Md. Code Regs. 05.05.01.21

Current through Register Vol. 51, No. 24, December 2, 2024

Section 05.05.01.21 - Project Evaluation Criteria

A. All projects in a round which meet the threshold criteria shall be rated and ranked on a point basis, which may include the following criteria:

(1) Capacity of the development team, including:

(a) Prior experience;

(b) Financial capacity;

(c) Participation of nonprofit organizations or housing authorities; and

(d) Participation of minority or women business enterprises;

(2) Public benefits of the project, including:

(a) Serving tenants with the lowest income levels;

(b) Maintaining the income restrictions for the longest period of time;

(c) Locating the project in older neighborhoods that are targeted for revitalization or in areas with existing development that are targeted for further growth;

(d) Filling demonstrated local needs for affordable housing including housing for families with dependent children or the disabled;

(e) Providing additional tenant services to the project;

(f) Demonstrating consistency with other investment in the community;

(g) Creating links to or reducing public housing waiting lists;

(h) Creating small scale projects; and

(i) Promoting geographic distribution of projects by locating the project in subdivisions of the State which:

(i) Are not entitled to receive an allocation of HOME or Community Development Block Grant (CDBG) funds from the federal government; and

(ii) Have an area median income below the non-metro median income, as determined by the U.S. Department of Housing and Urban Development from time to time;

(3) Quality of the development including, but not limited to, design elements such as unit size, amenities, layout, project site, visual appeal, energy efficiency, quality of materials and recreational facilities;

(4) Project financing, including:

(a) Total department subsidy per bedroom or per unit;

(b) Leveraging of outside funds, as defined from time to time by the Department;

(c) Long-term rent and operating or social service subsidies that materially reduce the operating expenses of the project or rental costs to tenants;

(d) The terms requested for the Department financing; and

(e) All sources of funding for the project.

B. A project may be penalized if the sponsor or any lead member of the development team, including developers, owners, or management agents, has participated in a project that:

(1) Currently is in receipt of a reservation of low-income housing tax credits or loan funds and has been unable to meet processing schedules as established by the Department;

(2) Has a record of consistent failure to promptly resolve compliance matters; or

(3) Has a record of noncompliance with the Department's asset management requirements including but not limited to untimely submission of required reports, below average or unsatisfactory physical inspection reports, failure to maintain a current management agreement on file with asset management, and late or delinquent loan payments.

C. A project may also be penalized if it fails to meet the Department's project financing and underwriting standards as follows:

(1) Proposed reserve for replacement deposits shall be either:

(a) Equal to or above the minimum reserve requirements, based on the type of work to be done, established from time to time by the Department; or

(b) If not equal to or above the minimum reserve requirements, accompanied by a detailed explanation of why costs are below the minimum reserve requirements, which explanation shall be acceptable to the Department;

(2) Financial projections shall show that the project shall achieve a ratio between net operating income and must-pay debt service, if any, not including debt service on loans made under this chapter, of at least 1.1 to 1 within a time acceptable to the Department;

(3) Operating reserves shall meet the standards set by the Department;

(4) Proposed operating expenses shall be acceptable to the Department;

(5) For any round of review, the Department may, in its discretion, vary the operating expense limits to accommodate unusual circumstances such as special historic preservation requirements or infrastructure needs; or

(6) The proposed rent levels for tenants in the project's restricted units shall be within the limits required in Regulation .12 of this chapter.

Md. Code Regs. 05.05.01.21

Regulations .21 adopted effective March 4, 1991 (18:4 Md. R. 446)
Regulations .21 Rental Multifamily Rental Financing Program adopted effective March 13, 2006 (33:5 Md. R. 518)