BOND / TAX CREDIT PROGRAM POLICIES 2017 Washington State Housing Finance Commission Approved August 2017 Contents Introduction ...............................................................................................................................6 1.1 Bond Financing............................................................................................................................................................. 6 1.1.1 Projects financed with Commission-Issued Bonds .........................................................6 1.2 Projects financed with Bonds issued by an Issuer other than the Commission ................................ 8 Program Limits ...........................................................................................................................9 2.1 Maximum Allocation of Tax Credit – WAC 262-01-130(7) ........................................................................ 9 2.2 Maximum Allocation of Bond Cap ........................................................................................................................ 9 2.3 Maximizing the Use of Recycled Bond Cap ....................................................................................................... 9 2.4 TOTAL DEVELOPMENT COST LIMIT – WAC 262-01-130(8)(a) .............................................................. 9 2.4.1 King County Limits ..................................................................................................... 10 2.4.2 Pierce and Snohomish TDC Limits ............................................................................... 10 2.4.3 Metro TDC Limits ....................................................................................................... 10 2.4.4 Balance of State TDC Limit .......................................................................................... 10 2.4.5 Urban Project TDC Limit Increase................................................................................ 10 2.4.6 TDC per Unit Limit Schedule ....................................................................................... 11 2.4.7 Waiver of the Total Development Cost Limit – New Construction ................................ 11 2.4.8 Changes in Total Development Costs .......................................................................... 12 2.4.9 Calculation of Future Total Development Costs Limits ................................................. 12 2.4.10 Other Public Funders Development Costs Limitation Initiative. ................................... 13 2.4.11 Total Development Cost Limit Exemption ................................................................... 13 2.5 Maximum Construction Contingencies – WAC 262-01-130(8)(b) ....................................................... 13 2.6 Maximum Developer Fees – WAC 262-01-130(8)(f) ................................................................................. 13 2.7 Maximum Consultant Fees – WAC 262-01-130(8)(f) ................................................................................ 14 2.8 Maximum Contractor’s Profit and Overhead – WAC 262-01-130(8)(g) ............................................ 14 MINIMUM Threshold Requirements.......................................................................................... 15 3.1 Complete Application and Appropriate Fee ................................................................................................... 15 3.2 Application Correction Period ............................................................................................................................. 15 3.3 42(m) Letter ................................................................................................................................................................ 15 3.4 Project Changes .......................................................................................................................................................... 15 3.5 Evergreen Sustainable Development Standard (ESDS)............................................................................. 16 3.5.1 ESDS Definitions of Rural and Urban ........................................................................... 17 3.5.2 ESDS Definitions of Substantial and Moderate Rehab.................................................. 17 Bond / Tax Credit Program Policies Page 1 3.6 Site Control – WAC 262-01-130(2)(B) ............................................................................................................. 17 3.7 Title Report .................................................................................................................................................................. 18 3.8 Market Study –WAC 262-01-130(2)(c) ............................................................................................................ 18 3.9 Consistency with Local Consolidated Plan – WAC 262-01-130(2)(e) ................................................. 20 3.10 Notification of Public Housing Authorities – WAC 262-01-130(2)(f) .............................................. 20 3.11 Relocation Plan – WAC 262-01-130(2)(d) ................................................................................................... 21 3.12 Financial Feasibility and Viability Analysis – WAC 262-01-130(7)................................................... 21 3.13 Project Financing .................................................................................................................................................... 22 3.13.1 Lenders ...................................................................................................................... 22 3.13.2 Tax Credit Investor ..................................................................................................... 23 3.13.3 USDA Rural Development Financing ........................................................................... 23 3.14 “50 Percent Test” .................................................................................................................................................... 23 3.15 Use of Tax-Exempt Proceeds for Land ........................................................................................................... 23 3.16 Rehabilitation Requirements ............................................................................................................................. 23 3.16.1 Bond Requirements: .................................................................................................. 23 3.16.2 Tax Credit Requirements ............................................................................................ 23 3.17 Development Team Capacity –WAC 262-01-130(2)(g) ......................................................................... 24 3.18 Property Management Capacity – WAC 262-01-130(2)(h) .................................................................. 24 3.19 Consultant Contract ............................................................................................................................................... 24 3.20 Identity of Interest ................................................................................................................................................. 25 3.21 Financial Solvency and Litigation Status ...................................................................................................... 25 3.22 Documentation of Ownership Entity .............................................................................................................. 25 3.23 Disqualification – WAC 262-01-130(3)(a) ................................................................................................... 25 3.24 Re-syndication ......................................................................................................................................................... 26 Bond Cap and Tax Credit Allocation Criteria ............................................................................... 27 4.1 Additional Low-Income Housing Commitment ............................................................................................ 29 4.2 Additional Low-Income Housing Use Period ................................................................................................. 29 4.3 Housing Commitments for Priority Populations .......................................................................................... 30 4.4 Project-Based Rental Assistance ......................................................................................................................... 31 4.5 811 Project Rental Assistance (PRA) program. ............................................................................................ 31 4.6 Leveraging of Public Resources ........................................................................................................................... 31 4.7 Leverage of Taxable Bonds.................................................................................................................................... 32 4.8 Cost Efficient Development ................................................................................................................................... 32 4.9 Limiting of Developer Fee ...................................................................................................................................... 32 Bond / Tax Credit Program Policies Page 2 4.10 Rehabilitation Project 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