2022-2023 Qualified Allocation Plan Update - Vermont Housing ...
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2022-2023 Qualified Allocation Plan Update https://www.vhfa.org/rentalhousing/qualified-allocation-plan-qap
Today’s Presentation & Goals:
Review pre-application / application timeline and
process
Discussion of notable Qualified Allocation Plan (QAP)
changes for 2022 including Building Design
Standards
Ensure Developers understand how staff will review
new or adjusted QAP materials.
Resources directed by the QAP • Qualified Allocation Plan (QAP) prioritizes investment for the significant affordable housing funding resource, both federal and state: • Federal 9% “Ceiling Credits” which are received annually on a per capita basis or a small state minimum. • Federal 4% “Bond Credits” which are generated through Tax Exempt Bond Financing. • State Rental Housing Credits • State Homeownership Credits (includes Manufactured Home Credit) • State Down Payment Assistance Credits
Application Process
(Section 2)
Pre-Application Process
-Due Date: November 10th
-Pre-application meeting and site visits before Nov 10th
-Items to submit
• Proforma
• Evaluation Criteria Summary Sheet
• VHCB ARPA Application OR Evidence of Site Control /
Option Agreement, Site Plan, Preliminary Building Plans, and
evidence of zoning compatibility
Pre-Application Process
2022 Award Round Timing
Award Round Application Due Date Board Meeting Date
9% Ceiling
March 2022 May 2022
Credits
State Rental
April 2022 June 2022
Credits
State
Homeownership June 2022 Aug 2022
Credits
Dec 2021 Jan 2022
Non-Competitive
Jan 2022 Feb 2022
Credit Awards
Feb 2022 March 2022
(Bond Credits
March 2022 April 2022
without
April 2022 May 2022
State Credit)
May 2022 June 2022
&
June 2022 July 2022
Financing
July 2022 Aug 2022
-
Aug 2022 Sept 2022
Administered
Sept 2022 Oct 2022
on a
Oct 2022 Nov 2022
Rolling Basis
Nov 2022 Dec 2022
Application Material Updates
• Updates to Service Plans / Budgets
• Moved Service Budget to proforma
• New Service Plan narrative template to submit
• Threshold + Evaluation Criteria Rubric is Updated
• VHFA Housing Credit Application Supplement is Updated
• Community Development Experience on Sponsor section expanded
• Other minor updates to Proforma
• Feedback on proforma template welcomed and outreach planned
• Download latest version from vhfa.org/rentalhousing/application-materialsApplication Material Updates
• Updates to Service Plans / BudgetsApplication Material Updates
Application Material Updates
• Updates to Service Plans / Budgets
• Moved Service Budget to proforma
• New Service Plan narrative template to submit
• Threshold + Evaluation Criteria Rubric is Updated
• VHFA Housing Credit Application Supplement is Updated
• Community Development Experience on Sponsor section expanded
• Other minor updates to Proforma
• Feedback on proforma template welcomed and outreach planned
• Download latest version from vhfa.org/rentalhousing/application-materialsApplication Material Updates • Threshold + Evaluation Criteria Rubric is Updated
Application Material Updates • Threshold + Evaluation Criteria Rubric is Updated
Application Material Updates
• Updates to Service Plans / Budgets
• Moved Service Budget to proforma
• New Service Plan narrative template to submit
• Threshold + Evaluation Criteria Rubric is Updated
• VHFA Housing Credit Application Supplement is Updated
• Community Development Experience on Sponsor section expanded
• Other minor updates to Proforma
• Feedback on proforma template welcomed and outreach planned
• Download latest version from vhfa.org/rentalhousing/application-materialsApplication Material Updates
• VHFA Housing Credit Application Supplement is UpdatedApplication Material Updates
• VHFA Housing Credit Application Supplement is UpdatedApplication Material Updates
• Updates to Service Plans / Budgets
• Moved Service Budget to proforma
• New Service Plan narrative template to submit
• Threshold + Evaluation Criteria Rubric is Updated
• VHFA Housing Credit Application Supplement is Updated
• Community Development Experience on Sponsor section expanded
• Other minor updates to Proforma
• Feedback on proforma template welcomed and outreach planned
• Download latest version from vhfa.org/rentalhousing/application-
materialsProgram Guidance and Priorities
(Section 1)Basis Boost – Ceiling Credits Only (Section 1.3) • Community Development Basis Boost (1 project limit): Historic Tax Credits & Located in Downtown or Village Center Removed mixed-use requirement Prioritization determined by performance on Evaluation Criteria • Housing with Services for the Homeless: Changes Housing with Services goal metric to 15% of Tax Credit Units vs. 10% of Total Units
Credit Limits (Section 1.4) The amount of available credits & credit award limits: 1. Small State Minimum of Ceiling Credits 2. Single project award maximum of 30% of total available credit 3. Limit on Age Restricted Projects will follow the single project award maximum of 30%. 4. Credit Enhancement Pool for 5% award enhancements resulting from project increases or reductions in other funding sources.
Communication & Transparency (Section 1.5) • Applicants and related parties are permitted and encouraged to contact VHFA staff with any questions, including those relating to the QAP rules, procedures, and applications. Similarly, letters of support from local officials and service providers submitted in connection with an application are encouraged and should be directed to VHFA staff. It is acknowledged that applicants may be working with members of the VHFA Board of Commissioners in their normal course of business while applying for other funding sources for projects.
Thresholds (Section 3)
Previous Loss of Affordable Housing
(Section 3.7)
• Staff added language to expand disqualification of applicants if an applicant
was involved in litigation focused on the transfer of ownership or transfer of
interest of affordable housing.
• Updated Language: Further, Sponsor must disclose if any member of the
development team, including the investor, have been involved in litigation
focused on the transfer of ownership or transfer of interest of affordable
housing. Involvement in past litigation, may be grounds for disqualification
of applicantsPermanent Supportive Housing (Sections 1.3.3.b; 2.4, 3.7, 4.2.3, 5.1, 6.3.9, and Definitions Section) • Revision of term “Permanent Supportive Housing” throughout QAP document • Replaced with “Housing with Services for the Homeless (Housing with Services)”
Limitation on Housing with Services for the
Homeless and Transitional Housing for the Homeless
(Section 3.7)
QAP closely aligns the definition of Transitional Housing to IRS
Section 42 Code, which focuses on Homelessness.
• The IRS more narrowly limits the use of tax credits in Transitional Housing than
what you will find in state definitions.
QAP limits Transitional Housing to
• recovery housing,
• relief from intimate partners violence,
• at-risk youth households or
• projects which adhere to best practicesBuilding Design Standards (Section 3.13 & 3.14) • All projects required to meet VHCB/VHFA Building Design Standard • Universal Design is required as part of the threshold regarding Adaptable and Visitable Housing • Language added to this section which encourages developers to consider residential and employment trends when designing living spaces • Including design features which more easily allow residents to work from home
Building Design Standards (Section 3.13 & 3.14)
Building Design Standards
(Section 3.14)
• New combined VHCB/VHFA Building Design Standards
• Focus on energy efficiency
• Relies on established best practice standards
• Promotes Integrated Design Process
• Key highlights
• High Performance Track Standards for all new construction or substantial rehabilitation
projects
• Maximize renewables and non-fossil fuel mechanical systems when possible
• Implement an Integrated Design Process and develop a clear mechanical Basis of
Design
• Comply with EPA Indoor airPlus for radon protection, moisture control and air quality
• Strive to avoid high Global Warming Potential materials and practicesCosts
(Section 3.15)
• Staff added a project development cost analysis to the threshold
requirements and will be analyzing costs as a comparative analysis tool.
• A copy of the cost study that was completed in late 2019 year can be found
on our website:Developer Fees (Section 3.16) • The maximum cash portion of developer fees is now $1,500,000 for Hybrid projects as well as for “Bond” projects.
HUD Subsidy Layering Review Standards (Section 3.9 & 3.16) • VHFA performs HUD Subsidy Layering Review for projects that combine LIHTC and Project Based Rental Assistance (PBRA). The process is directed by HUD and is purposed to analyze all resources going into a project to ensure projects are not being over- subsidized. • QAP language updated to reflect the convergence of Internal Rate of Return, Safe Harbor, and link to the new (February 2020) policy from HUD. • Integrated into Developer Fee section for all projects proposing PBRA. • For new proposals, applicants should not use PBRA for underwriting purposes unless there is an existing PBRA contract
Evaluation Criteria (Section 4.2)
Summary of Evaluation Criteria Changes
Checkmark Comparison: 2020 QAP Vs. 2022 QAP
Evaluation criteria 2020 QAP Percentage of Total 2022 QAP Percentage of Total
Checkmarks Checkmarks Checkmarks Checkmarks
Tenancy/Type + Service Level 1-5 16.7% 1-6* 18.18%
Site Location & Designations 2-5 16.7% 2-4* 12.12%
25% Housing with Services 4 13.3% 4 12.12%
Affordability: With PBRA (2020) 1 or 3 10.0% 0 0.0%
Deep Affordability (2022) 0 0% 2-3* 9.09%
Income Diversity 2 6.7% 2 6.06%
Permanent Debt 0 0% 1-2* 6.06%
Public Transportation 2 6.7% 1-2* 6.06%
Property Remediation (Blight) 2 6.7% 1-2* 6.06%
Existing Federally Subsidized 2 6.7% 2 6.06%
Historic Rehab 1 3.3% 1 3.03%
Passive House/ Net Zero 1 3.3% 1 3.03%
Highly Ready-to-Proceed 1 3.3% 1 3.03%
Eventual Tenant Ownership 1 3.3% 1 3.03%
Underserved Town 1 3.3% 1 3.03%
Community Development Exp 0 0% 1* 3.03%
Max Total Checkmarks: 30 100% 33 100%
*Added checkmarks from 2020-2022 QAP or the range of checkmarks has changed from 2020-2022.Site Location & Designations (Section 4.2 #1)
2020 Previous Evaluation Criteria 2022 Evaluation Criteria
Five Checkmarks Five Checkmarks
• Downtown, a Village Center or • Downtown, a Village Center or
Neighborhood Development Area Neighborhood Development Area
Four Checkmarks Four Checkmarks
• Supports Downtown, Village Center, • Downtown or Village Center
or Neighborhood Development Area • Support a Downtown or Village
based on location (i.e. within Center based on location (0.5-mile)
reasonable walking distance) • Neighborhood Development Areas or
Growth Centers associated with
Downtown or Village Center
Three Checkmarks Three Checkmarks
• New Town Centers • New Town Centers
• Growth Centers or Neighborhood • Growth Centers or Neighborhood
Development Areas not associated Development Areas not associated
with a Downtown or Village Center with a Downtown or Village Center
Two Checkmarks Two Checkmarks
• Dense Infill Sites • Dense Infill SitesSite Location & Designations (Section 4.2 #1) Dense Infill Sites: Sites not in or within designated downtowns, village centers, neighborhood development areas, growth centers, or new town centers that are intended to provide convenient neighborhood and city-wide oriented goods, services, and employment opportunities within walking or biking distance of many of the city’s or town’s residential areas.
Project Tenancy and Services
(Section 4.2, #2a & 2b)
Updated Criteria language:
• Removed references to prioritizing projects that have larger bedrooms
• Removed priority for projects with majority of units 2 bedroom or larger
• New language focuses on the unit mix that best meets the needs as
document in the Market Study: provides flexibility for sponsors to meet
needs of a community.
• Projects that are age-specific for senior occupancy remains the same receiving 1-3
checkmarks depending on the robustness of servicesProject Tenancy and Services:
(Section 4.2, #2c)
Projects may receive an additional 2 checkmarks when
Sponsors demonstrate:
• The proposed project includes a service plan which includes a Resident Service
Coordinator and/or programming that focuses on housing retention that effectively
reduces the risk of eviction; and
• Sponsor must demonstrate a history of providing housing occupied by households that
have experienced homelessness or were at risk of homelessness and the capacity to
provide a range of programming and services that focus on housing retention and
preventing homelessness.Housing with Services for the Homeless (Section 4.2, #3) • 4 checkmarks for projects that commit to 25% of the Housing Credit units as Housing with Services for the Homeless or At-Risk. • Project Sponsor can satisfy those units within their “owned portfolio”. Require a detailed portfolio submission that demonstrates the units are additive to supply of PSH units in a portfolio.
Affordability: Deep Affordability Targeting
(Section 4.2 #4)
Affordable to
Minimum % of Tax Checkmarks
Residents at
Credit Units Awarded
AMI %
20% - 24.99% 2
30% AMI
25% or more 3
30% - 39.99% 2
50% AMI
40% or more 3
• Select only one option
• Max of 3 checkmarks / Min of 2 checkmarks
• Now examines projects regardless of PBRA award statusAffordability: Deep Affordability Targeting (Section 4.2 #4) • Units below tax credit max rents (typically 60% AMI) recognized • Aligns with other funders of deeply affordable units • Affordability level commitments will be held in covenant by VHFA as part of the Extended Use Agreement • QAP now references analysis of the availability and capacity to obtain PBRA resources.
Income Diversity (Section 4.2 #5) • Unrestricted Rental Units For projects with fewer than 20 units - at least two (2) units that are either unrestricted or restricted above 60% AMI will receive two checkmarks. For projects with 20 or more units – no change – no fewer than 20% of the units are unrestricted or restricted above 60% AMI will receive two checkmarks.
Permanent Debt:
(Section 4.2 #6)
Permanent
Checkmarks
Location Amortizing Debt as
Awarded
a Pct of TDC
65% of the projects in the
Within 9% - 18% 1 last five years would have
received this checkmark
Chittenden 40% of the projects in the
County Greater than 18% 2 last five years would have
received these checkmarks
Outside 1.75% - 3.5% 1
Chittenden
County Greater than 3.5% 2Access to Transportation (Section 4.2, #7) Transportation criteria to reflect difference between the quality of public transportation available to projects. Now aligns to the various services available to communities Traditional fixed routes and schedules “On demand” transportation services Less regular “commuter stops”
Property Remediation (Section 4.2, #8) • Removed references to “Blight” from QAP • Criteria now considers two types of remediation: Projects on sites that address parcels that pose a risk to public health or safety will receive 2 checkmarks. For vacant lot infill, the project will receive one checkmark.
Passive Housing & Net Zero (Section 4.2, #11) • One checkmark for Passive House & Net Zero that awards projects able to reach beyond the statewide standards or criteria for receiving Efficiency Vermont funding. • Explore building upon Efficiency Vermont’s High Performance & Electric Building trends
Highly Ready to Proceed
(Section 4.2, #12)
• One checkmark for Highly Ready to Proceed Projects
• Received all necessary local, state, and federal permits with the
exception of the final building permit
• Is past any appeal periods on permits as of 20 business days before
the VHFA Board meeting where Allocated Housing Credit projects
will be consideredCommunity Development Experience of Sponsor
(Section 4.2 #15)
Projects sponsored by an entity with a demonstrated history or current proposed
project that achieves broad community development outcomes as defined below
shall earn up to 1 checkmark.
• Demonstrate a history of previous projects, or a current project, that will
redevelop historically neglected or complex properties that have significance to
the community or neighborhood; and
• Demonstrate a history of continued reinvestment and recapitalization within the
sponsor’s existing affordable housing portfolio, including a commitment to long-
term and perpetual affordability when appropriate; and
• Demonstrate that the entity has used resources generated from their housing
portfolio to create additional affordable housing, and/or increases the
affordability of housing within their portfolio; and
• Document a planned approach to continually identifying and addressing racial
inequities within the Sponsor’s organization, housing portfolio, or broader
community investments.Community Development Experience of Sponsor (Section 4.2 #15)
Community Development Experience of Sponsor (Section 4.2 #15) Staff will consider an entity’s previous opportunities for participation in affordable housing development. For example, entities owned or directed by women, black, indigenous, and people of color without extensive opportunities to participate in community development in Vermont will not be limited from being considered for this checkmark.
Summary of Evaluation Criteria Changes
Checkmark Comparison: 2020 QAP Vs. 2022 QAP
Evaluation criteria 2020 QAP Percentage of Total 2022 QAP Percentage of Total
Checkmarks Checkmarks Checkmarks Checkmarks
Tenancy/Type + Service Level 1-5 16.7% 1-6* 18.18%
Site Location & Designations 2-5 16.7% 2-4* 12.12%
25% Housing with Services 4 13.3% 4 12.12%
Affordability: With PBRA (2020) 1 or 3 10.0% 0 0.0%
Deep Affordability (2022) 0 0% 2-3* 9.09%
Income Diversity 2 6.7% 2 6.06%
Permanent Debt 0 0% 1-2* 6.06%
Public Transportation 2 6.7% 1-2* 6.06%
Property Remediation (Blight) 2 6.7% 1-2* 6.06%
Existing Federally Subsidized 2 6.7% 2 6.06%
Historic Rehab 1 3.3% 1 3.03%
Passive House/ Net Zero 1 3.3% 1 3.03%
Highly Ready-to-Proceed 1 3.3% 1 3.03%
Eventual Tenant Ownership 1 3.3% 1 3.03%
Underserved Town 1 3.3% 1 3.03%
Community Development Exp 0 0% 1* 3.03%
Max Total Checkmarks: 30 100% 33 100%
*Added checkmarks from 2020-2022 QAP or the range of checkmarks has changed from 2020-2022.Vermont Affordable Housing Tax Credits
(Section 5)Rental State Credit Priorities
(Section 5.1)
Priorities were more clearly defined in the QAP to
evaluate Bond Credit projects as well as set expectations
of project characteristics
– Homeless priority language was strengthened and
clarified.
– Three new priorities were added for a total of four
priorities.Rental State Credit Priorities
(Section 5.1)
2020 Prioritization of Awards 2022 Prioritization of Awards
10% of the units to households 15% of the Housing Credit
who are Homeless or At Risk units as Housing with Services
of Homelessness for the Homeless
Creating net new Housing
Credit units in growing
communities
Demonstrating innovation in
cost and scarce resource
efficiencies
The degree to which a project
exceeds thresholdsHomeownership State Credit Priorities
(Section 5.2)
• Update:
• New construction in growing communities based on Census data or Housing
Needs Assessment, or
• Rehabilitation of existing housing in all other communities.
• Deleted:
• Project Site Prioritization
– Project is planned to maintain the Historic Settlement Pattern of
Compact Village and Urban Centers separated by rural countryside;
– Downtown, a Village Center, or Neighborhood Development Area;
– Projects that support Downtowns, Village Centers, or Neighborhood
Development Areas by virtue of their location (i.e. that are within a
reasonable walking distance from the town core)Next Steps & Follow-up We are accepting feedback on several Prepare for 2023-2024 Qualified items over next couple months: Allocation Plan updated! Proforma Service Plan Requirements Application Supplements
Other thoughts for the future… 2023-2024 is just around the corner! We encourage earlier and more frequent engagement for future QAP changes. Possible Future QAP items: • Diversity, Equity, and Inclusion Work • Electric Vehicle Charging stations and Project “EV Readiness” • Internet and Broadband access • Additional Cost Efficiency and Innovation • Basis Boost Goals • More on Homeownership??
Questions/Comments/Additional Materials
You can find the Qualified Allocation Plan and other
resources at: https://www.vhfa.org/rentalhousing/qualified-
allocation-plan-qap
If you have questions or concerns, feel free to reach out to
the VHFA Development team at
developmentdept@vhfa.orgYou can also read
