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									                                                                Elder CHOICE :
                                                                ASSISTED LIVING FOR
                                                                ELDERS PROGRAM


The Massachusetts Housing Finance Agency (MHFA) is requesting proposals for
assisted living developments to be financed under the Commonwealth's Elder CHOICE
program. Elder CHOICE is designed to encourage the development of appropriate
housing alternatives for frail elders requiring assistance with daily living activities. The
"assisted living" concept offers a supportive residential environment which maximizes
the ability of elders to live independently and reduces the need for costly
institutionalization. Through this new program, MHFA will provide construction and
permanent financing for the development of assisted living communities. Elder
CHOICE has been developed in conjunction with the Executive Office of Communities
and Development, the Executive Office of Elder Affairs, and the Executive Office of
Health and Human Services.

The purpose of this program guide is to explain both program goals and how proposals
will be evaluated. Qualified projects will be awarded Official Action Status (OAS)
designation and invited to submit applications for construction and permanent debt
financing. Proposals will be evaluated and scored in order to determine threshold
acceptability for purposes of granting OAS. Projects that fail to meet threshold
requirements may be revised and resubmitted for consideration by the Agency. OAS
designation will be determined on the basis of scores which reflect the quality and
completeness of the proposal in five evaluation areas:

              Development Team Qualifications
              Marketability & Need
              Service Program & Concept
              Architectural Design & Site
              Integration of Program Components

Proposals are currently being accepted on a rolling admissions basis. Evaluations will
be concluded within 60 days of the submission of a complete application. Once a
satisfactory review is finished, OAS approval will be voted at the next meeting of the
Agency Board of Directors. While preliminary financial feasibility will be assessed at
the OAS stage, full loan underwriting will occur when a loan commitment application is
accepted for review by the Agency. Combined OAS/loan commitment applications will
be considered depending on the completeness of the application package.

June 1, 1995                                                                   Page 1

 Assisted living developments financed through Elder CHOICE will include a
 supportive service program designed to provide assistance with activities of daily
 living (ADLs) and other routine non-medical assistance. Service programs will be
 designed on a case management model and will reflect the individual and unscheduled
 needs of frail residents. Please see the attached Program Guidelines for detailed
 requirements. At a minimum, service programs will include the following:

Assistance with personal care (bathing, continence, dressing, ambulation, toileting,
eating, and transfers)
Housekeeping and maintenance, laundry service, medical monitoring, and
       Up to 3 meals per day 24-hour emergency response Service coordination and
       case management

Assisted living developments financed by the Agency will make these services available
to frail elders in a residential setting which maximizes their privacy, independence, and
control over their care.


MHFA was created with the mandate to expand housing opportunities for individuals
and families of varied economic means. In keeping with that mission, the Agency
requires that at least 20% of the units in a development must be available to low -income
residents whose income may not exceed 50% of area median income.

Proposals may target low-income occupancy to persons qualifying for the Medicaid
Group Adult Foster Care Program (GAFC) administered by the Division of Medical
Assistance. The GAFC program provides a reimbursement to qualified service
providers of $33.70 per day for costs associated with providing personal care services to
-Medicaid-eligible seniors. Service providers for proposals that will use GAFC
reimbursements must demonstrate a thorough understanding of the program as well as
eligibility to be designated as a Medicaidapproved provider. For information on the
GAFC program call Eleanor Shea-Delaney, Division of Medical Assistance at (617) 348-
5570.                                                   .

In addition to GAFC, equity raised through the syndication of the Low-Income Housing

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Credits may be used to support low-income occupancy in Elder CHOICE developments.
The Executive Office of Communities and Development (EOCD) has delegated to
MHFA the ability to award 4% Low-Income Housing Tax Credits used in conjunction
with taxexempt bond financing. Such tax credits are awarded by MHFA when a loan
commitment is approved by the Agency Board. For information on tax credits call the
MHFA Development Department, at (617) 854-1358.

June 1, 1995                                                                Page 2

Proposals will be assessed based on the extent to which they fulfill program objectives
within five evaluation areas, including:

      Development Team Qualifications
      Marketability & Need
      Service    Program    &   Concept
      Architectural    Design  &    Site
      Integration of Program Components

Each of the five program areas will be weighted equally in the evaluation process.
However, within each category some characteristics will be weighted more heavily.
Rather than emphasizine minimum criteria, the evaluations will stress a high degree of
quality, completeness, and consistency in the entire proposal. Priority factors are
described below as well as in the Program Guidelines and List of Evaluation Areas.


The development team, including developer/owner, manager/service provider, architect ,
and general contractor, must provide evidence of relevant experience in the
development and operation of housing of similar scale and complexity. Members of the
team will be evaluated on the basis of .demonstrated success in development, operations
and service provision, and design or construction of housing with services for the frail
elderly. Prior experience in the field of assisted living is most germane, however,
experience in similar development types such as nursing or rest homes, housing for the
frail elderly with supportive services, or residential hotels, will be considered depending
on the level of comparability to the proposed assisted living development.
The prior performance of the sponsor's similar developments will be considered with
respect to such factors as: service plan, occupancy and turnover, financial

                                       June 1, 1995
performance, real property maintenance, resident satisfaction, and success in
coordinating and networking within the local community.
The team must demonstrate significant expertise in the delivery and coordination of
services proposed for the development. Due to the importance of services in the
successful operation of an assisted living community, the experience and capability of
the proposed service provider will be extensively examined and will influence the
overall acceptability of the proposal. Proposals will not be accepted without a
designated service provider. Proposals that include GAFC reimbursement must

June 1, 1995                                                                  Page 3
demonstrate that the service provider is knowledgeable about Medicaid requirements
and is eligible for approval as a GAFC provider by the Division of Medical Assistance.

      Past performance in affirmative action by all team members will be reviewed as
      will the financial capacity and credit history of both the mortgagor and the
      general contractor.


The Agency will assess the marketability and need for the proposed assisted living
development in the particular locality. As part of the proposal, sponsors must submit an
independent market feasibility analysis for the proposed assisted living community,
including at a minimum:

               description of project concept and service program

               the target market including specific level of frailty and service
               needs local demographics including age and income characteristics
               proposed rent and service fees and level of affordability
               evidence of local support for the assisted living proposal

market information describing current and planned competitive and comparable
developments in the market area
Project proposals should reflect a detailed analysis of these market factors, however,
the Agency will rely on its own demographic analysis in the determination of market
feasibility which may-entail the use of third-party consultants. In addition to market
demand, the Agency will evaluate the planned marketing strategy and the
appropriateness of the site, the building, and the service program. Proposals will be
evaluated based on the extent to which service programs appropriately respond to the
documented needs of the target market group.

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All proposals should include a statement of mission or objectives as part of the service
program description and operating plan outline. What is the sponsor intending to
accomplish in the development of this assisted living community? A clear statement of
operating philosophy defines the framework on which each component of the
development - from food service concept to personal care policies and procedures - is
based. From this general statement of purpose, each proposal must articulate how the
project will actually be implemented: what services and shelter will be provided, how
service will be organized and delivered, how much it will cost to provide such shelter
and service, who the prospective residents will be, and why they will be willing to pay
the proposed rent and service charges.

June 1, 1995                                                                 Page 4
Every assisted living development will provide a minimum array of services (see
Program Concept) which must be tailored to each resident's specific needs and modified
over time through the development of an individualized care plan. In the operating plan
submitted with the application, sponsors must demonstrate the ability to accommodate
the increasing or changing needs of the very frail in a manner that facilitates the
resident's dignity, privacy, and ability to choose care or services. Resident participation
in the development of the individualized care plan, for example, is one manifestation of
these characteristics and is integral to the concept of assisted living.

Applicants are encouraged to structure rent and services in a "standard" package
including basic assistance available for a flat monthly charge. Residents should also
have the ability to purchase "enhanced" or optional services for an additional charge, if
needed and not provided under the basic plan. Alternative fee structures will be
considered provided minimum services are offered and service charges can be reliably
underwritten. Sponsors must demonstrate that prospective residents, given expected
frailty levels and income characteristics; will -have access to appropriate services as
their care needs increase. Sponsors will also be required to detail tenant selection and
move-out criteria in relation to the services offered and the expected frailty of the
resident population. If an application proposes using the GAFC program, sponsors
must demonstrate that the service plan conforms to the requirements of the program.

                                       June 1, 1995

      Proposals will be judged on the basis of site design and suitability for assisted
      living, the size and density of the development, the unit plan and mix, the overall
      architectural treatment, marketability of the design, and sensitivity to community

      Projects may range in size between 30 and 100 units. The physical design should
      present a residential rather than institutional environment while providing for a
      service infrastructure (administrative offices, commercial kitchen, and dining
      rooms). Architectural plans should be developed in consultation with the service
      provider and should be closely related to the requirements of proposed activity
      and service programs. The organization of interior spaces should be domestic in
      scale and appearance. Finishes and furnishings should evoke a home-like setting
      and accommodate the needs and preferences of elderly residents

June 1, 1995                                                                  Page 5
      In addition to preliminary plans and specifications, the architect will be required
      to submit an architectural program narrative which delineates the relationship
      between the architectural design and the service program. Proposals will be
      evaluated on the extent to which the architectural plan maximizes quality of
      resident life, building efficiency, and efficient delivery of services.

      Unit designs must support resident independence and dignity to the maximum
      extent possible. As such, units must include a private bathroom, kitchenette,
      lockable entry door, and individual climate controls. The unit mix must be
      supported by documented market demand. Shared occupancy scenarios in which
      unaffiliated individuals share a unit are discouraged by the Agency. Rental
      revenue attributable to shared units will not be considered in loan underwriting.


Following the analysis of each of the major components of the proposal, the Agency will
assess the extent to which the proposal meets the objectives of the program and is
successful in integrating these objectives into an effective project. This -analysis will
focus on the degree to which the proposal is appropriately responsive to the multi-
disciplinary demands of assisted living for the frail elderly. Evidence of the sponsor's
understanding of the local target market and effectiveness in designing a suitable
service package will be critical. The marketability of the concept and site location will
also be assessed as will the extent to which the architectural plan

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maximizes resident quality of life while minimizing operating expenses and development
costs. In the analysis of the overall proposal, the Agency will conduct a preliminary
review of financial feasibility in order to determine the likelihood that a proposal will be
able to move forward to the loan commitment stage.
Project sponsors must complete the One-Stop Application according to the instructions
for Official Action Status approval and supplementary instructions for Elder CHOICE
proposals. Failure to follow the supplementary instructions will result in an incomplete
application and delay processing. Prior to proposal submission, all applicants must attend
a pre-application conference with MHFA development staff. Please call the Development
Department at (617) 854-1358, if you have any questions.
Complete the One Stop application and exhibits as directed in the general and
supplementary instructions. Please submit six copies of the completed application to:
               Massachusetts Housing Finance Agency
               One Beacon Street, Boston, MA 02108
               Attention: Amy Jacobs

June 1, 1995                                                                   Page 6
Applications must be accompanied by a submission fee of $1.00 per $1,000 of estimated
loan amount. This fee is non-refundable and will be credited to the total fees due in the
event that the sponsor is invited to submit a loan commitment application following the
OAS review.


(1)     Elder CHOICE Program and Underwriting Guidelines

(2)     Supplementary Instructions for Elder CHOICE

(3)     One Stop Application Form and Instructions

June 1, 1995
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