tips for completing rhtc final applications a quick reference guide for completing and submitting a...
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- Tips for Completing RHTC Final Applications A quick reference guide for completing and submitting a Final Application.
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- WHAT IS THE FINAL APPLICATION? Simply put, the Final Application helps IHCDA determine the following: Does the actual project meet the commitments made in the initial application? Is the project within IHCDA guidelines? Does the information in the Final Application match all of the other documentation pertinent to the development? Once this is verified, the underwriter can issue the 8609s for the project.
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- WHAT DO I NEED TO DO? As you begin to assemble the Final Application package, be aware you need to also complete the following tasks before 8609s can be issued: Complete and pass the Pre-8609 Inspection. Complete and pass a Compliance audit. Submit the original recorded LEUA (Notice of Lien and Extended Use Agreement) to IHCDA. If the development has other IHCDA funds (HOME, CDBG-D), complete monitoring clearance for those awards.
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- Thats a great question, Im glad you asked. Its easy! Follow these FOUR SIMPLE STEPS will go a long way in helping your underwriter turn around your Final Application and get your Form 8609s to you. HOW DO I GET MY FORM 8609 QUICKLY?
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- 1. Make sure the application is complete. Use the Submission Guidelines on PAGE 2 of the Final Application: HOW DO I GET MY FORM 8609 QUICKLY?
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- 2. Submit a clean application. This is what the CD ROM in the file should look like: HOW DO I GET MY FORM 8609 QUICKLY?
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- 3. Submit searchable.pdf files. All.pdf files should be converted from a Word/Excel document. If only a scanned copy is available, please highlight relevant information for the underwriter. For Example, in the Development Agreement, you might highlight the language pertaining to the developer fee with a highlighter before scanning the document. Or you might send a cover letter explaining, Developer Fee: Development Agreement, Page 8, Paragraph 6. 4. Be proactive. Before you submit the Final Application package, take the time to find discrepancies or items outside thresholds. Provide clarification on them via written explanations or documentations.
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- HOW DO I GET MY FORM 8609 QUICKLY? Thats it, thank you! What follows are common mistakes and errors on Final Applications, take the time to read through them and ensure your Final Application is excellent.
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- When it is time to issue Tax Form 8609, page 8 from the Final Application is referenced. The building addresses listed here will be the addresses that are used on the 8609s. Make sure that each building address is correctly and completely written out. No two BINs should have identical addresses. The Placed in Service dates on page 8 should match the dates listed on the Certificates of Occupancy/Certificate of Substantial Completion.
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- The Effective Gross Income is used to calculate the Management Fee. 1-50 units = 7% of EGI 51-100 units = 6% of EGI 101 or more units = 5% of EGI Replacement Reserves New Construction: at least $250 per unit per year Rehabilitation: at least $350 per unit per year Single Family Units: at least $420 per unit per year Historic Rehab: at least $420 per unit per year
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- The cash flow after the Deferred Developer Fee should never be negative. To be included in RHTC basis, deferred Developer Fee must be due and payable at a certain date. Fees may be paid as a cash flow loan if it can be demonstrated that the fee can and will be paid in a reasonable amount of time (generally considered to be 8-15 years. Additionally, at the time of Initial Application, no more than 60% of the developer fee may be deferred for 4% & 9% RHTC Developments and no more than 80% of the developer fee may be deferred for bond volume 4% RHTC Developments. However, the Authority may, on a case by case basis, allow a larger percentage of the developer fee to be deferred.
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- Contractor Fee Limitations
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- 6% of $3,384,000 = $203,040 2% of $3,384,000 = $ 67,680 6% of $3,384,000 = $203,040 14% of $3,384,000 = $473,760 Example:
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- Architect Fee Limitations The architects fees, including design and supervision fees, must be limited to three percent (3%) of the total hard costs plus site work, general requirements, overhead, profit and construction contingency. Applicants that propose an architect fee exceeding three percent (3%) should have submitted the appropriate Competitive Negotiation Procedure paperwork placed.
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- Developer Fee Limitations New Construction: Developer fees for new construction developments must be the lesser of the total per unit amount listed below or $1,200,000 (the maximum for developments with tax-exempt bonds is $2,000,000). 1.$18,000 per unit for the first 15 units 2.$13,500 per unit for the next 30 units 3.$10,000 per unit for the next 30 units 4.$6,000 per unit for any unit above 75
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- Developer Fee Limitations Rehabilitation, Qualified Community Impact or Stellar Communities: Developer fees for Rehabilitation, Qualified Community Impact or Stellar Communities must be the lesser of the total per unit amount listed below or $1,200,000 (the maximum for developments with tax-exempt bonds is $2,000,000). 1.$20,000 per unit for the first 15 units 2.$15,000 per unit for the next 30 units 3.$12,500 per unit for the next 30 units 4.$6,000 per unit for any unit above 75
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- Operating Reserves This will be the greater of the two amounts below: 4 to 6 months of Operating Expenses, excluding Replacement Reserves, plus debt service $1,500 per unit
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- THANK YOU IHCDA thanks you for taking the time to look over this presentation and helping us review your Final Application package in a timely manner.