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Contact: Tracy Swanson (click name to e-mail) 614-645-1819 2008 Program Guidelines The Rental Housing Production and Preservation Program (RHPP) provides financial assistance to affordable multi-family housing projects that serve low and extremely low income households. The RHPP assistance is a vital component in ensuring successful projects that otherwise could not go forward or serve the extremely low-income population. Geographic Location and Eligible Properties Projects must be within the City of Columbus corporate limits. Priority will be given to rehabilitation of existing low-income housing located within the City of Columbus Empowerment Zone, new construction near employment centers, Section 8 preservation, and any property containing one or more residential units where at least 51% of the rentable floor space of the project is used for residential rental purposes. In the case of mixed-use structures, there must be a plan as well as financing in place for the commercial portion of the property. *The property must be decent, safe and sanitary at the time of occupancy. Eligible Activities and Types of Projects Rehabilitation: The property must require a minimum of $5,000 per unit of rehabilitation work. New Construction and Conversion: Construction of new units and/or conversion of building to residential rental housing. Expiring Section 8 Projects: Restructuring of projects with expiring project-based Section 8. Acquisition: For the purpose of developing multi-family or single family rental housing. Types of Projects: Single family rental units; multi-family rental units (2 or more units); Supportive Housing for people with special needs; and single room occupancy (SRO) units. Eligible Applicants An investor-owner is defined as a Sole Proprietor; a For-profit and Not-for-profit developer; Partnerships. Beneficiaries Rental housing projects must serve and be affordable to households earning 65% or less of the area median income (AMI) as defined by HUD. All rental units funded under the program must, at a minimum, meet HUD HOME Investment Partnership Program funding standards for rents and tenant income. More stringent affordability requirements may be applied to projects based on intentions set forth in the applications for funding or needs identified in the Consolidated Plan. 2008 HUD Income Guideline - 65% Area Median Income | Family | One | Two | Three | Four | Five | Six | Seven | Eight | Yearly Income | $29,705 | $33,930 | $38,220 | $42,445 | $45,825 | $49,205 | $52,650 | $56,030 |
NOTE: Total household income includes the income of all adults 18 years of age and older living in the home. In order to meet the requirements of the Columbus Consolidated Plan, in any project consisting of 20 or more HOME assisted units, rents for at least 15% of the units must be affordable to households earning 30% or less of the AMI and rent to households earning 50% or less of AMI. 2008 HUD Income Guideline - 30% Area Median Income | Family | One | Two | Three | Four | Five | Six | Seven | Eight | Yearly Income | $13,700 | $15,700 | $17,650 | $19,600 | $21,150 | $22,750 | $24,300 | $25,850 |
2008 HUD Income Guideline - 50% Area Median Income | Family | One | Two | Three | Four | Five | Six | Seven | Eight | Yearly Income | $22,850 | $26,100 | $29,400 | $32,650 | $35,250 | $37,850 | $40,500 | $43,100 |
NOTE: Total household income includes the income of all adults 18 years of age and older living in the home.
Financing Guidelines Loans The interest rate is negotiable. The equity required is a minimum of 5% of the total project cost. All projects must achieve a Debt Coverage Ratio of 1.1 in the stabilized year. The assumability of the loan will be addressed on a case by case basis depending on the project requirements. Grants Grants in the form of forgivable loans may be available for projects serving the homeless, special needs populations or lowest-income households (households earning 30% or less of the AMI). These grants will be considered on a case by case basis. Funds may be available from another funding source to cover the cost of identified lead-based paint hazards. Restrictive Covenant The owner must execute a restrictive covenant to ensure a minimum period of affordability as outlined below: 2008 Per Unit Assistance Minimum Period of Affordability | Rehabilitation of acquisition of existing housing.
Amount of HOME Fund | Under $15,000 | 5 years | $15,000 to $40,000 | 10 years | Over $40,000 | 15 years | New Construction or acquisition of newly constructed housing | Under $15,000 | 20 years | $15,000 to $40,000 | 20 years | Over $40,000 | 20 years |
If there is a FHA insured loan on the property, the period of affordability will be the term of the FHA loan or the period defined above, whichever is longer. Eligible Project Costs and Eligible Soft Costs Project Costs include: Acquisition; New Construction; Rehabilitation that addresses the following issues - Correction of all building code violations/incipient code violations; making energy efficient improvements; making general property improvements. The City may elect to target funds to specific project costs. Soft Costs include but are not limited to the following: Loan origination fees; credit reports; title reports and updates; recordation fees; preparation and filing legal documents; appraisals; attorney's fees; loan processing fees; architectural fees; engineering fees; preparation of work write-ups/cost estimates; audits; affirmative marketing and fair housing; construction management; environmental testing and/or site cleanup (not related to lead based paint testing). The final 10% or the rehabilitation and construction payments will be available only after final inspection is completed and final Certificates of Occupancy are issued. Costs not Reimbursed Legal organizational or syndication expenses associated with the development of low-income housing tax credit projects; the creation of the organization itself; construction contingency fund - 5% to 10% of hard construction/rehab costs; developer's fees defined as compensation for profit and/or risk - maximum allowable developer's fees total 10% of total project costs; costs incurred prior to the agreement between the City and the applicant. Additional Obligation for Funds Relocation If the applicant has acquired the real property within the last year or plan to purchase property as part of the project and/or there are tenants in the property, certain obligations must be met to ensure Federal Compliance. Contact the Acquisition and Relocation Compliance Services office, 757 Carolyn Avenue at 645-7442 for guidelines and requirements.Environmental Review The project must receive Environmental Review clearance as defined by the National Environmental Policy act, including the Historic Preservation review. Historic Review Clearance from the City of Columbus, Historic Review Preservation Officer must be obtained. The rehabilitation must comply with Section 106 standards by the Secretary of the Interior. Federal Prevailing Wage requirements will apply to projects in which the following number of units are funded: CDBG funded projects - eight or more units; HOME funded projects - twelve or more units. Lead Based Paint Hazards Work on properties that were built prior to 1978 must comply with Title X rules and regulations, as well as applicable state lead paint laws. The cost and scope of rehabilitation work determines what inspections and interventions will be required. Code Inspection/Occupancy Permit All projects must have building permits, pass a building code inspection and receive a final Certificate of Occupancy prior to final draw.Community Consultation Applicants are required to submit their applications to the appropriate Area Commission or Civic Neighborhood Association for disclosure and review prior to submission to the Department of Development. For assistance identifying the appropriate organization, contact Michael Puckett at 645-3219. There may be several civic or neighborhood associations to meet with. Be advised that the Area Commission process can take 2-3 months. City Reservation of Rights The City of Columbus reserves the right to waive the provisions of these guidelines within the limits of the Federal HOME, CDBG, City and State regulations in order to advance its mission and the goals of the Consolidated Plan. Such waiver shall not be construed as a general set-aside of the provisions and is at the sole discretion of the Director of the Department of Development. The amount and terms of the loan will be structured based on the minimum amount necessary to enable the rental housing affordable for the intended tenant income level. The City may invest up to 50% of the project cost after a 5% equity contribution, to a maximum of $15,000 per unit. For non-profit CHDOs which create housing in their designated service areas on a small scale without benefit of Low-Income Housing Tax Credits (LIHTC) and syndication, the maximum loan limit is $20,000 per unit. Terms of the loan are negotiable up to 30 years.
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