Questions and Answers
1. Should I use a SF-424 or a HUD-424 in my application?
Applicants must complete and submit a HUD-424 with their application.
2. What quarter of data will HUD use to evaluate existing grantee performance under the rating factor at Section IV(B)(2)?
The rating factor at Section IV(B)(2) states that applicants with existing HOPE VI grants (1993-2000 only) may lose up to 5 points if they have failed to achieve adequate progress in relation to cumulative unit production. It further indicates that HUD will evaluate this factor using production achievement numbers from the quarterly reporting system for the quarter most recently completed at the time of NOFA publication in the Federal Register. For purposes of the competition, this quarter is 6/30/2003.
3. If you operate both a Housing Choice Voucher (HCV) program and public housing, can you receive full points if only one of the programs has a rate of 97% or higher, or must both programs be above 97%?
Because the criteria under Section V(B)(4) is stated as "and/or," an applicant can have only public housing, and no Housing Choice Voucher (HCV) program, and still receive the maximum of 3 points. In turn, an applicant that has both public housing and a HCV program, will earn 3 points if the HCV utilization rate and/or public housing occupancy rate is 97% or higher.
4. In our City, we manage a portfolio of State public housing units. Are these State public housing units considered part of our public housing inventory for the purposes of this rating factor and should we include them in our calculation of public housing occupancy rate?
No. For purposes of the rating factor criteria under Section V(B)(4), if applicants manage any State public housing units, they are not to include those units in their calculation of public housing occupancy rate. Applicants should base their calculation on the Federal public housing units they manage.
5. We have a number of public housing units that are being reserved for relocation for another HOPE VI revitalization program we have underway and a Section 504 voluntary compliance agreement. Can we exclude these units being held vacant for relocation and 504 VCA purposes from our calculation of the public housing occupancy rate?
No. For purposes of the rating factor criteria under Section V(B)(4) and the calculation of public housing occupancy rate, applicants may not exclude units in their public housing inventory that are being reserved for relocation needs related to another HOPE VI Revitalization grant(s). Likewise for the calculation of public housing occupancy rate, applicants may not exclude units in their public housing inventory that are being held vacant for uses related to a Section 504 voluntary compliance agreement.
6. What will happen if an applicant does not have the reservation letters for Low-Income Housing Tax Credits (LIHTC) described under Section VI (Match and Leveraging)(D)(12)(a) and (b)?
If an applicant does not have proper documentation (reservation letter from their state or local housing finance agency) for LIHTC equity commitments proposed in their revitalization plan, then those equity amounts, regardless of phase, will not be considered in the point calculations under rating factor Section VI(H)(1) (Development Leveraging).
7. In regard to the threshold requirement under Section XI(B)(4), does an applicant have to demonstrate site control for off-site parcels of land for which they do not intend to use HOPE VI funds or place replacement housing?
Applicants must demonstrate site control for any parcel of land for which they plan to develop off-site housing, regardless of funding source. An applicant does not need to demonstrate site control for land on which they will not be developing any housing (e.g., commercial development). If they do propose to develop housing on these off-site parcels, whether replacement housing, market-rate housing, etc., they must demonstrate site control for these parcels.
8. Does the zoning threshold only pertain to off-site parcels of land?
Yes. The zoning threshold found under Section XI(E) only pertains to off-site parcels of land. It is not necessary to demonstrate zoning approval for the original public housing site.
9. For the threshold requirement under Section XI(E), do we have to demonstrate zoning approval for off-site parcels that are already zoned for single-family residential housing if our revitalization plan proposes to build a multifamily building on the parcels? Additionally, in our City, new construction often requires variances from the current zoning code, but not necessarily a change in zoning. Does the threshold for zoning also apply to any variances that may be needed?
If you are proposing to develop multifamily residential housing on off-site parcels that are currently zoned for single-family residential housing, proper zoning approvals must be secured and demonstrated in the application through a certification or the actual zoning approval document. The threshold at Section XI(E) requires "all necessary zoning approvals" have been secured. This means any type of zoning approval, whether a variance from the current zoning code or a zoning change.
10. In order to receive the 1 point under Section XII(B)(4)(e) for having held 5 or more public planning sessions leading to resident acceptance of the Plan, is there a timeframe in which the 5 or more sessions must have been held? Can the public planning sessions have occurred prior to the publication of the FY 2003 NOFA on October 21, 2003?
In order to earn the point under Section XII(B)(4)(e), public planning sessions (whether resident training sessions or public meetings) can have occurred before or after the publication date of the NOFA on October 21, 2003. However, the threshold requirement under Section VII(A)(5) focuses only on resident training sessions and public meetings held after the NOFA publication date.
11. Section XIII(A)(3)(b) indicates that, "Attachments that provide documentation of commitments from resource providers or CSS providers" will be excepted from the page limit. What attachments are included in this exception?
Section XIII(A)(3)(b) means that Attachment 19 (Physical Development Resources), Attachment 20 (CSS Resources), Attachment 21 (Anticipatory Resources), Attachment 22 (Collateral Resources), and Attachment 24 (Commitments with CSS Providers) will not be counted in the page count.
12. For Attachment 34, Conceptual Site Plan, should applicants provide conceptual site plans for development proposed for off-site parcels of land?
Yes. The instructions on page 60222 of the NOFA published in the Federal Register (October 21, 2003) request a conceptual site plan, "which indicates where proposed construction and rehabilitation activities will take place." Based on this language, the conceptual site plan(s) should address land wherever construction and rehabilitation activities are proposed, including off-site parcels. The reference to "adjacent property and/or buildings" is offered as additional description.
FAQs #13-22 posted on November 25, 2003
13. Will PHAs participating in the Moving To Work (MTW) demonstration program be given special consideration during the review of applications?
No. For purposes of awarding FY 2003 HOPE VI funding, the HOPE VI NOFA is the controlling instrument, not the MTW Agreement. Thus applicants must respond to the criteria as it is stated in the NOFA in order to be considered for HOPE VI funding. Applications submitted by MTW participants will not be given special consideration except in relation to those criteria in the NOFA where exceptions have been identified (e.g., Sections IV(A)(2), V(B)(3)) and will be reviewed in strict accordance with the criteria of the NOFA.
14. If a PHA has already been awarded a demolition grant during FY 2002 for the public housing site in question, is Attachment 16, Certification of Severe Physical Distress, for the same development still required?
Yes, the Certification of Severe Physical Distress (Attachment 16) is still required as part of the application for FY 2003 HOPE VI Revitalization funds. This certification is required in connection with Section V(A)(5). Notwithstanding any prior HUD approvals, applicants must respond to and meet all thresholds as stated in the FY 2003 HOPE VI Revitalization NOFA in order to be considered for the available funding.
15. The NOFA says that only Low-Income Housing tax Credits (LIHTCs) that have been reserved for the project will be counted as development leveraging. Can you provide a more specific definition of what "reserved" means in this context? For example, if the allocating agency says that they will do a set-aside each year for the targeted project, i.e. "reserve" tax credits for the development, is that sufficient? Or, must the PHA have been awarded all of the tax credits they will use for the development for it to count as leveraging?
The NOFA states in Section VI(D)(12) instructs that only tax credits that have been reserved for the targeted project will be counted as development leveraging under Section VI(H)(1). Section VI(D)(12)(a) specifically describes that the reservation letter "must constitute a firm commitment and can only be conditioned on the receipt of the HOPE VI grant." This means that the documentation must clearly demonstrate that the housing finance agency has awarded (i.e., through a reservation letter) the funds to the PHA for use in relation to the proposed revitalization plan. If the documentation instead indicates a commitment that is not firm, e.g., that the housing finance agency will consider the PHA for a reservation/award in the future (next cycle, etc.), that is not sufficient evidence of a commitment for the proposed equity to be counted toward the leverage ratio.
16. Does the criteria under Section VI(D)(12)(b) allow a weaker commitment from the allocating agency for LIHTCs to be used in future phases?
No. The Sections VI(D)(12)(a) and VI(D)(12)(b) require the same level of documented evidence in order for the proposed tax credit equity to be counted toward the leverage ratio. If an applicant does not have proper documentation (reservation letter from their state or local housing finance agency) for LIHTC equity commitments proposed in their revitalization plan, then those equity amounts, regardless of phase, will not be considered in the point calculations under rating factor Section VI(H)(1) (Development Leveraging).
17. What kind of documentation is required for Tax Exempt Bond Financing and 4% Low Income Housing Tax Credits in order to receive points for physical development leverage. Also, what is required in terms of documentation of debt financing?
Applicants should review Section VI(C) for information on how to properly document tax exempt bonds and other resources (debt financing) to be considered toward the calculation of physical development resources under Section VI(H)(1). HUD acknowledges that, depending on the housing finance agency, documentation for 4% tax credits may be represented in the form of a tax exempt bond award letter. Such documentation will be accepted if it is identified by the applicant as the available evidence of 4% tax credits in the calculation of leverage for points under VI(H)(1), again assuming that this documentation clearly indicates that tax exempt bonds have been committed to the project.
18. The NOFA indicates at Section VI(H)(1) that the calculation of physical development leverage does not include funds for CSS and administration activities. In defining funds for administration, does this include demolition and relocation, meaning that funds requested for demolition and relocation would be excluded from the calculation for the Physical Development Leverage ratio?
For the purposes of calculating Physical Development Leverage, demolition would be included but relocation would not. Demolition activities are not considered as part of administration; rather they are considered to be part of physical development activities and thus would be included in the calculation. Relocation would not be included as part of administration, however, it is not considered to be a physical development activity. HOPE VI funds used for relocation and leveraged funds used for relocation are not used in the calculation for Physical Development Leverage or CSS Leverage.
19. If a PHA controls a non-profit development organization, does site control of a vacant property by said non-profit constitute site control for purposes of the HOPE VI application?
No. Under the threshold requirement of Section XI(B)(4), the PHA, not another entity, must have control (i.e., option agreement, etc.) of off-site parcels of land proposed for housing development.
20. Are PHAs allowed to use HOPE VI funds in the development of off-site neighborhood facilities that will be used by residents of the revitalized community and surrounding neighborhood, i.e. a community recreation facility? If so, is site control required?
Yes, PHAs are allowed to use HOPE VI funds in the development of off-site neighborhood facilities to be used by residents of the revitalized community and surrounding neighborhood (such as a community recreation facility). The PHA would not need to demonstrate site control for the property on which such a facility would be built, as it does not constitute housing, and an applicant does not need to demonstrate site control for land on which they will not be developing housing (e.g., commercial development, community center, etc.). However, under Section XI(B)(4), applicants must demonstrate site control for any parcel of land for which they plan to develop off-site housing, regardless of funding source or whether the housing will be replacement housing, market-rate housing, etc.
21. The NOFA provides one point for Authorities with Master Development Agreements ready to submit to HUD. What if a PHA were using its subsidiary/instrumentality as developer? What if the PHA is acting as its own developer?
Under the Project Readiness section of the NOFA, XII(B)(4)(c), applicants may receive one point "if a Master Development Agreement has been developed and is ready to submit to HUD." Applicants would certify to this using Attachment 31. Where the PHA is using its subsidiary/instrumentality as its developer, the PHA may earn the point by preparing a MDA with its subsidiary/instrumentality. However, in cases where the PHA (not an affiliate/subsidiary/instrumentality) will act as its own developer for all components of the revitalization plan, then an MDA is not needed and the one point will be awarded automatically.
22. What are the specific requirements for additional public meetings in order for them to count as extra credit in the HOPE VI application?
Applicants should refer to Section VII for information on Resident and Community Involvement. This section contains the requirements for resident and community involvement in addition to the threshold (VII(A)(5)) and the rating factor portion (VII(B)). Applicants may earn an additional point under Section XII, the Project Readiness section, by going above and beyond the minimum requirements described in Section VII, particularly the threshold at VII(B), and certifying on Attachment 31 that they have conducted 5 or more public planning sessions (which include resident training sessions and public meetings).
FAQs #23-41 posted on December 09, 2003
23. What TDC limits should we use?
In accordance with Section III(A)(2), you should use the TDC limits in effect at the time this HOPE VI NOFA is published when making your TDC calculations. The limits in effect are those published in HUD Notice PIH 2003-8. Please be aware that Attachment 9 TDC/Grant Limitations Worksheet has been reposted to the HOPE VI webpage to incorporate these limits so that applicants may download the spreadsheets and use them to automate the calculation of their TDC/Grant Limitations. This along with other parts of the application kit may be found at the URL listed below. The TDC final rule may be found in the Federal Register, Vol. 67, No. 237, 76096 and on the HOPE VI website. http://www.hud.gov/offices/pih/programs/ph/hope6/grants/
revitalization/03/03revgrantkit.cfm
24. The threshold at Section III(D)(6) says that you may not apply for new HOPE VI Revitalization funds for units in that project that were funded by the existing HOPE VI Revitalization grant or other HUD funds, even if those funds are inadequate to pay the costs to revitalize or replace all of the targeted units. What do "other HUD funds" include?
The intent of the threshold at Section III(D)(6) is to prevent the double funding of units that have already received funds for revitalization-type purposes. This would mean HOPE VI Revitalization funds or "other HUD funds." For purposes of Section III(D)(6), "other HUD funds" would include Major Reconstruction of Obsolete Projects (MROP) funding and other funds under the Development Program.
25. The threshold at Section III(D)(7) states that, "HOPE VI funds may not be used to develop market rate units or affordable housing units which do not qualify as public housing or homeownership replacement units." What activities are included in the definition of "development activities" for the purposes of this threshold? Can HOPE VI funds be used for acquisition and predevelopment activities on parcels upon which mixed-income units (replacement, affordable and market-rate) will be developed?
HOPE VI funds cannot be used in connection with costs attributable to market rate units or affordable housing units that do not qualify as public housing or homeownership replacement units. Market rate units or affordable housing units that do not qualify as public housing or homeownership units can be a part of your proposal, however, you must demonstrate that you have sources of funds separate from HOPE VI to pay for these units. For example, if an applicant is proposing a site where there would be 50% market rate units and 50% public housing units, then the applicant must demonstrate that 50% of the funds will come from non-HOPE VI sources (i.e., to cover those market rate units).
26. In order to determine compliance with the threshold for the obligation of Capital Funds at Section IV(A)(2), will HUD consider whether the housing authority has obligated 90 percent or more of its FY 1999 Capital Funds by the applicable obligation deadlines?
No, for purposes of this threshold, HUD will not consider whether the housing authority has obligated 90 percent or more of its FY 1999 Capital Funds by the applicable obligation deadlines. Please see the technical correction to the NOFA addressing this matter, as published in the Federal Register on December 9, 2004.
27. If the site for the application has already been demolished per previous HUD approval, does the PHA need to submit photos in Attachment 17 demonstrating the extent of physical distress?
Attachment 17 relates to the rating factor described at Section V(B)(1). This section states: "If the targeted units have already been demolished, HUD will evaluate your description of the extent of the physical distress of the site as of the day the demolition application was approved." For a site where the units have already been demolished, applicants need to refer to these criteria when preparing Attachment 17, keeping in mind that the attachments are used to support narrative descriptions in the application. Thus applicants could provide pictures of the site before its demolition. Applications should respond as fully and clearly as possible to the criteria in the NOFA.
28. Under HUD Notice PIH 2000-23, PHAs are no longer allowed to practice maximized leasing with housing choice voucher (HCV) assistance. They are further instructed to take action to remedy any over-leasing and to return their leasing numbers to within the number of unit months available for authorized baseline vouchers. In order to do this, some PHAs have dropped significantly below their regular leasing benchmark in order to meet the requirements of Notice 2000-23. Do PHAs responding to Notice 2000-23 need to provide in their application the HCV program utilization rate available at the time of the deadline (January 20, 2004), which could be unusually low per requirements of the notice, or may they provide a year-to-date average?
The intent of the rating factor at Section V(B)(4) is for applicants to demonstrate the need for affordable housing in their community. However, applicants who must correct their over-leasing in response to the requirements of HUD Notice PIH 2000-23 may coincidentally have an unusually low utilization rate at the time of the deadline for HOPE VI Revitalization applications, as a result of their efforts to return their leasing rates to below 100 percent. In order to address the intent of the rating factor and to ensure applications demonstrate the most accurate picture of need for affordable housing as is possible, applicants may provide in their application a year-to-date average HCV utilization rate in response to the factor at Section V(B)(4).
29. Section VI(D)(9) states that: "Other Federal sources may also include funds provided by HUD, except public housing funds, such as HOPE VI Revitalization funds, HOPE VI Demolition funds, Capital Fund Program funds, and proposals to use operating subsidy for debt service. Though these HUD public housing funds may not be counted for points under this NOFA, they can be used as part of your revitalization plan." The revitalization plan being considered includes taking out a permanent loan based on the cash flow generated by the project, including ACC-assisted units. May we count the full amount of this loan toward our development leverage ratio?
No. In order to be counted as a physical development resource, you would have to exclude the portion of the permanent loan that is based on the ACC cash flow, as this would fall under the preclusion of using operating subsidy for debt service for purposes of leverage in the NOFA.
30. Do the resident training sessions and public meetings required under Section VII have to be completed 45 days before the application submission date?
No. There is no cut-off date for completing the resident training sessions and public meetings other than the date the application is submitted (January 20, 2004). Section VII(A)(1) notes that HUD will evaluate the nature, extent, and quality of the resident and community outreach achieved by the time the application is submitted. However, the threshold requirement under Section VII(A)(5) focuses only on resident training sessions and public meetings held after the NOFA publication date.
31. Rating factor XI(A) prescribes a point award based on the percentage of ACC units in the "unit mix." The section states that, "homeownership units and lease-purchase units would not be counted." Does this mean that they are disregarded entirely in computing the fraction, or simply that homeownership units don't count in the numerator even if they are targeted at public housing families. In other words, if a hypothetical PHA were doing 100 rental units of which 35 were ACC, plus 100 homeownership units (regardless of income target), would it receive 3 points or 1?
Homeownership units would not be counted in the numerator but would be counted in the denominator. Section XI(A) of the NOFA states that: "For purposes of this section, "public housing rental units" mean rental units under the ACC. Homeownership units and lease-purchase units would not be counted." Given this, homeownership units would not be counted as part of the numerator; rather the numerator would only include public housing rental units (ACC), as stated. The denominator represents the unit mix proposed in the application, which would mean all types of units, homeownership, rental, market rate, ACC, etc. Given this clarification, in your examples, 1 point would be awarded (35 ACC rental units / 200 units (total unit mix, includes 100 rental & 100 homeownership) = 18% = 1 point).
32. We know that you only have to demonstrate site control if you are using off-site parcels for housing. However, what about a situation where we intend to develop housing on-site where the targeted development used to be, and the land is in a trust, of which the housing authority is the sole beneficiary. Are we correct that we do not have to demonstrate site control in this situation since the site control threshold only applies to off-site housing development?
Yes, in accordance with Section XI(B)(4), site control must only be demonstrated for off-site parcels where housing development is proposed. Applicants do not need to demonstrate site control for the original site.
33. Our plan proposes the acquisition of off-site single-family homes for rental public housing replacement units. These single-family homes will be purchased based upon what will be available on the open market (on the multiple listing service) during the time the grant, if awarded, would be implemented. Do we still have to demonstrate site control of these properties, yet to be acquired?
Yes. In order to meet the site control threshold at XI(B)(4), there must be evidence of site control for any properties proposed in the application to be used for off-site housing development, regardless of when they will be acquired. All evidence of site control must be provided in the application at the time of submission.
34. Is the only evidence required for site control under Section XI(B)(4) an option form?
No. In accordance with Section XI(B)(4), evidence may also take the form of a sales agreement, a land swap, or a deed, contingent on receipt of the HOPE VI grant, compliance with environmental review requirements and site and neighborhood standards.
35. Under Section XI(B)(4), does the applicant also have to provide title information regarding the off-site parcels to be acquired?
No, titles are not required to meet the threshold at Section XI(B)(4).
36. Certain property held by the City or other municipalities may require action by the public body, which by time constraints cannot be accomplished prior to the submission date (90 days from the NOFA date). May we include a letter from the Mayor or director of the appropriate local agency indicating that conveyance or leasing (leasehold) of the site is acceptable without imposition of additional covenants or restrictions, and only contingent upon the necessary approval action?
No. The NOFA states in Section XI(B)(4) that evidence may not include a letter from the Mayor or other official, letters of support from members of the appropriate municipal entities, or a resolution evidencing the PHA's intent to exercise its power of eminent domain. Acceptable evidence noted in that section includes an option to purchase the property, a sales agreement, a land swap, or a deed.
37. Where a market assessment letter is required due to the inclusion of market rate housing in the revitalization plan, is the object of the market assessment only the market-rate housing, both rental and homeownership, that is included in the plan? Or is it all of the "housing units" proposed by the plan?
The market assessment letter is needed only in relation to market rate housing units (rental and homeownership) you propose to develop. The threshold requirement at Section XI(C) states that, "If you include market rate housing in your Revitalization Plan, you must demonstrate that there is a demand for the housing units of the type, number, and size proposed in the location you have chosen." Thus the statement that "you must demonstrate that there is a demand for the housing units," means, you must demonstrate that there is a demand for the market rate housing units. If the market assessment letter also addressed the need for the other types of housing units proposed in your plan, applicants will not be penalized. However, the purpose of the threshold at XI(C) is to ensure a market assessment demonstrating need for market rate housing has been done to support the proposal.
38. Is market-rate housing defined exclusively as housing intended for renters or buyers with household incomes greater than 80% of AMI?
Market rate means any unsubsidized unit, i.e., a unit that does not have any income restrictions.
39. With respect to an assessment of the market for limited commercial facilities that may be included in the plan, will a written commitment by a user to own or lease the commercial space be sufficient as evidence of market support so that a general analysis of the commercial market can be avoided and not addressed by the market assessment letter?
No. As the NOFA says in XI(C), "In your application you must provide a preliminary market assessment letter...that describes its assessment of the demand and associated pricing structure for the proposed residential units and any commercial facilities, economic development, and retail structures, based on the market and economic conditions of the project area." Per the instructions of the threshold at XI(C), the market assessment letter should address and demonstrate in some manner (which may include commitments already made by potential owners/leasers of the proposed commercial space) the need for any commercial facilities proposed in the application.
40. According to Section XII(B)(4)(b) of the NOFA, applicants will receive 2 points if the site is cleared. What is meant by "cleared?" For example, the site is currently being demolished and all of the buildings will be down by the time the FY 2003 HOPE VI application is submitted. However, the demolition contract calls for the underground utilities to also be removed. Would the 2 points be awarded for the site being cleared if the buildings are down, but removal of the underground utilities is still in the process of being removed at the time of application submission?
Yes. Section XII(B)(4)(b) states: "You will receive 2 Points if the targeted severely distressed public housing site is cleared." For purposes of the competition, "cleared" means that all buildings are down.