City of Ann Arbor
Request For Proposals
RFP No. 633
Federal HOME Program
Affordable Housing Development
Updated September 2006
Table of Contents
I. Introduction and Purpose ..................................................................... 1
II. Proposal Submission ........................................................................... 1
III. Selection and Criteria and Process ....................................................... 4
IV. General Terms and Conditions ............................................................. 5
V. Summary of Federal HOME Regulations ............................................. 7
VI. Proposal Submission Requirements ................................................... 10
Cover Sheet .................................................................................................. 11
Narrative Questions ...................................................................................... 12
Authorization for Release of Credit Information ............................................ 14
Appendix A: Legal Status of Proposer ........................................................... 15
Appendix B: Affordability Requirements 2006 ............................................. 16
Appendix C: Initial Sales Price and Resale Formula and Example ............... 17
Appendix D: Specimen Housing Affordability Agreement ............................. 18
Appendix E: Fair Employment Practice ......................................................... 29
Appendix F: Living Wage Requirements ....................................................... 31
Appendix G: Human Rights Requirements .................................................... 37
Appendix H: Board Member Roster ............................................................... 40
City of Ann Arbor
Request for Proposals
I. Introduction and Purpose
The City of Ann Arbor recognizes a growing need for a greater supply of lower cost
housing and wishes to preserve the diverse economic character of the community. In
May 2000, Ann Arbor City Council adopted the Affordable Housing Task Force Plan as
a guide to increase the supply of housing for families working in Ann Arbor. Since then,
various strategies have been explored but progress has been slow. There is a growing
concern that Ann Arbor is losing its economic diversity, more employees are commuting
significant distances to work and more families are spending an increasing percent of
their income on housing expense.
Market forces have resulted in little housing being produced that is affordable to those
earning less than 80% of the median income. (see Appendix B) Many families cannot
find affordable rental or owner housing in Ann Arbor. Consequently, local employers
have experienced difficulty finding employees willing to commute long distances.
The City of Ann Arbor encourages both nonprofit and for profit developers to produce
income-targeted housing units by offering federal and local subsidies. Applicants must
demonstrate the ability to carry out the proposed activity and will be evaluated on
experience, administrative capacity and financial management.
Federal HOME funds and Ann Arbor Housing Trust Funds are available in the form of
loans and grants for new construction or acquisition and/or rehabilitation of rental or
ownership housing in order to provide greater access to the local housing market for low
II. PROPOSAL SUBMISSION PROCESS
Proposals must be submitted in accordance with the specifications in this document.
Any proposal that does not conform fully to these instructions may be rejected.
Submit proposals to:
Attn Dee Lumpkin
Purchasing Unit, Financial Services
100 North Fifth Avenue
Ann Arbor MI 48104
The original and seven copies of the proposal must be received by the Purchasing Unit
no later than November 1, 2006 at 2:00 (EST), promptly after which proposals will be
publicly opened. Proposals shall be delivered in sealed envelopes endorsed across
one end as “RFP No. 633 Request for Proposal for Federal HOME Program Affordable
Housing Development.” Proposals submitted by fax will not be considered.
The information included in the RFP response should be as concise as possible. To be
considered each Submitter must submit a complete response to this RFP using the
format found in Section VI of this RFP. No other distribution of the proposals is to be
made by the Submitter. Appendix A of this RFP, Legal Status of Proposer must be
completed and returned with the proposal. An official authorized to bind the submitter to
its proposal provisions must sign each proposal copy in ink.
Proposals must arrive on or before the time and date specified. Proposals received
after the deadline will be deemed unacceptable for further consideration. Regardless of
the delivery method the Submitter is responsible for the actual delivery of the proposals
to the City of Ann Arbor Purchasing Unit at 100 N 5th Avenue, 5th floor, (see mailing
address above) as of the deadline. Submitters agree to honor their proposal for a
period of one hundred twenty (120) days from the proposal due date. All proposals
become the property of the City of Ann Arbor after the deadline whether awarded or
All information in a Submitter’s proposal is subject to disclosure under the provisions of
Public Act No. 442 of 1976, as amended (known as the Freedom of Information Act).
The City accepts no financial responsibility for costs incurred by any Submitter in
responding to this RFP. By responding to this RFP the Submitter agrees to hold the
City harmless in connection with the release of any information contained in its
Should any prospective Submitter be in doubt as to the true meaning of any portion of
this RFP, or should the Submitter find any ambiguity, inconsistency, or omission therein,
the Submitter shall make a written request for an official interpretation or correction. All
questions concerning the solicitation and specifications shall be submitted in writing via
e-mail or fax to the name of the issuing office below.
Questions must be submitted no later than October 23, 2006, 5:00 p.m. (7 business
days prior to the submission deadline).
Any oral responses to any questions shall be unofficial and not binding on the
City of Ann Arbor. The City’s staff will make such interpretation or correction, as
well as any additional RFP provisions that the City may decide to include, only as
an RFP addendum. Staff will mail or deliver addendums to each prospective
Submitter recorded as having received a copy of the RFP. Any addendum issued
by the City shall become a part of the RFP. Submitters should consider issued
addendums in preparing his or her proposal.
The Office of Community Development for the City of Ann Arbor has issued this
Request for Proposal. All contact regarding this RFP is to be directed to:
Housing Program Coordinator
Office of Community Development
Community Services Area
City of Ann Arbor
PO Box 8645
Ann Arbor, Michigan 48107
Fax: (734) 622-9022
Proposal Submission, Evaluation and Award Schedule
The schedule below is subject to change at the City’s discretion
September 18, 2006 RFP Issued
October 23, 2006 Final Questions submitted re: RFP
November 1, 2006 RFP Response deadline
November 2006 RFP Evaluations
Week of November 27, 2006 RFP Interviews
Week of December 11, 2006 Proposal Selected
January, 2007 City Council approval
Independent Cost Determination
1. By submission of a proposal, the Submitter certifies in connection with this
proposal: (a) It has arrived at the costs in the proposal independently, without
consultation, communication, or agreement, for the purpose of restricting
competition as to any matter relating to such fees with any other proposal
submitter or with any competitor; (b) Unless otherwise required by law, the costs
which have been quoted in the proposal have not been knowingly disclosed by
the Submitter and will not knowingly be disclosed by the submitter prior to award
directly or indirectly to any other prospective Submitter or to any competitor; and
(c) No attempt has been made or shall be made by the proposal Submitter to
induce any other person or firm to submit or not submit a proposal for the
purpose of restricting competition.
2. Each person signing the proposal certifies that he/she is the person in the
proposal Submitter’s organization responsible within that organization for the
decision as to the amount requested in the proposal and has not participated
(and will not participate) in any action contrary to 1(a)-(c) above.
3. A proposal will not be considered for award if the statement required in the Cost
Analysis portion of the proposal has been altered so as to delete or modify 1(a)-
(c) above. If 1(b) has been modified or deleted, the proposal will not be
considered for award unless the Submitter furnishes with the proposal a signed
statement, which sets forth in detail the circumstances of the disclosure, and the
City determines that such disclosure was not made for the purpose of restricting
III. EVALUATION CRITERIA AND PROCESS
1. Proposals will be ranked according to the criteria set forth below.
2. The City will determine which proposals to consider for interviews from this initial
3. The submitters will then be given an opportunity to present their proposal and
answer questions about their proposal during a formal interview process.
4. The City will determine which proposals to fund.
5. The City will determine the final funding award amount and terms.
Reservation of Rights
The City reserves the right to accept any Proposal, to reject any or all Proposals, to
waive irregularities and/or informalities in any Proposal and to make the award in any
manner the City believes to be in its best interest.
20 points Professional qualifications of development team - –
based on previous projects and verified by references
20 points Proposed work plan and ability to complete the work
within the prescribed time. Construction design,
including energy efficiency
20 points Financial feasibility including leveraging of funds, per
unit funding request, and cost analysis.
40 points Priorities and development objectives of City
All proposals will be reviewed and ranked on the basis of the evaluation criteria and
development objectives set forth below:
The City of Ann Arbor supports the Blueprint to End Homelessness goal of adding 500
units of permanently affordable supportive housing for chronically homeless persons in
our community. Therefore, the highest priority for City funding is rental projects that
serve these individuals or families in all or a portion of the units in the development.
The City’s second highest priority is rental housing for households at 30% of the Area
Median Income or less. Rental projects requesting funds must set aside some of the
units for this income level with appropriately low rental rates.
The third highest priority is rental and owner housing for households at 60% of the Area
Median Income or less. The City generally prefers larger developments with 12 or more
units. The City prefers that rental projects with 12 or more units include a mix of
bedroom sizes to serve families with children and a mix of incomes to prevent a
concentration of poverty.
The City prefers to fund projects in the City limits, but will consider funding projects
outside the City limits because affordable housing is a regional issue. The City strongly
supports projects that are located to take advantage of existing infrastructure.
The City will also evaluate projects based on the quality of the construction. The City
expects all rehabilitation and new construction projects to include energy efficient
design and appliances to ensure long-term savings for the occupants. The City will take
into consideration increased development costs due to green design and construction,
material quality, Davis-Bacon wages, downtown locations, and very low-income
The selected Submitter(s) will have the opportunity to discuss in more detail their
qualifications, their work plan and pro formas during the interview process.
The interview shall consist of a presentation of approximately thirty (30) minutes by the
Proposer, including the person who will be the project manager on this Contract,
followed by approximately thirty (30) minutes of questions and answers. Audiovisual
aids may be used during the oral interviews. Following the presentation, the Evaluation
Committee may request additional information.
IV. General Terms and Conditions
Subsidy funding for selected projects will be made possible by the federal HOME
Investments Partnership Program pursuant to Title II of the Cranston-Gonzalez National
Affordable Housing Act of 1990, 42 U.S.C. §12701 et seq. ("Program") and the HOME
Investment Partnership Program Rule, 24 C.F.R. Part 92, all as may be amended from
time to time. Copies of the federal regulation governing the program are available upon
request or a program description can be downloaded at
Developers and contractors are not eligible if they are presently debarred, suspended,
proposed for debarment, declared ineligible, voluntarily excluded from participation in
federal housing programs or have had a professional license suspended or revoked
which is required to provide services for a project under this RFP.
Housing Affordability Agreement
The Proposal submitter selected to do business with the City of Ann Arbor will be
required to execute a Housing Affordability Agreement, Mortgage and Note with the City
(a specimen Agreement is included with the RFP as Appendix D).
If a contract is not fully executed by April 30, 2007, then the City, at its sole option, may
choose to initiate negotiations with any other qualified Submitter.
Non-Discrimination – see Appendix G
All contractors proposing to do business with the City of Ann Arbor, except those
specifically exempted by regulations promulgated by the Administrator and approved by
City Council shall receive approval from the Human Resources Director prior to entering
into an agreement with the City. Said firms shall take affirmative action to insure that
applicants are employed and that employees are treated during employment in a
manner that provides equal employment opportunity and tends to eliminate inequality
based upon race, national origin or sex.
The prospective contractor shall submit to the City data showing current total
employment by occupational category, sex and minority group. If, after verifying this
data, the Human Resources Director concludes that it indicates total minority and
female employment commensurate with their availability within the contractor’s labor
recruitment area, i.e., the area from which the firm can reasonably be expected to
recruit, the prospective contract shall be accepted by the Human Resources Director as
having fulfilled affirmative action requirements for a period of twelve (12) months at
which time the Human Resources Director will conduct another review. Other firms
shall develop an affirmative action program in conjunction with the Human Resources
Director. The program shall include specific goals and timetables for the hiring and
promotion of minorities and females. Said goals shall reflect the availability for
minorities and females within the firm’s labor recruitment area.
Living Wage Requirements – see Appendix F
All contractors proposing to do business with the City of Ann Arbor, except those
specifically exempted by City Code, agree to comply with the living wage provisions of
Chapter 23 of the Ann Arbor City Code and, if a “covered employer” as defined therein
to pay those employees providing services to the City under this agreement a “living
wage” as defined in Chapter 23 of the Ann Arbor City code; and if requested by the City,
provide documentation to verify compliance.
V. Summary of Federal HOME Program Regulations
The City of Ann Arbor has the responsibility to ensure adherence to federal regulations.
The HOME program imposes requirements on HOME-assisted projects, including
income-targeting requirements, housing quality standards, terms of affordability, resale
provisions and rent restrictions. However, local jurisdictions are allowed to increase
restrictions to meet community needs. The City will provide assistance as needed
through technical support and continued monitoring. Projects which are not eligible for
funding under the HOME program will be considered for funding with the City’s Ann
Arbor Housing Trust Funds.
Funding Category Amount
HOME Acquisition, Rehabilitation and/or Refinance $ 526,462
HOME New Construction $ 665,062
Ann Arbor Housing Trust Fund – all project types $ 659,942
Each year, the U.S. Department of Housing and Urban Development defines
household income eligibility of the beneficiaries of the housing supported with
HOME funds according to the Area Median Income (AMI). (See Appendix B)
The City is open to all requests for grants and loans; project funding terms will be
determined by the availability of funds and the financial needs of the project.
Projects must show evidence of leveraging financing from other resources
whenever possible. Nonprofit/for-profit and private/public partnerships are
encouraged but not required. Loan guarantees, bridge loans and tenant based
rental assistance have not been funded previously but will be considered as
eligible fund uses.
The HOME subsidy may be applied as gap financing to the entire cost of the
project if all of the units are restricted to the HOME requirements or to
subsidize/buy down the cost of a specific number of units.
Davis-Bacon wage requirements apply if 12 or more units are subsidized with
Projects may be new construction, former industrial/commercial space converted
to housing, construction utilizing air rights over existing structures, acquisition
and/or rehabilitation of existing properties or structures or refinancing and
In general, affordability is based on housing costs not exceeding 30% of annual
gross income by bedroom/household size. All known utilities, fees and taxes to
be paid by the residents must be included in affordability calculations. (See
Appendix C for more details)
To assure long-term affordability, the City’s affordability period exceeds HUD’s
required affordability period. Community Housing Development Organizations
(CHDO’s) and new homeownership projects have a minimum affordability period
of 99-years. All other new construction rental projects have a minimum of a 30-
year affordability period. Small-scale (1 - 4 units) rental and homeowner
rehabilitation projects generally follow the HOME affordability periods.
Rental Property Owner - Specific Project Requirements
90% of the City’s annual HOME allocation funds for HOME-assisted rental units
must be rented to households that are 60% or less of Area Median Income.
A plan for managing the property and providing resident services needed by the
population being served must be included as part of the application
In projects of 5 or more HOME-assisted units, at least 20% of the HOME-
assisted units must be occupied by households at or below 50% of AMI.
Section 8 Vouchers may not be refused as a payment method. Rents must not
exceed HUD High limits. For projects of 5 or more HOME-assisted units, at least
20% of the HOME-assisted units must not exceed the HUD Low limit. (See
Tenant information and income verification forms shall be provided by the City
and must be completed and submitted to the City before tenant leases are
signed. Annual re-certifications and reporting of tenant income will also be
required for the life of the contract.
Homeowner - Specific Project Requirements
Affordability is determined by the City and is based on the household income,
market conditions, housing costs and the size of the unit. A deed restriction will
be placed on the units to ensure long-term affordability.
Subsidies are only available for units that are affordable to households that are at
or below 80% of AMI, but the preferred income-target is 60% of AMI (See
Appendix B). Homebuyer eligibility information and income verification
documentation must be provided to the City on approved forms prior to closing.
Future sales of owner-occupied units shall be subject to long-term resale
restrictions to ensure continued housing availability for low-income households.
The initial uncapped property taxes will be based on the restricted sales price
secured by the agreement instead of the unrestricted market value, and will be
adjusted annually according to Michigan State Law.
A plan for preparing potential purchasers for home ownership and working with
the post-purchase to help avoid difficulties that may jeopardize their ownership
should also be considered for a stronger application.
The Ann Arbor City Council approves all Federal HOME allocations and Ann Arbor
Housing Trust Funds exceeding $25,000 prior to execution of agreements.
VI. Proposal Submission Requirements
Please submit one copy of the following:
1. Original Proposal Cover Sheet with signature – see page 11
2. Narrative Questions – see page 12, please type (minimum 11-point font) and
include other documentation as appropriate (ie. Site plan, photographs, purchase
agreement, , sample lease, appraisal, survey, environmental reports, drawings)
3. Development Proforma / Sources and Uses – all costs of development including
hard and soft costs should be included. A developer’s fee up to 15% of total
acquisition and hard costs is allowable. Costs associated with support services
for rental units and homeowner education should also be included as a separate
budget. (A sample format is available in Excel upon request). Include the
sources and terms of funding, how those funds will be used, and whether the
funds are secured.
4. Rental Projects Only - Operating Proforma / Budget –revenue and expense
projections for 15 years is required. (A sample format is available in Excel upon
A minimum of $300/unit is required for replacement reserves.
2% minimum annual rent increases
3% minimum annual operating increases
5% minimum vacancy rate
Indicate in a footnote the number of units by bedroom size and rent targets
Indicate in a footnote all projected refinancings and estimated terms
5. Organizational Chart and list of Board members, if applicable. Corporate legal
documents, if applicable. HUD requires the City to report the race and gender of
the board members of nonprofits or the private owners. Please indicate the race
and gender next to each name. See Appendix H for form
6. Proof of financial capacity – nonprofit organizations (copy of most recent audit),
for-profit organizations or individuals (copy of two most recent IRS tax returns),
and a list of at least 3 business references for new developers that have not been
funded by the City in the past 5 years..
7. A signed release authorizing a credit check - see page 14
CITY OF ANN ARBOR FEDERAL HOME PROGRAM AND AFFORDABLE HOUSING
TRUST FUND AFFORDABLE HOUSING PROPOSAL COVER SHEET
Name of Applicant/Organization: _________________________________________
Federal Tax ID Number: _________________________________________
Non-profit Corporation _____ Date Incorporated: ________________
Private Corporation/Individual _____
(Attach Letter or Memorandum to describe relationship)
Project Location: ___________________________________________
Total Number of Units: ___________________ Number of HOME Units: ________________
Total Project Cost: $__________________ Amount of Request: $_______________________
Terms for request: (interest rate, years, amortized? Etc.)_________________________________
Type: Rental ___ or Homeownership___
Number of units by bedroom sizes _______________________________________________
Executive Director/Senior Officer/Owner: ____________________________________________
Telephone: _____________ E-mail: ___________________ Website: _____________________
Contact Person for Application:
Name: __________________________________________ Telephone: ______________________
Email: __________________________________________ Fax: ___________________________
I HEREBY SUBMIT THIS PROPOSAL FOR THE CONSIDERATION OF FINANCIAL ASSISTANCE IN
SUPPORT OF THE PROJECT HEREWITHIN DESCRIBED. ALL INFORMATION IS TRUE AND COMPLETE
TO THE BEST OF MY KNOWLEDGE. IF SELECTED FOR FUNDING, I WILL COOPERATE FULLY WITH
THE CITY OF ANN ARBOR TO COMPLY WITH LOCAL AND FEDERAL HOME PROGRAM GUIDELINES, AS
Authorized Signature: ____________________________________Date:_________________
Printed Name ________________________ Title: ____________________________
Please respond to the following questions in a written narrative in 1-3 pages.
1. Project Description?
Target Market – describe the targeted residents of the units including income
levels, household sizes, and any special needs (elderly, handicap accessible,
homeless etc.). How many units, what size by bedroom number, and square
footage? A marketing study is expected for developments with 25 or more units.
Describe the Affirmative Marketing Plan (for developments with 5 or more units)
for the subsidized units and to what extent assistance from outside entities is
desired to reach that target market. Also, describe the schedule anticipated for
accepting purchase agreements (owner) or lease commitments (rental). How
would a waitlist be managed?
a. Describe the building type, building materials, utilities, and amenities (garages
etc.). Provide the most specific design and construction documents available
from photos for rehab projects to site plans and blueprints for new
construction projects. At a minimum, newly constructed housing must meet
the current edition of the Model Energy Code published by the Council of
American Building Officials.
b. Rehabilitation only – age of building, appraised value, extent of rehabilitation
to be completed prior to occupancy, current utilities (type of heating/cooling),
storm water drain system.
2. Property Description?
a. Legal description of property – current zoning, common address and nearest
cross streets. Is annexation required? Provide a copy of signed purchase
agreement, purchase option or deed. If new construction a letter from the post
office with the official address will be needed (if contract is awarded).
b. Surrounding properties – uses of properties bordering project, distance from
nearest public transportation, schools, grocery and medical services.
c. A federal Environmental Assessment will need to be conducted of the site.
Please indicate whether the site may contain or be near environmental
contaminants, is on or near a wetland, railroad, or is in a historic district.
Property can be acquired before applying for City funds, however, all
expenses that occur before an Environmental Assessment is completed by
the City are ineligible for reimbursement with City funds.
3. Extent of Affordability
Housing Cost – For rental units list initial monthly rent for each type/size of
unit based on current market conditions, include rates for both subsidized and
non-subsidized units if applicable. Indicate which utilities are included in the
rent and indicate the expected monthly utility expenses not included in the
rent. For homeowner units, indicate the sales price, taxes, expected utility
costs and condo fees (if applicable). For condominiums, indicate how the
condo fees will be structured.
4. Justification for Subsidy?
a. Briefly justify the level and terms of the funding requested by describing the
relationship between the cost of the project and the required revenue needed
to support project feasibility. Include requirements needed by other funding
sources and all costs to be charged to the project (i.e. relocation,
infrastructure costs, etc.) The development pro forma and operating pro
forma should support the funding request from the City and other sources.
Any contingencies should also be noted.
b. Describe what other assistance from the City of Ann Arbor is needed or would
be beneficial in order to meet project financing goals and minimize total
5. Project Management?
a. Property Management- include a management and maintenance plan
b. Services: What measures will be taken to ensure renters or owners will have
long-term housing stability? Describe services that will be offered to tenants?
Describe services that will be offered to prepare potential purchasers for
c. Describe previous experience or involvement in the development of other
housing occupied or owned by the same target market to be assisted through
this housing project? Include resumes of key development team members or
other supporting documents to demonstrate capacity.
6. Current Status?
a. Describe where in the development process the project stands at the time of
proposal submission. Include a projection of future significant milestones
(dates) and the expected completion date. Include a copy of other financing
commitments or letters of intent if available.
b. Are there current residents in the unit? Relocation expenses will need to be
included in the project pro forma. Existing resident names and addresses
must be provided.
Authorization for Release of Credit Information
I hereby authorize the City of Ann Arbor to verify and further investigate any of the
information hereby provided. I understand and agree that the City may conduct credit
checks and review with federal, state and local public sources to obtain such
verification, and to obtain further information and that any of the sources named herein
may be contacted in order to obtain verification and further information. I certify that all
information provided is true, correct and complete to the best of my knowledge.
Signature Title Date
Social Security Number or Tax ID#
Appendix A: Legal Status of Proposer
City of Ann Arbor
Guy C. Larcom Municipal Building
Ann Arbor, Michigan 48107
Ladies and Gentlemen:
The undersigned declares that this Proposal is made in good faith, without fraud or collusion
with any person or persons submitting a proposal on the same Contract; that the undersigned
has carefully read and examined the “Request for Proposal” documents, including Information
and Instructions, Scope of Service, Information Required, all Addenda (if any), and understands
them. Further, the undersigned declares that it has extensive experience in successfully
providing the services required under the specifications of this Request for Proposal.
The undersigned acknowledges that it has not received or relied upon any representations or
warrants of any nature whatsoever from the City of Ann Arbor, Washtenaw County, its agents or
employees, and that this Proposal is based solely upon the undersigned's own independent
If the City accepts this Proposal and the undersigned fails to contract and furnish the insurance
documentation by April 1, 2007, then the undersigned shall be considered to have abandoned
In submitting this Proposal, it is understood that the right is reserved by the City to accept any
Proposal, to reject any or all Proposals, to waive irregularities and/or informalities in any
Proposal, and to make the award in any manner the City believes to be in its best interest.
COMPANY NAME: *
STREET/P. O. BOX:
CITY, STATE, AND ZIP CODE:
PRINTED NAME OF SIGNER:
TITLE OF SIGNER:
EMAIL OF SIGNER:
* NOTE: If the PROPOSER is a corporation, the legal name of the corporation shall be set forth
above together with the signature of authorized officer or agents. If PROPOSER is a
partnership, the true name of the firm shall be set forth with the signature of the partners
authorized to sign contracts on behalf of the partnership. If PROPOSER is an individual, his
signature shall be placed above.
*NOTE: Interested Organizations may establish a partnership of more than one Organization to
provide the services identified in the Scope of Services.
Appendix B: Affordability Requirements 2006
HUD determines the annual Area Median Income (AMI). Following is a 2006 chart indicating the
% of AMI for various family sizes.
Income % Area 1 person 2 persons 3 persons 4 persons 5 persons 6 persons
Median $57,700 $65,900 $74,200 $82,400 $89,000 $95,600
80% $41,700 $47,700 $53,650 $59,600 $64,350 $69,150
60% $34,620 $39,540 $44,520 $49,440 $53,400 $57,360
50% $28,850 $32,950 $37,100 $41,200 $44,500 $47,800
30% $17,300 $19,750 $22,250 $24,700 $26,700 $28,650
HOME funds can be allocated to specific units within a rental project. The HOME funds will
be a proportion of eligible development costs for the entire project based on the proportion
of HOME-funded units. Or HOME funds can be allocated toward the total development costs
if all units are eligible for HOME funds.
For rental projects containing 5 or more HOME-assisted units, 20% of the HOME-assisted
units must be occupied by households with incomes at or below 50% AMI and the rent level
may not exceed the Low HOME rents listed in the chart below.
Rent subsidies such as Section 8 vouchers and Tenant Based Rental Assistance may not
be refused as payment for rent.
The 2005 HOME High and Low rent levels are listed below. The 2006 HOME rents should
be available in the Spring of 2006. Rents can be lower than the rent levels listed below but
may not exceed these levels, inclusive of all utilities.
Rents Studio 1 Bedroom 2 Bedroom 3 bedroom 4 bedroom
High $669 $750 $913 $1149 $1,182
Low $669 $750 $913 $1071 $1,182
Total monthly costs are to include a utility allowance, mortgage principal and interest, taxes,
insurance and condominium fees, if applicable. See Appendix C for sales and resale formula.
Appendix C: Initial Sales Price and Resale Formula and Example
Initial and future sales prices for affordable homeownership units is based on the policy
as recommended by the City’s Housing Policy Board and adopted by City Council and
the U.S. Department of Housing and Urban Development. The FY 2006 Action Plan
includes this revised formula, which takes effect July 1, 2006 and will apply to all
projects funded through this RFP.
Sample City of Ann Arbor/ Washtenaw County Office of Community Development
Appraisal-Based Resale Formula
Initial sales price $100,000
Initial appraisal $150,000
Resale appraisal $200,000
Increase in appraised value $200,000 – $150,000 = $50,000
Resale price increase $50,000 x 25% = $12,500
Resale price $100,000 (initial) + $12,500 = $112,500
Initial owner equity $112,500 minus closing costs & mortgage pay off
The initial sales price will be determined annually based on the current market conditions
including interest rates and terms, taxes, and insurance costs. Following are the initial sales
prices for HOME-funded units for FY 2006
80% AMI Household 60% AMI Household
! Bedroom $83,400 $69,240
2 Bedroom $95,400 $79,080
3 Bedroom $119,200 $98,880
4 Bedroom $138,300 $114,720
1. An appraisal of the building for the HOME-assisted unit is conducted at the time of the
2. An appraisal is conducted of the building at the time the owner wishes to sell the unit;
3. The difference between the new and the old appraisal determines the increase in
4. The seller retains 25% percent of the increase in the appraised value (see sample
5. Please note that the appraised value and the initial sales price (based on the subsidy
required) are determined by two different processes and are not necessarily the same.
Appendix D: Specimen Housing Affordability Agreement
CITY OF ANN ARBOR
HOUSING AFFORDABILITY AGREEMENT
This AGREEMENT dated the day of____________, 2005, is between the CITY OF ANN
ARBOR, a Michigan municipal corporation ("CITY"), whose address is 100 North Fifth Avenue,
Ann Arbor, Michigan and ________________________ ("OWNER"), a Michigan
____________corporation whose address is __________________________.
WHEREAS, the OWNER has purchased property in the City of Ann Arbor, Washtenaw
County, Michigan, described as follows:
Commonly known as _______________________
(Parcel ID ____________________)
WHEREAS, the CITY receives funds from the United States Department of Housing and Urban
Development (HUD) pursuant to HUD’s HOME Investment Partnerships Program and the CITY
is authorized to award funds under the HOME Program pursuant to the Cranston-Gonzalez
National Affordable Housing Act and the regulations adopted by HUD contained in 24 CFR 92
et. Seq.; and
WHEREAS, On ____________, the OWNER was approved for a CITY HOME fund loan in the
amount of $________ for the purpose of acquiring and rehabilitating the property and using it as
affordable housing according to the following terms: repayment of the principal amount of
$___________ shall be paid at a rate of __% interest for a term of ___ years commencing on
THE PARTIES AGREE AS FOLLOWS:
1. SCOPE: The OWNER agrees to use CITY HOME funds for the acquisition and
rehabilitation costs of _________ units of affordable housing on the property formally
described in the above legal description. Acquisition funds of approximately
__________, will be used for the acquisition and related closing costs. Rehabilitation
funds in the amount of ____________ will be used to replace and/or repair
____________________ and other rehabilitation as determined by the Office of
Community Development. Changes in the rehabilitation specifications shall be approved
by the Office of Community Development by way of a signed construction change order.
2. LOAN AMOUNT: The CITY agrees to pay to or on behalf of the OWNER the sum of
__________ ($_________) of CITY HOME Funds according to the following terms: the
amount of $__________ shall be a ___% interest, deferred payment loan to be repaid at
the end of the ____-year loan term, or due immediately if the property is transferred or
sold, or the use changes from low-income residential housing.
3. TERM: This Agreement shall commence on the day of , 2006.
Unless otherwise extended, suspended, or terminated by the CITY, this Agreement shall
remain in effect until: 1) OWNER has returned to the CITY the funds authorized by this
Agreement and met all the terms and conditions for the receipt of funds pursuant to this
Agreement; OR 2) the end of both the CITY and HOME affordability periods.
4. AFFORDABILITY PERIODS: The affordability period for the CITY shall commence on
the date of signature of this Agreement and shall terminate ____ years from said date.
The HOME affordability period shall commence on the date the project is completed, as
evidenced by the issuance of the rehabilitation Final Inspection Report and
disbursement of the final drawdown of funds for the project, and shall terminate _____
years after project completion. The OWNER shall continue to comply with all applicable
HOME program regulations, and affordable housing policies of the CITY, and provisions
of this Agreement for the duration of this Agreement, notwithstanding the HOME
5. COMPLIANCE WITH LAWS. The OWNER agrees to comply with all of the
requirements now or hereafter in effect of Title II of the Cranston-Gonzalez National
Affordable Housing Act, the HOME program, and the regulations appearing at Section
24, Part 92 of the Code of Federal regulations (24 CFR 92 et seq.), including, but not
limited to, the assurances and certifications contained in this Agreement.
The OWNER agrees to comply with such further statutory, regulatory, and contractual
requirement(s) now or hereafter in effect as may be applicable to the receipt and
expenditure of HOME Funds, as administered by the U.S. Department of Housing and
Urban Development and the CITY of Ann Arbor.
A. The OWNER agrees to comply with the regulations, policies, guidelines, and
requirements of the Office of Management and Budget (OMB) (24 CFR Part 84
et seq.) as they relate to the application, acceptance and use of federal funds for
this program, as well as the Uniform Relocation Act. Incorporated by reference
are Title VI of the Civil Rights Act of 1964, Executive Order 11246, Section 3,
nondiscrimination and equal opportunity regulations set forth in 24 CFR 92.350
and the Americans with Disabilities Act.
B. The CITY agrees to assist the OWNER in complying with HUD requirements and
if the need arises, the CITY will provide technical assistance to help maintain the
affordability of the project.
6. FINANCES AND PROCUREMENT:
A. The OWNER will implement or continue the activities within the projected budget
and time frame and in accordance with any special terms and conditions for
funding more specifically described and stated in “Exhibit A”, which is attached
and incorporated herein by reference.
B. The OWNER will comply with established CITY disbursement schedules and
procedures. The OWNER agrees that all HOME funds will be disbursed within 15
days of receipt. In no event will a disbursement or further disbursements be
made after a notice by the CITY of a violation of this Agreement, which violation
has not been corrected to the satisfaction of the CITY.
C. The OWNER agrees that payment for services, supplies or materials shall not
exceed the amount ordinarily paid for such services, supplies or materials in the
area where the services are rendered or the supplies or materials are furnished.
All cost overruns shall be the responsibility of the OWNER.
D. The OWNER will comply with the requirements of 24 CFR 92.504(c)(3)(viii) to
assure that no funds available under this agreement are requested until funds
are needed for payment of eligible costs. Further, the amount requested by
OWNER must be limited to the amount needed for payment of eligible costs.
E. The OWNER will comply with 24 CFR 92.504 to assure that any repayment,
interest, and other program income shall be returned to the CITY.
F. OWNER will comply with the labor requirements contained in 24 CFR 92.354.
Every contract for the construction (rehabilitation or new construction) of housing
that includes 12 or more units assisted with HOME funds must contain a
provision requiring the payment of not less than the prevailing wages, as
predetermined by the Secretary of Labor pursuant to the Davis-Bacon Act (40
U.S.C. 276a – 276a-5), to all laborers and mechanics employed in the
development of any part of the housing.
G. The OWNER will establish a dedicated replacement reserve account for major
repairs outlined in the operating pro forma dated _______________.
H. The OWNER will provide annual project financial statements showing the
revenues and expenses from these reserve accounts, based on the OWNER’s
7. INCOME AND RENT DETERMINATION:
A. The OWNER agrees to comply with the requirements of 24 CFR 92.252
(rental) or 92.254 (homeowner), as applicable, pertaining to the
qualification of units assisted under the HOME program as affordable
housing and shall agree to the repayment of funds if the housing does not
meet the affordability requirements for the duration of this Agreement.
B. The initial rent rates shall not exceed the rents outlined in the project pro forma
C. The OWNER agrees to rent all of the units to persons with annual household
incomes equal to or less than ______% of the Area Median Income as defined
annually by HUD.
D. The OWNER agrees to establish annualized rent levels, which are at or below
the published High HOME or Low HOME rent levels appropriate to the unit size
by number of bedrooms as defined by HUD. A minimum of 20% (__) of the units
must be designated as very low-income units with rents that do not exceed the
Low HOME rent rate. The remaining units’ rent rates will not exceed the High
HOME rent rate. The very low-income units are floating units. The rent level shall
include utilities or the tenant’s rent shall be reduced by the amount the tenant
pays for utilities. Utilities include electricity, gas, solid waste, water and sewer but
shall not include telephone and cable. All units are designated as HOME-
E. In the event that the OWNER has tenants admitted below ___% of the Area
Median Income but whose income increases above ____% of Area Median
Income at any annual recertification, the continuation of those tenancies shall not
be considered a breach of this Agreement. The OWNER may increase rents for
tenants whose income rises above ___% of Area Median Income to a level not to
exceed 30% of the tenant's income.
F. The OWNER has provided the CITY with a pro forma estimating monthly rents
for the project. The CITY has relied on these statements in approving these
funds. The rent rates will increase annually consistent with the operating pro
forma dated ____________. The OWNER shall not charge any rents over 120%
of the amount listed in the pro forma without prior written approval of the CITY.
Any CITY disapproval of a proposed rent increase must be in writing and must
state the reason for disapproval.
G. The OWNER shall include tenant and participant protections in conformance with
24 CFR 92.253.
H. The OWNER shall comply with any applicable displacement, relocation, and
acquisition requirements imposed by the participating jurisdiction and HUD
I. The OWNER shall use its best efforts to ensure that the project is managed to
provide safe and habitable housing for its tenants and that the project will not
adversely affect the neighborhood. To that end, the OWNER shall work with the
CITY to establish and maintain systems for tenant selection, tenant support,
property maintenance, and communications with neighbors. The failure of the
OWNER to establish and maintain such systems shall be deemed a breach of
8. REPORTS, MONITORING AND EVALUATION. The OWNER agrees to cooperate fully
with the CITY, and HUD officials to evaluate and monitor the requirements and
performance of programs financed with funds identified in this Agreement. The OWNER
agrees to provide these same parties information and reports, oral or written, as may
reasonably be required or requested during the term of this Agreement on matters
relating to program activities, performance, contract compliance and evaluations of
programs receiving CITY funds.
The OWNER agrees to maintain documentation sufficient to evidence compliance with
rent and occupancy restrictions and tenant income certifications in compliance with the
requirements of 24 CFR 92.252. The OWNER shall provide copies of such
documentation, including but not limited to a certification of income form and rent levels
for the first occupants of the project and an annual update of this information to meet
program requirements. The OWNER agrees to complete and submit this information to
the CITY in a timely manner. The CITY shall provide the report form. Reports are due to
the CITY no later than 30 days after the forms are issued unless otherwise approved by
the Office of Community Development. In accordance with 24 CFR 92.203(a)(1)(ii), the
OWNER shall examine tenant income source documentation every sixth year of the
HOME affordability period.
The OWNER agrees to attend meetings with representatives of the CITY to discuss any
problems or questions related to this Agreement.
9. FINANCIAL AUDITS. Owner shall comply with 24 CFR part 84 relating to audit
requirements. Nonprofit organizations shall also comply with the requirements of OMB
Circular No. A-122 and A-133 as applicable. The OWNER agrees that all aspects of the
activities described in Exhibit A and all documents relating to and supportive of said
activities, including but not limited to specifications and reports of funds expended, shall
be freely available to the CITY or its authorized representatives for review by the CITY to
ensure conformity with the terms of this Agreement. Documentation shall include
payments for purchases, vouchers and other official documentation that show in proper
detail the nature and propriety of such expenditures. All documents must be clearly
identifiable and readily accessible. The OWNER agrees to securely maintain these
records for a period of five (5) years after the HOME affordability period terminates in
conformance with 24 CFR 92.508. The OWNER shall maintain records with respect to
ongoing occupancy, income levels, rent levels, leases and property standards
compliance for the most recent five years of the occupancy period for the duration of this
Agreement. The OWNER shall inform the CITY and permit examination by the CITY,
and HUD prior to destruction of any of these records. The CITY or HUD may cause an
audit of the records of the OWNER at a reasonable time after reasonable notice in
conformance with 24 CFR 92.508. The OWNER shall provide an annual project audit of
revenues and expenses based on the OWNER’s budget calendar.
10. INSPECTIONS. The OWNER shall comply with the requirements of 24 CFR 92.251
regarding property standards, and shall comply with the City Housing Code and Section
8 Housing Quality Standards at initial occupancy and for the duration of this Agreement.
The OWNER shall allow for annual inspections upon request of the CITY, after notice, to
assess compliance. The OWNER maintains full responsibility and liability for the
acceptance of workmanship and materials relating to any construction work completed
on this project. The OWNER shall complete all work according to plans and
specifications and applicable building, plumbing, electrical and housing codes and
Section 8 Housing Quality Standards. The OWNER agrees that all work is to conform to
requirements set forth by the CITY's Community Services Area, unless otherwise noted
in writing by the CITY's Community Services Area. The OWNER shall ensure that all
precautions are exercised at all times for the protection of persons and property by the
OWNER and its contractors and subcontractors. OWNER shall observe safety
provisions of all applicable laws and building and construction codes. The OWNER and
its contractors and subcontractors will secure all necessary certificates and permits from
the CITY or other public authorities as may be required in connection with the
performance of this Agreement.
The OWNER shall comply with the requirements of 24 CFR 92.355 regarding the testing
for and abatement of lead-based paint.
The CITY shall conduct ongoing inspections to ensure that HOME-financed
improvements are completed and in accordance with Exhibit A.
11. SECURITY: The OWNER agrees that it shall execute all appropriate documents to
secure and to provide for the repayment of all funds advanced by the CITY and other
lenders as well as to enforce the provisions of this Agreement. The OWNER shall not
incur additional debt secured by this property without written approval of the CITY, and
any other lenders. The CITY agrees to the initial debt secured on the property by
mortgages given to ____________________. Additional debt must be approved by the
City Administrator or his/her designee. The City acknowledges that future debt may
include the _________________________.
12. CONTRACT AMENDMENT: Line item budget transfers, or other amendments that do
not affect the Scope, Loan Amount, Term, or Affordability Period must be requested in
advance in writing by the OWNER and approved by the CITY Administrator or his/her
designee. All other amendments must be approved by CITY Council and the OWNER.
13. POLITICAL ACTIVITIES: None of the funds, materials, property, or services provided
directly or indirectly under this Agreement shall be used for any partisan political
activities or to further the election or defeat of any candidate for public office.
14. CONFLICT OF INTEREST. The OWNER and CITY shall comply with 24 CFR 92.356.
No employee, agent, consultant, officer or elected or appointed official of the CITY or
OWNER, who exercises or have exercised any functions or responsibilities with respect
to activities assisted with HOME funds or who are in a position to participate in a
decision making process or gain inside information with regard to these activities, may
obtain a financial interest or benefit from a HOME-assisted activity, or have an interest in
any contract, subcontract or agreement with respect thereto, or the proceeds
thereunder, either for themselves or those with whom they have family or business ties,
during their tenure or for one year thereafter.
No owner, developer or sponsor of a project assisted with HOME funds as defined in 24
CFR 92 may occupy a HOME-assisted affordable housing unit in a project. This
provision does not apply to an individual who receives HOME funds to acquire or
rehabilitate his or her principal residence or to an employee or agent of the owner or
developer of a rental housing project who occupies a housing unit as the project
manager or maintenance worker.
The OWNER may request an exception to the above conflicts of interest in writing to the
CITY. The CITY and HUD will determine whether to grant a request for an exception.
15. INSURANCE COVERAGE: The OWNER shall secure and maintain such insurance
policies, including those set forth below, as will protect itself, its contractors,
subcontractors and, unless otherwise specified, the CITY from all claims for bodily
injuries, death or property damage which may arise under this Agreement; whether the
acts were made by the OWNER or by any contractor or subcontractor or anyone
employed by them directly or indirectly. The following insurance policies are required:
a. Statutory Worker's Compensation in accordance with the provisions of the
Michigan Worker's Compensation Act;
b. Public Liability Insurance in an amount not less than $1,000,000 for
injuries, including accidental death to any one person;
c. Property, Builder’s Risk, and Casualty insurance
Insurance certificates shall be filed with the CITY giving satisfactory evidence of
insurance as stipulated above before the CITY will release funds to OWNER under this
contract. The certificates shall be maintained during the life of this Agreement and shall
also name the CITY as an insured party. All insurance certificates shall contain the
following language: "The company agrees that it will give the CITY of Ann Arbor thirty
(30) days prior written notice of its intent to cancel or materially change the described
policy". This language however, if accompanied by a disclaimer or any other language
that negates company responsibility for failing to provide said notice will not be
acceptable. The insurer must be reasonably satisfactory to the City Attorney.
16. INDEMNIFICATION. The OWNER agrees to indemnify, defend, and hold harmless the
CITY, its officers, agents, and employees from any and all claims and losses occurring
or resulting, to any and all OWNERs, contractors, subcontractors, material providers,
laborers, and any other person, firm, or OWNER furnishing or supplying work, services,
materials or supplies in connection with negligent performance under this Agreement,
and from any and all claims and losses occurring or resulting to any person, firm, or
OWNER who may be injured or damaged by the OWNER’s contractors or
subcontractor’s negligence in the performance of the Agreement; and against any
liability, including costs and expenses, for violation of proprietary rights, copyrights, or
rights of privacy. Nothing herein shall be construed as a waiver of the defense of
governmental immunity by the OWNER or the CITY.
17. AFFIRMATIVE MARKETING/EQUAL OPPORTUNITY: The OWNER agrees to comply
with the nondiscrimination provisions of Chapter 112 of the Ann Arbor CITY Code and to
take affirmative action to assure that applicants are employed and that employees are
treated during employment in a manner which provides equal employment opportunity
and tends to eliminate any inequality based upon race, national origin or sex. The
OWNER agrees to comply with the provisions of Section 9:161 of Chapter 112 of the
Ann Arbor CITY Code. The OWNER agrees to comply with living wage provisions of
Chapter 23 of the Ann Arbor CITY Code, if applicable, and, if a “covered employer” as
defined therein to pay those employees providing Services to the CITY under this
Agreement a “living wage,” as defined in Chapter 23 of the Ann Arbor CITY Code; and, if
requested by the CITY, provide documentation to verify compliance. The OWNER
agrees to comply with the provisions of Section 1:815 of Chapter 23 of the Ann Arbor
CITY Code, if applicable.
The OWNER shall comply with the requirements of 24 CFR 92.351 pertaining to
affirmative marketing. The OWNER shall establish an affirmative marketing strategy if
the project contains 5 or more HOME-assisted units. The affirmative marketing strategy
shall include, but shall not be limited to, procedures for advertising vacancies, accepting
referrals, and record keeping. The OWNER shall not discriminate against Section 8 rent
subsidy certificate or voucher holders.
18. NONPROFIT ORGANIZATION: (IF APPLICABLE)
The OWNER warrants that it has supplied the CITY with current copies of its Charter,
Articles of Incorporation, by laws and/or other documents designating the method of
electing or appointing the members of its Board of Directors. The OWNER shall also
keep on file with the CITY a current list of its Board members, its officers, and their
addresses. Any changes in membership shall be promptly reported to the CITY. No part
of its net earnings will inure to the benefit of any member, founder, contributor, or
individual. The OWNER shall maintain a Board of Directors, which includes at least one-
third residents of low-income neighborhoods, other low-income community residents or
elected representatives of low-income neighborhood organizations. The OWNER shall
provide a formal process for low-income program beneficiaries to advise the
organization in its decisions regarding the design, siting, development, and management
of the affordable housing project.
19. BREACH: In the event the OWNER breaches this Agreement or any of the loan
documents to be executed, whether through a material financial or non-financial default,
the CITY shall have full remedies consistent with the purpose of this Agreement and as
set forth in the loan documents. The CITY, in its discretion may or may not exercise
these remedies, which include but are not limited to: meeting with and providing
direction to the OWNER in the management of the project; appointing a receiver to
manage the project according to the terms of this Agreement; taking possession of the
project and managing it for the purposes of this Agreement; purchasing the property,
and all remedies set forth in the parties' loan documents and assignment of rent
document, if applicable. It is the intent of the parties that these remedies be exercised in
a manner appropriate in light of the breach and to the end that this project shall continue
to provide housing for the target population of low-income individuals. In the event of any
breach, each lender shall be responsible for enforcement of its own loan/grant
The CITY may terminate this Agreement, in whole or in part, at any time before the date
of completion, whenever it is determined that the OWNER has failed to comply with the
terms and conditions of this Agreement or in the event that funds are no longer available
to the CITY. The CITY shall promptly notify the OWNER in writing of the determination
and the reasons for the termination, together with the effective date. Payments made to
recipients or recapture of funds by the CITY shall be in accordance with the legal rights
and liabilities of the parties.
20. TERMINATION: The OWNER shall not transfer title or change use of the property
without prior written consent of the CITY. If a transfer or change of use is proposed, or if
the property is in foreclosure, or the OWNER is in breach of this contract, the CITY or
another nonprofit entity to be named by the CITY shall have the right to purchase the
property, unless the property is already restricted by other criteria, as low income
housing at a price to be negotiated between the parties of this Agreement, but not to
exceed the fair market value of the property after taking into account all Agreements and
liens. If the Low Income Housing Tax Credit Program is used to finance this project, the
purchase price shall be the lowest price permitted under the rules and regulations
governing the Low Income Housing Tax Credit Program, so long as all non-assumable
debts relating to the project are paid. The CITY shall publicly advertise the availability of
transfer of the project to nonprofit organizations.
If the parties approve a transfer of the property, any excess of the sale price over the
debt established in this section shall be used to provide affordable housing. The amount
shall be distributed according to the following formula: Any mortgages or liens on the
property shall be repaid first including those of the CITY. Any remaining funds shall then
be distributed according to the formula listed below: the CITY shall receive a
__________ percentage (___%) share of any increase in equity and the OWNER shall
receive the remaining ________ percentage (___%) share of any increase in equity.
Such termination shall not relieve OWNER of its obligations to comply with all terms of
this Agreement for any time up to the time of sale, and to prepare and/or preserve its
records required by this Agreement and to make them available for audit or inspection
for five years after the sale.
The OWNER shall prepare a plan for submission to the CITY 60 days before the
proposed sale or transfer for reinvesting the proceeds of the sale in affordable housing.
If the OWNER fails to submit such a plan, the OWNER waives its right to its share of the
proceeds. Any funds received by the CITY pursuant to a repayment defined in this
Agreement shall be HOME program income as defined in 24 CFR 92.2, in conformance
with 24 CFR 92.503.
21. ENFORCEMENT AND BINDING EFFECT: It is the parties' intent that the obligations
created by this Agreement be enforceable by all parties to this Agreement. This Housing
Affordability Agreement is binding upon the parties to this Agreement and upon their
successors, heirs and assigns, except as prohibited by this Agreement.
Each of these Agreements, restrictions and promises shall run with the land from the
date of this Affordable Housing Agreement.
If at any time during the term of this Agreement, the HUD HOME Investment
Partnerships Program ceases operation or ceases to have governing operating laws and
regulations, the OWNER and the CITY will mutually agree on operating rules for the
affordable housing on this property that capture the spirit and intent of this Agreement
and of the last promulgated laws and regulations of the HOME Program, and that
comply with affordable housing policies of the CITY’s Community Services Area.
22. SEVERABILITY: If any provision or provisions set forth in this document is in conflict
with any Michigan law or is otherwise unenforceable, that provision is void to the extent
of the conflict or unenforceability and is severable from and does not invalidate any other
provision of this Housing Affordability Agreement.
23. HEADINGS: The headings in this Housing Affordable Agreement are for convenience of
reference only and shall not affect the meaning of this Housing Affordability Agreement.
24. SIGNATURE AUTHORITY: The individuals signing this Housing Affordability Agreement
have the requisite authority to do so and bind the OWNER to the terms and conditions
The undersigned have executed this Agreement as of the day and year first above written.
________________________________, a Michigan ____________ corporation
Its: Executive Director
STATE OF MICHIGAN )ss:
COUNTY OF WASHTENAW
The foregoing instrument was acknowledged before me this day of 2006,
by _______________________, Executive Director, of ________________, a Michigan
________ corporation, on behalf of said corporation.
, Notary Public
State of Michigan, County of Washtenaw.
Acting in the County of Washtenaw.
My Commission Expires:
CITY OF ANN ARBOR, a Michigan municipal corporation
Jacqueline M. Beaudry
STATE OF MICHIGAN
COUNTY OF WASHTENAW
The foregoing instrument was acknowledged before me this day of 2006,
by John Hieftje and Jacqueline M. Beaudry, Mayor and City Clerk respectively, of the City of
Ann Arbor, a Michigan municipal corporation, on behalf of said corporation.
, Notary Public
State of Michigan, County of Washtenaw
Acting in the County of Washtenaw
My Commission Expires:
Approved as to Substance:
Roger W. Fraser
Community Development Director
Approved as to Form:
Stephen K. Postema
Prepared by and after recording return to: Kevin McDonald (P-61761) Assistant CITY
CITY of Ann Arbor
Office of the CITY Attorney
100 North Fifth Avenue
Ann Arbor, MI 48107
HOME funds: $_______
Grant Number: _______
The CITY agrees to pay to or on behalf of the OWNER the sum of $ of CITY HOME
Funds according to the following terms: the amount of $ _shall be a _ %
interest, deferred payment loan to be repaid at the end of the -year term with no
payment unless the property is sold or upon any change of use of the property from low-income
Budget & Schedule:
Activity CITY HOME Leveraged Total Deadline
Acquisition & closing $ $ $ October 2005
Rehabilitation Cost $ $ $
Rehab Cost Estimates March 2006
Bid RFP June 2006
Select Contractor June 2006
Pre Construction Walk June 2006
Contractor Work July2006
Permits pulled July 2006
1st Draw August 2006
2nd Draw October 2006
Rehabilitation November 2006
completed and passes
Final Walk Through November 2006
Permits Closed December 2006
All waivers and liens December 2006
signed (if applicable)
Final Draw December 2006
Acquisition and Rehabilitation. Complete rehabilitation to replace and/or repair _____________
and other rehabilitation as determined by the Office of Community Development. Changes in
the rehabilitation specifications shall be approved by the Office of Community Development by
way of a signed construction change order.
Special Conditions: None
Appendix E: Fair Employment Practice
The consultant, its agents or sub-contractors, shall comply with all requirements of Chapter 112
of Title IX of the Code of the City of Ann Arbor and in particular the following excerpts therefrom:
9:161 NONDISCRIMINATION BY CITY CONTRACTORS
(1) All contractors proposing to do business with the City of Ann Arbor shall satisfy
the nondiscrimination administrative policy adopted by the City Administrator in
accordance with the guidelines of this section. All contractors shall receive
approval from the Director prior to entering into a contract with the City, unless
specifically exempted by administrative policy. All City contractors shall take
affirmative action to insure that applicants are employed and that employees are
treated during employment in a manner which provides equal employment
opportunity and tends to eliminate inequality based upon race, national origin or
(2) Each prospective contractor shall submit to the City data showing current total
employment by occupational category, sex and minority group. If, after verifying
this data, the Director concludes that it indicates total minority and female
employment commensurate with their availability within the contractor's labor
recruitment area, i.e., the area from which the contractor can reasonably be
expected to recruit, said contractor shall be accepted by the Director as having
fulfilled affirmative action requirements for a period of one year at which time the
Director shall conduct another review. Other contractors shall develop an
affirmative action program in conjunction with the Director. Said program shall
include specific goals and timetables for the hiring and promotion of minorities
and females. Said goals shall reflect the availability of minorities and females
within the contractor's labor recruitment area. In the case of construction
contractors, the Director shall use for employment verification the labor
recruitment area of the Ann Arbor-Ypsilanti standard metropolitan statistical area.
Construction contractors determined to be in compliance shall be accepted by
the Director as having fulfilled affirmative action requirements for a period of six
(6) months at which time the Director shall conduct another review.
(3) In hiring for construction projects, contractors shall make good faith efforts to
employ local persons, so as to enhance the local economy.
(4) All contracts shall include provisions through which the contractor agrees, in
addition to any other applicable Federal or State labor laws:
(a) To set goals, in conference with the Human Resources Director, for each
job category or division of the work force used in the completion of the
(b) To provide periodic reports concerning the progress the contractor has
made in meeting the affirmative action goals it has agreed to;
(c) To permit the Director access to all books, records and accounts
pertaining to its employment practices for the purpose of determining
compliance with the affirmative action requirements.
(5) The Director shall monitor the compliance of each contractor with the
nondiscrimination provisions of each contract. The Director shall develop
procedures and regulations consistent with the administrative policy adopted by
the City Administrator for notice and enforcement of non-compliance. Such
procedures and regulations shall include a provision for the posting of contractors
not in compliance.
(6) All City contracts shall provide further that breach of the obligation not to
discriminate shall be a material breach of the contract for which the City shall be
entitled, at its option, to do any or all of the following:
(a) To cancel, terminate, or suspend the contract in whole or part and/or
refuse to make any required periodic payments under the contract;
(b) Declare the contractor ineligible for the award of any future contracts with
the City for a specified length of time;
(c) To recover liquidated damages of a specified sum, said sum to be that
percentage of the labor expenditure for the time period involved which
would have accrued to minority group members had the affirmative action
not been breached;
(d) Impose for each day of non-compliance, liquidated damages of a specified
sum, based upon the following schedule:
Contract Amount Per Day of
$ 10,000 - 24,999 $ 25.00
25,000 - 99,999 50.00
100,000 - 199,999 100.00
200,000 - 499,999 150.00
500,000 - 1,499,999 200.00
1,500,000 - 2,999,999 250.00
3,000,000 - 4,999,999 300.00
5,000,000 - and above 500.00
(e) In addition the contractor shall be liable for any costs or expenses
incurred by the City of Ann Arbor in obtaining from other sources the work
and services to be rendered or performed or the goods or properties to be
furnished or delivered to the City under this contract.
Appendix F: Living Wage Requirements
If a "covered employer," Contractor will comply with all the requirements of Chapter 23 of
the Ann Arbor City Code (Sections 1:811 B 1:821), in particular but not limited to the
following sections thereof:
For purposes of this Chapter, the following definitions shall apply:
(1) "Contractor/vendor" is a person or entity that has a contract with the City
primarily for the furnishing of services where the total amount of the contract or
contracts with the City exceeds $10,000 for any 12-month period.
"Contractor/vendor" does not include a person or entity that has a contract with
the City primarily for the purchase of goods or property, or for the lease of goods
or property to or from the City.
(2) "Covered Employee" means a person employed by a covered employer to
perform services which are covered or funded by the contract with or grant from
the City; provided, however, that persons who are employed pursuant to federal,
state or local laws relating to prevailing wages shall be exempt from this Chapter.
(3) "Covered Employer" means a contractor/vendor or grantee that has not been
granted an exemption from this Chapter pursuant to Section 1:817.
(4) "Employee" means an individual who provides personal services performed for
wages under any contract calling for the performance of personal services,
whether written or oral, express or implied. The term "employee" does not
include any individual who volunteers to perform services for an employer if
(a) The individual receives no compensation or is paid expenses, reasonable
benefits, or a nominal fee to perform the services for which the individual
(b) Such services are not the same type of services which the individual is
employed to perform for such employer.
(5) "Employee Health Benefits" or "Health Benefits" means providing health care
benefits for employees (or employees and their dependents) at employer cost or
making an employer contribution toward the purchase of such health care
benefits for employees (or employees and their dependents), provided that the
employer cost or contribution equals no less than $1 an hour for the average
work week of such employee, and provided further that any employee payment
or contribution toward health care shall not exceed 50 cents an hour for the
average work week for such employee.
(6) "Grant" means any form of financial assistance to a "Grantee" as set forth and
defined in Section 1:813(7). "Grant" does not include financial assistance used
for the purchase or lease of property or other nonpersonnel costs.
(7) "Grantee" is a person or entity that is a recipient of any financial assistance from
the City in the form of any federal, state or local grant program administered by
the City, revenue bond financing, tax increment financing, tax abatement, tax
credit, direct grant, or any other form of financial assistance that exceeds
$10,000 for any 12-month period, including any contractors, subcontractors, or
leaseholders of the grantee whose contract, subcontract or lease with the
grantee exceeds $10,000 for any 12month period.
(8) "Living Wage" means a wage equal to the levels established in Section 1:815.
(9) "Person" means any individual, copartnership, corporation, association, club,
joint adventure, estate, trust, and any other group or combination acting as a unit,
and the individuals constituting such group or unit.
(10) "$10,000 for any 12 month period" is computed by taking the total amount of the
contract, grant or loan and dividing it by the number of months the contract, grant
or loan covers.
(1) This Chapter shall apply to any person that is a contractor/vendor or grantee as
defined in Section 1:813 that employs or contracts with five (5) or more
individuals; provided, however, that this Chapter shall not apply to a nonprofit
contractor/vendor or nonprofit grantee unless it employs or contracts with ten
(10) or more individuals.
(2) This Chapter shall apply to any grant, contract, or subcontract or other form of
financial assistance awarded to or entered into with a contractor/vendor or
grantee after the effective date of this Chapter and to the extension or renewal
after the effective date of this Chapter of any grant, contract, or subcontract or
other form of financial assistance with a contractor/vendor or grantee.
1:815. Living Wages Required.
(1) Every contractor/vendor or grantee, as defined in Section 1:813, shall pay its
covered employees a living wage as established in this Section.
(a) For a covered employer that provides employee health care to its
employees, the living wage shall be $9.91 an hour, or the adjusted
amount hereafter established under Section 1:815(3).
(b) For a covered employer that does not provide health care to its
employees, the living wage shall be $11.48 a hour, or the adjusted
amount hereafter established under Section 1:815(3).
(2) In order to qualify to pay the living wage rate for covered employers providing
employee health care under subsection 1:815(1)(a), a covered employer shall
furnish proof of said health care coverage and payment therefore to the City
Administrator or his/her designee.
(3) The amount of the living wage established in this Section shall be adjusted
upward no later than April 30, 2002, and every year thereafter by a percentage
equal to the percentage increase, if any, in the federal poverty guidelines as
published by the United States Department of Health and Human Services for
the years 2001 and 2002. Subsequent annual adjustments shall be based upon
the percentage increase, if any, in the United States Department of Health and
Human Services poverty guidelines when comparing the prior calendar year's
poverty guidelines to the present calendar year's guidelines. The applicable
percentage amount will be converted to an amount in cents by multiplying the
existing wage under Section 1.815(1)(b) by said percentage, rounding upward to
the next cent, and adding this amount of cents to the existing living wage levels
established under Sections 1:815(1)(a) and 1:815(1)(b). Prior to April 1 of each
calendar year, the City will notify any covered employer of this adjustment by
posting a written notice in a prominent place in City Hall, and, in the case of a
covered employer that has provided an address of record to the City, by a written
letter to each such covered employer.
1:816. Employees Covered.
A covered employer shall pay each of its employees performing work on any covered contract
or grant with the City no less than a living wage as defined in Section 1:815.
Notwithstanding any other provisions in this Chapter, the following exemptions shall apply:
(1) Sweat equity contracts for home construction or rehabilitation grant will not
subject the grantee to coverage under this Chapter. Housing construction or
rehabilitation grants or contracts that are passed through to a contractor in their
entirety are exempt from the provisions of this Chapter, even when the City
participates in the selection of the contractor.
(2) For any contract or grant, the City Council may grant a partial or complete
exemption from the requirements of this Chapter if it determines one of the
(a) To avoid any application of this Chapter that would violate federal, state
or local law(s); or
(b) The application of this Chapter would cause demonstrated economic
harm to an otherwise covered employer that is a nonprofit organization,
and the City Council finds that said harm outweighs the benefits of this
Chapter; provided further that the otherwise covered nonprofit employer
shall provide a written plan to fully comply with this Chapter within a
reasonable period of time, not to exceed three years, and the City Council
then agrees that granting a partial or complete exemption is necessary to
ameliorate the harm and permit the nonprofit organization sufficient time
to reach full compliance with this Chapter.
(3) A loan shall be considered a grant under this ordinance only to the extent that a
loan is provided at below market interest rates and then only the difference
between the amount of the loan and the present value of the payments
thereunder, discounted over the life of the loan, shall be treated as financial
assistance under this ordinance.
(4) A payment of funds for the purpose of purchasing services, property, or goods on
behalf of individuals being assisted by a covered employer or potentially covered
employer (sometimes known as a "pass through" grant) that is used for said
purchases shall not be considered a grant; such funds shall be considered a
grant only to the extent that any such funds are retained by the covered employer
or potentially covered employer to provide financial assistance and support to its
1:818. Monitoring and Enforcement.
(1) Every covered employer shall agree to the payment of a living wage as a
condition of entering into or renewing a covered contract or grant with the City, shall
agree to post a notice regarding the applicability of this Chapter in every work place or
other location in which employees or other persons contracted for employment are
working, and shall agree to provide payroll records or other documentation as deemed
necessary within ten (10) business days from the receipt of the City's request. All City
contracts and grants covered by this Chapter shall provide that a violation of the living
wage requirements of this Chapter shall be a material breach of the contract or grant.
The Human Rights Office of the City shall monitor the compliance of each
contractor/vendor or grantee under procedures developed by the Human Rights Office
and approved by the City Administrator.
(2) Each covered employer shall submit to the Human Rights Office of the City
information regarding number of employees and applicable wage rates of its
employees covered by this Chapter in such manner as requested by that office.
At the request of the Human Rights Office, any contractor/vendor or grantee shall
provide satisfactory proof of compliance with the living wage provisions of this
(3) Any person may submit a complaint or report of a violation of this Chapter to the
Human Rights Office. Upon receipt of such a complaint or report, the Human
Rights Office shall investigate to determine if there has been a violation.
1:819. Penalties and Enforcement.
(1) A violation of any provision of this Chapter is a civil infraction punishable by a fine
of not more than $500.00 plus all costs of the action. The Court may issue and
enforce any judgment, writ, or order necessary to enforce this Chapter, including
payment to the affected employee or employees of the difference between
wages actually paid and the living wage that should have been paid, interest, and
other relief deemed appropriate.
(2) Each day upon which a violation occurs shall constitute a separate violation.
(3) In addition to enforcement under Subsections (1) and (2), the City shall have the
right to modify, terminate, and/or seek specific performance of any contract or
grant with an affected covered employer or to cancel, terminate or suspend the
contract in whole or in part and/or to refuse any further payments under the
contract or grant;
(4) Nothing contained in this Chapter shall be construed to limit in any way the
remedies, legal or equitable, which are available to the City or any other person
for the correction of violations of this Chapter
1:821. Other Provisions.
(1) No affected covered employer shall reduce the compensation, wages, fringe
benefits, or leave available to any covered employee or person contracted for
employment in order to pay the living wage required by this Chapter.
(3) No employee covered by a federal, state or local law requiring the payment of
prevailing wages shall be covered by this Chapter.
(4) This Chapter shall not be construed to apply to any person or entity that is a tax
exempt religious, educational or charitable organization under state or federal
law, but is not a contractor/vendor or grantee as defined in Section 1:813.
(5) This Chapter shall not be applicable to the establishment and/or continuation of
the following if developed specifically for high school and/or college students:
(a) A bona fide training program;
(b) A summer or youth employment program;
(c) A work-study, volunteer/public service, or internship program.
City of Ann Arbor
LIVING WAGE ORDINANCE
DECLARATION OF COMPLIANCE
The Ann Arbor Living Wage Ordinance (Section 1:811-1:821 of Chapter 23 of Title I of the Code) requires that
employers providing services to the City or recipients of grants for financial assistance (in amounts greater than
$10,000 in a twelve-month period of time) pay their employees who are working on the City project or grant, a
minimum level of compensation known as the Living Wage. This wage must be paid to the employees for the
length of the contract/project.
Companies employing fewer than 5 persons and non-profits employing fewer than 10 persons are exempt from
the Ordinance. If this exemption applies to your firm, please check below:
______ This company is exempt due to the fact that we employ or contract with fewer than 5 individuals.
______ This non-profit agency is exempt due to the fact that we employ or contract with fewer
than 10 employees.
The Ordinance requires that all contractors/vendors and/or grantees agree to the following terms:
a) To pay each of its employees performing work on any covered contract or grant with the City, no less
than the living wage, which is defined as $9.68/hour when health care is provided, or no less than
$11.21/hour for those employers that do not provide health care. It is understood that the Living Wage
will be adjusted upward each year on April 30, and covered employers will be required to pay the
adjusted amount thereafter. The rates stated above include the adjustment for 2005.
b) Please check the boxes below which apply to your workforce:
Employees who are assigned to any covered City project or grant will be paid at or above the
applicable living wage without health benefits Yes______ No_____
Employees who are assigned to any covered City project or grant will be paid at or above the applicable living wage
with health benefits Yes_____ No_____
c) To post a notice approved by the City regarding the Living Wage Ordinance in every work place or
other location in which employees or other persons contracting for employment are working.
d) To provide the City payroll records or other documentation as requested; and,
e) To permit access to work sites to City representatives for the purposes of monitoring compliance,
investigating complaints or non-compliance.
The undersigned authorized representative hereby obligates the contractor/vendor or grantee to the above
stated conditions under penalty of perjury and violation of the Ordinance.
Company Name Address City State Zip
Signature of Authorized Representative Phone (area code)
Type or Print Name and Title Email address
________________________________________ Questions about this form? Please contact:
Date signed Human Resources Office City of Ann Arbor
734/994-2803 fax: 734/994-2590
Appendix G: Human Rights Requirements
City of Ann Arbor Human Rights Office
INSTRUCTIONS FOR CONTRACTORS for completing CONTRACT COMPLIANCE FORM
The “non discrimination in contracts” provision of the City Code, (Chapter 112, Section 9:161) requires
contractors/vendors/grantees doing business with the City not to discriminate on the basis of actual or
perceived race, color, religion, national origin, sex, age, condition of pregnancy, marital status, physical
or mental limitations, source of income, family responsibilities, educational association, sexual
orientation, gender identity or HIV status against any of their employees, any City employee working
with them, or any applicant for employment. It also requires that the contractors/vendors/grantees
include a similar provision in all subcontracts which they execute for City work or programs.
This Ordinance further requires that each prospective contractor/vendor submit employment data to the
City showing current total employee breakdown by occupation, race and gender. This allows the
Human Rights Office to determine whether or not the contractor/vendor has a workforce which is
reflective of the availability of women and under-represented minorities within the contractor’s labor
recruitment area (the area where they can reasonably be expected to recruit employees). This data is
provided to the City on the Human Rights Office Contract Compliance Forms (attached).
To complete the form:
1) If a company has more than one location, then that company must complete 2 versions of
Form #1 should contain the employment data for the entire corporation.
Form #2 should contain the employment data for those employees:
who will be working on-site;
in the office responsible for completing the contract; or,
in the case of non-profit grantees, those employees working on the
project funded by the City grant(s).
2) If the company has only one location, fill out Form #1 only.
3) Complete all data in the upper section of the form including the name of the person who
completes the form and the name of the company/organization’s president.
4) Complete the Employment Data in the remainder of the form. Please be sure to complete all
columns including the Total Columns on the far right side of the form, and the Total row and
Previous Year Total row at the bottom of the form.
5) Return the completed form(s) to your contact in the City Department for whom you will be
conducting the work.
For assistance in completing the form, contact:
Human Rights Office of the City of Ann Arbor
If a contractor is determined to be out of compliance, the Human Rights Office will work with them to
assist them in coming into compliance.
CITY OF ANN ARBOR HUMAN RIGHTS OFFICE Form #1
CONTRACT COMPLIANCE FORM
Entire Organization (Totals for All Locations where applicable)
Name of Company/Organization_____________________________________________________________ Date Form Completed_____________________________________
Name and Title of Person Completing this Form________________________________ Name of President __________________________________________________________
Address_____________________________________________________________________ County_____________________ Phone #__________________________________
(Street address) (City) (State) (Zip) (Area Code)
Fax#____________________________________________ Email Address____________________________________________________________________________________
Number of Employees
Job Categories (Report employees in only one category)
White Black or Asian Hispanic Native American Indian White Black or Asian Hispanic or Native Hawaiian American Indian
African or Latino Hawaiian or or Alaska Native African Latino or Other Pacific or Alaskan TOTAL
American Other Pacific American Islander Native COLUMNS
A B C D F G H I J K L M
9/03 Questions about this form? Call 734/994-2803
CITY OF ANN ARBOR HUMAN RIGHTS OFFICE Form #2
CONTRACT COMPLIANCE FORM
Local Office (Only those employees that will do local or on-site work, if applicable)
Name of Company/Organization________________________________________________________________ Date Form Completed_____________________________________
Name and Title of Person Completing this Form_______________________________________________
Fax#_______________________________________ Email Address_________________________________________________________________________________________
Number of Employees
Job Categories (Report employees in only one category)
White Black or Asian Hispanic Native American Indian White Black or Asian Hispanic or Native Hawaiian American Indian
African or Latino Hawaiian or or Alaska Native African Latino or Other Pacific or Alaskan TOTAL
American Other Pacific American Islander Native COLUMNS
A B C D F G H I J K L M
9/03 Questions about this form? Call 734/994-2803
Appendix H: Board Member Roster ____________________________________
(name of Organization
Name Board Address and Phone Current Job and/or experience related to Race* Gender Term on
Position development M/F Board
*RACE (as defined by HUD): American Indian or Alaska Native; Asian; Black or African American; Native Hawaiian or Other Pacific Islander;
White; American Indian/Alaska Native and White; Asian and White; Black/African American and White; American Indian/Alaskan Native and
Black/African American; Other. In addition, please indicate Hispanic if it also applies.