The only official version of the Affordable Housing Tax Credit Rules
is published as part of the Oklahoma Administrative Code and only
available through the Office of Administrative Rules.
The only official
version of the Affordable Housing Tax Credit Rules
is published as part of the Oklahoma Administrative Code and only
available through the Office of Administrative Rules.
The
Housing Tax Credit Program Rules were approved by
the Oklahoma State Legislature March 28, 2002,
signed by Governor Frank Keating on
January 17, 2002, and
became effective July 11, 2002.”
|
TITLE
330. OKLAHOMA HOUSING FINANCE AGENCY SUBCHAPTER
1. GENERAL PROVISIONS
330:36-1-1. Purpose The
Tax Reform Act of 1986 and Section 42 of the Code authorizes the OAHTC
Program. Oklahoma Housing Finance Agency ("OHFA") has been
designated by the Governor as the State's allocating agency for purposes
of administering the State's OAHTC Program. 330:36-1-3.1
Overview [REVOKED] 330:36-1-3.2.
Scope
During
each program year, Tax Credit Allocations ("TCAs") will be
made available to eligible entities for the purpose of implementing
specific projects that further the stated purpose of the OAHTC Program.
Eligible entities include, but are not limited to, for-profit
developers, non-profits, public agencies and local governments. "Affiliate" means any Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is
under common control with any other Person and specifically shall
include parents and/or subsidiaries of the Person who is an Affiliate of
the first Person.
"Applicant" means any Person, and each Affiliate of such
Person, that submits an Application to OHFA requesting a TCA pursuant to
these Rules and the Application, and includes the Development owner(s)
and the original or successor Applicant and each of their successors in
interest in the Development, regardless as to whether any such
successors in interest in the Development have obtained the approval of
transfer of such interest in the Development as required by the Rules or
the Application.
"Application" means an application in the form prescribed by
OHFA, from time to time, in the AP, including all exhibits and other
materials filed by an Applicant with OHFA in support of or in connection
with the formal request by the Applicant requesting a TCA.
"Application
Packet"
(referred to in these Rules as the "AP") means the Application
in the form prescribed by OHFA from time to time, together with
instructions and such other materials provided by OHFA to any Person
requesting the same for the purpose of seeking to obtain from OHFA a
TCA. The AP may include definitive statements of what shall constitute
Threshold Criteria, Selection Criteria, priorities, preferences, and
compliance and monitoring requirements as may be authorized by or
provided for in the Code and these Rules, and may include the necessary
forms, instructions and requirements for Applications, environmental
assessments, market studies, commitments, extensions, Carryover
Allocations, Agreements, Elections, Set-asides, OHFA staff evaluation
criteria for Threshold Criteria and Selection Criteria, final ranking,
credit amounts, tax exempt bond financed projects, compliance
monitoring, and other matters deemed by OHFA Trustees, in their complete
discretion, to be relevant to the process of evaluation of Applications
and the Applicants in connection with the award or denial of TCAs.
"Code" means the Internal Revenue Code of 1986, as
amended, together with applicable rules and regulations, revenue
rulings, notices or procedures promulgated thereunder or referred to
therein or in the applicable rules and regulations.
"Consultant"
means any person (which is not an owner or Affiliate of an owner of the
Development) that provides professional or expert services relating to
an Application, a Development, or any activities pertaining to the
filing of an Application, the award of a TCA, the Carryover Allocation,
or cost certification documents filings with OHFA. "Control" (including the terms "controls",
"controlling", "controlled by", and/or "under
common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction or the management and
policies or any other Person, whether through an ownership interest in
the other Person, by contract, agreement, understanding, designation,
office or position held in or with the other Person or in or with any
other Person, or by coercion, or otherwise.
"Development" means a site or sites, together with any building
or buildings that are proposed, or are, to be assisted with tax credits
as a single undertaking.
"Development
Team"
means the Applicant, Owner, Developer, property management company and
the principals of each.
"Drug" for purposes of these OAHTC Program Rules, means
"a controlled substance" as that term is defined in Section
102 of the Controlled Substances Act, 21 U.S.C., Section 802.
"Elderly" means any person sixty-two years of age or older.
The sixty-two year old age limit does not apply to spouses or immediate
family members for purposes of qualifying as an Elderly Development. It
is intended that Elderly Developments will be operated for occupancy by
at least one person 62 years of age or older per unit to satisfy this
criteria. State or Federal definitions are not superseded by those
established for other housing.
"Large
Development" means
a Development with more than sixty (60) units. "Nonprofit" means a private nonprofit organization that is
organized under State or local laws; has no part of its net earnings
inuring to the benefit of any member, founder, contributor, or
individual; is neither controlled by, nor under the direction of,
individuals or entities seeking to derive profit or gain from the
organization; has a tax exemption from the Internal Revenue Service
under section 501(c) (3) or (4) of the Internal Revenue Code of 1986;
does not include a public body; has among its purposes the provision of
decent housing that is affordable to low income persons, as evidenced in
its charter, articles of incorporation, resolutions or by-laws; and, has
at least a one year history of providing affordable housing at the local
level, and is duly qualified to do business within the State.
"Nonprofit
Sponsored Development"
means and refers to a proposed Development that has or will have a
Nonprofit that has a Controlling interest by reason of an ownership
interest in a Person that is or will be the owner of the subject
Development, and has materially participated, or will materially
participate (within the meaning of the Code) in the Development and
operation of the Development throughout the Compliance Period.
"OAHTC" means the affordable housing tax credit provided
by Section 42 of the Code.
"OHFA" means Oklahoma Housing Finance Agency. OHFA has
been designated by the Governor to administer the State's OAHTC Program.
"Person" means, without limitation, any natural person,
corporation, partnership. limited partnership, joint venture, limited
liability company, limited liability partnership, trust, estate,
association, cooperative, government, political subdivision, agency or
instrumentality, CHDO, interlocal cooperative, or other organization of
any nature whatsoever, and shall include any two or more Persons acting
in concert toward a common goal.
"Qualifying
Households"
means households whose annual incomes do not exceed 60% of the median
family income for the area.
"Regulatory
Agreement"
means the written and recorded agreement between a recipient of a TCA
and the allocating agency, OHFA, placing restrictive covenants upon the
Development and the underlying land for a term of not less than thirty
years (30) years, or such other term as may be required from time to
time by provisions of the AP, these OAHTC Rules and Section 42 of the
Code and the federal rules and regulations promulgated thereunder and
containing other restrictions, covenants, warranties and agreements
required by state, federal or local law and these OAHTC Rules.
"Rural
Area"
means any city, town, village, area or place generally considered rural
by the Secretary of Agriculture (RHS) for rural housing programs.
"Rural
Development"
means a Development that is, or will be located within a Rural Area. RD
538 projects are not eligible for the Rural 515 set-aside, but may
qualify under other set-asides.
"Selection
Criteria"
means the evaluation criteria, over and above the Threshold Criteria,
set out in an applicable AP, which shall be established and may be
changed by OHFA from time to time in an applicable AP (using the
priorities for the State as they are established from time to time under
and pursuant to these Rules and the applicable AP), to determine the
Development's qualifications, and which are the bases for ranking
Applications and establishing a relative level of acceptability for
consideration under the Rules and the applicable AP for the possibility
of the award of a TCA by OHFA. Although the Selection Criteria may be
given substantial weight by OHFA Trustees in deciding whether or not a
particular Application and Applicant shall be awarded a TCA, the OHFA
Trustees reserve the right to take into consideration such other factors
as they, in their complete discretion, deem appropriate.
"Site
Control"
means the exercise of dominion or control over the property through
execution of a purchase and sale agreement, receipt of a deed or
conveyance of the Land where the development will be located, or an
option to purchase the property (where the option is not revocable on
the part of the seller). OHFA alone will decide if an Applicant or Owner
has obtained Site Control.
"Special
Housing Development(s)" means
any Development specifically designed and developed for persons with
Special Needs.
"Special
Needs"
means such targeted populations as may be designated from time to time
in an Application Packet by official action of OHFA, which designations
may include, but are not necessarily limited to, the elderly, persons
with mental and physical disabilities and/or disabled or handicapped
persons.
"TCA" means a tax credit allocation by OHFA to a
Development owner pursuant to the Code, these Rules, the applicable AP,
the Application, and formal action by OHFA.
"Threshold
Criteria"
means the criteria set out herein and in an applicable AP, which shall
be established and may be changed by OHFA from time to time in an
applicable AP, to determine the qualifications of the Applicant and the
owner and the Proposed Development, presented in each Application that
are the minimum level of acceptability for consideration under the Rules
and the applicable AP for the possibility of the award of a TCA by OHFA.
Failure to timely satisfy all Threshold Criteria set out in the
applicable AP shall result in the disqualification of the Application
for further consideration, and shall require OHFA to not apply the
Selection Criteria to the Application, and to notify the Applicant of
the disqualification. "Transitional
Housing"
for purposes of these OAHTC Program Rules means transitional housing for
the homeless which meets the requirements of Code Section 42(i)(3)(B)(iii). 330:36-1-6. [RESERVED]
330:36-1-7. National standards incorporated by
reference
(a)
The national standards for Development of the OAHTC Program are hereby
incorporated by reference, including Code Section 42 and all federal
regulations, promulgated thereunder, including, but not limited to, 26
CFR Sections 1.42-5, 1.42-6, 1.42-11, 1.42-13 and 1.42-17.
(b)
Copies of Code Section 42 and applicable federal regulations may be
obtained from OHFA, during regular business hours Monday through Friday
8:00 a.m. to 4:45 p.m., excluding legal holidays.
330:36-1-8. [RESERVED]
330:36-1-9. Regulatory Agreement/Compliance
Manual/Compliance with Applicable Laws (a)
Regulatory Agreement. TCA recipients (owners) must enter into a
written Regulatory Agreement with OHFA. Requirements, procedures, and
processes provided in the applicable Regulatory Agreement and amendments
to it shall apply to Developments and the owner(s) thereof selected to
receive a TCA.
(b)
Compliance Manual. OHFA shall provide each owner with a
Compliance Manual at a cost of $25.00.
(c)
Compliance with Applicable Laws. The Applicant, the
Development, the owner(s) of the Development, the Development Team and
the Affiliates of each must comply with all applicable federal, state
and local laws, rules, regulations and ordinances, including but not
limited to, Code Section 42, and regulations promulgated thereunder, the
Oklahoma Landlord Tenant Act, the Titles VI and VII of the Civil Rights
Act of 1964, as amended and Title VIII of the Civil Rights Act of 1968,
as amended. Neither the Applicant, the owner(s) of a Development, the
Development Team nor the Affiliates of each shall discriminate on the
basis of race, creed, religion, national origin, ethnic background, age,
sex, familial status or disability or handicap in the lease, use or
occupancy of the Development or in connection with the employment or
application for employment of persons for the operation and/or
management of any Development. The owner(s) of a Development will be
required to covenant and agree in the Regulatory Agreement to comply
fully with the requirements of the Fair Housing Act as it may from time
to time be amended.
330:36-1-10. [RESERVED]
330:36-1-11. Technical assistance
OHFA
will, from time to time, designate staff members who shall be available
to provide OAHTC Program technical assistance regarding the Code, these
Rules, the AP and their implementation and proposed Development
concepts. The names of staff members designated from time to time to
provide technical assistance may be obtained by contacting OHFA's
Housing Development Team. SUBCHAPTER
2. ALLOCATION PROCEDURES
330:36-2-1. TCAs distribution
(a)
OAHTCs allocated annually to the State by the IRS shall be awarded to
Applicants selected through a formal application process governed by a
Qualified Allocation Plan (QAP), which is contained in these Rules, and
an Annual Program Description which shall contain the Application form
and instructions for completion and filing of the same with OHFA
(collectively referred to as the "AP"). Each AP will be
developed using a process of informal public input sessions and one
formal public hearing. OHFA will make a draft AP publicly available for
comment to all interested parties on or before October 1 of each
calendar year. Comments received will be considered by OHFA in the
design of the AP that may become applicable for the OAHTC Program for
the next succeeding calendar year. The deadline for all informal input
sessions and the formal public hearing will be no later than December 1
of each calendar year. OHFA Trustees, in their discretion, may formally
adopt a final AP for the next succeeding calendar year and make the same
available to the public by not later than January 31 of the applicable
calendar year.
(b)
TCAs will be awarded according to the Act, Code, these Chapter 36 Rules,
the applicable AP, and the discretion of the OHFA Trustees, by their
formal action.
(c)
The AP shall be made available to parties considering the filing of an
Application and interested parties upon request.
Requests for the AP should be directed to OHFA's
Housing Development Team.
330:36-2-2. Additional Credits
(a)
Applications for additional Credits on new construction developments are
not allowed. Although discouraged, applications for additional credits
on rehabilitation developments may be allowed, but only under
extenuating circumstances not easily identifiable or ascertainable at
the time of initial credit award. The OHFA Board of Trustees may award
additional credits at their sole discretion. Maximum award amount cannot
exceed 10% of the original tax credit allocation amount. Applicants
which have received approval of a Carryover Allocation in a prior year
for a specific Development may request additional Credits for that
Development. The Applicant may supplement the Applicant's prior
Application; however, the Application as supplemented must:
(1)
Be made by the applicable reservation cycle deadline;
(2)
Be accompanied by the Application fee;
(3)
Meet all Threshold requirements of the Credit Program Rules in effect as
of the deadline of the reservation cycle in which the request for
additional Credits is made; and
(4)
Each page be clearly tabbed in conformity with the current form of
Application.
(b)
The supplemented Application will be scored and ranked in accordance
with the Credit Program Rules in effect as of the deadline of the
reservation cycle in which the request is made.
(c)
An additional feasibility analysis will be undertaken. The Applicant
must prepare an in-depth analysis of why additional Credits are
required. OHFA may request information from the Applicant's lender(s),
accountants, legal advisors or financial Consultants to confirm
representations contained in the Application.
(d)
Neither the Applicant nor OHFA shall be required to give additional
notice pursuant to 330:36-5-3.1 of these Chapter 36 Rules if the notice
requirements of the Credit Program Rules if effect as of the date of the
Applicant's original filing of an Application were met. 330:36-2-3. Set-aside categories for TCAs
(a)
The annual allocation of OAHTC Program tax credits made available to the
State shall be divided into various set-aside categories, including but
not necessarily limited to, specific set-aside categories of
non-profits, rural areas, elderly, and such other categories as OHFA
Trustees, in their complete discretion, may adopt from time to time for
inclusion in an applicable AP. Non-profits competing in the nonprofit
set aside must be, at a minimum, a 51% Controlling general partner.
(b)
The amount of the State's annual allocation of credits devoted to each
set-aside category will be determined by the Code, these Chapter 36
Rules and from time to time by formal action of OHFA. Specific set-aside
categories and amounts for each category may be determined from time to
time by formal action of OHFA and shall be set out in the applicable AP.
OHFA may, in its discretion, at any time and from time to time, modify
the amount of the State's annual allocation of credits devoted to any or
all of each set-aside in the AP if, in the complete discretion of the
OHFA Trustees, they determine that the housing needs of the State so
warrant, except for the minimum 10% set aside for non-profits required
by the Code.
330:36-2-4. [RESERVED]
330:36-2-5. Geographic allocation of TCAs
OHFA's
jurisdiction for location of Developments shall be the entire State of
Oklahoma, including Indian Lands, and, subject to the priorities
established from time to time in the applicable AP, OHFA may make awards
of TCAs throughout the State.
330:36-2-6. [RESERVED]
330:36-2-7. Award amounts
(a)
The maximum TCA for any one Development proposal shall not exceed
$500,000.
(b)
OHFA may grant TCAs for amounts less than applied for based upon OHFA's
financial and feasibility analyses. In order to make the most efficient,
equitable and practicable utilization of the State's tax credit
allocation, the Trustees of OHFA may approve, giving consideration to
the recommendations of OHFA's staff, the utilization of funding from
other housing programs administered by OHFA which may also result in a
decrease in the amount of the TCA approved.
330:36-2-8. [RESERVED]
330:36-2-9. Reallocation of additional tax credits
(a) Annually, additional tax credits may become
available for the award of TCAs as the result of: (b)
In keeping with the applicable AP, OHFA may award TCAs based on the
amount of credits available, in the calendar year any such credits first
become available. For the calendar year in which such additional credits
become available they shall be prorated among all the remaining cycles
for which awards have not been made by formal action by OHFA.
(c)
OHFA reserves the right, in its complete discretion, to make any
adjustments in the amount of TCAs that may be awarded in any cycle of a
given calendar year, by increasing or decreasing the amount of TCAs made
available in a given cycle during such year. Any such adjustments may be
made by a formal separate resolution or by making the total amount of
TCAs in an earlier cycle more or less than the pro-rata amount available
for that cycle, and, in either case, the amounts of credits available
for award in the later cycle or cycles of the same calendar year shall
be increased or decreased to accommodate the prior action. All credits
not awarded in any calendar year shall be carried over for use in the
next calendar year, in accordance with the provisions of the Code, these
Rules, the applicable AP and the formal action of OHFA, if any formal
action is deemed to be necessary under the Code.
330:36-2-10. [RESERVED]
330:36-2-11. OHFA Development notification
OHFA
shall, within ten (10) working days of receipt of an Application, but
not less than 60 days prior to OHFA Trustee consideration thereof,
notify, in writing, by certified mail, the Chief Executive Officer of
each Local Governing Body of the jurisdiction within which the proposed
Development is to be located and the official elected tribal governing
body, if the Development will be located on tribal property, and the
legislators who are entitled to such Notice, regarding the
characteristics of the proposed Development to be located within their
jurisdiction/district. OHFA Trustees shall afford not less than a
thirty-day comment period to such Chief Executive Officers and
legislators. OHFA's Trustees shall consider all comments received from
such Chief Executive Officers and legislators in their deliberations
concerning whether or not to award any TCA to the Applicant. SUBCHAPTER
4: DEVELOPMENT APPLICATIONS AND SELECTION
330:36-4-1. Development Applications
For
the purpose of selecting Applicants and Developments for awards of TCAs
all Applicants must submit an Application in the form prescribed in the
applicable AP. The Application shall set forth, in a clear and concise
manner, Threshold and Selection Criteria that conform to the Code, these
Chapter 36 Rules, and the applicable AP. All Applications submitted to
OHFA must contain sufficient information to permit OHFA staff to:
(1)
Make a factual determination as to whether, on its face, the Application
satisfies each of the applicable Threshold Criteria set forth in the
applicable AP; and
(2)
Make a factual determination as to whether, on its face, the Application
is to be evaluated under any set-aside category established by the AP;
and
(3)
Conduct a review, assessment, and evaluation for selection as described
in the applicable AP.
330:36-4-2. Selection of Applications for award of
TCAs
(a)
General. For the purpose of selecting Applications for awards
of TCAs, OHFA may annually develop Threshold and Selection Criteria that
conform to the Code, the OAHTC Program purposes and these Chapter 36
Rules for inclusion in the next year's AP. The number, severity, or
value of any one or more of the Threshold Criteria items may be
increased by adoption of an AP for a given year that contains such
increased Threshold Criteria items. However, each AP must contain, as a
minimum standard for approval of any Applications for the award of any
TCAs, for any applicable AP, the Threshold Criteria set out herein below
in this section. (b)
Minimum Threshold Criteria. Failure to meet all Threshold
Requirements set forth in the AP upon initial submission of the
Application will result in the Application being rejected without
further review. The Threshold Criteria shall include, but are not
necessarily limited to the following:
(1)
Prohibition of Phased Developments. Phased Developments are
permitted in MSAs only if they are described and contemplated in the
original Application, and if all phases contain 50% or more market rate
units (2)
Notice to local Chief Executive Officer and other interested parties.
The provisions of this subsection apply to all Applicants for a TCA,
including the owners of Developments to be located on tribal
property(ies).
(A)
Developments located within a MSA. Not less than 30 days prior
to submission of an Application for a Development within a MSA, the
Applicant must notify, in writing and by certified mail, the local Chief
Executive Officer of the local Governing Body, Chairman of the
appropriate county commissioners, state legislators within whose
district the proposed Development is to be located and any other state
legislator(s) whose district(s) boundary is within a two mile radius of
the proposed Development's site, regarding their intent to submit a
Development proposal. This written notice shall serve to provide a
reasonable opportunity to comment on the proposed Development.
(B)
Developments located outside of a MSA. Not less than 30 days
prior to submission of an Application for a Development located in a
non-MSA, the Applicant must notify, in writing and by certified mail,
the local Chief Executive Officers of the Local Governing Body, the
Chairman of the appropriate county commissioners, and state legislators
within whose district the proposed Development is to be located
regarding their intent to submit a Development proposal. This written
notice shall serve to provide a reasonable opportunity to comment on the
proposed Development.
(C)
Publication notice. Notice of an Applicant's intent to file an
Application shall also be published in a newspaper of general
circulation in the area wherein the Development will be located. All
such notices shall be in a format prescribed by OHFA. However, at a
minimum all such notices must contain the following information:
(i)
the name and the legal description or street address of the proposed
Development;
(ii)
the names, business addresses and telephone numbers of the Applicant and
the Applicant's designated contact person in regard to the proposed
Development;
(iii)
whether the Development is new construction, acquisition and
rehabilitation and/or substantial rehabilitation;
(iv) the maximum number of Units proposed and
their characteristics;
(v) the amount of credits requested;
(vi)
the Cycle and year in which the Application may be considered by the
OHFA Trustees for an award of a TCA;
(vi)
the month in which the Applicant reasonably expects the Application to
be heard by the OHFA Trustees;
(viii)
the name, business address, telephone number and extension number of the
contact person at OHFA to whom all inquiries about the hearing on the
Application and the proposed Development should be directed.
(D)
Additional notice requirements. If the site for the
proposed Development is not located within the specific corporate limits
of an incorporated town or city, but is proposed to be located within
two (2) miles of an incorporated town or city(ies) limits, Applicant
must provide the same notice to each such town(s) and city(ies) as if
the site was located within the corporate limits of each such town(s)
and city(ies).
(3)
Market analysis. All Applicants must submit third party,
independent housing market analyses conforming to the Threshold Criteria
set forth in the applicable AP, demonstrating and documenting the status
of the market demand for the type and number of housing units proposed
to be developed.
(4)
Nonprofit owners. Applicants proposing Developments under the
nonprofit set-aside must demonstrate and document that the Nonprofit
owner and/or Nonprofit ownership participant meet the definition of a
nonprofit as defined in Section 42h(5)(C) of the Code and these Chapter
36 rules at 330:36-1-4. Applicants for nonprofit set-aside TCAs must
demonstrate that the Nonprofit participant:
(A)
has an ownership interest (either directly or through a Partnership) in
the Development;
(B)
is at least a co-general partner, co-managing member, or a controlling
stockholder, or can otherwise demonstrate ownership of, or the
contractual obligation to acquire a controlling interest in the proposed
Development by not later than the date the Development is substantially
completed and commences business;
(C)
will materially participate, on a regular basis, in the planning and
construction of the Development, and in the operation and management of
the Development throughout the entire compliance period pursuant to
469(h) of the Code;
(D)
has a Board of Directors and Officers that are independent from any
for-profit Development partner;
(E)
is duly authorized to do business within the State; and
(F)
has at least one year of housing experience in the State.
(5)
Resolution of local support. Applicants must provide
documentation of official local support for the Development by the
jurisdiction within which the proposed Development is to be located,
i.e. the Local Governing Body. The required documentation must be in the
form of a resolution duly adopted by the Local Governing Body, and must
be in a form that shall be subject to approval by OHFA's General
Counsel. In the case of Developments to be located on tribal property,
the resolution of support may be issued by the official elected tribal
governing body.
(6)
Capacity and prior performance. Each Applicant must demonstrate
and document the degree of expertise of Applicant and owner in the use
of TCAs and the Development, rehabilitation and/or conversion,
management and operation of properties related to the type of the
proposed Development. Applicants, Owners, and their Affiliates,
including all Development team members, shall be examined in regard to
their existing Developments, and the record of compliance performance
within Oklahoma and other states in which the Development team members
have developed or are developing affordable housing. Applicants with
existing Developments shall be ineligible for a TCA where OHFA has or
receives notice of uncorrected or repeated instance of nonperformance by
Applicant, owner, or any of their Affiliates, including any of their
Development team, including without limitation:
(A) failure to meet and maintain minimum property
standards;
(B)
failure to meet and maintain any material aspect of a Development as
represented in a Development Application; (C)
have been involved in uncured financing defaults, foreclosures, or
placement on USHUD's list of debarred contractors;
(D)
events of material uncorrected non-compliance with any Federally or
State assisted housing programs within the prior seven (7) years; or
(E)
the appointment of a Receiver; conviction on a felony criminal charge;
or bankruptcy within the prior seven (7) years. (7)
Acquisition credits/ten-year holding requirement. Applicants
requesting acquisition credits must provide an opinion of counsel, in a
form satisfactory to OHFA, that the ten-year holding requirement of Code
Section 42(d)(2)(B)(ii) has been met or a waiver obtained from the IRS.
If an existing waiver or waiver to be granted is claimed, copy of the
waiver letter or a copy of the letter indicating a waiver will be
granted and is forthcoming must be included in the applicant's
Development proposal.
(8)
Appraisal. Applicants must provide an appraisal of the
Development prepared within twelve (12) months of the date an
Application is filed with OHFA. The appraisal must be on an "as
built" basis and must be prepared by a State Certified General
Appraiser.
(9)
Phase 1 environmental study. Applicants must submit a
Phase 1 Environmental Assessment of the property to be developed within
twelve (12) months of the filing of an Application with OHFA. In lieu of
assessment for existing RDC-financed properties to be acquired and
rehabilitated, the Applicant and RDC must certify that there are no
adverse environmental concerns.
(10)
Financial feasibility and viability. Applicants must
provide a plan that demonstrates and makes commitments to the
Development's financial feasibility and viability as a qualified
low-income housing Development throughout the extended use period.
(11)
Readiness to proceed. Applicants must demonstrate
readiness to proceed in a timely manner should they be awarded a TCA.
Factors that may be considered regarding Development readiness shall
include but not be limited to:
(A)
obtaining firm financing commitments. Applicant must demonstrate to
OHFA's satisfaction that the Applicant has financing commitments for one
hundred percent (100 percent) of the project's total estimated
construction and permanent financing. Financing rates and the terms of
the commitment must have been approved by the lending institutions and
the commitment conditioned only on the award of TCAs;
(B) site control; (C)
land preparation. Applicant must provide preliminary plans or
specifications for those activities commonly necessary to make a site
ready for building, i.e. clearing, grading, infrastructure (streets,
utilities, and the like), etc.
(D)
completion of all environmental impact and assessment activities; and
(E)
proper zoning for the proposed Development. (c)
Code preference selection criteria.
(1)
Income targeting. Each Application will be analyzed and
evaluated as to the extent to which it is demonstrated therein a
commitment to target lower-income populations. Points will be awarded
based on the percentage of total AHTC units targeted to persons at or
below 50% AMFI to the total number of AHTC units in the project. A
maximum of 10 points is available under this criteria on a sliding scale
established in the annual AP.
(2)
Term of affordability. Each Application will be
analyzed on its ability and evaluated as to any commitments made therein
in regard to serving qualified tenants for a period of time longer than
the minimum required by the Code. A maximum of 5 points will be awarded
for an extension of the term of affordability beyond the minimum
required by the Code.
(3)
Development location and housing characteristics. Each
Application will be analyzed and evaluated as to the geographic location
and prevailing market conditions for the proposed Development. Examples
of location and condition variables may include but are not necessarily
limited to locating Developments within Difficult Development Areas,
areas with rent burdens and/or Qualified Census Tracts the development
of which contributes to a concerted community revitalization plan,
including but not limited to USHUD or RDC designated Empowerment Zones,
Enterprise Communities and/or Championship Communities. A maximum of 10
points is available for projects satisfying targeted locations as
established in the annual AP.
(d)
Selection criteria. The Selection Criteria shall be set
forth in the appropriate AP, and shall include, but not necessarily be
limited to the following:
(1)
Development Leverage/Level of Community Support. Each
Application will be analyzed and evaluated as to the extent to which it
incorporates Development beneficial participants that result in
tangible, cost beneficial investments or contributions to the proposed
Development. Such investments and contributions may include, but are not
necessarily limited to: funding under the HOME Investment Partnership
Program, the Native American Housing Assistance and Self-Determination
Act (NAHASD) Program, the Affordable Housing Program of the Federal Home
Loan Banks, the Rural Development 515 Program and other comparable
funding sources, cash, supportive services, equity grants, discounted
loans, land, and structures, and any other type of tangible or
intangible properties, including services, which may be incorporated in
the assets and liabilities, income or deductions from expenses of the
Development in accordance with generally accepted accounting principles.
Donated structures, public improvements and tax abatements are not
acceptable examples of leverage. Leverage shall be considered as the
proportion or percentage of leverage resources to total eligible basis.
Examples of community support include, but are not necessarily limited
to: fee waivers, tax abatements, public improvements directly related to
a Development, donations of property and/or materials, and other
contributions of direct value to the proposed Development that are under
the control of the unit of local government providing such assistance or
support. A maximum of 20 points is available under this criteria as
established in the annual AP. Support must be directly related to the
proposed project and be a tangible contribution that can be incorporated
into the assets and liabilities, income or deductions from expenses of
the development in accordance with generally accepted accounting
principles. Eligible evidence of support will be established in the
annual AP.
(2)
Development Characteristics. Each Application will be analyzed
and evaluated as to commitments made therein for the provision of
resident appropriate supportive amenities and services, including but
not limited to: supportive services, day care, formalized resident
involvement in the Development's on-going operations and management, and
special on-site facilities. Services and amenities must be on-site if a
Large Development; Small Developments may provide off-site or
contractual services. A maximum of 20 points is available under this
criteria for the resident appropriate supportive amenities and/or
services established in the annual AP. Only services and amenities which
exceed the minimum required by applicable laws, such as the ADA, will be
eligible for points. (3)
Applicant/Owner Management Experience. Each Application will be
analyzed and evaluated as to the experience of the owner in owning and
successfully operating and managing or providing management for
Developments in the OAHTC Program and/or for other types of affordable
housing Developments. A maximum of 20 points is available under this
criteria for Owner/Applicants that have placed into service three (3) or
more developments which are being successfully operated in compliance
with the Code and federal regulations, the Regulatory Agreement and the
rules of OHFA;10 points may be awarded for Owner/Applicants that have
placed into service one (1) or two (2) developments that are being
successfully operated in compliance with the Code and federal
regulations, the Regulatory Agreement and the rules of OHFA. This
evaluation will be based on the experience of the Owner/Applicant and
professional development team members.
(4)
Tenant/Special Needs Populations. Each Application will
be analyzed and evaluated as to the extent to which commitments are made
therein to serve Special Needs populations. A maximum of 10 points is
available under this criteria. To be eligible for the maximum number of
points, the project must be 100% dedicated to tenants with special
needs. One floating unit per development with rents set at 50% of the
allowable tax credit rent will be eligible for 5 points.
(5)
Public Housing Wait Lists. Each Application will be
analyzed and evaluated as to the extent to which it is demonstrated that
the local public housing authority documents the presence of a client
waiting list for affordable housing units. A maximum of 5 points is
available under this criteria.
(6)
Tenant populations of individuals with children. Each
Application will be analyzed and evaluated as to the extent to which it
is demonstrated that the development will provide amenities and a unit
mix conducive to families/individuals with children. A maximum of 5
points is available under this criteria.To be eligible, the market study
must indicate a need for family units.
(7)
Tenant ownership. A maximum of 5 points is available to
applicants proposing for single family home ownership after the
Compliance Period. Applicants must submit a detailed plan which includes
projections on maintenance, tenant reserve funds, etc. which plans will
be evaluated for feasibility.
(8)
Cost per unit. Each Application will be analyzed and evaluated
as to the ability demonstrated therein to cost efficiently produce the
highest number of quality housing units for the TCAs requested in the
Application together with all other benefits provided by OHFA or applied
for with OHFA by the Applicant or any Affiliate of the Applicant for the
same Development. Projects with the lowest Tax Credit eligible basis per
unit will be given priority in the case of a tie in the final total
rating scores. (e)
OHFA discretion. Not withstanding the point ranking
under the Selection Criteria set forth above under 330:36-3-2(c), OHFA
reserves the right and shall have the power to allocate Credits to a
project irrespective of its point ranking, if such intended allocation
is: (1) in compliance with Code Section 42;
(2)
in furtherance of the housing goals set forth herein, in the AP or any
formally adopted resolution of the Trustees; and
(3)
is determined by the Trustees to be in the interests of the citizens of
the State.
330:36-4-2.1.
General program requirements and limitations
(a) General. [Reserved]
(b)
Developer Fee limitations. The amount of allowable Developer
Fees shall be limited to:
(1)
Small developments. Developer Fees may not exceed
eighteen percent (18%) of the Qualified Project Costs, excluding the
Developer Fees, making up the eligible basis of the qualified low-income
building(s).
(2)
Large Developments. Developer Fees may not exceed
fifteen percent (15%) of the Qualified Project Costs, excluding the
Developer Fees, making up the eligible basis of the qualified low-income
building(s).
(3)
OHFA may, in its sole discretion, increase the Developer Fees allowable
in order to create special financing incentives to meet a pressing local
affordable housing need. All determinations of allowable Developer Fees
shall be made in a manner consistent with the Code, IRS regulations
and/or any directives of the Internal Revenue Services at the time of
Allocation.
(c)
Contractor Fee limitation. Allowable Contractor Fees shall be
limited to:
(1)
Small Developments. Total allowable Contractor fees may not
exceed sixteen percent (16%) of the Qualified Project Costs, excluding
the Developer Fees and Contractors Fees, making up eligible basis of the
qualified low-income building(s). Allowable Contractor Fees are further
limited as follows:
(A)
General requirements may not exceed six percent (6%) of the Qualified
Project Costs, excluding the Developer Fees and Contractors Fees, making
up the eligible basis of the qualified low-income building(s);
(B)
General Overhead may not exceed two percent (2%) of the Qualified
Project Costs, excluding the Developer Fees and Contractors Fees, making
up the eligible basis of the qualified low-income building(s); and
(C)
Builders Profit may not exceed eight percent (8%) of the Qualified
Project Costs, excluding the Developer Fees and Contractors Fees, making
up the eligible basis of the qualified low-income building(s).
(2)
Large Developments. Total allowable Contractor fees may
not exceed fourteen percent (14%) of the Qualified Project Costs,
excluding the Developer Fees and Contractors Fees, making up eligible
basis of the qualified low-income building(s). Allowable Contractor Fees
are further limited as follows:
(A)
General requirements may not exceed six percent (6%) of the Qualified
Project Costs, excluding the Developer Fees and Contractors Fees, making
up the eligible basis of the qualified low-income building(s);
(B)
General Overhead may not exceed two percent (2%) of the Qualified
Project Costs, excluding the Developer Fees and Contractors Fees, making
up the eligible basis of the qualified low-income building(s); and
(C)
Builders Profit may not exceed six percent (6%) of the Qualified Project
Costs, excluding the Developer Fees and Contractors Fees, making up the
eligible basis of the qualified low-income building(s).
(d) Underwriting standards.
(1) Operating and replacement reserves.
(A)
Minimum operating reserves should equal four to six months of projected
operating expenses plus:
(i) debt service payments and
(ii) annual replacement reserve payments.
(B)
Minimum replacement reserves should equal $200 per unit annually for new
construction and $300 for rehabilitation developments. (C)
Exceptions may be approved, at the discretion of OHFA, for certain
special needs developments, such as elderly developments.
(D)
Developer guarantees may be accepted in lieu of operating reserves, at
the discretion of OHFA. The developer must demonstrated financial
capacity and liquidity. OHFA will also considered the developer's tract
record and the number of other guarantees outstanding.
(E)
Notwithstanding the foregoing, these underwriting standards shall not
apply if the project is being constructed in accordance with another
federal program, such as Rural Development 515, and such program
provides for budgeting for operating and replacement reserves.
(2) Debt service coverage.
(A)
Debt service coverage means the ratio of a property's net operating
income (rental income less operating expenses and reserve payments) to
foreclose able, currently amortizing debt service obligations.
(B)
The minimum acceptable debt service coverage ratio of 1.1 (1.05 in RHS
properties) is required.
(3)
Projections. All projections and pro-formas must
contain realistic operating expense and vacancy rate projections
consistent with prevailing market conditions.
(4)
Cost limits. Costs per unit must be realistic and
consistent with prevailing market rates. OHFA encourages cost efficient
production, but will not give a preference solely for lowest
construction costs.
(5)
Capital needs assessment. No allocations for
rehabilitation will be made unless preceded by a capital needs
assessment performed by an independent third party (architect, engineer,
contractor, Rural Development) which considers the full term of
affordability based on extended use agreements.
(6)
Minimum of $6500 hard construction costs per unit for
rehabilitations. No allocations for rehabilitation will be made
unless a minimum of $7500 in hard construction costs per unit will be
expended. (e)
Progress reports. Progress reports must be filed by the
Applicant/Owner beginning with the calendar quarter following the
approval of a reservation of Credits until the Form 8609 is issued for a
building. The report must contain, at a minimum, the status of site
preparation and/or construction, including the percentage of completion
of each building. The report must address any other requirements set
forth in a Resolution of the Trustees and/or the Carryover Agreement.
(f)
Additional requirements. OHFA may, as it deems
necessary in its sole discretion, impose additional requirements or
Program limitations on any Applicant, Owner or Project. Said
requirements or limitations may be set forth in a Resolution of the
Trustees or in any contract between the Applicant or Owner and OHFA.
(g)
Bond financed developments. Developments financed at
least fifty percent (50%) with the proceeds of tax-exempt bonds subject
to the private activity bond volume cap are required to comply with all
requirements of these Rules.
(h)
Timeliness and completeness of filings. Deadlines for
filing Applications will be established in the AP. Should OHFA request
additional information the deadline for filing same with OHFA will be
set forth in the letter requesting same. Applicants/Owners must strictly
comply with all deadlines and all filings must be complete when filed. 330:36-4-3 Fees [AMENDED AND RENUMBERED FROM
330:36-5-13]
(a) General.
Application and TCA Fees will be used to support overall OAHTC Program
delivery and operation activities. Application fees shall be calculated
as follows:
(1) Application fees.
(A)
for single site or contiguous site Developments consisting of one to
four Units, the application fee shall be $250.00;
(B)
for single site or contiguous site Developments consisting of five to
fifty Units, the application fee shall be $500.00; (C)
for single site or contiguous site Developments consisting of fifty one
to one hundred units, the application fee shall be $1,000.00;
(D)
for single site or contiguous site Developments consisting of over one
hundred units, the application fee shall be $2,000.00; (E)
for 0 to 10 scattered sites, the application fee shall be $250.00 per
site, up to $1,000 maximum; 11 to 20 scattered sites, $1,000 plus $250
per site, up to a maximum of $2000.00.
(F)
For non-profit sponsored Developments the application fee shall be
$250.00
(2)
Amendment fee. Any amendments to an Application,
exhibits thereto or other information on file with OHFA must be
accompanied by a $50.00 processing fee along with $10.00 per each
supplemental page and/or each page amended. No amendments to an
Application will be accepted prior to approval of a reservation unless
the amendment is request, in writing, by OHFA.
(3)
Reservation fees. A non-refundable Reservation fee of
1% of the reservation amount is due within fourteen (14) days of
notification from OHFA of the approval of a Reservation.
(4)
Allocation fee. An Allocation fee shall be paid in an
amount equal to seven (7) percent of the Allocation, but in any event
not less than $1,000. The Allocation fee must accompany the Allocation
or Carryover Allocation request. The Allocation request will not be
submitted to the Trustees for approval, nor will a Carryover Allocation
Agreement be executed, nor will Form 8609 be issued unless this fee has
been received by OHFA.
(5)
Processing fee. A processing fee of one half of one
percent (1/2%) of the TCA must accompany the request for a final
Allocation.
(6)
Regulatory Agreement filing fee. Upon approval of a
final Allocation, an executed Regulatory Agreement must be submitted to
OHFA and be accompanied by a check payable to the County Clerk of the
county or counties in which the Development is located. The check or
checks shall be in an amount sufficient to cover the filing fees of that
county(ies). OHFA will provide a schedule of said fees.
(7)
Compliance monitoring fees. In addition to the
documentation required by OHFA, an annual compliance monitoring fee
shall be paid to OHFA. The applicable year the compliance fee is being
invoiced on an annual basis and shall be payable on or before January
28th for each year during the compliance period and extended use period
subject to annual adjustment. If the Development includes scattered
sites, a compliance monitoring fee for each site shall be paid to OHFA.
Failure to remit timely payment of compliance monitoring fees shall
result in the filing by OHFA of a lien against the Development. The
compliance monitoring fee shall be computed as follows:
(A)
For Developments financed by RD under the Section 515 or by tax-exempt
bonds (and otherwise qualify under the Code) where an agreement has been
entered into between OHFA and RD or the tax-exempt bond issuer wherein
the RD or tax-exempt bond issuer agrees to provide OHFA with the
required information respecting the income and rent of the tenants in
the Development, the fee shall be $150 per Development per year, plus
$2.50 per OAHTC unit per year within any building within the
Development; (B)
For developments where no agreement has been entered into between OHFA
and RD or the tax-exempt issuer wherein RD or the tax-exempt bond issuer
agrees to provide OHFA with the required information respecting the
income and rent of tenants-the fee shall be $250 per Development per
year, plus $10.00 per OAHTC unit per year within any building within the
Development.
(C) For single site or cont |