AHP DISBURSEMENT MANUAL by rMQDu4g

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     AHP
    EARLY
DISBURSEMENT
   MANUAL
Effective February 1, 2011
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                                              TABLE OF CONTENTS

SUMMARY .................................................................................................................................... 3
DISBURSEMENT AVAILABILITY ............................................................................................ 3
 Restricted Access to AHP Subsidy .............................................................................................. 3
DISBURSEMENT PROCESSING ................................................................................................ 3
DISBURSEMENT CRITERIA ...................................................................................................... 4
DISBURSEMENT TIMELINE AND SUBSIDY ADJUSTMENTS ............................................. 6
  Timeline for Disbursement of Funds .......................................................................................... 6
  Transfer of Funds ........................................................................................................................ 6
  Subsidy Adjustments .................................................................................................................. 7
DOCUMENTS AND FORMS ....................................................................................................... 8
  AHP Early Disbursement Grant Request Instructions ................................................................ 8
  Required Documentation Descriptions ....................................................................................... 9
  AHP Early Disbursement Request – pdf version ..................................................................... 11
FREQUENTLY ASKED QUESTIONS AND COMMON MISTAKES ..................................... 13
  Frequently Asked Questions ..................................................................................................... 13
  Common Mistakes .................................................................................................................... 15
STAFF LISTING .......................................................................Error! Bookmark not defined.16
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SUMMARY
This AHP Early Disbursement Manual has been designed as a reference guide for Sponsors and
Members (banks) that have been awarded Affordable Housing Program (AHP) funds by the
FHLBank of Cincinnati for rental projects. Instructions for accessing funds and checklists are
included in this manual.
Please review the manual prior to submitting a request for funding. An AHP Early Disbursement
Request form must be completed by both the Sponsor and the Member. Use the Disbursement
Request form and this manual to identify acceptable documentation for an Early Disbursement
request.
You must complete the proper forms and submit the necessary documentation so that the request
may be processed as expeditiously as possible. Please allow at least 30 days for processing a
disbursement request.
For questions regarding funding, please contact the Housing Program Manager/Disbursements.



DISBURSEMENT AVAILABILITY
Disbursements will be processed by the FHLBank in accordance with the FHLBank’s procedures
and guidelines for funding of subsidies and all applicable monitoring procedures, which are
published on the Bank’s website, www.fhlbcin.com.

Restricted Access to AHP Subsidy
The FHLBank reserves the right to deny or delay subsidy disbursement to a Member or Sponsor if:
   1. Either the Member or the Sponsor has failed to respond to a prior FHLBank request for
      information regarding this or other AHP projects, or
   2. If the Member or Sponsor has been asked by the FHLBank to cure a noncompliant situation
      and resolution is pending, or
   3. The Sponsor currently has other older, open, and incomplete AHP projects that must be
      closed or making adequate progress towards completion.



DISBURSEMENT PROCESSING
In processing disbursement requests, the FHLBank reviews the information submitted with the
disbursement request and other pertinent project information obtained from the Member and
Sponsor during the review process. The FHLBank verifies that the project continues to qualify
for the awarded subsidy based on the applicable threshold requirements and scoring criteria and
that the Member and Sponsor have complied with the obligations committed in the approved
application. The FHLBank re-evaluates the financial and operational feasibility of the project
and verifies the project’s continued need for subsidy. Members and Sponsors requesting AHP
funds from the FHLBank must have documents in place in a form satisfactory to the FHLBank to
meet the requirements of the AHP Regulation and may be required, upon the FHLBank’s
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request, to provide copies of such documents to the FHLBank prior to the FHLBank’s
disbursement of funds. Below is a detailed list of documents required for disbursement
processing. The FHLBank reserves the right to request further documentation as necessary.
All AHP funds are subject to the FHLBank’s funding requirements. Receipt of a disbursement
does not guarantee compliance with the AHP guidelines. The FHLBank reserves the right to
reduce or recapture funds at any time, should the project be found out of compliance or no longer
demonstrate the need for subsidy.



DISBURSEMENT CRITERIA
Rental projects can submit an AHP Early Disbursement Request, but the project must meet the
following criteria:

   1. Project must be approved for an AHP grant with no monies drawn down. Advances are not
      eligible.
   2. All AHP agreements must be fully executed.
   3. All funding sources must be fully committed.
   4. Sponsor must be current on all required reporting on other FHLBank projects and all
      projects must be operating in compliance.
   5. The projects must have Low or Moderate Disbursement Risk (that is, projects with Low or
      Moderate Sponsor Risk and either Low or Moderate Project Risk). This risk assessment is
      determined once the FHLBank receives the AHP Early Disbursement Request and
      supporting documentation. All other projects would be disbursed only after project
      completion (see Exhibit 3).

Sponsor Risk (see Exhibit 1)
    An assessment of risk based on the capacity and prior/current performance of the project
    Sponsor. The risk reflects the likelihood that the project will not be completed and that
    funds might have to be recaptured.
         1.   Sponsor Capacity: based on FHLBank staff assessments of the information
              provided about the Sponsor through registration and other related information;
         2.   Project progress: based on the number of projects which have been successfully
              completed and the number and status of active projects;
         3.   Significant modifications required: based on the magnitude and frequency of
              changes in prior and current projects related to significant financial matters or
              project targeting; and
         4.   Disbursements with delays or questions: based on the magnitude and frequency
              of significant documentation issues which delay disbursements.
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Exhibit 1: Sponsor Risk

Sponsor capacity score (assigned by AHP staff)
                        Low                    Moderate                          High
                          0                         2                             3
Project progress score (active/completed projects)
                        Poor                  Satisfactory                       Good
                          0                         1                             2
Significant modifications score (financial matters or targeting)
                     Frequently              Occasionally                        Never
                          0                         1                              2
Disbursement delays score (Sponsor documentation issues)
                     Frequently              Occasionally                        Never
                          0                         1                              3

                                                  Score                      Sponsor Risk
                                                   0-4                          High
                                                   5-7                        Moderate
                                                  8-10                           Low


Current Project Risk (see Exhibit 2)
    An assessment of risk based on the nature of the project. The risk reflects the likelihood that
    the project will not be completed and that funds might have to be recaptured.
        1.     Rental projects only; and
        2.    Project characteristics: certain types of projects present inherently greater risk,
              such as new construction or substantial rehab projects that do not have
        government funding or executed construction contracts. Other unusual project
        characteristics may also present greater risk.


Exhibit 2: Current Project Risk


 Acquisition    New construction / rehab with executed         New construction / rehab without
    only        construction contract (Sponsor is not the      executed construction contract or
                 general contractor) and/or government               government funding
                                funding
    Low                        Moderate                                     High
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Disbursement Risk (see Exhibit 3)
    The FHLBank will provide early disbursement of AHP grant funds only to projects with
    Low or Moderate Disbursement Risk (that is, projects with Low or Moderate Sponsor Risk
    and either Low or Moderate Project Risk). All other projects would be disbursed only after
    project completion.


Exhibit 3: Disbursement Risk based on Project and Sponsor Risk

                                                       Sponsor Risk
                                    Low               Moderate                   High
                  Low               Low                 Low                      High
 Project Risk   Moderate            Low               Moderate                   High
                  High              High                High                     High

All disbursements will require certain documentation necessary for the FHLBank to process the
request. The documents required will be described in detail towards the end of this manual. Note,
check the FHLBank’s website for any changes to the definitions as indicated in the AHP
Implementation Plan which guides the administration of the AHP program.



DISBURSEMENT TIMELINE AND SUBSIDY ADJUSTMENTS
Timeline for Disbursement of Funds
Once the Disbursement Request with all supporting documentation is received, the FHLBank will
begin analyzing the information and will contact the Sponsor and the Member via fax or email
should additional information or clarification be required. All disbursements will be processed in
the order in which they are received.
Please allow at least 30 days for the processing of all disbursement requests. However, should
the FHLBank receive incomplete or incorrect documentation, delays in the disbursement process
could occur. Upon a complete review, additional information is requested and the requested
information should be received by the FHLBank within 30 days. For a timely receipt of funds,
refer to the Frequently Asked Questions and Common Mistakes sections of this manual for tips
on how to avoid unnecessary delays.


Transfer of Funds
Once your request has been approved, the Member and Sponsor will receive a Confirmation of
AHP Funds Disbursement via fax or email indicating the amount disbursed for the project.
Within one business day, the FHLBank will electronically deposit the approved funds into the
Member’s Demand Deposit Account with the FHLBank. If the Member does not receive the
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funds within this timeframe, please contact the Housing Program Manager/Disbursements for
assistance.
.


Subsidy Adjustments
The FHLBank reserves the right to make reasonable adjustments to all Disbursement Requests at
the FHLBank’s discretion, in accordance with the FHLBank’s procedures and guidelines for
funding of subsidies and all applicable monitoring procedures. The majority of subsidy
adjustments occur if the project’s funding sources have changed and there is no longer a need for
subsidy, if the project no longer meets the applicable scoring criteria as outlined in the AHP
Agreement, if the household does not meet the income-eligibility criteria or feasibility guidelines,
if AHP monies are being used for ineligible expenses, or if the costs presented are not reasonable.
If you have questions regarding an adjustment made to your Disbursement Request or the total
amount of your AHP award, please contact the Housing Program Manager/Disbursements for
more information.
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DOCUMENTS AND FORMS
AHP Early Disbursement Grant Request Instructions
Collaboration between the project Member and Sponsor is necessary to complete the request form
and provide the required documentation for a rental project. Please follow the steps below to
request funds. If you need additional assistance, contact the Housing Program Manager/
Disbursements.

Step 1: Complete the AHP Early Disbursement Request

      All sections on the AHP Early Disbursement Request must be completed. Attach additional
       sheets if necessary to provide any explanations. An incomplete request form or missing
       documentation may delay the funding process.
      If there is no change or the question is not applicable, please check the “N/A” box.

Step 2: Provide Required Documents

For all funding disbursements:
      The Affordable Housing Program Agreement and Contingency Letter must be signed by the
       project Member and Sponsor and returned to the FHLBank.
      Additional documents are necessary. Please see the AHP Early Disbursement Request
       checklist for required documentation and this manual for required formatting. Incomplete
       or missing documentation may delay the funding process.

Step 3: Obtain Required Signatures

      The AHP Early Disbursement Request must have signatures from both the project Member
       and Sponsor contacts.

Step 4: Submit the AHP Early Disbursement Request with all required supporting
documentation
      By Email: AHPDisbursement@fhlbcin.com
          o Subject line must indicate: [Project number] Early Disbursement
      By Mail:
           Housing and Community Investment
           Federal Home Loan Bank of Cincinnati
           221 E. 4th Street
           Cincinnati, OH 45202
      By Fax: 513-852-7647
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Required Documentation Descriptions

                    REQUIRED DOCUMENTATION DESCRIPTIONS

    AHP Early Disbursement           The Early Disbursement Request is for rental projects
    Request                          only. Must be executed by the Sponsor and Member
                                     contacts and all sections of the request must be
                                     completed. Check the boxes for “Already on file,”
                                     “Enclosed,” or “N/A.”
1a Direct Subsidy Agreement          Must be executed by two signers from the Member
                                     bank authorized to draw funds from the FHLBank.
                                     Original signatures are required. This document was
                                     mailed to the Member contact when the project was
                                     approved.
1b Affordable Housing Program        Must be executed by the Member and Sponsor
   Agreement                         contacts. This document was mailed to the Sponsor
                                     and Member contacts when the project was approved.
                                     Original signatures are required.
1c Contingency Letter                Must be executed by the Member and Sponsor
                                     contacts. This document was mailed to the Sponsor
                                     and Member contacts when the project was approved.
                                     Original signatures are required.
2  Evidence of 100% funding          If the project was approved for SHOP, HOME funds,
   sources shown on the approved     etc., the executed grant agreements must be submitted.
   development budget                For other permanent loans, the executed Note and
                                     Mortgage or Deed of Trust must be submitted. If the
                                     project was approved with a cash contribution from the
                                     Member, Sponsor, or other, donated items, or a
                                     deferred developer fee – verification of these items will
                                     be required to be submitted at time of final
                                     disbursement.
3 Proof of site control              Must submit the recorded deed or lease indicating that
                                     the property has been transferred to the Sponsor or
                                     Owner of the project. At the time of final
                                     disbursement, the FHLBank retention language must
                                     be in the deed, referenced in the deed as an exhibit or
                                     addendum, or included as a restrictive covenant. A
                                     copy of the Advance retention language and grant
                                     retention language are available in the Rental
                                     Disbursement Manual.
4 Executed construction contract     Must submit the executed construction contract with a
   (Sponsor is not the general       scope of work for the project. The Sponsor cannot
   contractor)) with a scope of work serve as the general contractor if this document is to be
   that is consistent with the       submitted.
   approved development budget.
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5a For Tax Credit projects only,       For Tax Credit Rental projects only, must submit the
   copy of the firm commitment         executed Carryover Allocation for tax credits for the
   from the syndicator                 project.
5b For Tax Credit projects only,       For Tax Credit Rental projects only, must submit the
   copy of the equity pay-in           equity pay-in schedule from the investor, usually found
   schedule                            in the executed Partnership Agreement with all
                                       attachments.
6  Has the total development cost,     If there are any changes to the development or
   or any one line item in the         operating budget, changes must be submitted.
   development budget, changed
   more than 10% since the initial
   application was submitted? Or,
   has the project’s financial
   structure changed?
6a If “Yes”, submit the following:     Blank attachments can be requested from FHLBank
    i. Updated Attachment A:           contacts at the end of this manual.
         Sources & Uses.
    ii. Updated Attachment B:          Developer fee (includes developer fee, developer
         Rental Income.                overhead, consultant fee, and construction management
    iii. Updated Attachment C: 15-     if the Sponsor is the general contractor), capitalized
         Year Operating Budget.        reserves (includes operating reserve, lease-up reserve,
                                       and replacement reserves on the development budget),
                                       and replacement reserves on the operating budget
                                       cannot exceed what the project was approved for…if it
                                       does, a detailed explanation must be submitted.
7   Have any of the following          Any of the following changes require a modification
    project characteristics changed?   request to be submitted. Follow the Modification
      Sponsor or Member Role          Procedures in the FHLBank’s Implementation Plan
      Project Targeting (Income,      located on the FHLBank website.
         Special Needs, Homeless,
         etc)
      Number of units/unit mix
      Project location
      Any other change
    If “Yes,” provide an explanation
    of the changes.
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AHP Early Disbursement Request – pdf version
Page 12
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FREQUENTLY ASKED QUESTIONS AND
COMMON MISTAKES
Below is a list of frequently asked questions and common mistakes that often occur when
requesting a disbursement of funds. They are being provided in an attempt to assist Members and
Sponsors in expediting the disbursement process.


Frequently Asked Questions
   Q. Why does the FHLBank require documentation before releasing funds?
   A. In order to determine that grant recipients are eligible for AHP funds and to reduce the
      potential for recapture of funds from our Members, we require documentation of pass-
      through of AHP funds, evidence of sources of other funding, and other documentation as
      indicated in the Request form.

   Q. Does the FHLBank have a standard retention document?
   A. Yes. The retention language is on the FHLBank’s website and in the other manuals. The
      retention language is different for Advance and grant projects. If the project was approved
      for both a grant and an Advance, both retention languages must be used. The retention
      language in the recorded warranty deed is required for final disbursement. You should
      rely on the most current retention language on the FHLBank’s website under
      Resources/Documents and Forms/Attachment G - Retention Agreements

   Q. One of my proposed funding sources was not approved. Will my project be cancelled?
   A. If other financing can be obtained, the project will not be cancelled.

   Q. How will I know if a submitted request is approved?
   A. A Confirmation of AHP Funds Disbursement will be emailed or faxed to the Member and
      Sponsor.

   Q. How long does it take to receive funding once the FHLBank has received a completed
      Disbursement Request and all supporting documentation?
   A. Typically, the FHLBank will require up to 30 days for reviewing the Disbursement Request
      and providing the funds, but if additional information is required, it may take longer.

   Q. How will the Member institution receive funding after a request for funds has been
      approved?
   A. We will credit the Member’s demand deposit account for the amount approved.
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Q. Can AHP funds be loaned to the project?
A. Yes, but if the loan is repayable, payments must be made directly to the FHLBank.
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Common Mistakes
In order to assist our Members and Sponsors in receiving funds in a timely manner, we have
included a list of common mistakes that can potentially delay the processing of your Disbursement
Request.
   1. The AHP Early Disbursement Request is incomplete or unsigned by one or both parties.
      All questions should be answered. If a question is not applicable, please check the “N/A”
      box in the space provided.
   2. All of the funding sources approved at application were not documented with executed
      grant agreements or Notes/Mortgages (Deeds of Trust).
   3. There is an unexplained significant change in the AHP Attachments. Please attach
      budget narratives to explain any substantial or unanticipated changes to the project’s
      financing.
   4. The project was approved for an AHP Advance only…these projects are not eligible.
   5. The project is in the high risk category…these projects are not eligible.
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                                     STAFF LISTING

                                             Phone Number      E-mail Address

Damon v. Allen                           (513) 852-7518        allendv@fhlbcin.com
Senior Vice President & Community Investment Officer

Brenda A. Pierre                             (513) 852-7505    pierreba@fhlbcin.com
Housing Quality Assurance Officer

Mary L. Hernandez **                         (513) 852-7604    hernandezml@fhlbcin.com
Affordable Housing Program Manager

Julie M. Doerger **                          (513) 852-7609    doergerjm@fhlbcin.com
Housing Program Manager

Jill A. Cravens **                           (513) 852-7550    cravensja@fhlbcin.com
Voluntary Programs Manager

Laura K. Overton **                          (513) 852-7603    overtonlk@fhlbcin.com
Housing Financial Analyst II

Cassandra L. Larcarte **                     (513) 852-7619    larcartecl@fhlbcin.com
Housing Financial Analyst II

Samantha M. Walker **                       (513) 852-7621     walkersm@fhlbcin.com
Housing Financial Analyst I



                                           1-888-345-2246
                                        Fax: (513) 852-7647
                              Visit us on the web at www.fhlbcin.com


** AHP Disbursement Reviewers

								
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