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					HUD’S OFFICE OF MULTIFAMILY
   HOUSING PROGRAMS
 ENERGY INNOVATION FUND
          NOFA
        SEPTEMBER 19, 2011
PURPOSES OF THE ENERGY INNOVATION FUND (EIF) PROGRAM

MAIN PURPOSE:
 Stimulate innovative, scalable, replicable approaches for
 increasing the energy efficiency of existing multifamily
 properties.

OUR AUTHORITY:
 Consolidated Appropriations Act of 2010 (Pub L. 111-117).
 Congress directed $25 million for the Multifamily Energy
 Pilot Program to catalyze innovations in the residential
 energy efficiency sector that have promise of replication.
 This NOFA provides information and instructions for
 applying for a grant.


                                                              2
OUTCOMES OF THE EIF
HUD expects that outcomes of the Program will include:

•   Reduced energy consumption, and lower greenhouse gas
    emissions.
•   Increased private investment to support multifamily
    energy efficiency.
•   Green jobs in construction, property management,
    technical analysis.
•   Quality data on retrofit costs, benefits, challenges, and
    opportunities.
•   Approaches for retrofitting such properties that can be
    applied widely.
•   Approaches that address the so-called “split incentives”
    issue.
                                                                3
CRITICAL DETAILS FOR MULTIFAMILY EIF
Application deadline is Thursday October 20, 2011

Full NOFA and Application can be accessed at www.grants.gov
  • After you register, go to “Apply For Grants”; then choose “Step 1,
     Download a Grant Application package”; then enter CFDA # 14.319.

Applications must meet all:
  • Entity eligibility requirements
  • Property eligibility requirements
  • Activity eligibility requirements


•   All applications must be submitted electronically through
    www.grants.gov
•   Today’s webcast will be archived, available for viewing on HUD’s
    website
•   Today’s webcast is intended to provide clarification to the NOFA. In the
    event of conflict between information provided today and information
    provided in the NOFA, the published NOFA prevails.                      4
ELIGIBLE APPLICANTS INCLUDE:
 1. Treasury-certified community development financial institutions
 (CDFIs) with affordable housing development and rehabilitation
 programs.

 2. National, regional, or local private or non-profit entities, inclusive of
 Public Housing Authorities, currently administering affordable housing
 development and rehabilitation programs, including technical assistance
 and capacity building programs. Such entities must manage or direct
 programs impacting a minimum of 1,000 units of affordable housing.

 3. Special purpose financing entities (e.g., housing trust funds) whose
 primary purpose is to preserve, retrofit, and/or build affordable housing.

 4. Nonprofit or for-profit organizations (and/or consortia thereof) that
 own or control a portfolio of Eligible Multifamily Properties. Such
 entities must manage or direct programs impacting a minimum of 1,000
 units of affordable housing.
                                                                           5
    ELIGIBLE PROPERTIES

Eligible Properties must have all of the following features:

•    Multifamily Properties (5 units or more)
•    Existing Properties (no new unit construction)
•    Affordable Housing (majority of units serve low-income
     residents), including public housing properties
•    Under control of applicant




                                                               6
ELIGIBLE ACTIVITIES / TYPES OF AWARDS


 Two types of awards:

 1.   Financing Demonstrations

 2.   Applied Research Demonstrations




                                        7
FINANCING DEMONSTRATIONS

Must leverage additional capital
 • Minimum 2:1 match at the award level, plus
 • Minimum 1:1 match at the property level


Must test new ways of funding energy retrofit improvements.

Examples of eligible Financing Demonstrations include:
  1) Energy retrofit financing vehicles providing investor equity;
  2) Loan loss reserves; interest rate reductions;
  3) Secondary financing; loan guarantees; secured/unsecured loans;
  4) Energy-related revolving loan programs;
  5) On-bill utility repayment programs or other mechanisms;
  6) Power purchase agreements, energy performance contracts, or similar
        financing structures.

Award Ceiling for each Financing Demonstration award is $7.5 million

                                                                       8
APPLIED RESEARCH DEMONSTRATIONS
Must address a longstanding barrier to multifamily residential retrofits that:
 1) is not primarily financial in nature; and
 2) is applied to an actual property or group of properties (pure research is not
    allowed).

May address the issue in behavioral, structural, or regulatory terms, or be related to
 availability of information or options.

Examples of eligible Applied Research Demonstrations include:
  • Solutions that provide more information on and greater owner and/or tenant
    control over energy use;
  • Solutions that convert properties from master metered/owner paid utilities to
    individually metered/tenant paid utilities that result in efficiencies and savings,
    or vice versa; and
  • Conservation practices and solutions that address the problem of split incentives
    by creating incentives for parties that promote investment strategies for energy
    improvements.

Award Ceiling for each Applied Research Demonstration award is $3 million
                                                                                    9
MATCHING FUNDS REQUIREMENT

Participation requires matching funds from private, non-governmental
sources (funds other than federal, state, local, or tribal) to complement grant
funds. An applicant must demonstrate upon application the commitment of
such funds:

  •   Financing Demonstrations: Matching funds of at least $2 of for every $1
      requested, and will be required to bring additional matching funds of $1
      for every $1 loaned at the project level.
  •   Applied Research Demonstrations: Matching funds of at least $1 for
      every $1 requested.

NOTE: A secondary purpose of this program is to engage private industry in
the initiative; additional matching funds above these minimum thresholds
are desirable, and the application review process gives credit for funds above
the match minimums.


                                                                          10
Guidance for preparing a
 Successful Application




                           11
ANTICIPATED IDEAL APPLICANTS (FAVORED IN SCORING)

•   Competitive entities must be eligible (as defined in the
    NOFA) and are expected to be very experienced, control a
    lot of housing, already be addressing affordability, be able
    to get parties in private sectors interested.
•   Applicants must bring something new to the table - seeking
    creativity, innovation.

•   Credit Factors (in review of applications):
    •   1. Experience/Capability
    •   2. Soundness of Approach
    •   3. Maintenance of Funds and leveraging above match
    •   4. Low Income Needs
    •   5. Sustainable Solutions


                                                             12
APPLICATION CHECKLIST

   Are you an eligible applicant?
   Do you have significant experience in affordable housing?
   Have you secured necessary outside funding?
   Can you document your private funding sources?
   Are you proposing a “new” area of investigation, i.e. is your idea competitively
    innovative?
   Is your proposal “replicable” and “scalable”?
   Are you prepared to negotiate the final terms of work to be performed with HUD
    prior to an award?
   Are you proposing a team of key personnel who are experienced in both housing
    and energy innovation?
   Are you willing to negotiate changes to the work activity based on periodic
    examination of progress and outcomes?
   Have you identified properties for this program that can meet environmental and
    other HUD requirements?
   Do you have or are you willing to accept/extend Use Agreements on all program
    properties?
    Have you determined how to perform the proposed work and created a draft
    Work Plan (complete with milestones and timetables) to submit with your
    application?                                                                    13
USE AGREEMENT REQUIREMENTS

•   HUD will require that the ownership of a property benefiting
    from these grant funds:
•   Have an existing Use Agreement with a remaining term of at
    least ten years from date of delivery of the grant benefit or
    commencement of grant-related activity; or
•   Extend the term of any existing Use Agreement for a period of
    at least ten years; or
•   Execute a new Use Agreement for a period of no less than ten
    years from this date, in a form and substance prescribed by
    HUD.




                                                             14
OPERATIONS & MAINTENANCE PLAN
•   Applicants must make a commitment in the Draft Work Plan to
    Implement an Operations and Maintenance Plan for each property.
•   Applications must include a template for an Operations and
    Maintenance Plan.
•   Templates should:
       Identify best practices from the green housing industry;
       Describe how residents will be engaged.
•   Examples include the HUD Mark-to-Market Green Initiative Operations
    and Maintenance Plan, and the Enterprise Green Communities
    Operations and Maintenance requirements.
•   For Financing Demonstrations, sub-grantees/borrowers may develop
    their own plan so long as the Grantee reviews and accepts the plan
    prior to commencement of the grant activity.




                                                                     15
 DEMONSTRATING THE ABILITY TO BRING IN MATCHING FUNDS
 AT THE APPLICATION STAGE

Matching Dollars Required:
 • Financing Demonstrations: matching dollars 2:1
 • Applied Research Demonstrations: matching dollars 1:1


As a part of the application, demonstrate the ability to match funds via either:
  1) their own capacity to provide required funds or
  2) letters of intent from one or more third parties

Letters of Intent from third parties must :
  1) demonstrate agreement to perform a specified activity
  2) describe the proposed total level of commitment (in dollar value)
  3) demonstrate financial capacity to deliver the pledged resources; and
  4) evidence intent to commit the resources if the application is funded.
  5) be written on the letterhead of the third party organization
  6) be executed by a legally authorized official of the organization
  7) be dated no earlier than the date of publication of this NOFA; and
  8) remain valid for the full period of proposed grant activities.

Letter of Intent must convert to Third Party Commitment Letters prior to award.
                                                                                   16
PROCESS FLOW CHART – APPLICATION, NEGOTIATION & AWARD

                           Application
                           received by HUD

                                                     Grantee executes
   Incomplete
                   HUD checks for completeness;      grant /cooperative
   app rejected
                   examines receipt date and         agreement and
   or request
                   inventories documents.            work plan - POINT
   revisions
                                                     of OBLIGATION of
                                                     FUNDS

   Incomplete      Complete applications delivered
   app rejected    to Selection Committee (SC)




   Applicant       SC makes preliminary selection
   fails to        and contacts potential grantees
   negotiate/      to open negotiations
   rejected

                   SC and potential grantees agree   EI project begins
   Agreement
   not reached     on Work Plan



    Negotiations   SC is satisfied with terms of
    fail           Work Plan and 718 Issued -
                   COMMITMENT
    DRAFT WORK PLAN

•   Draft Work Plan is a required submission with the
    application.

•   The Draft Work Plan must describe the objectives of the
    proposed activity, how those activities will be implemented
    and achieved, milestones, and timetable.

•   If an applicant is preliminarily selected by HUD, the draft
    Work Plan will be used as the basis for negotiations, and a
    final Work Plan will be developed in that process.

•   Grants will be awarded through Cooperative Agreements
    rather than traditional grant agreements, giving HUD the
    ability to work closely with each Grantee.
                                                                  18
    APPLICATION SORTING CRITERIA

•   MAXIMUM POINTS that may be awarded to any
    application: 100 plus 2 possible bonus points

•   NEGOTIATIONS: Applicants with the highest scoring
    applications will be contacted in order of ranking to
    participate in negotiations leading to a possible award of
    grant funds. HUD will enter into negotiations with those
    applicants using the draft Work Plan (required in the
    application package). The applicant and HUD must agree
    on a Final Work Plan which will include all milestones for
    the activity and for disbursement of the Grant funds by
    HUD to the Grantee.


                                                                 19
HOW TO MAXIMIZE THE EFFECTIVENESS OF YOUR APPLICATION

The rating categories are:

Factor 1: Experience and Capacity – up to 25 points
  • Management Team and Key Staff : 0 to 10 Points
  • Organizational Experience : 0 to 5 Points
  • Capacity : 0 to 10 Points
  • Deduction for Poor Prior Experience: Up to 15 Points
    Deducted

Factor 2: Soundness of Approach – up to 35 points
  • Implementation Strategy: 0 to 15 Points
  • Innovation: 0 to 10 Points
  • “Replicability”: 0 to 10 Points


                                                           20
 HOW TO MAXIMIZE THE EFFECTIVENESS OF YOUR APPLICATION

Factor 3: Matching Funds/Leveraging – up to 15 points
  • More points for leveraging (bringing additional funds above required
    matching ratio): 0 to 10 Points
  • Continuation beyond grant period: 0 to 5 Points


Factor 4: Low Income Housing Needs – up to 10 points
  • More points for a higher percentage of housing units for Low-income
    population
  • More points for a longer term of Use Agreements (See table in NOFA
    for point calculation).

Factor 5: Sustainable Solutions – up to 15 points
  • Energy savings and Greenhouse gas emission reductions: 0 to 13
    Points
  • Capacity Building and Knowledge Sharing: 0 to 2 Points


Bonus Points - 0 to 2 Points
                                                                      21
AFTER AWARD – WORKING TOGETHER
MANAGING THE GRANT ACTIVITY
GRANTEES will coordinate progress directly with HUD

 Kickoff Meeting –within 30 days of award
   •   Coordinated by OAHP
   •   Discuss/Understand milestones for measuring progress
   •   Discuss/Understand process and procedures for making e-LOCCS
       withdrawals
 Periodic Progress Meetings
   •   Grantees and HUD meet pursuant to Work Plan
   •   Discussion of progress, barriers encountered, proposed solutions
 Funding Withdrawals from e-Loccs System
   •   Timing and withdrawal triggers

HUD review and approval of withdrawals requests

                                                                          23
REPORTING REQUIREMENTS

Quarterly report requirements are as follows:

a.Comparison of scheduled milestone completion and expenditures
to actual activity.

b.      Dollars expended to date, sub-awards made, and funds
        remaining, all by funding source.

c.      Program Income as per applicable program income rules.

d.      For Financing Demonstrations awards that create a revolving
        loan fund, report on matching dollars for grant activities at
the     project loan level (1:1 match requirement).




                                                                        24
REPORTING REQUIREMENTS

Annual report requirements are as follows:

a. Number of units and the number of properties receiving energy
   retrofits.
b. Energy consumption and costs prior to retrofit in properties receiving
   energy retrofits.
c. Specific retrofit measures being applied.
d. Estimated and actual costs of the retrofit measures.
e. Energy consumption reductions anticipated, and as achieved (when
   available).
f. Financial savings from improved efficiency for the property and for
   residents.
g. Financial structures utilized, and the associated transaction costs.




                                                                        25
REPORTING REQUIREMENTS

Final report to HUD upon Grant closeout

Contains a final summary of program activities and
outcomes including:

  •   Review of actual outcomes compared to anticipated and
      projected outcomes;
  •   Discussion of lessons learned, anticipated and
      unanticipated problems and solutions;
  •   Discussion of the benefits that resulted from the
      program activity.



                                                         26
EIF NOFA SUMMARY
•   PURPOSE: Stimulate innovative, scalable, replicable approaches for
    increasing the energy efficiency of existing multifamily properties
•   Carefully review entity, property, and activity eligibility requirements
•   Financing Demonstrations:
         2:1 matching requirement (plus 1:1 at the property level for loan funds)
         Award cap of $7.5 million per award
•   Applied Research Demonstrations:
         1:1 matching requirement
         Award cap of $3 million per award
•   Applications deadline Thursday, October 20, 2011 at 11:59:59 Eastern
    time; NOFA General Section includes instructions for timely receipt
•   Process:
         Applications will be reviewed, rated and ranked by HUD.
         Grantees preliminarily selected will be invited to negotiate final Work Plan
          with HUD.
•   Final Grantees will execute grants/Cooperative Agreements with HUD


                                                                                     27
CLOSING

•   Email questions to EIFApplication@hud.gov

•   Further Information:
•   Visit www.grants.gov for complete program description and NOFA and
    program application and application instructions

•   The Multifamily Energy Innovation Fund is CFDA # 14.319, published
    as Federal Register FR-5415-N-01

•   Thank you for your interest, attention and participation!




                                                                     28

				
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