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Regardless of the amount, all capital contributions other than syndication
equity will be deemed to be a part of, and therefore added to, the
Deferred Developer Fee for feasibility purposes under §11.302(i)(2)
of this chapter (relating to Underwriting Rules and Guidelines) or
where scoring is concerned, unless the contribution is a seller note
equal to or less than the acquisition price of the subject Development,
the Development is a Supportive Housing Development, the Development
is not supported with Housing Tax Credits, or the ownership structure
includes a nonprofit organization with a documented history of fundraising
sufficient to support the development of affordable housing.
(D) Equity Financing. (§2306.6705(2) and (3))
If applicable to the program, the Application must include a term
sheet from a syndicator that, at a minimum, includes:
(i) an estimate of the amount of equity dollars expected
to be raised for the Development;
(ii) the amount of Housing Tax Credits requested for
allocation to the Development Owner;
(iii) pay-in schedules;
(iv) syndicator consulting fees and other syndication
costs. No syndication costs should be included in the Eligible Basis;
and
(v) include an acknowledgement of the amounts and terms
of all other anticipated sources of funds and if the Application reflects
an intent to elect income averaging there must be an acknowledgement
to that effect in the term sheet.
(E) Financing Narrative. (§2306.6705(1)) A narrative
must be submitted that describes all aspects of the financing plan
for the Development, including as applicable the sources and uses
of funds; construction, permanent and bridge loans, rents, operating
subsidies, project-based assistance, and replacement reserves; and
the status (dates and deadlines) for applications, approvals and closings,
etc. associated with the term sheets for all funding sources. For
Applicants requesting Direct Loan funds and 9% LIHTC, Match, as applicable,
must be documented with a letter from the anticipated provider of
Match indicating the provider's willingness and ability to make a
financial commitment should the Development receive an award of Direct
Loan funds. The information provided must be consistent with all other
documentation in the Application.
(7) Operating and Development Cost Documentation.
(A) Fifteen-year Pro forma. All Applications must include
a 15-year pro forma estimate of operating expenses (or longer, if
required by the NOFA), in the form provided by the Department. Any
"other" debt service included in the pro forma must include a description.
For Tax-Exempt Bond Developments, the pro forma must be signed by
the lender and syndicator.
(B) Utility Allowances. This exhibit, as provided in
the Application, must be submitted along with documentation from the
source of the utility allowance estimate used in completing the Rent
Schedule provided in the Application. This exhibit must clearly indicate
which utility costs are included in the estimate and must comply with
the requirements of §10.614 of this title (relating to Utility
Allowances), including deadlines for submission. Where the Applicant
uses any method that requires Department review, documentation indicating
that the requested method has been granted by the Department must
be included in the Application.
(C) Operating Expenses. This exhibit, as provided in
the Application, must be submitted indicating the anticipated operating
expenses associated with the Development. Any expenses noted as "other"
in any of the categories must include a description. "Miscellaneous"
or other nondescript designations are not acceptable.
(D) Rent Schedule. This exhibit, as provided in the
Application, must meet the requirements of clauses (i) - (vi) of this
subparagraph. The income and corresponding rent restrictions will
be reflected in the LURA for the duration of the Affordability Period
and for Tax-Exempt Bond Developments, in accordance with the Applicant's
election under Tex. Gov't Code §1372.0321. The requirements are:
(i) indicate the type of Unit restriction based on
the Unit's rent and income restrictions;
(ii) reflect the rent and utility limits available
at the time the Application is submitted;
(iii) reflect gross rents that cannot exceed the maximum
rent limits unless documentation of project-based rental assistance
is provided and rents are consistent with such assistance and applicable
legal requirements;
(iv) have a Unit mix and net rentable square footages
that are consistent with the site plan and architectural drawings;
(v) if applying for Direct Loan funds:
(I) Direct Loan-restricted Units will generally be
designated "floating" unless specifically disallowed under the program
specific rules or as specifically allowed in a NOFA;
(II) if HOME, TCAP RF, and/or NSP PI are the anticipated
fund source, the Application must have at least 90% of the Direct
Loan-restricted Units be available to households or families whose
incomes do not exceed 60% of the Area Median Income;
(III) in which HOME or TCAP RF are the anticipated
fund source have at least 20% of the Direct Loan-restricted Units
available to households or families whose incomes do not exceed 50%
of the Area Median Income;
(IV) in which NHTF is the anticipated fund source,
have 100% of the Direct Loan-restricted Units available to households
or families whose incomes do not exceed the greater of 30% of the
Area Median Income or whose income is at or below the poverty line;
(V) in which NSP PI is the anticipated fund source,
have at least 25% of the Direct Loan-restricted Units available to
households or families whose incomes do not exceed 50% of the Area
Median Income;
(VI) in which HOME-ARP is the anticipated fund source,
during the State Affordability Period have at least 20% of the Direct
Loan-restricted Units for households and families whose incomes do
not exceed 60% of the Area Median Income and 100% of the Direct Loan-restricted
Units for households and families whose incomes do not exceed 80%
of the Area Median Income; and
(vi) if proposing to elect income averaging, Units
restricted by any fund source other than housing tax credits must
be specifically identified, and all restricted Units, regardless of
fund source, must be included in the average calculation.
(E) Development Costs. This exhibit, as provided in
the Application, must include the contact information for the person
providing the cost estimate and must meet the requirements of clauses
(i) and (ii) of this subparagraph. For Applications that include a
scope of work that contains a combination of new construction and
rehabilitation activities, the Application must include a separate
development cost schedule exhibit for only the costs attributed to
the portion of rehabilitation activities.
(i) Applicants must provide a detailed cost breakdown
of projected Site Work costs (excluding site amenities), if any, prepared
by a Third Party engineer. If Site Work costs (excluding site amenities)
exceed $20,000 per Unit and are included in Eligible Basis, a letter
must be provided from a certified public accountant allocating which
portions of those site costs should be included in Eligible Basis.
(ii) If costs for Off-Site Construction are included
in the budget as a line item, or embedded in the site acquisition
contract, or referenced in the utility provider letters, then an Off-Site
Cost Breakdown prepared by a Third Party engineer must be provided.
The certification from a Third Party engineer must describe the necessity
of the off-site improvements, including the relevant requirements
of the local jurisdiction with authority over building codes and the
source of their cost estimate. If any Off-Site Construction costs
are included in Eligible Basis, a letter must be provided from a certified
public accountant allocating which portions of those costs should
be included in Eligible Basis. If off-site costs are included in Eligible
Basis based on PLR 200916007, a statement of findings from a CPA must
be provided which describes the facts relevant to the Development
and affirmatively certifies that the fact pattern of the Development
matches the fact pattern in PLR 200916007.
(F) Rental Assistance/Subsidy. (§2306.6705(4))
If rental assistance, an operating subsidy, an annuity, or an interest
rate reduction payment is proposed to exist or continue for the Development,
any related contract or other agreement securing those funds. Such
documentation shall, at a minimum, identify the source and annual
amount of the funds, the number of units receiving the funds, and
the term and expiration date of the contract or other agreement.
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