NOTICES
HOUSING FINANCE AGENCY
Request For Proposals; 2006 Tax Exempt Qualified Residential Rental Facilities Seeking Private Activity Bond Allocations
[35 Pa.B. 4268] Private activity bonds to finance qualified residential rental facilities are subject to the limitations imposed through the Statewide unified private activity bond cap (volume cap). The Department of Community and Economic Development (Department) provides for the allocation of volume cap to issue private activity bonds among the various qualified issuers in this Commonwealth. Each year, the Department provides certain allocations to the Housing Finance Agency (Agency) for the issuance of private activity bonds for housing purposes.
The Agency encourages the development of quality affordable rental housing in this Commonwealth. This Request for Proposals (RFP) has been designed to establish a process for inviting, evaluating and selecting qualified tax exempt residential rental facilities seeking allocations of volume cap in 2006.
The Agency encourages applications from multifamily developments and will use its best efforts to provide volume cap to as many qualified properties as are reasonably feasible, subject to continued availability of volume cap for these purposes. Based upon current demand, the Agency expects that volume cap will be readily available for multifamily developments, and the Agency encourages applicants to seek volume cap financing for developments using 4% Low Income Housing Tax Credits rather than more competitive 9% Low Income Housing Tax Credits.
Program Deadlines
Time deadlines have been established for processing and reviewing applications. Developers are advised to evaluate their financing goals and development preparedness prior to applying for volume cap. Developments not meeting the minimum qualifications or otherwise failing to evidence an ability to meet each of the deadlines set forth as follows may be rejected at any time by the Agency.
The time frame for the process is as follows:
* July 14, 2005 The Agency's Board announces RFP/posts on website * July 29, 2005 Applications and Letters of Instructions are available * October 7, 2005 Applications, with all fees and exhibits, will be accepted * November 17, 2006 Preclosing packets are due by
3 p.m. at the Agency* December 13, 2006 Bond and development financings must be completed * December 14, 2006 The Agency recaptures any preliminary volume cap not used Applications will be accepted on a first come, first served basis on or after October 7, 2005, and may be accepted up to August 1, 2006. The Agency may extend this deadline based upon availability and the ability to process and meet appropriate time frames. Applicants are urged to submit complete applications as early as possible to ensure adequate processing time for consideration and to best ensure that all financing activity will be completed prior the aforementioned deadlines.
The Agency will attempt to complete its review of applications in a timely manner and to provide preliminary allocations within 3 months from the date of application. Once the Agency provides a preliminary allocation of volume cap for a housing facility, the developer and its bond issuer must issue bonds and begin construction within the time frames set forth previously. Failure to finalize all aspects of development and bond financings within this time period and to submit all required preclosing and closing documentation to the Agency will result in recapture of the volume cap. Developers and issuers are advised to review funding sources, commitments and financing structures to ensure they can meet these deadlines for year 2006 submission.
The Agency will not approve carryforwards of unused volume cap for local bond issuers. In addition, the Agency requires that an actual construction loan closing occur on or before the end of 2006. Development funding must be in place and actual construction or property rehabilitation contracts must be completed, without condition. Escrow or construction bridge loan closings will not satisfy the Agency's closing requirement.
Developments using Federal Low Income Housing Tax Credits (Tax Credits) in their financing plan must meet section 42 of the Internal Revenue Code of 1986 (Code), as amended, and the year 2006 PHFA Tax Credit Allocation Plan, Processing Guide and program submission deadlines. These documents are available on the Agency's website at www.phfa.org.
Request for Proposals Summary
This RFP announces the availability of year 2006 housing bond volume cap for the funding of multifamily developments on a first come, first served basis. Depending on the total volume cap available in this Commonwealth for housing bonds, the Agency may determine to fund the multifamily developments as meet the minimum qualifications set forth in this notice.
The Agency encourages applications from multifamily developers and will use its best efforts to fund as many qualified projects as are reasonably feasible. Sponsors are advised to submit applications early to maximize their potential to be funded out of available resources and to allow sufficient processing time.
Eligibility for tax exempt financing does not ensure qualification or eligibility under the year 2006 PHFA Tax Credit Allocation Plan for developments seeking Tax Credits for a portion of their financing. Allow adequate time for the review of the Tax Credit application and for any necessary processing by other State or Federal funding sources.
To qualify for private activity volume cap, residential rental facilities must meet all qualifications of the Code. Facilities may involve the rehabilitation of existing rental facilities, new construction of facilities, modernization of public housing facilities and construction of qualified assisted living housing. Evidence of qualification must be provided through a narrative description of the financing structure at the time of application and prior to closing, through the submission of a qualifying opinion from a bond counsel specializing in matters relating to private activity bond financings. The Agency reserves the right to reject any application not providing adequate assurance of any of these qualifications.
Application Requirements
The owner, general partner or sponsor and the proposed bond issuer must jointly submit a completed application (one original and two copies) to the Agency for consideration. Applications seeking volume cap in the amount of $5 million or more may be required to utilize Agency bond financing for the development. (If Agency financing is requested, provide notice to the Agency prior to application submission.)
Each application for tax exempt issuing authority must be prepared in accordance with the 2006 Multifamily Housing Application Package and Guidelines and must include the following:
A. Brief Narrative Description of the Development
A brief narrative must outline how the development meets each of the following criteria:
* Qualification under the relevant bond financing sections of the Code.
* Qualification under section 42 (Tax Credits) of the Code, if applicable, and a supporting letter from counsel or an accountant experienced in the Low Income Housing Tax Credit Program.
* Qualification of the development team and the bond financing team.
* Evidence of financial feasibility of the facility and description of bond financing structure.
* Demonstrable evidence of commitment of all necessary financing sources.
* Ability to support a 30-year minimum affordability period for low income tenants or a demonstrable feasible plan to convert the development to affordable homeownership at the end of the qualified development period.
* A market study, in a form acceptable to the Agency, demonstrating an adequate market for the units without adversely affecting or impairing existing or proposed rental properties in the proposed development locale.
B. Letter Outlining Bond Financing Structure and Identifying Financing Team
A letter must be included with the application, addressed to the Agency, signed by both the owner, general partner or sponsor and the proposed bond issuer outlining the bond financing structure and identifying each of the following (with names, addresses and phone numbers): 1) the proposed bond issuer (if other than the Agency); 2) development ownership entity and principal partners or guarantors; 3) bond counsel to the issuer; 4) underwriters or placement agents, if any; 5) underwriter's counsel, if any; and 6) all other entities involved in the financing (that is, rating agencies, bond insurer, letter of credit bank and credit enhancement entity).
In the event the Agency is not the bond issuer, the bonds must receive an investment quality rating from one of the Nationally recognized rating agencies (or otherwise meet Agency criteria to ensure that the bonds are maximizing and reasonably achieving market opportunities).
In the event the Agency is the bond issuer, all the Agency financing and processing requirements must be met and a complete Agency financing application must be submitted with the tax exempt financing application. Contact the Agency for the applicable instructions.
C. Submission of Application Fees Identified in the Multifamily Housing Program Guidelines
Upon submission of an application, the applicant is required to pay one application fee equal to the lesser of $25 per unit or $1,000. This is a nonrefundable fee. For facilities intending to use and qualify for Tax Credits, the Agency will assess additional tax credit fees for allocation and compliance monitoring as identified in the 2006 Multifamily Housing Program Guidelines. Costs incurred in this application process are the sole responsibility of the applicant.
Minimum Criteria for Agency Review
For Agency consideration, developments must meet the minimum qualifications set forth as follows:
* May not apply for more volume cap than will reasonably support the financing structure. (The Agency may disallow applications for volume cap for construction financing if the applicant has another source of permanent financing, such as PennHOMES, which reduces the financing on a dollar for dollar basis. The disallowance is not intended to discourage leveraging HOPE VI and other public housing funds.)
* Evidence of qualification under the relevant bond financing sections of the Code.
* Evidence of qualification for Tax Credits, if applicable.
* Evidence of qualification of development team and bond financing team.
* Evidence of financial feasibility of facility and cost efficiency of bond financing structure--the Agency reserves the right to impose a cap on any volume cap requests.
* Evidence of commitment of all long-term development financing sources.
* Evidence of ability to support a 30-year minimum low income set aside period or a feasible financial conversion to affordable homeownership at the end of the qualified project period.
* Evidence and support of adequate market for the units.
* Demonstration that the development will not adversely impact other affordable housing properties in the identified market area.
* Evidence of accessibility or VisitAbility design features, or both, in the development to the greatest extent economically feasible.
Funding Priorities of the Program
The Agency will give priority to developments that best demonstrate the following characteristics:
* Ability to quickly and efficiently close their financing, begin and complete construction.
* Maximum efficiency of all financing resources and structure.
* Provision of quality housing within the community for persons with greatest need.
* Affordability of development's rents.
* Reasonableness of costs for financing structure.
* Reasonableness of construction costs.
* Reasonableness of third-party fees.
The Agency may consider additional criteria it deems necessary in its discretion to achieve maximum benefit of the resources available to it for financing low and moderate residential rental facilities. Additional factors include, inter alia, consideration of geographic and regional representation and resource allocation, community and economic impact and achieving the most qualified developments with the scarce resources through the imposition of a maximum per development allocation of volume cap. The Agency may disallow developments with identity of interest between any of the principal parties.
The Agency reserves the right to discontinue, modify, suspend or amend this program at any time, with or without further notice to any interested party. Decisions of the Agency are subject to additional conditions, restrictions and requirements as determined by the Agency in its sole discretion. In addition, the Agency's selection of developments for possible allocation of volume cap is subject to final allocation approval by the Department. The Agency also reserves the right to impose any conditions on the financing that it deems reasonable in its discretion.
To provide a resource for households seeking affordable housing throughout this Commonwealth, the Agency will require developments financed with volume cap to participate in its interactive database for affordable housing units. Developments will be required to provide information including unit amenities, household size, household income and move-in information and any ongoing unit vacancies in a secure and timely manner to the Agency throughout the project affordability and compliance period.
Application Submission/Contact Information
Copies of this RFP and the required 2006 Multifamily Housing Application Package and Guidelines are available from the Development Division, Housing Finance Agency, 211 North Front Street, Harrisburg, PA 17101, (717) 780-3882, fax (717) 780-3905. Additional information or guidance may be published from time to time on the Agency's website at www.phfa.org.
Applications for year 2006 volume cap will be accepted on or after October 7, 2005. Fees, signed narratives and required exhibits and attachments must be included with the application. Applications must be signed and may not be submitted by means of facsimile or e-mail. Information submitted by the applicant or gathered by the Agency in the review of the application is the sole property of the Agency and may be made public.
The Agency is committed to a policy which prohibits discrimination against persons based upon race, religion, gender, national origin, handicap, familial status or age in its programs and employment.
BRIAN A. HUDSON,
Executive Director
[Pa.B. Doc. No. 05-1454. Filed for public inspection July 29, 2005, 9:00 a.m.]
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