|
|
 |
|
| Affordable Housing Program Monitoring |
| |
|
|
|
The Affordable Housing Program (AHP) regulations require that all projects
receiving AHP subsidies must be monitored by the Chicago Federal Home Loan
Bank (Chicago FHLB) to ensure that the project complies with the commitments made
in the AHP application (and any subsequent approved modifications),
Chicago FHLB policies and procedures and the AHP regulations throughout
the project's retention period. AHP projects must be retained as
affordable housing for five years for owner-occupied projects and fifteen
years for rental projects.
|
| |
|
Successful monitoring of all AHP projects is integral to the Chicago FHLB,
from both a regulatory standpoint and an obligation to our shareholders
to ensure that the AHP funds are utilized according to established
affordable housing guidelines for the purpose the program was intended.
|
|
| Semi-Annual Progress Reports |
| |
|
Prior to completion of the project, the member and project sponsor are required to
report semi-annually to the Chicago FHLB on the project's progress.
The Chicago FHLB initiates this process and will send a progress report to
both the member and project sponsor. The project sponsor should complete
the form, sign it and forward it to the member for their review and
signature. The member then forwards the report to the Chicago FHLB.
|
|
|
|
| |
|
Following project completion, the monitoring process differs for
owner-occupied projects and rental projects. Again, the Chicago FHLB will
initiate this process by requesting the necessary monitoring documentation.
|
|
| Owner-Occupied Projects - Monitoring Following Project Completion |
| |
All owner-occupied projects shall be reviewed by the Chicago FHLB within
one year after project completion. As part of the review:
- The member and project sponsor are required to complete a Project
Completion Report to verify compliance with commitments made in the
AHP application (and any subsequent approved modifications).
- The member and project sponsor may be required to submit further documentation
required by the Chicago FHLB to verify compliance with commitments of the
approved AHP application, Chicago FHLB policies and procedures and the AHP
regulations.
- The member is required to certify to the Chicago FHLB that the project is
habitable and that long term (five-year) retention documents have been
properly executed and recorded. The member may be required to submit
documentation confirming that the retention documents have been recorded.
- The Chicago FHLB shall review the project documentation
and confirm that:
- the AHP beneficiaries are income eligible
- the AHP subsidy was used for eligible purposes
- the actual costs are in accordance with the Chicago FHLB's feasibility guidelines
- the AHP subsidy was necessary for the financial feasibility of the project
- units are subject to deed restrictions or other legal retention agreements meeting retention requirements of five years
- the completed project is materially the same as stated in the AHP application
|
|
| Owner Occupied Project - Long Term Monitoring |
| |
No further monitoring is required. However:
- The member will be required to notify the Chicago FHLB of any
sale or refinancing of units prior to the end of the 5 year retention
period and repay any unforgiven subsidy to the Chicago FHLB. This is
easily achieved through the recording of a retention vehicle.
- The member and project sponsor will be required to submit any further
documentation requested by the Chicago FHLB or the
Federal Housing Finance Board as part of their annual review,
throughout the project's 5 year retention period.
|
| |
| Rental Projects - Monitoring Following Project Completion |
| |
All rental projects shall be reviewed by the Chicago FHLB within one
year after project completion. As part of the review:
- The member, project sponsor, or owner if applicable, are required to complete a
Project Completion Report to verify compliance with commitments made in the
AHP application (and any subsequent approved modifications).
- member, project sponsor, or owner if applicable, may be required to submit further documentation
required by the Chicago FHLB to verify compliance with commitments of the approved
AHP application, Chicago FHLB policies and procedures and the AHP regulations.
- The member will be required to submit documentation confirming that the
retention documents have been recorded.
- The owner will be required to certify to the Chicago FHLB that the project is
habitable and in compliance with the commitments made in the AHP application.
- The project sponsor, or owner if applicable, will be required to submit a final
Sources and Uses Statement showing final costs
and final sources of funding. Sources and uses of funds must
balance. If project includes commercial space, please submit separate Sources and Uses
Statements for the housing and the commercial space.
- The project sponsor, or owner if applicable, will be required to submit a final
Development Budget detailing total project costs and sources of financing
(including terms, rates and amortization) to confirm that project
costs are reasonable. If project includes commercial space, please
submit separate development budgets for the housing and the commercial
space.
- The project sponsor, or owner if applicable, will be required to submit a final
15 Year Operating Proforma detailing both income and expenses to confirm that
operating costs are reasonable and that the project is financially feasible for the full 15 year retention period.
The operating proforma should include:
- Gross Rent
- Other income separated from rental income (laundry, parking, etc.).
- Vacancy/Loss
- Detailed Operating Expenses
- Replacement Reserves
- Debt Coverage Ratio
- Inflation Assumptions
If the project includes on-site residential services, such as meals, tenant counseling, case management, etc., please submit separate operating budgets, including income and expenses, for housing and services.
- The project sponsor, or owner if applicable, will be required to submit a Tenant Income
Worksheet listing the current occupants of the building. The
information provided on the worksheet allows the Chicago FHLB to
confirm that rents are affordable and that current tenants are
eligible for the AHP subsidy and meet the commitments made in the AHP
application. Please review the Tenant Income Worksheet Definitions
for help with completing the Tenant Income Worksheet.
- Tenant Income Worksheet & Definitions
The Chicago FHLB uses median income guidelines published annually by the Department of Housing and Urban Development (HUD) to determine income eligibility.
- The Chicago FHLB is required to review the project documentation
and determine that:
- the completed project is materially the same as stated in the AHP application
- the AHP subsidy was used for eligible purposes
- the actual costs are in accordance with the Chicago FHLB's
feasibility guidelines
- the AHP subsidy was necessary for the
financial feasibility of the project
- units are subject to deed restrictions or other legal retention
agreements meeting retention requirements of fifteen years
- rents are affordable
- tenants meet the income targeting and other commitments made in the application
|
| |
| Rental Projects - Long Term Monitoring |
| |
- The project owner will be required to certify annually to the
Chicago FHLB that the project is in compliance with rent and income
targeting commitments made in the AHP application and to the project
habitability.
- The member will be required to certify to the Chicago FHLB every
three years that the project appears to be suitable for occupancy
based upon an exterior visual inspection.
- The project sponsor, or owner if applicable, will be required to submit a
Tenant Income Worksheet
listing the current occupants of the building and income documentation
for a sample of current tenants every 2, 4 or 6 years based on the
following:
- 6 years if AHP subsidy is between $50,001 and $250,000.
- 4 years if AHP subsidy is between $250,001 and $500,000.
- 2 years if AHP subsidy is greater than $500,000.
The information provided on the worksheet allows the Chicago FHLB to
confirm that rents continue to be affordable and that the current
tenants meet the commitments made in the AHP application. Please review
the Tenant Income Worksheet Definitions for help with completing the
Tenant Income Worksheet.
The Chicago FHLB uses median income guidelines published annually by the
Department of Housing and Urban Development (HUD) to determine income
eligibility.
- Projects receiving over $500,000 in AHP subsidy will have an
onsite visit every two years. The project sponsor, or owner if applicable, will be required to
have a representative present during the site visit to answer any
questions.
- The member and project sponsor, or owner if applicable, will also be required to submit any further
documentation required by the Chicago FHLB or the
Federal Housing Finance Board as part of their annual review throughout
the project's retention period.
|
| |
 |
| |
|
|
|
