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HomeMy WebLinkAboutHomekey NOFA Summary 2020 1 SUMMARY HOMEKEY PROGRAM 2020 NOTICE OF FUNDING AVAILABILITY On July 16, 2020, the State of California Department of Housing and Community Development (HCD) released a Notice of Funding Availability (NOFA) for the Homekey Program (Homekey) available here. Homekey is a statewide effort to expand available housing for persons experiencing homelessness or who are at risk of experiencing homelessness and impacted by the COVID -19 pandemic. For this NOFA, people experiencing homelessness or who are at risk of experiencing homelessness are considered inherently “impacted by COVID-19” and referred to as the Target Population.1 Key Points • The amount of grant funding available for Homekey is $600 million, which is derived from two funding sources: • $550 million is from the state’s direct allocation under the federal Coronavirus Relief Fund (CRF), which must be expended by December 30, 2020. • $50 million is from the state General Fund (GF) which will fund 24-month period operating subsidies and must be expended by June 30, 2022 . • For projects involving CRF awards, escrow must be closed by the December 30, 2020 expenditure date. • If applications are approved, The Department will disburse funds to cover Homekey -critical expenditures that were incurred during the period of March 1, 2020 through December 30, 2020. • HCD will begin accepting applications on an over-the-counter basis on or about July 22, 2020 and review will be prioritized based on tiered criteria and date of submission , described below. • Applicants must complete online application at https://www.hcd.ca.gov/grants -funding/active- funding/homekey.shtml • On July 24, 2020, HCD will hold an informational webinar regarding the Homekey NOFA . Register here. • Final application due date is no later than 5:00 p.m. PDT on September 29, 2020; however, applicants are encouraged to submit applications as soon as possible before the Priority Review Period ends on August 13, 2020 as projects will be awarded on a first-come, first-served basis up to the cap for the region and based on the tiering system as discussed below. • IMPORTANT : All applicants must participate in a pre-application consultation to discuss the proposed project with HCD and/or the California Department of General Services (DGS) prior to submitting an application. Email homekey@hcd.ca.gov to request the pre-application consultation as soon as possible. Prioritization and A pplication Processes Applications will be awarded depending on whether they are received during the Priority Review Period (July 16 - August 13, 2020) or during Review Period 2 (August 14 - September 29, 2020). 1 "Target Population" means members of the target population identified in Health and Safety Code section 50675.1.1 (a) who are individuals and families who are experiencing homelessness or who are at risk of homelessness defined in Section 578.3 of Title 24 of the Code of Federal Regulation and who are impacted by the COVID-19 pandemic. 2 Priority Review Period Applications received during the Priority Review Period will be grouped by geographic region. Each region has a maximum allocation of CRF and GF funds. After applications are grouped by region, they will be sorted into two different tiers described below. Tier One projects will be awarded on a first -come, first-served basis, up to the regional cap. If the Tier One projects are undersubscribed after August 13, 2020, Tier Two applications will be awarded according to date stamp. Tier One projects include : • Permanent Housing or projects that will result in Permanent Housing and can be occupied within 90 days from date of acquisition; OR • Interim Housing2 that can be occupied within 90 days, provided that the project is expected to be developed into Permanent Housing at a later date; OR • Interim Housing with a coordinated exit strategy adopted by the CoC to support transitions into other Permanent Housing. Applicant must provide a letter from the local CoC that demonstrates the coordinated exit strategy of the Target Population. Tier Two projects include: • All other projects and uses, including projects that will be used for Interim only (with no expectation to develop into Permanent Housing or support transitions into other Permanent Housing). Tier Two projects will be waitlisted and will be awarded only if funds are available after August 13, 2020. Review Period 2 Applications received during Review Period 2 (August 14 - September 29, 2020), will be awarded according to date stamp, as funds are available. Application Scoring Application scores will be based on the following categories: • Ability to expend funds by December 30, 2020 (50 pts); • Demonstration of team’s experience and capacity to acquire and operate project (40 pts); • Demonstration of how project will address racial e quity, other systemic inequities, state and federal accessibility requirements, and serve members of the Target Population (25 pts); and • Extent to which applicant can demonstrate project’s community impact and site selection (45 pts). Please note, applications are required to meet the minimum program requirements and have a minimum score of 110 points to be eligible for funding. 2 “Interim Housing,” “Transitional Housing” or “Congregate Shelter” means any facility whose primary purpose is to provide a temporary shelter for people experiencing homeless in general or for specific populations of people experiencing homelessness, without requiring lease/occupancy agreements. 3 Eligibility and Program Requirements Eligible Applicants Eligible Applicants include cities, counties, or other Local Public Entities3 applying to be a Development Sponsor either on its own or with another entity (such as a for -profit or nonprofit corporation, or another local public entity). Eligible Uses Eligible Uses of funds include: • Acquisition or rehabilitation of motels, hotels, or hostels (need not be Project Roomkey sites); • Master leasing of properties; • Acquisition of other sites, including apartments or homes, adult residential facilities, senior residential care facilities, manufactured housing, and other buildings with existing residential uses; • Conversion of units from nonresidential to residential in a structure with a certificate of occupancy as a motel, hotel, or hostel; • Purchase of affordability covenants and restrictions for units; • Relocation costs for individuals who are being displaced as a result of rehabilitation of existing units; and • Capitalized operating subsidies for units purchased, converted, or altered with funds provided pursuant to Health and Safety Code §50675.1.1 . (Capitalized operating subsidies will be awarded with funds from the $50 million GF Fund ; the $550 million in Homekey funds derived from the CRF i s not permitted to be sued for capitalized operating subsidies.) Eligible Projects The Homekey NOFA provides a list of eligible projects such as motels, hotels, hostels, adult residential facilities, and multifamily rental housing projects with five or more units. However, this is not an exhaustive list, and HCD will consider a variety of eligible projects that may be discussed during the pre -application consultation. 3 “Local public entity” means any county, city, city and county, the duly constituted governing body of an Indian reservation or rancheria, redevelopment agency organized pursuant to Part 1 (commencing with Section 33000 ) of Division 24, or housing authority organized pursuant to Part 2 (commencing with Section 34200 ) of Division 24, and also includes any state agency, public district or other political subdivision of the state, and any instrumentality thereof, which is authorized to engage in or assist in the development or operation of housing for persons and families of low or moderate income. “Local public entity” also includes two or more local public entities acting jointly. California Health and Safety Code §50079. 4 Project Requirements Project requirements are outlined in the chart below. See sections 305, 306 and 307 of the NOFA. Project Requirements Permanent Housing, §305 Interim Housing, §306 Other: Master Leasing, §307 Development Sponsor must have control of property, which is not contingent on approval of any other party. The nature of Sponsor’s title and/or interest in the property is subject to HCD approval. ✓ ✓ ✓ Plan to extend a local covenant restricting the use and Target Population for 55 years. ✓ Applicant must provide a plan to cover operations and service costs with specific funding sources (government/philanthropic/private) for the proposed project for five years, and must demonstrate a path for the ultimate use of the site for ten years. ✓ ✓ ✓ (Only five- year plan required) Plan must include description of services offered at site, on -site staffing plan, and plan to secure off-site support services, such as physical and behavioral health services. ✓ ✓ Applicant must commit to one-for-one replacement of assisted housing if the site will be redeveloped or demolished before it is occupied. ✓ If replacement housing is proposed outside of target neighborhood, application must include justification why relocation is necessary. ✓ If project results in displacement of any tenants (regardless if they are the Target Population), applicant must show how assistance will be provided in compliance with local, state, and federal law. ✓ General Program Requirements In order to be eligible to receive funding, projects must meet the following requirements: • A city, county, public housing authority, or federally recognized tribal government can submit an application independently as the Development Sponsor or jointly with another entity as the Development Sponsor. 5 • Projects must serve the Target Population, those experiencing homelessness or at risk of experiencing homelessness and who are impacted by the COVID-19 pandemic. Please note per the NOFA that all people experiencing homelessness or who are at risk of experiencing homelessness are considered inherently “impacted by COVID-19.” • The purchase of existing residential units, or affordability covenants and restrictions require the units to be restricted to individuals and families who are experiencing homelessness or who are at risk of homelessness defined in Section 578.3 of Title 24 of the Code of Federal Regulation, for no fewer than 20 years. • Developer experience must be demonstrated for both Permanent Housing and Interim Housing projects. o Minimum Permanent Housing experience: Development, ownership, or operation of a project similar in scope and size to the proposed Project, or at least two affordable rental housing projects in the last ten years, with at least one of those projects containing at least one unit housing a tenant who qualifies as a member of the Target Population. The property manager shall also have three or more years of experience serving persons of the Target Population. If a property manager is not yet selected for the proposed Project, the selected property manager shall have three or more years of experience serving persons of the Target Population, OR the Grantee shall certify that this requirement will be reflected in any future solicitation or Memorandum of Understanding. o Minimum Interim Housing project experience: Development or ownership of an Interim Housing project in the last ten years for members who qualify as the Target Population. The Eligible Applicant has successfully operated an emergency shelter or Transitional Housing or other Interim Housing for at least three years or more for members of the Target Population. Demonstrated experience in linking Interim Housing program participants to Permanent Housing to ensure long-term housing stability. Experience administering a Housing First progra m including principles of harm reduction and low barriers to entry. • Since HCD is relying on the Development Sponsor’s experience and capacity t o maintain control of project, the Development Sponsor cannot have more than two corporate entities between itself and the borrowing entity in a project with multiple layers of ownership. • Applicants must demonstrate strong organizational and financial capacity to develop project , including but not limited to the urgency to acquire a site to provide housing to the Target Population , development plan to meet the expenditure period , and leverage of other funding sources. • Project must meet all applicable state and local requirements pertaining to rental housing, manufactured housing, including but not limited to requirements for minimum square footage, and requirements related to maintaining the project in a safe and sanitary condition. • Applicants should consider the CEQA exemption set forth in Health and Safety Code 50675.1.2. Required Documents The Department will require e ligible applicants to submit the following documents: • Overview of project vision; • Description of project team, including partnerships with any other entities; 6 • Demonstration of the development's team experience to acquire and/or r ehabilitate and operate the project; • Identification of the site suitable for development and evidence of site control or a plan and timeline for obtaining site control along with other supporting evidence (e.g., letter of intent, exclusive negotiating agreement, ground lease, etc.); • A proposed development vision that identifies the financial and regulatory mechanisms to be used to maintain the ongoing affordability of the project; Department of Housing and Community Development • A summary of the committed and intended sources, and uses, of the project awarded with Homekey funds; • A proposed timeline for the entire project, including major milestones, any required entitlements, permits, environmental clearances, board or governing body approvals, etc., and completion of the project; • A proposed financing plan for any eventual development of the project; • Preliminary commitment for title insurance. If no title report is available, the Applicant shall identify any known encumbrances on the property; • Environmental site assessment (i.e., Phase 1 Environmental Assessment), or evidence that the assessment is in process and timeline to complete; • Appraisal or evidence that the appraisal is in process and timeline to complete; • Physical Needs Assessment or evidence that the physical needs assessment is in process and timeline to complete. This assessment must include consideration of accessibility requirements (Section 311 , See NOFA pg. 20); • Non-Discrimination Statement and descriptions of tenant selection and/or coordinated entry system practices that meet non-discrimination requirements (Section 311); • Documented ability to obtain the insurance coverages outlined in Article VI of the NOFA; and • Authorizing Resolution (AR) approved by the Applicant's governing body Funding Characteristics Maximum Grant Amount Generally, Homekey will fund $100,000 per unit at the time of acquisition. However, certain applicants can request up to $200,000. As demonstrated in the table below, the first $100,000 does not require a local match, but the next $50,000 requires a local match of $50,000 (1:1 match), and the next $50,000 requires a local match of $100,000 (2:1 local match). In order to receive the maximum $200,000 per unit, applicants must have a proposed project that is: i) under Tier One, and ii) close to permanent occupancy or can demons trate occupancy within 90 days of acquisition. HCD may also consider additional criteria for projects (e.g., consideration of overall project costs with future rehabilitation, investment in disadvantaged communities without displacement, and affirmatively furthering fair housing). Homekey Contribution Eligible Applicant Contribution Total Per Door (Unit) First $100,000 No match required $100,000 Next $50,000 (Tier One projects) 1:1, Up to $50,000 $200,000 Next $50,000 (Tier One projects) 2:1, Up to $100,000 $350,000 7 Fund Matching Applicants must demonstrate a five-year commitment to provide operating funds for the proposed project. The first two years of operating funds may come from the GF; however, the remaining three years must be provided by match contributions. Match contributions may be provided by any public or private sources provided that the use of those funds adheres to applicable law and alternative fund matching requirements. 24-Month Operating Subsidy Applicants may request up to $1,000 per month per unit for a perio d of 24 months, which may be used for operating subsidies. The 24-month operating subsidy must be expended by June 30, 2022. Other Requirements In addition, all programs must: • Take Housing First approach in property management and tenant selection proces s upon occupancy. • Adhere to all state and federal accessibility requirements .4 Accessibility units shall be distributed throughout project and be available in a sufficient range of sizes consistent with 24 CFR Section 8.26. • Adopt a written non-discrimination policy requiring that no person on the basis ex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, age, medical condition, genetic information, citizenship, p rimary language, immigration status (except where explicitly prohibited by federal law), arbitrary characteristics, and all other classes of individuals protected from discrimination under federal or state fair housing laws, individuals perceived to be a member of any of the preceding classes, or any individual or person associated with any of the preceding classes be excluded from participation, be denied benefits of, or subject to discrimination under any program funding in whole or in part through funds made available in the Homekey NOFA. NOTE: This anti-discrimination policy requirement is broader than federal and state fair housing laws. • Adhere to minimum insurance requirements outlined in the Homekey NOFA in Article VI. Program Operations Grantees will be required to provide progress reports of the development plan and any updates to th e timeline regarding the completion of the project. Grantees must ensure expenditure of funds is consistent with requirements of the Homekey Program. HCD may request repayment of funds for failure to comply. 4 Including California Building Code Chapter 11A and 11B, the Americans with Disabilities Act, Title II, Uniform Federal Accessibility Standards (UFAS) standards, 24 C.F.R. Part 8, or HUD's modified version of the 2010 ADA Standards for Accessible Design (Alternative 2010 ADAS), HUD-2014-0042-0001, 79 F.R. 29671 (5/27/14) (commonly referred to as "the Alternative Standards" or "HUD Deeming Memo").