determines has acted improperly, illegally or inappropriately in the applicant's dealings with the Authority or in any way relative to the Housing Credit Program. ADFA reserves the right to reject any application from consideration for an award of federal or state housing tax credits if any member of its development team is determined by ADFA to be out of compliance in regard to any existing development financed with ADFA-awarded resources.
It is the policy of ADFA to prohibit applicants from contacting ADFA staff in any manner regarding any application after the Application Deadline. Violations of this policy will be brought to the attention of the Board Housing Review Committee and could result in a downgrade to the final scoring, rejection of the application from consideration for an award of federal or state housing credits, or suspension or disqualification from the ADFA housing tax credit program. NO CONTACT WITH ADFA BOARD MEMBERS IS ALLOWED AND ANY SUCH CONTACT WILL BE GROUNDS FOR IMMEDIATE REJECTION OF AN APPLICATION.
Developments selected will be given preliminary approval for a reservation of Housing Credits. The required reservation fee of One Hundred Fifty and No/100 Dollars ($150.00) per low-income unit shall be submitted to ADFA within twenty-one (21) days of notification of reservation of Housing Credits. Developments that will not be placed in service in the tax year ADFA approves the Housing Credit reservation may be awarded a Carryover Allocation upon the satisfaction of requirements of IRC § 42 and the Authority. All developments with a valid reservation of Housing Credits will be required to obtain a Placed-in-Service Allocation or Carryover Allocation from ADFA dated before or on December 31, 2013. Requests for carryover allocations for the year 2013 are due to ADFA by or on December 6, 2013.
The Owner of the development identified in the application shall utilize the allocation of Housing Credits. The transfer of credits is prohibited.
Any material change to the original application, and all subsequent material changes, shall be submitted to ADFA in writing at least thirty (30) days prior to the desired effective date of the change. All changes shall be reviewed and approved by ADFA's Multi-Family Housing Staff, ADFA's Board Housing Review Committee and/or ADFA's Board of Directors, as appropriate. Any change to the original application made without approval from ADFA will be null and void and may result in remedial action by ADFA, including but not limited to penalties on future applications or suspension from the tax credit program in Arkansas for a set period of time.
A $500.00 fee per change item submitted shall be submitted to ADFA with all change requests.
$500.00 shall be submitted for all such change requests, including but not limited to change in unit size, configuration, location, requests for approval of change of management company, change in development team, and transfer of ownership interest.
A scattered site development is any low-income housing development whose buildings are at least 2000 feet away from each other. The development shall be so treated if all of the units in each building in the development are designated low-income housing units and all of the buildings in the development are located within one jurisdiction, i.e. city or county.
Assisted Living housing is a combination of housing, supportive services, personalized assistance and health care designed to respond to the individual needs of those who need help with activities of daily living, in a way that promotes maximum independence for each resident. Supportive services are available 24 hours per day to meet scheduled and unscheduled needs of each resident. An Assisted Living development applicant shall comply with all state and federal regulations for assisted living developments. Assisted Living development applicants will be required to submit an approved Certificate of Need or Permit of Approval from the State of Arkansas with their application.
Housing intended for the use of persons with a disability (as defined by HUD), which contains all the physical design, construction, and on-site service provision components adequate to meet the needs of the disabled population targeted. Any market study submitted in support of an application for housing intended for the use of person with disabilities shall address the housing needs of the targeted disabled population in the primary market area. The applicant shall also include a marketing plan designed to reach the targeted disabled population for which the proposed housing is to be developed. The applicant must submit its statement that the supportive services offered to the disabled population served will be optional as defined in 26 C.F.R § 1.42-11(b).
Applicants shall submit a final development cost certification supported by an audit report performed by a Certified Public Accountant prior to issuance of IRS Form 8609. See Section XI of this QAP below for additional requirements.
Developments approved for Housing Credits shall comply with local and federal regulations pertaining to unit accessibility and construction standards to accommodate persons with physical disabilities. The applicant's architect must submit a statement that the development will comply with all federal and state accessibility laws.
In a development with Housing Credits, the lead-based paint requirements apply to all units and common areas in the development.
The Authority requires that occupancy of all housing financed or otherwise assisted by ADFA be open to all persons regardless of race, color, religion, sex, handicap, familial status or national origin and contractors and subcontractors engaged in the construction or rehabilitation of such housing provide equal opportunity for employment without discrimination as to race, color, religion, sex, handicap, familial status or national origin.
Each applicant, developer, consultant, and other development team member on the application, and all principals of development team members as well as any public official affiliated with a tax credit, tax credit/HOME or bond program application, shall complete a Criminal Background and Disclosure Form - Housing, Attachment A to the Application. Failure to submit, or correctly complete the Criminal Background and Disclosure Form - Housing by each applicant, developer, consultant and development team member on the application or affiliated public official on a HOME program application shall disqualify the Application for reservation of LIHTCs, Tax-Exempt Bonds subject to Private Activity Volume Cap ("Bonds") or HOME funds.
Each applicant or recipient of LIHTCs, Bonds, or HOME funds, and any principal of such applicant or recipient, is subject to ADFA's Criminal Background Check Policies and Procedures and their requirements. Each consultant, developer, or other development team member or any principal of such consultant, developer, or other development team member, is subject to ADFA's Criminal Background Check Policies and Procedures and their requirements.
ADFA, in its sole discretion, shall determine whether the criminal background of an applicant, developer, consultant or other development team member, or of a partner, member, or shareholder of the applicant, developer, consultant or other development team member disqualifies such person(s) or entity or entities. If such person(s) or entity or entities are determined to be disqualified to participate on the development team of the proposed development, the application may be rejected from further consideration for housing tax credits, which may necessarily result in rejection from further consideration for other ADFA resources. ADFA may allow, in its discretion, applicant to provide, after notice of such determination to applicant, a replacement development team member subject to approval of such replacement member by ADFA.
Applicants receiving reservations of federal low-income housing tax credits will be required to conduct a pre-construction conference with ADFA staff prior to construction. It will be the responsibility of the applicant to schedule the pre-construction conference.
Random inspections will be conducted on under construction and completed developments at ADFA's discretion to ensure compliance with ADFA requirements and representations made in the application. The inspection will be conducted by an ADFA-employed inspector or by an ADFA selected third-party inspector whose report will be submitted to ADFA. The developer/applicant will be responsible for the cost of the inspection which will be in accordance with ADFA's approved inspection fee schedule. The cost of re-inspections performed due to construction errors or mistakes by development shall be at the cost of the developer and/or applicant as well. ADFA's President or his designee shall have the authority to require that construction cease in the event that ADFA determine that work being preformed does not comply with ADFA's minimum design standards or other applicable codes, and the representations of the owner's tax credit application. ADFA shall have no liability for any costs incurred and profits lost as a result of the cessation of work. Applicant, by submitting its tax credit application, agrees to hold ADFA, its agents, employees, officers and directors harmless for all costs incurred and profits lost as a result of the cessation of work. Applicant further agrees that it shall defend, indemnify and hold harmless ADFA, its officers, agents, directors and employees from and against any and all claims, liabilities, damages, losses, injuries, costs, expenses, suits and actions arising from ADFA's cessation of work being performed.
All developments awarded tax credits shall inform ADFA monthly of the progress of construction or acquisition and rehabilitation. Provision to ADFA of a copy of the construction lender's or investor's inspection report shall be sufficient to comply with this requirement unless further information is requested by ADFA.
All development owners shall notify ADFA's Multi-Family Programs Manager (1) that the development has placed in service and the date each building placed in service; and (2) the first credit year that Owner intends to elect. This notification must be provided in writing to ADFA within thirty (30) days of placement in service.
Failure by Owner to notify ADFA of placement in service within the time specified will result in a fee of $25 per day, payable by Owner to ADFA, for each day that Owner fails to notify ADFA in writing after the deadline set forth herein. If Owner was also awarded HOME Program funds, this requirement may be met by submitting to the Multi-Family Department a copy of the placed-in-service form required by the HOME Program Department to be submitted with requests for final payment or release of retainage.
It is owner's responsibility to ensure that, once the development is placed in service, it is suitable for occupancy by meeting Uniform Physical Conditions Standards ("UPCS") and ADFA approved design standards. ADFA's Compliance and Monitoring Department will inspect all developments throughout each development's affordability period.
Any and all fraud, abuse or waste by the development and development team members in regard to the development will be reported to federal and state government agencies and entities as required under any now applicable legislation and any and all legislation that becomes applicable in the future requiring such reporting.
ADFA will follow the IRC for Carryover Allocation requirements. ADFA will issue a Carryover Allocation following receipt of a carryover application and all required supporting documentation required by ADFA from the development owner, which must be submitted to ADFA before or on December 6, 2013.
In order to continue to qualify for the Carryover Allocation, the owner's basis in the development as of November 4, 2014 must exceed ten percent (10%) of the owner's reasonably expected basis in the development as of December 31, 2015 ("Carryover Allocation Basis"). The owner will be required to evidence its Carryover Allocation Basis in the development on documentation required by ADFA. Failure to provide the required documentation evidencing the owner's Carryover Allocation Basis in the development by November 4, 2014 will cause the Housing Credits to be returned.
The terms and conditions of the Multi-Family Housing Application will be incorporated into the Carryover Allocation documentation.
The requirements in this Section are required to be met by all development owners' request for issuance by ADFA of IRS Form(s) 8609. ADFA reserves the right to clarify these requirements as necessary. This section, and any such clarifications, will be reflected in the Final Cost Certification Requirements document available on the ADFA web-site under Publications and Forms, Multi-Family.
DEADLINE FOR SUBMITTING ALL REQUIRED DOCUMENTS AND INFORMATION FOR REQUESTS FOR ISSUANCE OF IRS FORM(S) 8609:
All developments placing in service after the effective date of this 2013 Qualified Allocation Plan must submit a complete cost certification package, including all documents and information required herein, within one-hundred twenty (120) days of placement in service.
If a complete cost certification package is not been submitted within (120) days of placement in service, ADFA may deny any or all other applications for ADFA resources that are pending or that become pending prior to submission of a complete cost certification package and all fees paid that have accrued as set forth below.
A $15.00 per calendar day late fee shall be assessed for all cost certification packages submitted after the deadline set forth herein.
The $15.00 per calendar day late fee shall also be assessed for all cost certification packages submitted within the time set forth herein but which fail to include all information and documentation required herein to be included with the cost certification package request for IRS Form(s) 8609.
Further documentation or information that becomes necessary to obtain based upon review of the complete cost certification package may be requested in writing by ADFA and shall be provided to ADFA within 10 calendar days, excluding the day such request is sent by ADFA (which shall be established by date of letter or date that electronic mail is sent from ADFA, of such written request from ADFA). A separate $15.00 per calendar day late fee will be charged for each day after the provided 10 calendar days that the documentation or information is not submitted to ADFA. This fee accrues until ADFA is in actual receipt of such requested documentation and information.
All fees set forth in this Section must be paid before ADFA will proceed with the cost certification review and issuance of IRS Form(s) 8609.
The development owner is required to submit the following items to ADFA staff for review:
Certificate(s) of Completion (Occupancy) by proper state or local authority for each building in the development. Temporary Certificates of Occupancy will not be accepted as evidence of placement in service except if accompanied by a tax counsel opinion which unequivocally opines that such temporary certificates of occupancy, under the circumstances particular to the development for which such Temporary Certificates are submitted, validly evidences placement in service under IRS Section 42. Such tax counsel opinion must specifically state that the opinion may be relied upon by ADFA.
OR
The limitation to the amount of credits awarded or approved as set forth by ADFA in its award letter to tax-exempt bond applicant shall not apply to final cost certifications of developments financed by tax-exempt bonds. The limitation on total credits per development shall not apply to developments financed by tax-exempt bonds. All credits requested by developments financed by tax-exempt bonds must be supported by qualified basis certified by a Certified Public Accountant.
Applicants shall comply with all applicable federal, state and local laws, including but not limited to Section 42 of the Code. ADFA's Compliance Monitoring Policies and Procedures Manual for the Low-Income Housing Tax Credit Program may be obtained from ADFA's office, and may also be accessed at ADFA's website (www.arkansas.gov/adfa). Fair Housing manuals may be obtained from HUD's Little Rock office, and the Fair Housing Accessibility Guidelines may be accessed at HUD's website (www.hud.gov).
The owner will be required to prepare and submit to the Authority, no later than February 1 of each year following the first taxable year of the owner's credit period, an Owner's Certificate of Continuing Program Compliance which, among other certifications, certifies that for the preceding 12-month period no tenants in low-income units were evicted or had their tenancies terminated other than for good cause and that no tenants had an increase in the gross rent with respect to a low-income unit other than as permitted under Section 42 of the Internal Revenue Code. The owner will also be required to prepare and submit to the Authority, no later than February 1 of each year following the first taxable year of the owner's credit period, the LIHTC Compliance Monitoring Status Report. Both the Certificate of Continuing Program Compliance and the LIHTC Status Report shall be submitted under penalty of perjury to the Authority in accordance with Internal Revenue Service procedures for monitoring compliance. The compliance monitoring procedures apply to all buildings placed in service in Arkansas that have received an allocation of Housing Credits as determined by Section 42 of the Code. Regular site inspections to monitor compliance with habitability standards, according to the Uniform Physical Conditions Standards established by the United States Department of Housing and Urban Development, and ADFA design standards will be carried out by the Authority at least once every three (3) years.
In the event the Authority becomes aware of non-compliance or upon the failure to submit a Certificate of Continuing Program Compliance, the Authority will notify the owner of the areas of non-compliance and the required timeframe to correct the deficiencies. There is a maximum of sixty (60) days to correct such non-compliance. Additionally, the Authority will notify the IRS, as required, of any non-compliance or failure to certify no later than forty-five (45) days after the end of the allowed time for correction.
Frequent or consistent non-compliance of Applicant or any member of the development team in regard to the operation of any development may result in points reduction in the scoring of applications and/or suspension of the Applicant or development team member from applying for tax credits for a set term of time and/or compliance with conditions set forth by ADFA. Frequent or consistent non-compliance shall be in the sole discretion of ADFA and will include but not be limited to reports from ADFA's Compliance Department and IRS Form(s) 8823.
The appropriate application fee (determined from the list below) shall be included with the application and be in the form of a check payable to the Arkansas Development Finance Authority. All fees are non-refundable. Overpayments will not be refunded.
For-profit applicants - developments with 50 units or less | $1,000 |
For-profit applicants - developments with 51-100 units | $2,000 |
For-profit applicants - developments with 101+ units | $3,000 |
Non-profit applicants | $300 |
A non-refundable reservation fee of $150.00 per low-income unit will be required to secure the reservation of Housing Credits. Overpayments will not be refunded.
A fee equal to $150.00 per low-income unit will be required at the time the owner submits the final development cost certification requesting issuance of IRS Form 8609(s). Overpayments will not be refunded.
A monitoring fee equal to eight percent (8%) of the total annual Housing Credits allocation, or total original housing credit allocation prior to return of such credits and award of Section 1602 Exchange funds, as applicable, will be required at the time the owner submits the final development cost certification requesting issuance of IRS Form 8609(s). Overpayments will not be refunded.
Developments financed with tax-exempt bonds must apply to receive Housing Credits not allocated as part of the State's annual Housing Credit ceiling. Section 42(m)(1)(D) of the Code requires such developments to satisfy the "requirements for allocation of a housing credit dollar amount under the qualified allocation plan applicable to the area in which the project is located". Although these developments need not compete for an award through the competitive process, they will be evaluated for compliance with the Threshold Requirements set forth in this QAP and the Additional Requirements for a Complete Application set forth in this QAP.
In addition, each development financed with tax-exempt bonds shall be in compliance with the monitoring provisions of this QAP. Applicants shall comply with ADFA's Guidelines for Reserving Volume Cap for Tax-Exempt Private Activity Bonds for Residential Rental Housing and the Arkansas Development Finance Authority Rules and Regulations Implementing the Law on the Allocation of the State Volume Cap for Private Activity Bonds Pursuant to Act 1004 of 2001 in effect at the time of the filing of the application.
The Authority is charged with allocating no more Housing Credits to any given development than is required to make that development economically feasible. This decision shall be made solely at the discretion of the Authority, but in no way represents or warrants to any sponsor, investor, lender or anyone else that the project is, in fact, feasible or viable.
ADFA's review of documents submitted in connection with the allocation is for its own purposes. ADFA makes no representations to the owner or anyone else as to compliance with the Code, Treasury regulations, or any other laws or regulations governing Housing Credits. The applicant and owner of the development are responsible for understanding and following all applicable tax law requirements for the development.
No director, officer, agent or employee of ADFA shall be personally liable concerning any matters arising out of, or in relation to, the award or allocation of Housing Credits, the rejection of any application for housing credits, the award or lack of award of any other ADFA-administered resource whether federal or state in origin, the closing of any awarded funds or lack of closing, or the failure of a development to comply with federal, state or local laws, regulations, or other governing instruments, or the recapture of any credits or funds from any development, or the failure of any development to remain financially feasible, or the failure of any development to meet federal, state, or local deadlines.
ADFA reserves the right to amend this Qualified Allocation Plan as necessary to prudently administer ADFA-administered funds or to comply with state or federal law. ADFA reserves the right to adopt rules ancillary to this Qualified Allocation Plan as necessary to prudently administer ADFA-administered funds. ADFA reserves the right to make any and all necessary technical changes to this Qualified Allocation Plan as circumstances may warrant. ADFA reserves the right to do or require all things necessary or convenient to carry out its purposes, pursuant to Ark. Code Ann. Section 15-5-207(b)(20)(A) and Ark. Code Ann. Section 15-5-207(b)(26).
Adopted by the Board of Directors of the Arkansas Development Finance Authority on this 18th day of October, 2012.
By:____________________________
Jesse Sharp, Chairman
ATTEST:
____________________________
Mac Dodson, President/Secretary
ARKANSAS DEVELOPMENT FINANCE AUTHORITY MULTI-FAMILY HOUSING MINIMUM DESIGN STANDARDS
The following outline of minimum standards must be used in designing Multi-Family developments receiving low-income housing tax credits.
Any deviation from these standards must receive prior written approval from the Arkansas Development Finance Authority. In addition to these minimum standards, all developments must be designed in accordance with all federal and state accessibility requirements, Fair Housing requirements, and any applicable local, state and national building codes.
Applicant and architect shall execute separate verifications under oath that the representations set forth in Attachment G, Minimum Design Standards Checklist, will be met in the construction or rehabilitation of the proposed development and that all amenities and energy features represented in the application will be included in the construction or rehabilitation of the proposed development. The general contractor for the development must sign off on Attachment G prior to issuance of the Notice to Proceed.
The following documents shall be prepared by a registered architect or engineered licensed to practice in the State of Arkansas.
Final plans and specifications must be submitted to ADFA prior to the preconstruction conference.
Example:
DIVISION 2 SITE WORK
Section 02232 : Select Material Sub-base Course for Flexible Pavement
A waiver will not be granted unless land is available to the partnership and will remain available to the partnership which is sufficient to allow construction of the number of parking spaces required but for the waiver. Applicant must have site control over this land, have authority to agree to contract for this reservation of use and allow all restrictive documents to run with the reserved land, and agree in writing to so contract.
Unit Type | Number of Bathrooms | Minimum Unit Net Area | Minimum Bedroom Net Area |
1 bedroom | 1 | 750 sq ft | 120 sq ft |
2 bedroom | 1.5 | 950 sq ft | 120 sq ft |
3 bedroom | 2 | 1150 sq ft | 120 sq ft |
4 bedroom | 2 | 1300 sq ft | 120 sq ft |
Unit areas do not include outside storage, covered porches, patios, balconies, etc.
All siding materials listed above are required to be 8 inches above the finished floor elevation of the building ground floor, with the exception of concrete patio and covered breezeway areas. Brick or decorative block must be used as an apron material.
Six 1-gallon shrubs per unit.
Windows shall have a U-Factor of not greater than 0.35 and a solar heat gain coefficient (SHGC) of not greater than 0.30.
For rehabilitation developments, if any of the above elements cannot be included in any building because of structural constraints, an energy audit or report, performed by an independent, professional energy consultant/audit firm, which identifies those constraints but enumerates:
The applicant must submit a signed statement that it will implement the energy improvements or energy performance measures identified within the energy audit or report in order to be considered for points under this criterion. Also, a certification from the design architect or licensed engineer confirming the implementation of the energy improvements or energy performance measures will be required prior to the issuance of IRS Form 8609.
http://www.arkansas.gov/adfa/HOME%202011/Universal%20Design%20Doc.pdf.
If structural constraints prohibit adherence to ADFA's "Multi-Family Housing Minimum Design Standards", applicant may seek a waiver from ADFA of the standard concerned. Such waiver request must be in writing and include the following:
ADFA reserves the right to amend these Minimum Design Standards as necessary to prudently administer ADFA-administered funds or to comply with state or federal law. ADFA reserves the right to adopt rules ancillary to these Minimum Design Standards as necessary to prudently administer ADFA-administered funds. ADFA reserves the right to make any and all necessary technical changes to these Minimum Design Standards as circumstances may warrant. ADFA reserves the right to do or require all things necessary or convenient to carry out its purposes, pursuant to Ark. Code Ann. Section 15-5-207(b)(20)(A) and Ark. Code Ann. Section 15-5-207(b)(26).
109.04.12 Ark. Code R. 004