109.00.10 Ark. Code R. § 001 - 2010 Assisted Living Incentive Fund
ASSISTED LIVING INCENTIVE FUND (For use in development or redevelopment of affordable assisted living housing)
POLICIES AND PROCEDURES
As set forth in a Memorandum of Understanding between the Arkansas Department of Human Services ("DHS") and Arkansas Development Finance Authority ("ADFA") executed on March 30, 2010, DHS will make available to ADFA the sum of five million dollars ($5,000,000) in DHS funds for use in developing, implementing and administering an Assisted Living Incentive Fund ("ALIF"). The ALIF will be used to incentivize development of affordable Assisted Living housing in Arkansas and to strengthen the financial feasibility of such developments. It is the goal of DHS and ADFA to increase the number of affordable Assisted Living units in Arkansas for the benefit of low-income, elderly Arkansans.
* the applicant will be required to submit an approved Certificate of Need or Permit of Approval ("POA") for Level II residents issued by the State of Arkansas. In addition, all affordable Assisted Living developments receiving assistance from the ALIF shall comply at all times with state and federal regulations for assisted living developments.
* the applicant will be required to successfully apply to ADFA for Low-Income Housing Tax Credits ("LIHTC"), HOME Investment Partnerships Program ("HOME"), or other ADFA housing programs and initiatives in conjunction with the requested ALIF funds.
* the applicant must provide a complete and accurate application to ADFA evidencing the financial feasibility of developing or redeveloping and operating such housing units at affordable rents and providing appropriate supportive services to tenants. The applicant must provide satisfactory information evidencing the applicant (or the applicant's consultant) has the necessary knowledge, skill, ability, and capacity to develop affordable housing, as evidenced by examples of other affordable housing successfully developed by the applicant (or applicant's consultant), examples of successfully developed market-rate housing, examples of projects benefitting low-income persons or families, etc.
* ALIF funds will be available for application by eligible applicants, including but not limited to, cities, counties, for-profit and non-profit developers, ADFA-designated Community Housing Development Organizations ("CHDOs"), Planning and Development Districts ("PDDs"), Public Housing Authorities ("PHAs"), cap agencies, and others demonstrating the necessary capacity to successfully develop and operate affordable Assisted Living housing in Arkansas.
tenants whose income does not exceed sixty percent (60%) of area median income for the area in which the Assisted Living development is located, adjusted for family size, at affordable rents.
rehabilitation, new construction, financing, relocation, demolition, developer's fees, project activity costs, and ancillary costs of appraisal, market study, construction interest, and closing costs, etc.
* Each applicant applying for ALIF funds must apply to develop or redevelop a
minimum of five (5) Assisted Living housing units.
* Each applicant must submit with the ALIF application an approved Certificate of Need or POA for Level II residents issued by the State of Arkansas.
* Each applicant applying for ALIF funds must submit at the time of application submission, a letter of support from the chief elected official (CEO) of the applicable local jurisdiction where the assisted living housing is to be developed or redeveloped.
* Each applicant must submit with the ALIF application a current Market Study, completed by a market study provider on ADFA's Approved Market Study Provider list (the list may be found at www.arkansas.gov/adfa), which evidences the need for Assisted Living housing units at the location planned for the development.
* The threshold requirements, including but not limited to, an approved POA, local support letter, market study evidencing the need for Assisted Living units in the area targeted for development, criminal background check, and any other documentation or information designated by ADFA as a threshold requirement.
* The selection criteria adopted for the ADFA Housing program for which the applicant is applying in conjunction with the ALIF funds.
* The amount of ALIF funding requested, the total development budget, firm financial commitments, per unit costs, and the reasonableness of all development costs associated with the Assisted Living housing to be developed or redeveloped.
* The capacity of the applying entity to satisfactorily complete all development activities within established time frames and within budgetary limitations.
* The scope and quality of supportive services to be provided and the level of commitment and capacity of the entity that will provide any supportive services associated with the Assisted Living housing units.
* Other criteria specific to the site, housing need, applying entity, or other facets of the ALIF application.
* Satisfactory completion of the environmental review process.
* Satisfactory execution of agreements, closing documents and filing of the applicable documents as required, including the filing of a mortgage and note in favor of ADFA for the full amount of ALIF funds allocated.
* A pre-construction conference is conducted with the development team and ADFA representatives present.
* ADFA will issue one (1) Notice to Proceed applicable to ALL ADFA housing programs approved for the Assisted Living development. It is imperative the developer does not begin construction until the Notice to Proceed is issued by ADFA and received by the developer.
* a forgivable loan, forgiven over the development's affordability period (based on the longest affordability period required by any financing component of the development budget but no less than ten (10) years) for developments evidencing a debt coverage ratio of 1.1 or less but which may be increased to 1.2 or higher by means of the forgivable loan described herein.
* a repayable loan, repayable over a term which coincides with the longest applicable affordability or compliance period of any financing component of the development budget at an annual interest rate of one percent (1%). All income generated from ALIF loan repayments will be utilized to incentivize additional Assisted Living housing. Applications utilizing the repayable loan option will be reviewed more favorably than applications selecting the forgivable loan option.
The maximum amount of ALIF funds available to any one (1) affordable Assisted Living development shall be no more than $500,000, and no allocation of ALIF funds may exceed $12,500 per assisted living unit. Under no circumstances will the ALIF allocation be more than the minimum amount needed to make the affordable Assisted Living development financially feasible at affordable rents using standard underwriting criteria.
implement changes to the ALIF Program at any time to ensure compliance with federal law, grant waivers or exceptions to ALIF Program requirements, and exhibit flexibility in their interpretation of ADFA policies and procedures associated with ALIF funds to fully and more efficiently utilize the ALIF funds for their intended purpose.
ADFA will perform on-site compliance and monitoring inspections of all ALIF-financed developments during the applicable period of affordability. The purpose of the monitoring inspections is to determine and ultimately ensure compliance with all applicable regulations and requirements contained in these policies and the regulations of any applicable ADFA or DHS program used in the ALIF development. In the event non-compliance occurs, ADFA staff will work with the property owner to re-establish compliance. Should the non-compliance continue or be incapable of being brought into compliance, ADFA will use any and all means at its disposal to recapture the ALIF funds and re-allocate them to Assisted Living projects in need of such assistance.
Notes
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