Proforma Disbursement Account Page 1 AHP by gsh14666

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     AHP
   RENTAL
DISBURSEMENT
   MANUAL



    AS OF
NOVEMBER 1, 2009
                                             TABLE OF CONTENTS

S
SUMMARY.................................................................................................................................... 3
DISBURSEMENT AVAILABILITY ............................................................................................ 3
  Access to AHP Subsidy ............................................................................................................... 3
DISBURSEMENT PROCESSING ................................................................................................ 3
DISBURSEMENT CRITERIA ...................................................................................................... 4
DISBURSEMENT TIMELINE AND SUBSIDY ADJUSTMENTS............................................. 4
  Timeline for Disbursement of Funds .......................................................................................... 4
  Transfer of Funds........................................................................................................................ 4
  Subsidy Adjustments .................................................................................................................. 5
DOCUMENTS AND FORMS ....................................................................................................... 6
  Rental Disbursement Request Instructions ................................................................................. 6
  Required Documentation Descriptions ....................................................................................... 7
  Rental Retention Language for projects that receive AHP grant awards ................................. 18
  Rental Retention Language for projects that receive AHP Advance awards ........................... 19
  DISBURSEMENT REQUEST FOR RENTAL PROJECTS ................................................... 20
FREQUENTLY ASKED QUESTIONS AND COMMON MISTAKES..................................... 23
  Frequently Asked Questions ..................................................................................................... 23
  Common Mistakes .................................................................................................................... 25
STAFF LISTING .......................................................................................................................... 26
                                                                                               Page 3




SUMMARY
This Rental Disbursement Manual has been designed as a reference guide for Sponsors and
Members that have been awarded Affordable Housing Program (AHP) funds by the FHLBank of
Cincinnati for rental projects. Instructions for accessing funds, checklists, feasibility guidelines,
and retention language are included in this manual.
Please review the manual prior to submitting a request for funding. A Disbursement Request form
must be completed and signed by both the Sponsor and the Member. Use the checklist provided in
this manual or the one located on the website to assist you in submitting the necessary
documentation for processing.
You must complete the proper forms and submit the necessary documentation so 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 Bank’s procedures and
guidelines for funding of subsidies and all applicable monitoring procedures, which are published
on the Bank’s website, www.fhlbcin.com.

Access to AHP Subsidy
The FHLBank reserves the right to deny 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. Either 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 a disbursement, 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 to in the approved
application. The FHLBank re-evaluates the financial and operational feasibility of the project,
verifies the project’s continued need for subsidy, and verifies the reasonable costs.
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
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required, upon the Bank’s request, to provide copies of such agreements to the FHLBank prior to
the Bank’s disbursement of funds. A detailed list of documents required for the disbursement
process can be found later in this manual. The FHLBank reserves the right to request further
documentation as necessary.
All AHP funds are subject to the Bank’s disbursement 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, costs
presented are not reasonable, or the project no longer demonstrates the need for subsidy.




DISBURSEMENT CRITERIA
Rental projects must submit a disbursement request upon completion of the project, as evidenced
by the Certificate of Occupancy or other comparable issued for the property. 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 package 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. Should the FHLBank
receive incomplete, incorrect, or conflicting documentation, delays in the disbursement process
could occur. For a timely receipt of funds, refer to the Frequently Asked Questions and Common
Mistakes section 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 Disbursement
Confirmation via fax or email that confirms the amount disbursed for the project as verified. The
FHLBank will then deposit the approved funds into the Member’s Demand Deposit Account
electronically within one business day. If you have not received your funds within this
timeframe, please contact the Housing Program Manager/Disbursements for further assistance.
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Subsidy Adjustments
The FHLBank reserves the right to make reasonable adjustments to all Disbursement Requests at
the Bank’s discretion, in accordance with the Bank’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
Rental Disbursement Request Instructions
Collaboration between the project Member and Sponsor is necessary to complete the request form
and provide the required documentation. Please follow the steps below to request funds. If you
need additional assistance, contact the Housing Program Manager/Disbursements.

Step 1: Complete the Disbursement Request Form

   •   All sections on the Disbursement Request form 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 Disbursement Request checklist for
       required documentation for Rental projects. Incomplete or missing documentation may
       delay the funding process.

Step 3: Obtain Required Signatures

   •   The Disbursement Request form must have signatures from both the project Member and
       Sponsor contacts.

Step 4: Submit the Disbursement Request form
   •   Mail or fax the completed Disbursement Request form along with all required supporting
       documentation to:


                         Housing and Community Investment Department
                             Federal Home Loan Bank of Cincinnati
                                        221 E. 4th Street
                                     Cincinnati, OH 45202

                                       FAX: 513-852-7647
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Required Documentation Descriptions

REQUIRED DOCUMENTATION DESCRIPTIONS

                                     Must be executed by the Sponsor and Member contacts
     Disbursement Request for        and all sections of the request form must be completed.
     Rental Projects                 Check the box for “Already on File,” “Enclosed,” or
                                     “N/A.”
                                     Must be executed by two signers from the Member
                                     bank authorized to draw funds from the FHLBank.
     Direct Subsidy Agreement –
1a                                   Original signatures are needed. This document was
     with original signatures
                                     mailed to the Member contact when the project was
                                     approved.
                                     Must be executed by the Member and Sponsor
     Affordable Housing Program      contacts. This 7-8 page document was mailed to the
1b
     Agreement                       Sponsor and Member contacts when the project was
                                     approved.
                                     Must be executed by the Member and Sponsor
                                     contacts. This 3-4 page document was mailed to the
1c   Contingency Letter
                                     Sponsor and Member contacts when the project was
                                     approved.
                                     The FHLBank requires a completion date for all rental
                                     projects as evidenced by a Certificate of Occupancy for
                                                 s
                                     the project' address(es).
                                       • If a certificate of occupancy is not required for
                                          such work, the date of project completion shall be
                                         the date certified by the project architect that the
                                         work was substantially complete (for example,
                                         through AIA document G704 Certificate of
2    Certificate of Occupancy
                                         Substantial Completion).
                                       • If there is no project architect, the date of project
                                         completion shall be the date certified by the
                                         general contractor that the work was substantially
                                         complete.
                                       • If there is no general contractor, the date of project
                                         completion shall be the date certified by the
                                         Sponsor that the work was substantially complete.
                                     This section must be completed for Low Income
                                     Housing Tax Credit projects only. If the project does
3    For Tax Credit projects only:
                                     not contain tax credits, refer to section #4 for the
                                     information needed.
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                                      Must be executed and dated, and must contain all of
                                      the projects' finals costs and sources (development
                                      budget) and be completed by an independent auditor.
                                      It can also contain a final operating budget.
                                         • All development and operating figures must match
                                           the amounts on the final Tax Credit Proforma
                                           submitted.
                                         • If the project includes non-residential space as
     Executed cost certification by        approved in the AHP application, a completed
     an independent auditor to             Attachment A (development budget) from the
3a
     document all project costs and                   s
                                           FHLBank' website must be submitted indicating
     sources.                              the costs for the residential and non-residential
                                           aspects of the project. A breakdown of the total
                                           square footage of the project and non-residential
                                           space or other comparable documentation must be
                                           submitted and the percentage of non-residential
                                           space in the project must tie back to the non-
                                           residential costs on the development budget. Any
                                           non-residential space must be covered by another
                                           source aside from AHP monies.
                                      Must be an executed construction contract and all
     Executed construction contract   change orders for the project. If there is more than one
3b
     with all change orders.          contract, the Sponsor must submit all of the contracts
                                      and all of the change orders for the project.

                                      Must be the Tax Credit Proforma as prepared for the
                                      tax credit investor that contains the final development
     Final Tax Credit Proforma as
                                      budget, final operating budget, final schedule of rents,
3c   prepared for the tax credit
                                      and final rental performance indicators. All
     investor.
                                      development and operating figures must match the
                                      amounts on the Cost Certification submitted.

     Final executed Syndication       If the project was syndicated through a private
3d   Agreement if syndicated          investor, must submit a final executed Syndication
     through a private investor.      Agreement for the project.
                                      Must submit the executed Carryover Allocation for tax
     Executed Carryover               credits for the project. The annual amount of tax
3e
     Allocation.                      credits must match the amount on the final Tax Credit
                                      Proforma submitted.
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                                      Must submit the final executed Partnership Agreement
                                      with all attachments. The developer fee, capitalized
     Executed final Partnership       reserves (includes operating, lease-up, and replacement
3f   Agreement with all               reserves on the development budget), and total capital
     attachments.                     contribution (equity from the investor) must match the
                                      amounts on the final Tax Credit Proforma and Cost
                                      Certification submitted.
                                      The project was approved with the Sponsor having at
     Documentation that the non-      least a 51 percent ownership interest in the general
     profit Sponsor has an            partnership for the project. Verification can be shown
3g
     ownership interest in the        in the final Partnership Agreement, verification of how
     partnership.                     the stock is split, or other comparable document
                                      accepted by the FHLBank.
                                      The developer fee, capitalized reserves (includes
     Do the total capital
                                      operating, lease-up, and replacement reserves on the
     contribution, developer fee,
                                      development budget), and total capital contribution
     and capitalized reserve
                                      (equity from the investor) must match the amounts on
     amounts in the Partnership
                                      the final Tax Credit Proforma and Cost Certification
3h   Agreement match the amounts
                                      submitted. If the amounts do not match each other, the
     on the Cost Certification and
                                      Partnership Agreement or Tax Credit Proforma and
     Tax Credit Proforma? All
                                      Cost Certification will have to be redone and all
     amounts must tie back to one
                                      changes initialed by all parties or the document(s) re-
     another.
                                      signed.
                                      This section must be complete for non-Tax Credit
     For non-Tax Credit projects
4                                     projects only. If the project contains tax credits, refer
     only:
                                      to section #3 for the information needed.
                                      Must submit either #4a or #4b information. Must be
     Executed cost certification by
                                      executed and dated, and must also contain all of the
     an independent auditor to
                                      projects' finals costs and sources (development budget)
     document all project costs and
                                      and be completed by an independent auditor. It can
     sources and executed
4a                                    also contain a final operating budget. Must also submit
     construction contract with all
                                      an executed construction contract and all change orders
     change orders if the
                                      for the project. If there is more than one contract, the
     construction was not
                                      Sponsor must submit all of the contracts and all of the
     completed by the Sponsor; OR
                                      change orders for the project.
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                                        Must submit either #4a or #4b information. Must
                                        submit the final development budget (Attachment A:
                                        Sources & Uses) for the project.
                                          • This document is available on the FHLBank’s
                                            website.
                                          • The budget must contain all of the project costs
                                            and sources where the AHP monies will be used as
                                            the gap funding.
     Final development budget             • If there are more than 200 construction contracts,
                                            change orders, invoices, or receipts, an executed
     (Attachment A) and all
                                            Cost Certification from an independent auditor
     executed construction
                                            must be submitted.
     contracts, change orders,
4b                                        • If the project includes non-residential space as
     invoices, receipts to verify the
     final costs. If more than 200          approved in the AHP application, an Attachment A
     receipts, etc., a cost                 (development budget) from the FHLBank'      s
     certification must be obtained.        website must be submitted indicating the costs for
                                            the residential and non-residential aspects of the
                                            project. A breakdown of the total square footage
                                            of the project and non-residential space or other
                                            comparable documentation must be submitted and
                                            the percentage of non-residential space in the
                                            project must tie back to the non-residential costs
                                            on the development budget. Any non-residential
                                            space must be covered by another source aside
                                            from AHP monies.
     If Attachment A is being
                                        If a cost on a receipt, invoice, construction contract, or
     submitted and the costs do not
                                        change order does not match the amount on
     match receipts, invoices, etc.
                                        Attachment A (development budget) submitted, a
4c   submitted, a detailed cost
                                        detailed cost breakdown must be submitted as to what
     breakdown must also be
                                        costs on the receipts, invoices, construction contracts,
     submitted as to what receipts
                                        or change orders tie back to the cost on Attachment A.
     are in each cost.
                                        Must submit the final rental project worksheet
                                        (Attachment B) for the project. This document is
                                        available on the FHLBank’s website. The income
                                        targeting must match what was approved in the
     Final rental project worksheet
4d                                      approved AHP application. If there is an alert on the
     (Attachment B).
                                        completed Attachment B and the project does not
                                        receive project-based rental subsidy or the project was
                                        not approved with the alert, an explanation must also
                                        be submitted.
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                                       Must submit the final 15-year operating budget
                                       (Attachment C) for the project. Only Year 1 will have
                                       to be completed and the later years’ amounts will filter
                                       in as the percentages increase for Income and Expenses
                                       are input.
                                          • This document is available on the FHLBank’s
                                            website.
                                          • There should be at least a one percent difference
                                            between these increases or the difference with
                                            which the project was approved.
                                          • Must indicate the gross rent, rental subsidy, or
     Final operating budget
4e                                          other income, vacancy/loss assumptions as
     (Attachment C).
                                            approved, detailed operating expenses,
                                            replacement reserves which cannot exceed the
                                            amount approved in the AHP application, and debt
                                            service, if applicable.
                                          • The debt service amount must tie back to the Note
                                            and Mortgage or Deed of Trust submitted.
                                          • The project must cash flow for the entire 15 years.
                                            If the project goes negative in Year 12 or after, a
                                            detailed explanation must be submitted. If the
                                            project goes negative in Year 11 or earlier, the
                                            project is not eligible for AHP monies.
                                       The developer fee (includes developer fee, developer
                                       overhead, consultant, and construction management if
     Do the developer fee and
                                       the Sponsor is the general contractor) and capitalized
     capitalized reserves in the
                                       reserves (includes operating reserve, lease-up reserve,
     development budget and
                                       and replacement reserve) on the development budget
     replacement reserves in the
                                       and replacement reserves in the operating budget
5    operating budget exceed what
                                       cannot exceed the amounts in the approved AHP
     the project was approved for at
                                       application. If these amounts exceed what was in the
     original AHP application? If
                                       approved AHP application, a detailed explanation must
     “Yes”, an explanation must be
                                       be submitted. If the explanation is not accepted by the
     provided.
                                       FHLBank, the AHP monies will be reduced by the
                                       difference.

                                      Must verify the price of the land paid by the Sponsor
     Verification of land/acquisition with an executed HUD-1 Settlement Statement,
6a   cost paid with a HUD-1, deed, warranty deed evidencing the amount, or a purchase
     or purchase contract.            contract. The amount paid for the land must appear on
                                      the HUD-1 Settlement Statement, if applicable.
                                                                                           Page 12



                                        Must verify the market value of the land with an
                                        appraisal or Property Value Assessment from the
     Documentation of market
                                        county recorder’s office (some have websites) dated
     value with an Appraisal or
                                        within 6 months of the acquisition date. Related-party
6b   Property Value Assessment
                                        transactions require an appraisal. If the land price paid
     dated within 6 months of the
                                        is greater than the market value, the grant amount will
     acquisition date.
                                        be reduced unless the project was reduced for this
                                        reason at the time of approval.
     Verification of donated land in    Must be an executed warranty deed or other
6c   the form of a warranty deed or     comparable document evidencing the donation of the
     other verification.                parcel of land to the Sponsor.
                                     Must be an executed HUD-1 Settlement Statement,
                                     warranty deed evidencing the amount, or a purchase
     Verification that land was
                                     contract AND the land cost paid must be at least 50%
6d   provided at below-market
                                     less than the market value. The amount paid for the
     price.
                                     land must appear on your HUD-1 Settlement
                                     Statement.
                                     If the project was approved for SHOP, HOME funds,
     Evidence of ALL funding         etc., the executed grant agreements must be submitted.
     sources shown on the final      If the project was approved for a cash contribution
     development budget. Include     from the Member, Sponsor, or other, an executed letter
7    copies of all executed funding verifying the cash contribution or cancelled check must
     grant agreements, equity        be submitted. For other permanent loans, the executed
     letters, Notes and Mortgages or Note and Mortgage or Deed of Trust must be submitted
     Deeds of Trust, etc.            and must tie to the debt service on Attachment C
                                     (operating budget).
                                        If the project was approved with Social Service fees
     If there are Social Service fees   and operating grants as part of the project as indicated
     and grants on the operating        in the approved Attachment C (operating budget), must
     budget (Attachment C), a           submit a current cost breakout of the Social Service
8
     current cost breakout of the       fees and what operating grants are used to cover these
     fees and grants must be            fees. The total amounts for Social Service fees and
     submitted.                         grants must match the amounts on the Final
                                        Attachment C submitted.
     If the operating budget
     (Attachment C) contains            If the project was approved with project-based rental
     project-based rental subsidies,    subsidies and the amount must be indicated on the final
     verification is needed with a      Attachment C submitted, must submit the current
     rental subsidy agreement. If       executed rental subsidy agreement. If the amounts on
9
     the rental subsidy agreement       the agreement and Attachment C do not match one
     and Attachment C subsidy           another, a breakdown indicating how the amount on
     amounts do not match, a            Attachment C was calculated from the amount on the
     detailed cost breakdown must       Agreement must be submitted.
     also be submitted.
                                                                                            Page 13


      If the project was approved
      with over 50% of the units
                                         Must submit an explanation of how the tenants will pay
      targeted to homeless units and
                                         their rent if the project was approved with more than
      is not receiving rental subsidy,
                                         50 percent of homeless units and is not receiving
      an explanation of how the
                                         project-based rental subsidy. If the Sponsor is
10    tenants will pay their rent must
                                         covering the rents with fundraising dollars, two
      be submitted. If fundraising is
                                         previous years audited statements are needed to verify
      being used to cover rents, two
                                         that the Sponsor has enough equity to operate the
      previous years audited
                                         project.
      statements from the Sponsor
      must be submitted.
                                         Must be a current, executed letter from the Sponsor
    Empowerment activities, such
                                         indicating that the services approved in the application
    as counseling, education
11a                                      are available to the tenants of the property or a current
    opportunities, Head Start, etc.
                                         brochure evidencing these empowerment activities are
    have been made available.
                                         available.
                                         Must submit a certification from the non-profit Primary
                                                  s
                                         Sponsor' board of directors demonstrating the
                                         following: 1. That a tenant of the project, selected by
                                         the tenants, will be given a position on the non-profit
      Tenant on the Sponsor’s Board
11b                                                    s
                                         organization' board of directors (with all rights and
      of Directors.
                                         responsibilities); 2. Outline procedures which describe
                                         the selection process including eligibility and filling
                                         vacancies. 3. Signed by the Board Chair or Secretary if
                                         not already received.
                                         Must be a foreclosure sale document, evidence that the
                                         borrower conveyed property back to lender, letter from
    Property vacant due to               the lender, or some other comparable document.
11c foreclosure, deed in lieu, or        Projects were approved with at least 20% and up to
    short sale.                          greater than 50% of the units meeting this criterion at
                                         application. May have been submitted at time of
                                         approved AHP application.
                                         Must be a picture evidencing that the property was
                                         vacant or some other comparable document. Projects
      Rehab property vacant due to
11d                                      were approved with at least 20% of the units meeting
      foreclosure or other.
                                         this criterion. May have been submitted at time of
                                         approved AHP application.
                                         Must be a current, executed letter from the approved
    8 hours of landscaping
                                         organization indicating that the 8 hours of landscaping
11e detailing the activities
                                         labor has been provided and indicate what activities
    performed.
                                         were performed.
                                                                                           Page 14



                                       Must be a current, executed letter from the approved
      40 hours of construction labor
                                       organization indicating that the 40 hours of
11f   detailing the activities
                                       construction labor has been provided and indicate what
      performed.
                                       activities were performed.
                                       Must be a current, executed letter from the approved
    Donation of at least $500 in
11g                                    organization indicating that they have provided the
    goods/services.
                                       service or good and that it is worth at least $500.
                                     Must be a current, executed letter from the approved
      Fee waiver from the local
11h                                  government organization indicating that they have
      government.
                                     provided the fee waiver for the project.
                                     Must submit an executed Advance Application for
    If an AHP Advance, submit the
                                     either a Mortgage Matched Advance (same term and
    proper Advance Application
                                     amortization) or a Balloon Advance that is signed by
12 signed by two authorized
                                     two authorized signers from the Member. If this
    signers with the Disbursement
                                     document is needed, it can be requested by the
    Request.
                                     Member.
                                     Must submit a deed indicating that the property has
                                     been transferred to the Sponsor or Owner of the project
                                     and that the FHLBank retention language is in the
    Copy of the deed evidencing      deed, referenced in the deed as an exhibit or
    that the property is in the name addendum, or included as a restrictive covenant.
    of the Sponsor/Owner with the Retention period = 15 years from the completion date
13 FHLBank retention language        of the project as evidenced with the Certificate of
    inserted, attached as an exhibit Occupancy or other documentation as requested in #2.
    or addendum, or as a restrictive The retention language is attached to this document
    covenant to the deed.            and is specific to either a grant or Advance approved
                                     for the project. If the project contains both an Advance
                                     and a grant, both retention language wording must be
                                     in the warranty deed.
    Executed Management              Must submit an executed Management Agreement or
14 Agreement/Plan which              Plan, even if the Sponsor is the manager of the project,
    contains at a minimum:           which must contain at a minimum the following points.
                                     Must indicate the fair housing policies used in the
14a Fair housing policies.
                                     project.
                                       Must outline the tenant intake procedures for the
14b Tenant intake procedures.
                                       project.
                                   Must indicate the management fee given to the
    If not managed by the Sponsor, management company if not self-managed. This
14c
    management fee is indicated.   amount must match the amount on the final
                                   Attachment C (operating budget) submitted.
                                                                                        Page 15



                                   Must indicate the income targeting (number of units
    Income targeting matching the
                                   and percentage of area median income) matching the
    approved AHP application –
14d                                approved AHP application and either final Attachment
    number of units and percentage
                                   B (rental project worksheet) or Final Tax Credit
    of area median income.
                                   Proforma submitted.
                                      Must indicate the number of homeless units matching
                                      the approved AHP application. The units that qualify
                                      as homeless must meet the following FHLBank
                                      definition: “Homeless household” means a household
                                      made up of one or more individuals, who:
                                       1. Reside in overcrowded housing; “overcrowded
                                           housing” means a housing unit occupied by more
                                           than one household or any housing unit with an
                                           average of more than two persons per sleeping area
                                           (including a living room as a sleeping area); or
                                       2. Are facing imminent loss of their home due to
                                           condemnation or eviction; or
    Number of homeless units
                                       3. Lacks a fixed, regular, and adequate nighttime
14e matching the approved AHP
                                           residence; or
    application.
                                       4. Has a primary nighttime residence that is:
                                           a. A supervised publicly or privately operated
                                               shelter designed to provide temporary living
                                               accommodations (including welfare hotels,
                                               congregate shelters, and transitional housing
                                               for the mentally ill);
                                           b. An institution that provides a temporary
                                               residence for individuals intended to be
                                               institutionalized;
                                           c. c) A public or private place not designed for,
                                               or ordinarily used as, a regular sleeping
                                               accommodation for human beings.
                                      Must indicate the number of special needs or elderly
                                      units matching the approved AHP application. The
                                      units that qualify as special needs must meet the
                                      following FHLBank definition: “Special Needs” means
                                      any person or household meeting one of the following
                                      additional definitions:
      Number of special needs units    1. “Physically disabled” means any person:
14f   matching the approved AHP            a. With a physical impairment which results in
      application.                             substantial functional limitations and who is
                                               receiving disability benefits from federal or
                                               state government; or
                                           b. Who is deemed physically disabled by a
                                               qualified professional who attests that by
                                               reason of this impairment is unable to perform
                                               life roles in at least one of the major domains
                                                   Page 16


         of living, working, learning, or socializing.
2.   “Mentally disabled” means any person:
     a. Who is diagnosed with a psychiatric disorder
         and who is receiving disability benefits from
         federal or state government; or
     b. Who is deemed to have a comparable long-
         term mentally disabling condition by a
         qualified professional who attests that by
         reason of this impairment is unable to perform
         life roles in at least one of the major domains
         of living, working, learning, or socializing.
3.   “Developmentally disabled” means any person:
     a. With a severe chronic developmental disability
         who has been diagnosed with mental
         retardation and who is receiving disability
         benefits from federal or state government; or
     b. Who is deemed developmentally disabled by a
         qualified professional who attests that by
         reason of this impairment is unable to perform
         life roles in at least one of the major domains
         of living, working, learning, or socializing.
4.   “Co-occurring disabled” means any person:
     a. Diagnosed as having both a psychiatric
         disorder as well as a substance
         abuse/dependency (co-occurring) and who is
         receiving disability benefits from federal or
         state government; or
     b. Who is deemed to have a comparable long-
         term co-occurring condition by a qualified
         professional who attests that by reason of this
         impairment is unable to perform life roles in at
         least one of the major domains of living,
         working, learning, or socializing.
5.   “Physically or emotionally abused” means any
     person who is receiving medical or other
     therapeutic care for abuse from a qualified service
     provider;
6.   “Chemically dependent” means any person with a
     history of substance abuse/dependency, who is
     receiving treatment for the abuse/dependency from
     a qualified service provider;
7.   “Persons with AIDS” means any person with a
     medical diagnosis of Auto Immune Deficiency
     Syndrome or who is medically diagnosed as HIV
     positive and who is receiving medical care for the
     condition diagnosed;
                                                                                         Page 17



                                   If approved in the AHP application, must indicate that
                                   management will assist the tenants of the project in the
    Management will assist tenants
                                   formation of a tenants association. The association can
14g in the formation of a tenants
                                   only contain tenants of this project and the tenants
    association, if applicable.
                                   cannot join an existing tenant association of another
                                   project.
    Management will make
    available empowerment             If approved in the AHP application, must indicate that
    services as committed to in the   management will make available the empowerment
14h approved AHP application,         services such as counseling, case management,
    such as counseling,               transportation, employment training, etc. to the tenants
    transportation, employment        of the project.
    training, etc.
    Permanent loan from the           Must be documented with executed copies of Note(s)
15a
    Member.                           and Mortgage(s) or Deed(s) of Trust.
      Bridge or construction loan     Must be documented with executed copies of Note(s)
15b
      from the Member.                and Mortgage(s) or Deed(s) of Trust.
                                      Must be documented with the Note and a copy of the
                                      standard rate sheet for loans of this type offered by the
    Below-market rate on the
                                      Member and published for the general public OR a
15c permanent, construction, or
                                      current, executed letter from the Member indicating the
    bridge loan from the Member.
                                      below-market interest rate given for the project and the
                                      standard rate for this type of loan.
                                      Must be documented by Settlement Statements which
                                      indicate the actual costs and fees charged for the loan
    Reduced/waived fee on the         and general lending program documents which indicate
15d permanent, construction, or       the normal fees and costs associated with the type of
    bridge loan from the Member.      loan OR a current, executed letter from the Member
                                      indicating what fees were reduced or waived for the
                                      project.
                                      Must be copies of cancelled checks OR copies of
                                      checks with verification from the Sponsor that the
      Cash contribution from the      funds were received. This contribution must be listed
15e
      Member.                         as a cash source on the final Attachment A
                                      (development budget) or Cost Certification for the
                                      project.
                                                                                               Page 18




Rental Retention Language for projects that receive AHP grant awards

The language below should be inserted into the Warranty Deed or as a Restrictive Covenant to
the Warranty Deed. If it is attached to the Warranty Deed as an addendum, the Warranty
Deed itself must reference the addendum or exhibit.


As a condition and in consideration of receipt of direct subsidy funds from the Federal Home
Loan Bank of Cincinnati’s Affordable Housing Program, the Project Owner, for itself and all
successors to the property, agrees that:
 (i) The                                                                      s”)
                                                                    (“Project' rental units, or
     applicable portion thereof, must remain occupied by and affordable for households with
     incomes at or below                                            (insert levels committed to
     be served in the approved AHP Application) for a period of fifteen (15) years (“Retention
     Period”) from the date of the recording of this deed;
(ii) The Federal Home Loan Bank of Cincinnati, whose mailing address is P.O. Box 598;
     Cincinnati, OH 45201-0598, is to be given notice of any sale, refinancing, foreclosure, or
     change in ownership of the Project occurring prior to the end of the Retention Period;
(iii) In the case of a sale or refinancing of the Project prior to the end of the Retention Period, an
      amount equal to the full amount of the direct subsidy shall be repaid to The Federal Home
      Loan Bank of Cincinnati, unless the Project continues to be subject to a deed restriction or
      other legally enforceable retention agreement or mechanism incorporating the income-
      eligibility and affordability restrictions committed to in the AHP application (as stated
      above) for the duration of the Retention Period; and
(iv) The income-eligibility and affordability restrictions applicable to the Project terminate after
     any foreclosure.
                                                                                              Page 19



Rental Retention Language for projects that receive AHP Advance awards

The language below should be inserted into the Warranty Deed or as a Restrictive Covenant to
the Warranty Deed. If it is attached to the Warranty Deed as an addendum, the Warranty
Deed itself must reference the addendum or exhibit.


As a condition and in consideration of receipt of below market rate loan funds from the Federal
Home Loan Bank of Cincinnati’s Affordable Housing Program, the Project Owner, for itself and
all successors to the property, agrees that:
 (i) The                                                               s”)
                                                             (“Project' rental units, or
     applicable portion thereof, must remain occupied by and affordable for households with
     incomes at or below                                                   (insert levels
     committed to be served in the AHP Application) for a period of fifteen (15) years
     (“Retention Period”) from the date of the recording of this deed;
(ii) The Federal Home Loan Bank of Cincinnati, whose mailing address is P.O. Box 598;
     Cincinnati, OH 45201-0598, is to be given notice of any sale, refinancing, foreclosure, or
     change in ownership of the Project occurring prior to the end of the Retention Period;
(iii) In the case of a sale or refinancing of the Project prior to the end of the Retention Period,
      the full amount of the interest rate subsidy received by the Project Owner, based upon the
      pro rata portion of the interest rate subsidy imputed to the subsidized Advance during the
      period the Project Owner owned the Project prior to the sale or refinancing, shall be repaid
      to The Federal Home Loan Bank of Cincinnati, unless the Project continues to be subject to
      a deed restriction or other legally enforceable retention agreement or mechanism,
      incorporating the income-eligibility and affordability restrictions committed to in the AHP
      application (as stated above) for the duration of the Retention Period; and
(iv) The income-eligibility and affordability restrictions applicable to this Project terminate after
     any foreclosure.
                                                                                                     Page 20



                                                                          DISBURSEMENT REQUEST
                                                                            FOR RENTAL PROJECTS

Project Name:
Project Address(es):
Member Name:
Sponsor Name:
Project Number:
Total Awarded:            $                             Amount Requested:         $

             * This form takes the place of the Request for Funds and Rental Checklist.
                                                                                      Already
Required Documentation:                                                                on file
                                                                                                 Enclosed      N/A
1. Executed copies of the following documents:
  a. Direct Subsidy Agreement – with original signatures.
  b. Affordable Housing Program Agreement.
  c. Contingency Letter.
2. Certificate of Occupancy.
3. For Low Income Housing Tax Credit projects only:
  a. Executed cost certification by an independent auditor to document all
     project costs and sources.
  b. Executed construction contract with all change orders.
  c. Final Tax Credit Proforma as prepared for the tax credit investor.
  d. Final executed Syndication Agreement if syndicated through a private
     investor.
  e. Executed Carryover Allocation.
  f. Executed final Partnership Agreement with all attachments.
  g. Documentation that the non-profit Sponsor has an ownership interest in
     the partnership.
  h. Do the total capital contribution, developer fee, and capitalized reserve
     amounts in the Partnership Agreement match the amounts on the Cost
     Certification and Tax Credit Proforma?               Yes       No
     All amounts must tie back to one another.
4. For non-Tax Credit projects only:
  a. Executed cost certification by an independent auditor to document all
     project costs and sources and executed construction contract with all
     change orders if the construction was not completed by the Sponsor; OR
  b. Final development budget (Attachment A) and all executed construction
     contracts, change orders, invoices, receipts to verify the final costs. If
     more than 200 receipts, etc., a cost certification must be obtained.
  c. If Attachment A is being submitted and the costs do not match receipts,
     invoices, etc. submitted, a detailed cost breakdown must also be
     submitted as to what receipts are in each cost.
                                                                                                  Page 21


                                                                                   Already
Required Documentation:                                                             on file
                                                                                              Enclosed      N/A
4. For non-Tax Credit projects only:
  d. Final rental project worksheet (Attachment B).
  e. Final operating budget (Attachment C).

5. Do the developer fee and capitalized reserves in the development budget and
    replacement reserves in the operating budget exceed what the project was
    approved for at original AHP application?
    Yes       No                If “Yes”, an explanation must be provided.
6. Property information:
  a. Verification of land/acquisition cost paid with a HUD-1, deed, or purchase
      contract.
  b. Documentation of market value with an Appraisal or Property Value
       Assessment dated within 6 months of the acquisition date.
  c. Verification of donated land in the form of a warranty deed or other
       verification.
  d. Verification that land was provided at below-market price.
7. Evidence of ALL funding sources shown on the final development budget.
    Include copies of all executed funding grant agreements, equity letters,
    Notes and Mortgages or Deeds of Trust, etc.
8. If there are Social Service fees and grants on the operating budget
    (Attachment C), a current cost breakout of the fees and grants must be
    submitted.
9. If the operating budget (Attachment C) contains project-based rental
    subsidies, verification is needed with a rental subsidy agreement. If the
    rental subsidy agreement and Attachment C subsidy amounts do not match,
    a detailed cost breakdown must also be submitted.
10. If the project was approved with over 50% of the units targeted to homeless
    units and is not receiving rental subsidy, an explanation of how the tenants
    will pay their rent must be submitted. If fundraising is being used to cover
    rents, two previous years audited statements from the Sponsor must be
    submitted.
11. Evidence that the project meets the following commitments as indicated in
     the approved AHP application, if applicable:
  a. Empowerment activities, such as counseling, education opportunities,
     Head Start, etc. have been made available.
  b. Tenant on the Sponsor’s Board of Directors.
  c. Property vacant due to foreclosure, deed in lieu, or short sale.
  d. Rehab property vacant due to foreclosure or other.
  e. 8 hours of landscaping detailing the activities performed.
  f. 40 hours of construction labor detailing the activities performed.
  g. Donation of at least $500 in goods/services.
  h. Fee waiver from the local government.
12. If an AHP Advance, submit the proper Advance Application signed by two
    authorized signers with the Disbursement Request.
13. Copy of the deed evidencing that the property is in the name of the
     Sponsor/Owner with the FHLBank retention language inserted, attached as
     an exhibit or addendum, or as a restrictive covenant to the deed.
                                                                                                Page 22


                                                                                 Already
Required Documentation:                                                           on file
                                                                                            Enclosed       N/A
14. Executed Management Agreement/Plan which contains at a minimum:
  a. Fair housing policies.
  b. Tenant intake procedures.
  c. If not managed by the Sponsor, management fee is indicated.
  d. Income targeting matching the approved AHP application – number of
     units and percentage of area median income.
  e. Number of homeless units matching the approved AHP application.
  f. Number of special needs units matching the approved AHP application.
  g. Management will assist tenants in the formation of a tenants association,
     if applicable.
  h. Management will make available empowerment services as committed to
     in the approved AHP application, such as counseling, transportation,
     employment training, etc.

15. Evidence that the project meets the commitments for Member involvement
    as indicated in the approved AHP application, if applicable:
  a. Permanent loan.
  b. Bridge or construction loan.
  c. Below-market rate on the permanent, construction, or bridge loan.
  d. Reduced/waived fee on the permanent, construction, or bridge loan.
  e. Cash contribution.


Authorized Signatures:
The individuals signing this request certify that they are authorized to make such requests and
representations contained herein, on behalf of the project Member and Sponsor identified. The Sponsor
and Member further certify that they have taken the steps necessary to determine that the information
provided is true and accurate, and understands the Federal Home Loan Bank of Cincinnati has a duty to
invoke sanctions pursuant to the Federal Housing Finance Agency’s Affordable Housing Program
regulation in the event of non-compliance with the terms of the approved AHP application and any
subsequent modifications as approved by the Federal Home Loan Bank of Cincinnati. Any changes to the
project that may affect scoring criteria or feasibility must be reported to and approved by the FHLBank.

MEMBER REPRESENTATIVE
Printed Name:                                               Telephone Number:
Title:                                                      E-mail:
Signature:                                                  Date:


SPONSOR REPRESENTATIVE
Printed Name:                                               Telephone Number:
Title:                                                      E-mail:
Signature:                                                  Date:
                                                                                           Page 23



FREQUENTLY ASKED QUESTIONS AND
COMMON MISTAKES
Below are a list of Frequently Asked Questions and Common Mistakes that have occurred 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 or Advance 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 acceptable long-term retention documentation,
      verification of final development and operating costs, and other documentation as
      indicated in the Request form.

   Q. Is it possible to obtain funds prior to completion of the project?
   A. See the Early Disbursement information on our website at www.fhlbcin.com. This is only
      available to projects approved in 2007 or after, approved for an AHP grant, and have not
      drawn any funds. The Sponsor and project must also go through a risk-based assessment.

   Q. Does the FHLBank have a standard retention document?
   A. Yes. The retention language is on the FHLBank’s website and in this document. The
      retention language is different for Advance and grant projects. If the project was approved
      for both a grant and an Advance, both set of retention languages must be used.

   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 Disbursement Confirmation form 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 to review the Disbursement Request and
      provide the funds, but if additional information is needed, 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 DDA account for the amount approved.
                                                                                       Page 24


Q. We have had significant turnover within the organization since our application for AHP
   funds were approved. Are there any resources to improve our familiarity with the program
   and the approval process?
A. See the Rental webinar under Resources on the FHLBank’s website at www.fhlbcin.com.

Q. Does the retention document have to be recorded prior to receiving AHP funds?
A. Yes. The FHLBank will require a signed and legally recorded document to be submitted
   to the Bank prior to disbursement of funds to the Member. Failure to provide the
   retention documentation in the time required may result in a delay of funds disbursed.

Q. Will HOME or Tax Credit retention documents be accepted as evidence of long-term
   retention?
A. Retention documents must follow the requirements specified in the AHP Implementation
   Plan and the retention period for 15 years.

Q. If I received approval for an AHP grant or Advance, why do I need to send updated
   financial information when I request a disbursement of AHP funds?
A. The approval of AHP funds for your project is a commitment to fill the financial gap that
   you have identified. The FHLBank is required to analyze a project’s final financial
   structure for AHP funds in order to determine that AHP subsidy is needed and that costs
   are reasonable. In most cases, our analysis process should not be cause for undue
   concern, since the great majority of projects continue to demonstrate the need for the full
   amount of the AHP commitment.


Q. My project involves the renovation of an occupied building. Do the residents have to
   comply with the income restrictions outlined in my application, or are the income
   restrictions only applicable to new tenants?
A. The AHP regulations require that all tenants meet the income qualifications at the time
   the application for AHP funds is submitted. Tenants who occupy the facility at the time
   the renovations are complete must meet the targeting levels outlined in your AHP
   application. The Initial Certification of Program Compliance sent out 12 months after
   project completion will request a rent roll so that the FHLBank can determine your
   project is in compliance with the targeting levels outlined in your approved AHP
   application.

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.
                                                                                          Page 25



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 Disbursement Request for Rental Projects is incomplete. 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 or used were not documented with
      executed grant agreements, Notes/Mortgages or Deeds of Trust, or equity letters.
   3. The Management Agreement/Plan does not contain all of the information required at a
      minimum or does not match the approved application for income targeting, special needs
      units, homeless units, etc.
   4. Verification of land/acquisition cost and/or market value was not submitted.
   5. The AHP Attachment A, B, and C has not been updated and are not the final budgets.
   6. There is an unexplained significant change in the AHP Attachment A. Please attach
      budget narratives to explain any substantial or unanticipated changes to the project’s
      financing.
   7. The Attachment A submitted does not tie back to the receipts, invoices, construction
      contracts, change orders, grant agreements, etc. received.
                                                                                                   Page 26



STAFF LISTING

Phone Number                                                             E-mail Address

Carol M. Peterson                                  (513) 852-7615        petersoncm@fhlbcin.com
Senior Vice President, Director

Damon v. Allen                                     (513) 852-7518        allendv@fhlbcin.com
Vice President

W. Jeff Reynolds                                   (513) 852-7614        reynoldswj@fhlbcin.com
Vice President

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

Judy M. Rose                                       (513) 852-7619        rosejm@fhlbcin.com
Sr. Community Investment Representative

Mary L. Hernandez                                  (513) 852-7604        hernandezml@fhlbcin.com
Housing Program Manager/Reporting & Monitoring

Jessica H. Wells **                                 (513) 852-7617       wellsjh@fhlbcin.com
Housing Development/Finance Specialist

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

Jill A. Cravens                                    (513) 852-7550        cravensja@fhlbcin.com
Housing Team Leader

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

Jodi M. Baynum                                    (513) 852-7602         baynumjm@fhlbcin.com
Housing Program Assistant

Samantha M. Morris                                (513) 852-7621         morrissm@fhlbcin.com
Housing Program Assistant

Sherry L. Hudson                                  (888) 345-2246         hudsonsl@fhlbcin.com
Administrative Assistant




                                                  1-888-345-2246
                                               Fax: (513) 852-7647
                                     Visit us on the web at www.fhlbcin.com
                                  Credit Department - Toll Free 1-800-828-4191


** Rental Disbursement Reviewers

								
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