Gap Financing with 4% Credits

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Gap Financing with 4 Credits

• Kevin Clark
• Ohio Housing Finance Agency

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Housing Development Assistance Program

• Open application window
• Apply for 4 credits and gap financing together.
• Gap financing is subject to availability.
• Funding source Ohio Housing Trust Fund

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Housing Development Assistance Program

• Eligible Applicants
• Non-profit and for-profit development
  organizations
• Public housing authorities
• Ineligible Applicants
• Local governments

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Housing Development Assistance Program

• Eligible Activities
• Acquisition of property from a non-related party
• Demolition (except Preservation projects)
• On-site improvements
• Construction and/or renovation costs
• Furnishings appliances

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Housing Development Assistance Program

• Eligible Activities (continued)
• Professional fees (architect, engineer, legal,
  etc.)
• Developer consulting fees associated with the
  proposed development
• Ineligible activities
• Costs of market rate housing and/or commercial
  space

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Housing Development Assistance Program

• Loans
• 2 interest, 30-year term
• Payments as cash flow permits
• 50 of cash flow in excess of 10,000
• Any unpaid principal interest due and payable
  at the end of the term

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Housing Development Assistance Program

• Grants
• Controlling GP must be a 501(c)(3) or 501(c)(4)
  non-profit organization
• At least 20 of the units affordable to and
  occupied by households at or below 35 of median
  income
• Funds cannot be loaned to the limited partnership

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Housing Development Assistance Program

• Funding Limits
• 250,000 maximum in eight large cities
• Akron, Canton, Cincinnati, Cleveland, Columbus,
  Dayton, Toledo, Youngstown.
• 350,000 maximum in all other areas.

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Housing Development Assistance Program

• Funding is also limited to 50 of the total
  project cost.
• Local matching funds are not required for
  bond-financed properties.

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Housing Development Assistance Program

• Affordability occupancy restrictions
• HUD Participating Jurisdiction (PJ area) At
  least 40 of the units at 50 of median income.
• Non-Participating Jurisdiction (Non-PJ area)
  At least 35 of the units at 50 of median income.

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Housing Development Assistance Program

• All projects (regardless of funding source) must
  maintain HOME-assisted units.
• Number based on percentage of HDAP funds to total
  project cost and construction cost per unit.
• Distributed evenly among unit sizes.
• Subject to HUD High- and Low-HOME rents.

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Housing Development Assistance Program

• Prevailing Wage
• General rule For-profit applicants must follow
  State Prevailing Wage rules.
• Federal financing may trigger Davis-Bacon wage
  requirements.
• Guide to Prevailing Wage Requirements

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Housing Development Assistance Program

• Environmental Review
• Construction may not begin until the OHFA
  environmental review process is complete.

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Contact Information

• Kevin Clark
• Ohio Housing Finance Agency
• [phone]
• kclark_at_ohiohome.org