Publicly Owned Housing Program(POHP) Orientation & Overview · 4. Construction Loan Closing •File assigned to a Loan Closer •Previously submitted due diligence forwarded to Legal/Closing

Publicly Owned Housing Program(POHP) Orientation & Overview

Irene Ruiz-Briseno| Preservation Underwriter

David Schluchter | POHP Program Manager

05/23/2019

Our Mission

Housing is the foundation for success, so we collaborate with individuals, communities and

partners to create, preserve and finance affordable housing.

Minnesota Housing | mnhousing.gov 2

POHP Funded Developments (2012-2018)


2018 POHP RFP


• Applications Received:

• 20 different HRAs applied for funding

• 23 developments: 4 Metro and 19 Greater Minnesota

• Requests in excess of $12.3 million

• Recommended for Funding:

• 18 HRAs selected (which includes 3 on waiting list)

• 19 developments (which includes 3 on waiting list)

• $7,668,195 recommended for funding

• $2,273,562 on waiting list

Congratulations!

Now… What?

Minnesota Housing | mnhousing.gov5

Today’s Agenda

1. Things You Need To Know

• Terms and Conditions

• Program Resources

• Additional Considerations

• HUD Requirements

2. Selection & Next Steps

• Box.com

3. Due Diligence Process

• Six Phases

Minnesota Housing | mnhousing.gov

Things You Need To Know:Terms and Conditions

• POHP Awards shall be structured as a zero-interest deferred End Loan or Construction Loan

• 20 year term; 35 year compliance period

• Your future funding award must comply with all POHP requirements as outlined in the Program Guide


Things You Need To Know:Accessing Program Resources

POHP Webpage:

• www.mnhousing.gov

• Multifamily Rental Partners

• Deferred Loans

• Publicly Owned Housing Program

• View more information


Things You Need To Know:Additional Considerations

• B3 – Buildings, Benchmarking, and Beyond

MHFA Staff will work with CSBR to determine applicability

• State Pre-Design

Applicable if construction costs exceed $1,500,000

• Energy Rebates

Katherine Teiken, Clean Energy Program Specialist

Common Items: Boilers, Furnaces, Hot Water Heaters, Insulation

• Relocation/Temporary Housing During Renovations


Things You Need To Know:Important HUD Requirements

Procurement:

A/E Services, Environmental

Consulting, Contract Awards – must

comply with the HRAs approved

procurement policy

5-Year Capital Fund Action

Plan:

Your POHP project should be included in your 5-year plan

Davis Bacon:

Applicable if using federal funds (capital fund program) as

leverage

Environmental Review:

Should be completed and

approved


Selection & Next Steps Letter

• Selection Letter

• Important Next Steps:

• Approved scope of work items

• Total POHP funding

• Leverage amount

• Schedule a project launch meeting

• Request access to Box.com

• Construction Loan versus End Loan


Due Diligence Process


1. Procurement of Architect/Engineer

2. Environmental Reports and Design Phase

3. Bidding and Contract Awards

4. Construction Loan Closing

5. Rehabilitation

6. Rehabilitation Complete / Project Closeout

Due Diligence Process


1. Procurement of Architect/Engineer

2. Environmental Reports and Design Phase

3. Bidding and Contract Awards

4. Construction Loan Closing

5. Rehabilitation

6. Rehabilitation Complete / Project Closeout

Due Diligence Process1. Procurement of Architect/Engineer

• The HRA should conduct an RFQ for architectural and/or engineering services if required

• The RFQ should contain all of the information the proposers need to know in a manner that is easy to follow:

• Advertisement/Purpose

• Program Information

• Scope of Services

• Submission and Evaluation Requirements

• Schedule and Required Information

• Attachments


Due Diligence Process1. Procurement of Architect/Engineer

• Architect Contract

• Draft must be reviewed and approved by MHFA

• Must include Jobs Reporting provision language

• Architect’s Evidence of Insurance

• SWIFT Vendor ID Number

• Helpline 651-201-8106

• W-9 Form

• EFT Form


Due Diligence Process2. Environmental Reports and Design Phase

• Authority’s Enabling Resolution

• HUD Declaration of Trust

• Owner’s Evidence of Insurance

• Environmental Reports

• Asbestos

• Lead-Based Paint

• Bidding Abatement

• B3 or Limited Scope Form

• Bid/Construction Documents


Due Diligence Process3. Bidding and Contract Awards

From the HRA:

• Owners and Encumbrance (O&E) Report

• Authority’s Certified By-laws

• Authority’s Borrowing Resolution

• Architect’s Opinion Letter

• Draft Documents from other sources (e.g. DEED SCDP, FHLB)


From the General Contractor:

• Construction Contract• Draft must be reviewed and

approved by MHFA

• Must include Jobs Reporting provision language

• Building Permits

• Contractor’s Evidence of Insurance

• Sworn Construction Statement

• Draft Payment and Performance Bonds

Due Diligence Process4. Construction Loan Closing

• File assigned to a Loan Closer

• Previously submitted due diligence forwarded to Legal/Closing for review

• Invoices and Supporting Documentation needed for Closing Draw

• You will work with your assigned Draw Technician to prepare a payee list and initial draw


Due Diligence Process5. Rehabilitation

• After a successful loan closing, a notice to proceed can be issued

• Monthly Draw Process

• Draw Form

• Contractor Pay Applications

• Proof of Payment Form

• Funds disbursed via SWIFT Vendor number

• Change Orders

• Require MHFA review and approval


Due Diligence Process6. Rehabilitation Complete / Project Closeout

• Certificate(s) of Substantial Completion

• 100% Completion

• Building Permit closeout

• Environmental Documentation

• Final Sworn Construction Statement

• Photos of Completed Work

• Completed Jobs Reporting


Communication Coordination

• It is not possible to over communicate throughout the entire POHP process:

• Due diligence

• Closing

• Construction

• Project close-out

• Communicate with all partners including:

• Program Manager

• Loan Processor

• Assigned Staff Architect

• HUD Representative, as applicable


POHP Program Staff

David Schluchter – POHP Program Manager

[email protected] | 651.296.8161

Irene Ruiz-Briseno – Preservation Underwriter


Dani Salus – Preservation Manager



Technical/Architectural Staff

Erika Arms – Architect


Jerry Narlock – Architect


Mike Thomas – Architect


Katherine Teiken – Clean Energy Program Specialist



Thank you!
