Applications must meet the following threshold requirements
to be eligible for Credit:
A.
Affordability.
1. The Project will comply with
Section 42 of the Code and this QAP for a minimum period of 45 years to
maintain the Project as residential rental housing, keep at least 60% of the
total Credit Units in a Project occupied by persons with 50% area median income
and keep the Credit Units in the Project rent-restricted in accordance with
Section 42 of the Code.
2. The
Applicant waives the right to request MaineHousing to present a Qualified
Contract under Section 42(h)(6) of the Code.
3. The Applicant must submit a letter of
intent from an investor (and, in the event of any change in investor, the
replacement investor) in which the investor agrees to the granting of an option
to purchase:
(i) the Project; and
(ii) the partnership interest of the limited
partner(s) or membership interest of the non-managing member(s) of the Project
owner ("Purchase Options"), to one or more of the general partner, managing
member, developer or sponsor on terms that at a minimum satisfy the threshold
requirements set forth in Appendix E. The investor must also agree
in the letter of intent that the Purchase Options complying at a minimum with
the threshold requirements in Appendix E will be included in the
Project owner's limited partnership agreement or limited liability company
operating agreement.
4.
If the Applicant, general partner, managing member, developer, or sponsor of
the Project is a Qualified Nonprofit Organization, the Applicant must submit a
letter of intent from an investor (and, in the event of any change in investor,
the replacement investor) in which the investor agrees to the granting of a
right of first refusal ("ROFR") to the Qualified Nonprofit Organization on
terms that at a minimum satisfy the threshold requirements set forth in
Appendix E. The investor must also agree in the letter of intent
that the ROFR complying at a minimum with the threshold requirements in
Appendix E will be included in the Project owner's limited
partnership agreement or limited liability company operating
agreement.
B. Total
Development Cost (TDC). Cost reasonableness will be evaluated using an index,
which is the weighted average of the TDC per unit and the TDC per bedroom. For
mixed- use projects, the TDC for only the residential portion of the project,
including common areas, will be used for this calculation. The weighted average
will be calculated as follows:
([2 X TDC/unit] + [TDC/bedroom]) divided by 3.
The product of this calculation will be referred to
throughout this document as the "TDC Index". An Application will be rejected if
the TDC Index exceeds the TDC Index Cap below for a project of its type at any
time prior to the later of the construction loan closing or carryover
allocation.
Type of Project
|
TDC Index Cap
|
Adaptive Reuse
|
$395,000per unit
|
New construction
|
$370,000per unit
|
Acquisition and rehabilitation of existing
housing
|
$340,000 per unit
|
Demolition and reconstruction of all housing on the same site
or another site will be treated as new construction. If a Project involves more
than one project type, the TDC Index Cap for the Project is the average of the
TDC Index Caps allocable to each type, weighted by the number of units of each
type.
C. Acquisition and
Rehabilitation of Existing Housing. Projects that involve the acquisition and
rehabilitation of existing multifamily housing are subject to the following:
1. Capital Needs Assessment. The Application
must include a capital needs assessment satisfying the requirements set forth
in Appendix C.
2.
Minimum Rehabilitation Requirements. The Rehabilitation Costs per unit of
existing housing must be at least $75,000.
3. Relocation/Displacement. The Project must
comply with MaineHousing's Temporary Relocation and Permanent
Displacement Policies and, if the Project is federally-assisted, all
applicable federal requirements, including the Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970, as amended. The Applicant
must take reasonable steps to minimize the displacement of existing tenants of
the Project. The Application must identify any tenants who will be permanently
displaced and the reason for the displacement. The Project's TDC must include
all costs associated with permanent and temporary displacement or relocation.
MaineHousing will not allocate Credit until it has approved a project's
relocation plan.
D.
Development and Management Experience and Capacity. Applicant teams must have
sufficient knowledge, experience and capacity to adequately design, develop,
complete, maintain, manage, and operate LIHTC Projects and to provide related
services, such as accounting, tax and legal advice, and resident service
coordination. If the Project will involve multiple subsidy sources in addition
to LIHTC which results in overlapping targeting and rental restrictions, the
Applicant team must have sufficient knowledge, experience and capacity to
handle the increased complexity. If MaineHousing determines the Applicant's
team lacks sufficient qualifications, the team may be required to
1. hire a qualified consultant,
2. hire additional qualified staff,
or
3. replace a team
member.
E. Site Control.
The Applicant must have site control of the Project throughout the Application
process in the form of an option, a purchase and sale contract, ownership, or
long-term lease. The Applicant, its agents, and MaineHousing must have access
to the Project site, and if the Project is an existing occupied property,
access to records and other information about the existing tenants, including
current rent and income information.
F. Growth Management Limitations. A Project
that involves the new construction or acquisition of newly-constructed
residential rental property or the conversion of existing buildings to
residential rental property must comply with the State's Growth Management Law,
30-A M.R.S. §4349-A, as amended. Projects must meet one of the following
two sets of criteria to be eligible for a Credit allocation:
1. If the municipality in which the Project
is located has adopted a comprehensive plan or growth management plan that is
consistent with applicable State law, then the Project must be in a designated
growth area as identified in such plan; or
2. Otherwise the Project must be located in
an area
a) served by a public sewer system
with existing capacity for the Project,
b) identified as a census-designated place in
the latest Federal Decennial Census, or
c) in an urban municipality and defined under
23 M.R.S. §754 as compact.
The law exempts projects that exclusively serve certain
populations, such as persons with disabilities, who are homeless, or are wards
of the State.
G. Project Feasibility. The Applicant must
have the financial ability to develop and complete the Project and to operate
it throughout the Compliance Period.
1.
Development Budget. The Applicant must identify
a) all sources of funding for development and
completion, whether direct or indirect, including the amount, timing, terms,
conditions, and status (e.g. "applied for" or "committed") as of the date of
the Application and uses of the funding based on the projected costs of and
schedule for developing and completing the Project; and
b) all sources and uses of funding for the
Project, whether direct or indirect and whether they are included in the
development budget for the Project.
2. Operating Budget. The Applicant must
identify all
a) sources of income, including
rent from the residential units, any income from commercial or non-residential
space, and the amount, terms and conditions of rental or operating assistance;
and
b) costs of operating the
Project as projected over the Compliance Period. The Applicant also must
identify all forms of property tax relief (such as a PILOT, tax abatement or
exemption, or Tax Increment Financing) and other assistance that reduces
operating costs.
3.
Related Development. Any Related Development must be completed prior to or
concurrently with the completion of the Project, and there must be sufficient
funding to operate the Related Development.
If MaineHousing determines that the Application includes
information that is inconsistent with applicable requirements or is
unreasonable based on comparable LIHTC projects, industry standards, or market
conditions, MaineHousing may where it deems appropriate re-characterize such
information to assess Project Feasibility notwithstanding the identified issue
with the information provided.
H. Project Design and Construction
Requirements. The design and construction or rehabilitation of the Project must
comply with MaineHousing's Construction Standards and all applicable local,
state and federal codes, regulations, statutes and ordinances. The latest
version of Construction Services'
Quality Standards and Procedures
Manual can be found here:
https://www.mainehousing.org/programs-services/housing-development/construction-services
Of particular note are updates to MaineHousing's energy
efficiency standards.
When applicable, Projects must also comply with:
2. Section
3 of the Housing and Development Act of
1968 (12 U.S.C §
1701u) and its associated regulations ( 24
C.F.R. Part
75 ). The Section
3 program requires that recipients of
certain HUD financial assistance, to the greatest extent possible, provide
training, employment, contracting and other economic opportunities to low- and
very low-income persons, especially recipients of government assistance for
housing, and to businesses that provide economic opportunities to low- and very
low-income persons.
Please refer to the Section
3 Contractor, Subcontractor and
Subrecipient Package on our website:
https://www.mainehousing.org/programs-services/housing-development/construction-services
I. Project Amenities.
The Project must have the following amenities and services:
1. Community Room. The Project must include
an on-site community room with sufficient capacity to serve tenants' needs. For
a scattered-site Project, only one community room is required and should be
centrally located to the greatest extent possible to best serve all
tenants.
2. Laundry Facilities. The
Project must include either a washer/dryer hook-up in each unit or a fully
accessible, centrally located laundry facility with sufficient capacity to
serve all tenants.
3. Broadband
Access. The Project must include broadband infrastructure with capacity
sufficient to support the provision of Telehealth services.
Broadband infrastructure includes cables, fiber optics, CAT5e
(or greater) interior wiring, or other permanent (integral to the structure)
infrastructure, including wireless infrastructure, as long as the installation
results in broadband infrastructure in each dwelling unit sufficient for the
build-to standard of The Maine Connectivity Authority.
Healthcare service providers and the tenants receiving care
may not be charged for the use of the internet or wireless and telephone
services provided for telemedicine services.
4. Shared Facilities. An amenity will meet
the requirements if the amenity:
a) is fully
accessible and located on an accessible path to the Project,
b) is within an existing multifamily housing
project adjacent to the subject site,
c) has sufficient capacity to serve both the
Project's tenants and the existing project,
d) will be available to the Project's tenants
during the Compliance Period on the same terms as the residents of the existing
multifamily project, and
e) will
not charge the tenants to use the shared amenity other than a reasonable fee
that does not exceed the amount charged to any others for the same
use.
5. Recreational
Activities. An area(s) of recreational activity must be located on the Project
site or within a ½ mile. The area(s) and activities must be free of
charge to the tenants and not require membership. Projects with single-family
detached style units satisfy this requirement if each unit has a private lawn
with sufficient room for playground equipment, gardening or other activities
acceptable to MaineHousing.
6.
Exceptions. The requirements of this subsection do not apply to existing
multifamily housing projects if the Applicant cannot comply with the
requirements because of the nature of the site, structural limitations, zoning
restrictions or other land use limitations.
J. Resident Service Coordination. The
Applicant must make a resident service coordinator available twice weekly to
the tenants on-site a minimum of one (1) hour per week for every five (5)
Credit Units. The coordinator shall meet with tenants in a private and
confidential manner to evaluate individual needs and make appropriate
referrals. The services provided must be free of charge to the tenants. The
Applicant must maintain adequate funding throughout the Compliance
Period.
K. Smoke-free Housing. The
Applicant must
1. implement a written
occupancy policy prohibiting smoking in the units and common areas,
2. include a non-smoking clause in the lease
for every household, and
3. make
educational materials on tobacco treatment programs (including the phone number
for the statewide Maine Tobacco HelpLine) available to all tenants through the
resident service coordinator.
L. Waiting List Preference. The Applicant
must give an occupancy preference to eligible persons whose names are on a
public housing or Section
8 waiting list, except for Projects:
(i) financed by Rural Development,
or
(ii) with Section
8 Project-Based Rental Assistance
(preference will apply to any Credit Unit without project-based rental
assistance).