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Permanent Supportive Housing (PSH) 2022 Notice of Funding Available (NOFA) Webinar Dana Schultz PSH Program Analyst Dana.Schultz@hcs.oregon.gov

Agenda Welcome and Introductions Eligibility and Application Parameters FAQs and Important Dates NOFA Details PSH Project Requirements Overview Application Overview Evaluation and Scoring General Reminders Q+A

PSH at OHCS Permanent Supportive Housing or PSH is housing that: Is deeply affordable to households living on extremely low-incomes (30% AMI or below, often zero-income) Is permanent, meaning it has no time limit Provides comprehensive tenancy support services that can be accessed on site and are voluntary Can be provided via 100% or integrated models Prioritized to serve the chronically homeless households Rooted in Housing First philosophy

PSH NOFA 2022 Eligibility and Application Parameters Projects must serve qualified low-income households that are experiencing chronic homelessness Eligible Applicants: Projects and/or teams that have completed an Oregon Supportive Housing Institute Projects from Developers who were part of a team that went through a Supportive Housing Institute *Projects that did not go through the Institute or where the full team did not attend the Institute, if awarded, will be required to complete the CSH Endorsement process

PSH NOFA 2022 Eligibility and Application Parameters Teams that were funded in previous PSH NOFAs and have not yet closed on financing are ineligible. Projects that have already been funded through a competitive OHCS NOFA are not eligible for additional capital funding but may apply for PSH PBRA or Services Funding (if they meet the Institute participation parameters). Only one project per sponsor and/or team can be submitted. Applicants may apply only for one phase of a multi-phase Project.

PSH NOFA 2022 Eligibility and Application Parameters Projects must contain a minimum of 5 PSH units. Projects can request one, two, or all three of the PSH resources available through this NOFA. Developments that are under construction are not eligible for capital funding but are eligible for Rental Assistance and/or Services Funding. *as long as capital came from OHCS

FAQs & Dates to Remember Questions should be submitted to: HCS.PSH@hcs.oregon.gov Please include PSH NOFA in the subject line of emails FAQs will be published at regular intervals on the PSH NOFA website Questions accepted until: April 8th Pre-Application due date: February 18th, 4:00 PM PSH Application due date: April 22nd,4:00 PM PST

NOFA Details Funding Available $25 million in Article XI-Q bond proceeds for PSH Capital Soft set-aside of 45% for rural areas and 40% for urban areas, 15% for Tribal-led projects Other funds: OAHTC (can cover up to 95% permanent loan) 4% LIHTC (limited to $20 million (80%) of the available PSH Capital Resources) Federal Housing Trust Fund (HTF) ($15 million) Gap Funds ($5 million available, $1 million request cap) *only for Integrated Projects

NOFA Details Funding Available PSH Project-Based Rental Assistance (PBRA) PSH PBRA will pay up to 60% AMI rents and will subsidize the gap between 27% of a households income and 60% AMI rent Administrative Fee payments of $60 per unit per each month occupied 15-year contract term PSH Services Funding Reimbursement model Capped at $10,000 per unit per year 15-year contract term

Funding Limits There is no set subsidy cap. However, projects that request less than $300,000 in PSH and HTF per PSH unit will receive point preferences. Request Points Up to $150,000/unit 20 $151,001/unit - $200,000/unit 15 $200,001/unit - $250,000/unit 10 $250,001/unit - $300,000/unit 5 $300,001+/unit 0

Rural and Urban Definition An eligible category for receiving funds through this NOFA. Rural areas are defined as: A. Oregon communities with population of 15,000 or less within counties that are considered Metropolitan Statistical Areas (MSA) and outside of the Portland Urban Growth Boundary. MSA Counties include Benton, Clackamas, Columbia, Deschutes, Jackson, Josephine, Linn, Marion, Multnomah, Polk, Washington, and Yamhill. B. Communities with populations of 40,000 or less in the balance of the state (not defined in parts A. or C. in this section). C. All Oregon communities within the Portland Urban Growth Boundary are considered urban and not considered rural regardless of size. Note: A community may be considered rural if it had been under the population threshold within the past 3 years of published data, and if their current population is within 5 percentage points of eligibility.

PSH Project Requirements Eligible Activity New Construction Rehabilitation Acquisition/Rehabilitation One phase of a multiphase project Please note: Developments that are under construction (including site work) at the time of application are not eligible for development capital through this NOFA. Developments that begin construction after PSH Capital Fund Reservation and before PSH Capital loan closing may have their PSH Capital Fund Reservation revoked.

PSH Loan Terms 0% interest, 30-year affordability period Payments deferred for the loan term 1st lien position, can be shared Construction and permanent financing

Project Requirements Affordability Affordability Period: minimum of 30 years from the end of the year that the Project is placed in service or the length of the bonds outstanding, whichever is greater Loans satisfied through repayment or extended affordability for another 30-year period

Project Requirements Rents and Incomes PSH Units rent and income levels are restricted to 60% AMI and below (with an exception for the one permissible manager's unit per Project) PSH households cannot be charged more than 30% (27% if using OHCS PSH Rental Assistance) of their income towards rent. PSH Units utilizing HTF funds must serve households 30% AMI or below.

Project Requirements Utilities Units that are utilizing PSH Rental Assistance must be supplied with owner paid utilities. An owner-provided utility allowance does not meet the requirement. If you are utilizing rental assistance from a partner other than OHCS, this requirement does not apply.

Project Requirements Construction Standards All Projects must meet local and state code requirements. The Department s Core-Development Manual (CDM) Version 3.1 must be used with this NOFA Important: Part 3 of the CDM contains critical NOFA application requirements

Project Requirements Development Period PSH Units should be ready for lease-up within 36 months of fund reservation This NOFA anticipates funding reservations in August 2022; in which case units would be ready for initial lease-up by August 2025.

Project Requirements Ownership Integrity Single-Asset Ownership Owner never has been convicted of fraud, misrepresentation, theft or other moral turpitude within the previous ten (10) years. Owner has never been involved in a bankruptcy proceeding within the previous five (5) years. Owner never has been debarred or otherwise sanctioned by OHCS.

Project Requirements Underwriting Guidelines Minimum debt service coverage ratio of 1.20 on all "must-pay" debt 7% vacancy rate 2% escalation of rents and 3% escalation of expenses Capitalized operating reserve equal to six (6) months operating expenses and debt service Minimum annual replacement reserve deposit of $450 per unit Prior to closing, a Phase I environmental study is required Demonstration of meeting BOLI compliance, if applicable If other public capital or operating subsidies are used in financing the Project, relevant requirements of those subsidy sources will also apply

Project Requirements Operating Expenses Currently OHCS does not have a minimum required amount for operating expenses for PSH units. However, projects budgeting under $6,500 per unit per year will need to explain their amount in the operating budget tab of their proforma. PSH projects generally require more operating expenses

Project Requirements Tenancy Support Services and PBRA PSH Projects must provide comprehensive tenancy support services to tenants Services utilization must be voluntary for tenants PSH Projects must utilize project-based rental assistance External resources can used for either (evidence of commitment required) or they can be requested in the NOFA application

Project Requirements Readiness to Proceed Zoning Project must be properly zoned for the type of intended Project Provide the Certification of Zoning executed by the appropriate zoning authority Projects that must complete a zoning change to develop the Project will not be funded Site Control Applicant must have control of the land, evidenced by one of the following: a recorded deed or conveyance showing the Applicant is the owner of the site, a valid purchase and sale agreement, a valid option to purchase, a valid option for a long-term lease

Project Requirements Compliance Monitoring $25/PSH unit/year for Compliance Monitoring Fees Monitoring elements: o Initial household income verification o Annual income verification, including through self-certification o Risk-based physical inspections every 1-3 years based on Project condition o PSH Program Monitoring o Other Requirements: If other public capital or operating subsidy from any source is used, the compliance requirements of those sources will be assumed to apply. For example, if 4% LIHTCs are used, all 4% LIHTC compliance requirements will apply.

Application Overview Step 1. Download the PSH NOFA Where to get it: download from the OHCS website https://www.oregon.gov/ohcs/development/Pages/nofa22 -permanent-supportive-housing.aspx What to do with it: Read it and refer to it as you re working on your application

Application Overview Step 2. Complete the PSH Pre-application and Site Review Checklist for Procorem/Application Access Where to get them: download from OHCS website https://www.oregon.gov/ohcs/development/Pages/notice- of-funds-availability.aspx What to do with them: Complete both documents (Pre-Application and Checklist) Submit them together to HCS.PSH@hcs.oregon.gov by February 18th, 4:00 PM PST *Can submit prior! This action will alert OHCS staff to generate Procorem access credentials for your project. You will receive these via email.

Application Overview Step 3. Complete PSH Application Where to get it: download the full application from the Procorem work center with provided credentials sent to you via email from OHCS. https://app.procorem.com/login What to do with it: Complete the application Submit it and all required supplemental documentation/attachments to Procorem by 4:00 PM PST on April 22, 2022. Send a check along with the transmittal form for application charges to OHCS. Charges must be postmarked by April 22, 2022. Application charge payments cannot be made through Procorem.

Evaluation Process Preliminary Review Threshold Requirements Review Competitive Scoring

Preliminary Review Each Application will be reviewed for timeliness (application and materials submitted on-time) and completeness of the NOFA requirements. If an item is missing from the application, the sponsor will be notified and given 5 business days to provide it. HTF Supplemental Form required for all projects seeking development capital

Threshold Review Applications move to this review after meeting the Preliminary Review requirements Pass/Fail review of Readiness to Proceed Adequacy of Development Timeline Zoning Site Control Financial Viability Initial proforma review PSH Demonstrated Service Provider commitment Housing First model

Competitive Scoring Applications that pass the Preliminary and Threshold Reviews will be scored competitively Maximum of 100 points available

Competitive Scoring Combined PSH and HTF Subsidy per PSH Unit (20 points) Based on project data submitted in the application and verified against project pro forma, etc. Request Up to $150,000/unit $151,001/unit - $200,000/unit $200,001/unit - $250,000/unit $250,001/unit - $300,000/unit $300,001+/unit Points 20 15 10 5 0 Community Support (2 points) Letter from CoC

Competitive Scoring Readiness to Proceed (10 points) Timeliness Environmental Site Checklist completion Financial Viability (12 points) Proforma review and Services budget review Development Team and Service Provider Capacity and Experience (6 points) Narrative questions in application MWESB (4 points) Narrative questions in application

Competitive Scoring PSH Project Narratives (46 points) Community Need for PSH (4 points) PSH Services Plan (8 points) Inclusion of culturally responsive and equity measures (8 points) Tenant-Centered Design (4 points) Tenant referral process (6 points) Outcomes and Reporting Capacity (6 points) Supportive Housing Institute Project Preference (10 points)

Competitive Scoring-Tips! Tips for Narrative Responses: Do not assume that the reader is familiar with your organization Some reviewers may not have access to your complete application, even if you feel like you re repeating an answer, there s a reason for it Explain acronyms Not all reviewers will be subject area experts in rental development, real estate development, homelessness service delivery, or PSH; demonstrate expertise and provide high level overviews of concepts.

NOFA Process Reminders Procorem training resources can be found here: https://help.procorem.com/general_overview/meet- procorem/ Questions should be submitted to HCS.PSH@hcs.oregon.gov FAQs will be published at regular intervals

Questions?