NOTICES
HOUSING FINANCE AGENCY
Request for Proposals; 2004 Tax-Exempt Qualified Residential Rental Facilities Seeking Private Activity Bond Allocations
[33 Pa.B. 3090] 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). In accordance with the act of November 17, 1998 (P. L. 788, No. 100), the Department of Community and Economic Development (DCED) provides for the allocation of volume cap to issue private activity bonds among the various qualified issuers in this Commonwealth. Each year DCED 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 2004.
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.
Program Deadlines
Time deadlines have been established for processing and reviewing applications and will be adhered to by the Agency. 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 following deadlines may be rejected at any time by the Agency.
The timeframe for the process is as follows:
* June 13, 2003 Board announces Request for Proposals/posts on website. * July 15, 2003 Applications and letters of instructions are available. * October 10, 2003 Applications, with all fees and exhibits, will be accepted. * November 19, 2004 Preclosing packets are due by 3 p.m. at the Agency. * December 8, 2004 Bond and development financings must be completed. * December 9, 2004 The Agency recaptures any preliminary volume cap not used. Applications will be accepted on a first come, first served basis on or after October 10, 2003 and may be accepted up to August 2, 2004. 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 to the aforementioned deadlines.
The Agency will attempt to complete its review of applications in a timely manner and 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 commence construction within the previous time frames. 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 2004 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 December 8, 2004. All 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.
In addition to meeting all requirements relating to private activity bonds set forth in section 147(g) of the Code, as amended, developments using Federal Low Income Housing Tax Credits (Tax Credits) in their financing plan must also meet all requirements of section 42 of the Code, as amended, and the year 2004 PHFA Tax Credit Allocation Plan (2004 plan), processing guide and program submission deadlines.
RFP Summary
This RFP announces the availability of year 2004 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 multifamily developments as able to meet the following minimum qualifications.
The amount of volume cap available for multifamily developments is limited due to the competing uses of volume cap in this Commonwealth and among housing bond programs. Nevertheless, the Agency does encourage applications from multifamily developers and will use its best efforts to fund as many qualified projects as reasonably feasible. Sponsors are advised to submit applications early in the 2004 calendar year 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 2004 Plan.
To qualify for private activity volume cap, residential rental facilities must meet all qualifications of the Code. These 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. (If Agency financing is requested, notice must be provided to the Agency prior to application submission.) Each application must be prepared in accordance with the 2004 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 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.
* Demonstrable evidence of affordability of rents for low income residents.
* 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; (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 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 2004 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 following minimum qualifications:
* 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. 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 long term affordability of rents for persons with low income.
* 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.
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, commence 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 all 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, among other things, 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 interested parties. 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 DCED. The Agency also reserves the right to impose any conditions on the financing that it deems reasonable in its discretion.
Application Submission/Contact Information
Copies of this RFP and the required 2004 Multifamily Housing Application Package and Guidelines are available from the Development Division, Housing Finance Agency, 2101 North Front Street, Harrisburg, PA 17110, (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 will be accepted beginning October 10, 2003. Fees, signed narratives and required exhibits and attachments must be included with the application. Applications must be signed and may not be submitted by 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.
WILLIAM C. BOSTIC,
Executive Director
[Pa.B. Doc. No. 03-1277. Filed for public inspection June 27, 2003, 9:00 a.m.]
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