Date post: | 20-Aug-2015 |
Category: |
Documents |
Upload: | national-alliance-to-end-homelessness |
View: | 347 times |
Download: | 1 times |
Financing & Developing Affordable Housing
Adrienne E. Quinn
V.P. Public Policy & Government Relations
Enterprise Community Partners
July 13, 2010
2
Overview
Project Vision – population served/income level Identifying Potential Development & Management Partners Site Selection Determining the Size of the Building/Project Identifying Funding Sources Build a Timeline Developing A Capitol Budget Developing An Operating Budget Outreach to Neighbors Submitting Funding Applications Permitting Construction Rent Up/Tenant Selection
3
Identifying Potential Development & Funding Partners
Why? Managing permanent housing requires a different skill set than
successfully operating a service program or shelter; The compliance requirements for the housing funding sources are
challenging and can result in the loss of funding; In order to obtain funding, funders will look for experience from your
project team developing and managing a similar building/project. Who?
Has your organization worked successfully with an owner and operator of affordable housing within the community?
Ask a local funder, e.g. city or state, for recommendations regarding what organizations develop projects on time and on budget and successfully manage affordable housing.
If looking for a partner to manage your project, determine if they have managed a building for a the same population that you intend to serve.
4
Site Selection
Not Every Site is a Good Site – Even Free Ones!!!!
5
Site Selection - Due Diligence
Zoning Does the local code allow an apartment building and what size building? Does the zoning require retail on the first floor? Does the site have any special restrictions, e.g. setbacks from a stream,
an historic building on site?
What constraints does the site have? e.g., fill, historic building, steep slope
Cost What is the land cost per unit? Will site constraints dramatically increase cost?
Accessibility to services, transit Actual Sales Price of Comparable Sites/Appraisal Neighborhood Out Reach/ Potential Opposition
6
Determining Size of Building/Project
What does zoning allow, e.g. height, lot coverage, density for a lot that size, minus setbacks, etc.?
What are the funding limits from your potential funding sources, e.g. not project/organization may receive more than $2 million?
What is the likely amount of funding you might receive?
(have initial conversations with state and local funders)
Construction type & cost – wood frame v. steel depends on height.
Operating considerations for population being served – No such thing as too big to fail!!!!
7
Potential Funding Sources
Local Funding Sources General Fund Inclusionary Zoning Funds Tax Increment Financing Funds Human Services funding
State Sources State Housing Trust Funds Document Recording Fees Services Funding
Federal Sources Administered By State/Locality Community Development Block Grant (CDBG) HOME McKinney Vento – capital + operating Medicaid
8
Potential Funding Sources- cont.
State Housing Finance Agency + Investor Low Income Housing Tax Credits (LIHTC) 9% & 4% Private Activity Bonds
Federal Sources Administered By Federal Govt. Section 202 – Senior Housing (HUD) Section 811 – Disabled Housing (HUD) Veterans Per Diem (VA)
Housing Authority Section 8 Vouchers VASH Vouchers
Philanthropy Bank Loans
9
Build a Timeline
Acquiring the Property/Building• Purchase and Sale Agreement / Option• Maximum Extensions• ClosingInitial Feasibility/Environmental • Site survey• Market study• Phase I Environmental Assessment• Phase 2 Environmental Assessment• State Environmental Review /NEPA• Capital needs assessment • Neighborhood notification (if required)• Relocation of existing tenantsFinance• Appraisal• Financial underwriting• Application for each capital funding source
10
Build a Timeline con’t.
Construction costs and Approvals• Construction cost estimate• Lender selection• Investor Selection• Funding for services• Award date for each funding source• Preliminary drawings completed• Zoning approval• Site plan approval• Building permit application submitted• Building permits issued• Final Plans and Specs Completed• Selection of general contractor• Begin construction• Issued certificate of occupancyLease Up, Management Selection • Selection of management entity• Selection of service providers• Begin lease-up• Placed in service - 1st Building• Placed in service - Last Building• Projected First LIHTC Year
11
Building a Capital Budget
Acquisition Costs:
• Total Purchase Price: Land Existing Structure
• Liens• Closing, Title & Recording Costs• Extension payment• OtherSUBTOTAL
12
Building a Capital Budget con’t
TOTAL CAPITAL BUDGET=
Acquisition Costs +
Construction Costs +
Other Development Costs +
Soft Costs
13
Building a Capital Budget con’t.
Construction Costs: Demolition Total Construction Contract:
New Building Rehab Contractor Profit Contract Overhead Contingency
Site Work / Infrastructure Off site Infrastructure Environmental Abatement (Building) Environmental Abatement (Land) Sales Tax Bond Premium Equipment and FurnishingsSUBTOTAL
14
Building a Capital Budget, con’t.
Other Development Costs: Real Estate Tax Insurance Relocation Bidding Costs Permits, Fees & Hookups Impact/Mitigation Fees Development Period Utilities Bridge Loan Fees & Interest Construction Loan Fees Construction Loan Interest Permanent Loan Fees Other Loan Fees
15
Building A Capital Budget, con’t.
Other Development Costs con’t: State & Local Loan Fees LIHTC Fees LIHTC Nonprofit Donation Accounting/Audit Marketing/Leasing Expenses Carrying Costs at Rent up Operating Reserves Replacement ReservesSUBTOTAL
16
Building A Capital Budget, con’t.
Soft Costs: Appraisal Market Study Architect Engineering Environmental Assessment Geotechnical Study Boundary & Topographic Survey Legal Fees: Developer Fee Project Management / Development Consultant FeesSUBTOTAL
CAPTIAL BUDGET = TOTAL ALL CAPITAL BUDGET SUBTOTALS
17
Operating Budget
• Calculate Revenues & Expenses
• Revenues Must Equal or Exceed Expenses
18
Operating Budget con’t.
REVENUES• Residential Income • Annual Gross Tenant Paid Rental Income• Annual Gross Rental Subsidy Income• Total Annual Operating Subsidy Sources• Commercial Income• Rent from Commercial Tenants
19
Operating Budget con’t.
EXPENSES • Operating Expenses- • Heat• Electric• Water & Sewer• Garbage Removal• Contract Repairs• Maintenance and janitorial • Management - Off-site• Management - On-site• Insurance• Accounting• Marketing• Real Estate Taxes• Replacement Reserves• Operating Reserves• Debt Service• OtherTotal Residential Operating Expenses
20
Financing & Developing Affordable Housing
Outreach to Neighbors
Submitting Funding Applications
Permitting
Construction
Rent Up/Tenant Selection