community enhancement and economic development fund (ceed program) a hud section 108 loan program...
TRANSCRIPT
COMMUNITY ENHANCEMENT AND ECONOMIC DEVELOPMENT FUND(CEED PROGRAM)
A HUD SECTION 108 LOAN PROGRAM
Indiana Office of Community and Rural Affairs
2014 Regional Conference
Darin Edwards Kathleen Weissenberger [email protected] [email protected]
@OCRAIndiana #INOCRAconf
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
What is Section 108• Financing tool that allows States and
Entitlements to make loans up to 5 times their annual CDBG allocation
• All activities must meet CDBG requirements and loan terms must meet Section 108 underwriting criteria
• Notes are repaid with revenue from the project first. If project fails, loan collateral will be liquidated, finally the States yearly allocation of CDBG funds will be the last source of repayment.C
EED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
Indiana’s CEED Program• In August 2013, the State was notified by the
U.S. Department of Housing and Urban Development (HUD) that we were approved for up to $30 million of Section 108 Loan Assistance. • The State has up to 5 years to allocate loan
funds from the $30 million loan pool.
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED Program Eligible Applicants• Borrower• State of Indiana non-entitlement
jurisdictions• Counties (except Lake and Hamilton)• Cities (except those with direct CDBG
allocation)• Incorporated Towns
• End Borrower• Businesses• Non-profits• Housing developers
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
Advantages of CEED Program• Long-term, Fixed-rate Financing• AAA rates• Not considered a general obligation note• Enables non-entitlement community to do a
larger, cost effective project
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED Eligible Projects• Housing Development
• Affordable Housing Acquisition/Rehab• Senior or Family Occupancy
• Economic Development• Job Creation• Equipment Purchase • Facility Acquisition/Rehab
• Community Development • Public Improvements• Brownfield Remediation
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED Regulatory Requirements• Compliance with all CDBG regulations:• National Objective/Eligible Activity
• Low Moderate Income:• Job creation/retention• Area Benefit• Limited Clientele
• Slum/Blight• Area• Spot
• Urgent Need
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED Regulatory Requirements cont.• Income Targeting LMI / Income Qualification &
Verification for Housing• Environmental & Historic Review• Labor Standards (Davis Bacon)• Uniform Relocation Act• Fair Housing/Civil Rights/504 Accessibility
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED Regulatory Requirements cont.• Financial Management/Procurement• Construction Contract Requirements & Bonding
Requirements• Section 3• Lead Based Paint
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED Application Process• Initial Contact
• Housing – IHCDA • Non-Residential – OCRA Liaison
• Checklist and Eligibility• State receives and reviews the proposed
project eligibility• State works with Local HUD office to
determine eligibility. State may request meeting with applicant. Ongoing process.
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED Application Process cont.• Application Underwriting• State reviews project viability after receipt of
all required application documentation • Approval• Application will be submitted to National
HUD office for approval. Can take up to 40 days
• Consent• State legal opinion to HUD submitted
Commitment letter for financing to borrower. Around 55 days.
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED Application Process cont.• State/ HUD Closing• State to execute HUD debt instruments and
HUD advances funds to LUG. Around 60 days • Project Closing & Funding• Funding to take place after receipt of all
appropriate supplemental documentation and legal documents are executed. Around 45-60 days
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED Application Process cont.• Ongoing Servicing• Ongoing loan servicing by IHCDA to include
servicing accounts, payment reminders and remittance, submitting appropriate reports to State, etc.
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED Financing• Minimum Loan Amount - $500,000.00• Maximum Loan Amount - $7,000,000.00• Term• Maximum 20 years residential• Maximum __ years non-residential
(variable)• Interest Rates• Interim – variable interest rate• Permanent – fixed interest rateC
EED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
Interim Financing• Interim loan available until public offering• Interest rate: Variable 90 day London Inter
Bank Offered Rate (LIBOR) +250 basis points, paid quarterly
• HUD guarantees repayment of borrower’s loan to investors
• Interim Lender currently a Money Market Fund
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
Permanent Financing• Permanent – fixed interest rate
• Public offering provides long-term, fixed-interest rate financing
• “Public offering” conducted occasionally by HUD Section 108 underwriting team
• Interest rates—fixed; benchmarked on U.S. 10-year Treasury note of equivalent maturity +250 basis points
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
Permanent Financing cont.• Permanent – fixed interest rate
• Fees—includes underwriting, legal and printing costs
• Loans serviced by IHCDA
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
@OCRAIndiana #INOCRAconf
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
Community and Economic Development Questions
@OCRAIndiana #INOCRAconf
CEED
Loan P
rogra
mOffice of Community and Rural Affairs
Indiana Housing and Community Development Authority
Housing Development Questions
Matt Rayburn
[email protected] 233 9564
Darin [email protected] 233 4611