ICF INTERNATIONAL INC. Moderator: Kelly Price. June 30, :00 pm CT

Transcription

1 Page 1 ICF INTERNATIONAL INC. June 30, :00 pm CT Operator: Good day and welcome to the NSP2 Peer to Peer conference call. Today s conference is being recorded. At this time, I d like to turn the conference over to Ms. Kelly Price. Please go ahead. Kelly Price: Thank you. Hi folks. This is Kelly Price with ICF International. We re one of HUD s NSPTA providers. And as the operator said we d like to welcome you today to the webinar on NSP2, the peer to peer webinar as we call it to share ideas and tips and information on NSP2 with you. Right now, I m going to turn over to Courtney Smith with ICF who s going to give you some instructions regarding asking questions and participating in the webinar today so Courtney? Courtney Smith: Good day everyone and welcome to the NSP2 Grantee Peer to Peer webinar. Today s webinar is being recorded, however you ll be muted until there is specific instruction for taking questions.

2 We ll take questions at the end of the presentation. And if you have a question please change your Feedback box from green to purple to let us know that you have a question. The Feedback box is located in the upper right-hand corner of Live Meeting. ICF INTERNATIONAL, INC. Page 2 You can ask a question by pressing star 1 on your Touch-tone phone which will put you in a queue for questions. If your question has been answered please remove yourself from the queue by pressing star 2. Please wait until the indicated interval for the question and answer period. At this time we d like to turn the webinar back over to Kelly Price who will do the introduction. Thanks Kelly. Kelly Price: Thank you. As we said the goal of this webinar today is to - actually first of all I want to make sure everybody s aware we have - we do have two of our HUD NSP folks on the phone. We have John Laswick and Hunter Kurtz on the phone. And I ll introduce our other panelists in just a minute. With this webinar today we do have some of your peers who are administering very large and small NSP2 grants. The intent is to ensure that you have some tips and ideas shared from these folks who are doing an excellent job in planning and extending their funds so far in NSP2. NSP2 came with some funding. In fact 50% of the funds must be spent two years from when HUD signed the grant agreement. And 100% of the funds must be expended in three years from that grant agreement date.

3 Page 3 In addition, within that requirement you have the requirement, of course to target at least 25% of the funds towards low income households below 50% of the area median. So that is an additional challenge for many grantees to meet. ((Inaudible)) many of you in terms of receiving income (fees) which is a good thing. But program income, more money has to go back out. And so that s also a consideration and one that we will definitely hit on today with these four panelists who found some mechanisms to handle that that they can share with you. So that s sort of the background and context for what we hope to accomplish today. And I d like to introduce our panelists today. We have four NSP2 grantees. We have Steven Haver from the Reading, Pennsylvania community. We have Pam Hallett representing the Community Builders, David Morton from the Reno Housing Authority, Herman Reyes from Chicanos Por La Causa. And again we ve tried to have a range of NSP2 grantees both in terms of size of grants. We have a $5 million grant all the way up to I guess two - just NSP2 grants with Community Builders in Chicanos Por La Causa. We also tried to get sort of a geographic representation across the country as well so that there are market conditions and geographic conditions that play into your programs as well. The way we re going to handle today s webinar is that each of these panelists go through a presentation in about 15 or so minutes, talk about their program and some of the tools and techniques that they found effective in expending their funds and carrying out their activities.

4 We ll let each of them go through their presentations. And then as Courtney said earlier we will hold questions until the end when our last presenter Herman Reyes speaks. After that we will take questions from the audience for all of our panelists or for our folks at HUD. ICF INTERNATIONAL, INC. Page 4 So with that I think we ll move to our first - one of your first NSP2 peers, one of our grantees which is Reading, Pennsylvania. So I ll turn it over to you. Steven Haver: Good afternoon everyone or good morning to those that are on the West Coast. My name is Steve Haver. I work for the city of Reading Community Development Department. We are one of the NSP2 program grantees. As Kelly said earlier we received a grant in the amount of $5 million and were recently recognized at HUD s Regional All Grantee meeting as being the leading spender in our region having spent 60% of the grant funds thus far. So I think that s probably one of the reasons we were nominated to participate in this call. I do have to provide a little bit of a disclaimer. I m not the person that runs the program on a day to day basis. That would be (Daniel Wright) who is currently on vacation. However I managed the HOME Program. And this program is based to a large extent on our very successful HOME Program. So I think I can talk fairly coherently about some of the techniques and strategies that we ve been using with NSP2. We do have two partners and a consortium, our city Reading, which is a local nonprofit that we have worked with for about ten years in the HOME program prior to the NSP2 grant.

5 They have acquired or rehabilitated and resold about 425 homes in Reading primarily with HOME funding with some other federal grants with some state money. So they re pretty experienced partner in the acquisition rehab business. ICF INTERNATIONAL, INC. Page 5 We re also working with Reading Housing Authority which is our public housing authority to operate the rental housing component of the NSP2. They ve both been very good partners. They re experts in their specific areas and have been really great to work with in this program. As I said the total amount is $5 million. That s divided really 80/20 between acquisition rehab, resale of single-family units and acquiring rehabilitating 20 rental units. To meet the program guidelines with the requirements of 25% of the funds go to people at or below 50% of AMI that s going to be the primary focus of the rental housing part of the component. I think we found is probably a lot of the grantees have that it s getting very challenging to qualify people for mortgages, particularly with the HOME Program which limits people to 80% of AMI. At least the NSP2 has a little more flexibility to get up to 120%. But we ve had to implement some various strategies with pre and post-sale counseling, with down payment assistance with seconds to get the equity that s needed in some of these properties. So it s really taken a creative effort to get both the HOME properties and NSP 2 properties sold.

6 As far as program income we have a couple of the completed properties under contract and have not closed on any of them yet. ICF INTERNATIONAL, INC. Page 6 The program income will go back into the program to help us meet our target numbers. I think we already talked about the consortium partners. Our city Reading, it really runs a program on a daily basis and do most of the hard work. They are out, you know, beating the streets and finding the properties either through foreclosures. We worked with a blighted property review committee that looks at vacant and blighted houses working with Brooks County Redevelopment Authority and Reading Redevelopment Authority to identify potential suitable properties as well. And we re focused in a fairly small area that s four census tracts. And because of that I mean we pretty much know what s out there. Reading is a smaller community. It s only about 90,000 residents. And with it just being in four census tracts it s a pretty focused area. And we are kind of struggling to get enough properties and the program to get through it. Like I say, we spent 60% of the money. So we ve made a lot of progress but definitely the rate of acquisition is slowing down. Again I think one of the keys to the success of our program is that we have long-standing working relationships and kind of have, you know, the systems down and the forms down and the capacity down from doing 400 houses through the HOME program.

7 We do have monthly meetings with both the consortium partners and kind of keep an online Web based progress report and have done some mapping. ICF INTERNATIONAL, INC. Page 7 There s a tool online called batchgeo.com that you can plot anything that you can put the addresses in a spreadsheet. So it s been kind of useful to look at the NSP2 properties on a Google map as well as using some of HUD s new mapping tools with SCPD mapping site. You know, both of those kind of help us to visualize, you know, the areas and what s out there and where we ve got a lot of properties we re focusing on. I guess that s the end of my slides. I think that I will be available for questions at the end of the session so I look forward to answering those if anyone has any. Kelly Price: Thank you, Steven. We will go now to Pam Hallett at the Community Builders. Pam Hallett: Hi. This is Pam, welcome all. I see our numbers are growing. The Community Builders is based in Boston. We re a nonprofit development company that has a mission to build strong communities for individuals of all incomes to achieve their full potential as you can see on the slide. Our corporate offices are in Boston but we have regional offices in Chicago and Philadelphia and then smaller offices scattered about in New York and other parts of Pennsylvania and New Jersey.

8 Our program is targeted to District of Columbia Massachusetts, New York, Pennsylvania, Ohio, Virginia, Illinois, Indiana and North Carolina. ICF INTERNATIONAL, INC. Page 8 On our second substantial amendment we did ask to be allowed to purchase a project in Connecticut. And we were granted that approval. So we appreciate that because we ve added one other state. Community Builders has been around for a long time. We were started back in the middle of the 60s. And we have over the last ten years played a leading role in many Hope Six projects throughout the country. We have many Section 8 projects that we own, have rehabbed and were built and now manage. We ve utilized the low income housing tax credits and were now in the neighborhood stabilization programs. Our total amount of funding for this grant was $78,617,000. The kinds of things we re doing, we re a multifamily development, redevelopment of vacant land as well as vacant properties, acquisition and rehab of assisted housing, construction bridge loans and predevelopment expenses. We were asked to join this webinar because we ve done very well committing funds. We ve actually committed just about $66 million of the 78 that we have. That includes our administrative 10% piece. We ve expended almost 15%. And we have done more than or achieved more than the 25% low - below 50% of medium income in terms of targeting projects and committing to them. Those are

9 Page 9 still under construction right now. We have four projects under constructions. And we anticipate them being completed by mid So for our program income we have set up a separate account for program income. We ve established procedures for quoting and spending that program income. We re planning to use it in the same manner that we have been using the program funds. The program we put together is to leave a small amount of NSP dollars in each of our projects as permanent financing but to do bridge loans for construction which means we, on a $12 million deal, might give a $10 million bridge construction loan then take out the majority of that bridge loan with other permanent financing such as low income tax credits, other permanent funding from a bank or other lender and then typically multiple layers of soft financing. Our partnerships have been pretty long-established relationships but we ve gone back and during this program reinitiated them. So we ve met and sat with many state and local municipalities to talk about how we can utilize our NSP2 and leverage it to get us the permanent financing we want and to go ahead and use our NSP dollars over and over again to we hope actually do far more units than what we had originally put in our grant application. We ve also sat down with many local HUD offices and lenders around the country to talk about what kind of REOs they might have, what kind of projects they see in their portfolios that might be in trouble and might be heading towards foreclosure, perhaps be in foreclosure. We received a fair amount of information from them and been able to utilize that information to go ahead and pick up some of the projects.

10 Page 10 On specifically for the capacity building piece we have over 300 staff at Community Builders. And so last July we headed up a whole training session so that people knew and understood NSP2 and then how to utilize it. So we invited everyone into Boston, set them up, spent three days going over the program, explaining it and taking questions and comments and thinking about how we might actually make our process work with what we ve already established as processes throughout the organization. As we got into looking at the section 3, that s something that Community Builders had never done before. So we went ahead and created a position for an outreach coordinator for the section 3. And to create our section 3 plan we first sent our staff, our NSP staff to HUD trainings on NSP 3 and Davis-Bacon and then hired skilled consultants to go ahead and actually sit with us an entire day, go through how we wanted our section 3 to work, what we thought would work, what we re required to do under the law. And then the consultants actually put together our section 3 plan for us which we then took and created models for our development staff where they could complete a simplified form of the overall section 3 plan so that we our grantee have our own section 3 plan. And then our own development entities create their own section 3 plan that we ve created a model to make it easier to set up and create. Other systems and tools that we ve set up is we re still in the process of creating an entire Davis- Bacon database. And that will also be able to allow us to check for section 3 new hires so that we meet that percentage requirement.

11 Page 11 We anticipate that coming on board now in the next couple of weeks. So up to this point we ve basically been doing it manually with Excel spreadsheets. So we re looking forward to be able to dump it into our database and be able to create reports fairly easily, have questions or concerns be popped out of that database. And then we can go back to the development staff and clean up any questions or comments we have. Now we also do have a weekly meeting here at the corporate office with senior staff where we report on our expenditures and what kind of loans we are looking at doing, where our projects are in process, what kinds of problems or concerns we have about reaching closings or expenditures on each deal that we have. So we ve been sort of paying attention to this for a long time. We re also implementing a new system where each month we ll sit down with the COO, the CEO and senior VPs and go over where we are in getting towards that 50%. We had a major meeting a couple of weeks ago where we reviewed where we were. We came up with sort of plan A that if all of these things fell into place and the projects were funded and expended we would meet that 50% easily. However there were some fairly large deals which at this point are still questionable. So we ve set up plan B in case the big deals fall out as to how we will continue moving forward. And then in worst case scenario we have a plan C. And so we ll be looking at those at our weekly meetings as well as then with senior staff here to review that meeting that 50% expenditure. At this point we re at just about 15%. So we have a bit to go but I think we re going to make it pretty easily.

12 Page 12 Oh here so basically this is what I was just mentioning. And we re also encouraging development staff to move those projects, take out predevelopment loans on the real deals that are moving forward so that we can pay for architectural and engineering and acquisitions and options and really get things moving so that the cash is actually being pulled out of the grant as opposed to waiting to close on the major permanent funding. And I think that s the end of my presentation. Let me just say one other thing. On getting to the 25% at below 50% what we did was look specifically for deals and foreclosure that had some kind of rental subsidies. So we were looking at elderly projects, permanent housing for formerly homeless, HUD properties or properties with HUD mortgages which were at some level in either foreclosure or abandonment. And actually out of the ten deals we have just about ready either closed or just about ready to close. I would say we have one, two, three of our deals that actually have rental subsidies in them. And that is how we re reaching down to that below 50% of median income. All right, I ll wait for questions afterward. Thank you. Kelly Price: Great. Thanks Pam. That was helpful. Pam Hallett: Thank you. Kelly Price: We re going to go now to David Morton who s with the Reno Housing Authority. David? David Morton: Hi. It s good to be on the panel. I appreciate the opportunity.

13 Page 13 We as the housing authority do all the traditional things housing authorities do. We have public housing units. We have a large Section 8 program and a variety of small programs. But about two years ago, we started buying single-family rentals. And at this point, we actually have over 100 that we re operating foreclosures principally that we ve purchased and we re operating for low income household. But in addition we are the PBCA for the state of Nevada. So we ve got a broader responsibility in that sense. We were asked by the city of Reno and the city of Sparks in Washoe County to expend the moneys that they were given under NSP1 which was not a really large amount of money. It was what was prorated to us from the state of Nevada. But about $4.7 million came to us in our cities and county under NSP1. And while we initially thought we would only be dealing with the portion of that that would go to people under 50% of the median income, as it turned out they asked us to administer the bulk of 4.7, ended up with $4.2 million that we used exclusively to buy foreclosed single-family homes in three target areas under that program. But having done that and having experience with another single-family home purchase program, an EDI grant that we received for an inner-city neighborhood we had felt that we had ample experience to try to tackle NSP2. We are the lead agency in putting together a consortia for the - again including the cities, the city of Reno as the lead agency for the local governments but representing the county as a whole.

14 Page 14 But we brought in the Nevada Rural Housing Authority. They had had extended experience in financing single-family purchases. So we thought they would add strength to our application. We wanted the Consumer Credit Counseling Services Program to do all the counseling aspects of the home ownership. And we included a bank that is very active in our community, Charles Schwab Bank. They only have a couple of actually permanent locations but one of those is in Reno. And they have been extremely helpful in that process. The total amount of money that we received in our grant was $20,995,000 as you can see on the screen. Our focus based on our local community and what our problems were, were that, you know, we re one of the parts of the country that have suffered the most in terms of prices going up just extremely high. It seemed like it would never end with all the new construction, great subdivisions being built all over the community, a lot of them entry-level, a lot of others higher income but a great deal of single-family home development. So we were sailing high as long as the market was going up. But when it tanked we tanked big time. And so for us, when we looked at our community and what our needs were and trying to focus that on parts of the community where we could really make an impact, we ended up building on the original NSP1 target areas -- those three. We were now required to do that on a census tract basis as opposed to some more geographical delineations we had made in NSP1.

15 Page 15 But we built on the NSP1 target areas. We included the more inner city older neighborhood that we had had an EDI grant on so that we were trying to maximize the impact of what we had done under the prior grants that were still continuing at the time we made this application. But we had learned enough under NSP1 that we felt like we had a good handle on what needed to be done. And we brought in technical staff to help us with making sure we had numbers and we knew what the target areas really were and the whole process and as it says bringing in the partners. But what it really boiled down to for us was that instead of coming up with a whole variety of activities as many of my colleagues have done, we were much more narrow in what we did. And again it was based on our community and the target areas and the situation. And that s single-family homes. We had all these single-family homes and nice single-family homes too at least in two of the target areas. One was a master plan of subdivision with parks and walkways and just, I mean a lovely area but again geared it - within the target range that we re talking about, the 50% to 120% of the sale. And another more entry level, a little bit lower but still newer homes less than ten years old, some 1,600 homes in this - in a beautiful subdivision. And the thought of being able to buy homes in those areas and then a - in our Sparks we ve tried to do all this geographically. In the city of Sparks we took three census tracks there that were close together with a little bit older but still fairly nice homes. So with those four target areas, the one low income northeast Reno area, the Sparks three census tracks there and then the two really nice new subdivisions we were dealing with for us it

16 Page 16 was clear that it needed to be purchased as single-family homes, not multifamily or not some of the other things we could have done. We opted to purchase as many homes as we could. We planned the program income very carefully of what we could do. And for us what we concluded was the first thing we needed to do was buy houses that we would be renting, so the program income. And I ll deal with that in a little bit more detail in a moment. But it boiled down to we re acquiring and rehabbing single-family homes. And then it was a matter of what we do with them. We had some for rentals, some for rent to own and then home ownership. The total goal of our grant was to purchase up to 200 homes in these six census tracks using NSP2 money. And we also contributed $1 million of our own money. And we re hoping to leverage some private investment through another fairly creative manner. But again using NSP money, our sole focus was to purchase single-family homes. So let me go into a little more detail with the next slide. What we did again recognizing this issue of program income and how do you spend the money as quickly as you can instead of re-spending the money in the long run we want to do that. But initially we decided to focus our attention on the rentals. In other words we - the low income aspect of this because if we re renting them we re not going to have a great deal of program income.

17 Page 17 We re spending a lot of money buying homes. We re spending a lot of money rehabbing them. But there s relatively small amount of program income in that period. The same thing as true of lease to own. We re spending the money and not necessarily generating huge amounts of program income. On the sales though we will. And so we sort of - we structured this where we would focus on the rental and the lease to own first. Now we bought some to sell. And we haven t exclusively done that but that was the focus of our program direction. And as far as managing this we clearly wanted the anticipation actively and appropriately from our partners. And, you know, we wanted to make sure that they had a stake in this, they were not just signing on to help us get the grant. But the city of Reno clearly had to do the environmental review. And so we ended up funding an employee for them to do this. So they had a clear vested interest in doing hours quickly and timing and making sure that we were able to turn around the purchase process because initially that was a real issue. It s gotten pretty smooth at this point. But we also wanted the assistance and expertise of the Nevada Rural Housing Authority which has gotten into a major issue on some bonds and doing financing for first - for entry-level housing. And so they were pretty strong partner to come with us. And for in return for their assistance we basically are giving them at least five of the houses that we purchased to - for long term rental so

18 Page 18 that they will manage and operate those. As it turns out they ll use a private management company. But the principle is that they will play the same role with those five that we re going to be playing with at least 55. So again, bringing them in as a partner and getting their full support with all the home ownership aspects that they can bring to the table. And then that consumer credit affiliates, you know, they re doing training already. But we wanted to make sure we had training set up in Spanish, that we had groups that we re training that was more available. So we worked out an agreement with them over the period of the three years that they will do all of our homeownership counseling. And we came up with a designated amount of money for that that was built into the grant and was approved in the process. So they all have a clear stake in our success. And we re just real pleased with the way that s worked out. From our standpoint as I said, it was pretty easy to decide how to deal with it. And by not coming up with a large number of additional issues we didn t have to get into the complexities of those. But we did want to make sure that we had timetables and plans and that we stayed on track with those, we worked with them, we had the incentives. But as you go on a day-to-day basis the thing that we ve learned and I think it s pretty common sense is that you better track your work and so we built in weekly meetings on an overall basis where we bring in as many of the players and staff and otherwise as we can. And then we have a separate weekly meeting just to monitor the rehab because that s the one we found is more of a problem.

19 Page 19 We can buy the houses very readily out here. That has not proven to be a problem. But rehabbing has been - we ve gotten delayed sometimes on that. So that s the thing we re really focusing on. But we ve set up a whole host of other things we monitor and track as well. We re doing a lot of landscaping, trying to make sure the exterior of our properties look great and trying to monitor all that and stay on top of it and the percentages of money we re spending. In our case we ve done very, very well. We have actually expended, not just obligated but we ve expended 53% of our money as of June 20. And I signed off on two more draws today for two more houses that probably puts us up at close to 55% at this point. So spending the money has not been a problem. But again a big part of that is we targeted it to the rentals, the purchase and rehab initially. So we ll go from there but at this point we re feeling very comfortable with the grant. We think we ll spend all the money and hopefully we ll have additional program income coming in as we sell to buy more and go beyond the 200 over the period of time. So I think I ll close at that point and answer questions. I ve probably taken enough time. Thanks. Kelly Price: Yes that was great. Thank you. Appreciate it. Now we ll go to our final panelist, Herman Reyes from Chicanos Por La Causa.

20 Page 20 Herman Reyes: Yes good morning or good afternoon. Thank you. Okay how do I change this slide? Just go down? Okay. Well thank you all for inviting us on this call. We re very happy and thrilled to be talking to you all. Let me introduce a little bit Chicanos Por La Causa up. We are the largest community development corporation in Arizona. We have roughly 900 employees I think at last count. We ve been around about 43 years. So we re certainly an institution here in the states. We re focused on obviously servicing individuals and families at low or moderate income levels. We roughly have about 32 programs that we, you know, that we run out of Chicanos Por La Causa. We re focused on economic development, education and community development and housing and social services. So we have a breadth and depth of services that we offer here out of Phoenix, Arizona which is our headquarters. We are the lead consortium for NSP2 getting out into NSP2. We basically - the way this all started just to give everybody a great history is all 13 nonprofits including Chicanos Por La Causa belong to the National Association of Latino Community Asset Builders or NALCAB. And so back when, you know, we decided to apply for this HUD grant we chose 13 nonprofits that had the capacity to be able to offer, you know, the plans that they we re offering to do. So Chicanos Por La Causa, we re chosen as the lead agency based on our capacity and our previous experience with HUD grants.

21 Page 21 So we are administering this grant across eight states and the District of Columbia. Let me go quickly to the next slide. So what we were awarded across the eight states and DC was $137 million and so I didn t put every nonprofit in the slide here because it would ve taken a little too much space. But we certainly can answer those questions afterwards. The Chicana for La Casa in Phoenix was also awarded. We were the lead awardee with approximately $33 million. As far as the activities that we re performing we were awarded for all five eligible activities. It s important to note that we, you know, we were awarded, you know, some nonprofits, specifically are doing, you know, demolition on land banking or specific activities and so not everybody s doing all five eligible activities. I wanted to go ahead and give you a breakout of what we are performing across all 13 nonprofits. So this constitutes roughly, you know, 2100 units of properties. About 800 are multifamily, have significant single-family, most are resale even though there is some rental in there. Obviously there was a discussion I think made about, you know, the challenge in having too much rental up front. I think that I echo that in terms of being able to generate program income. So we were, you know, we were certainly focused on trying to maximize program income. So definitely we re focused more on resale versus lease at least for the initial expenditure of the grant. So let me move forward.

22 Page 22 In terms of the program income, the way most nonprofits are running their program that we are administering is most are - had incorporated the program income into their plan. So, you know, we have already anticipated that program income will be generated as a result of the sales. And so the, you know, the numbers that I just demonstrated were basically predicated on the fact that program income would be generated. So the way that we are handling program income -- and I certainly like to talk to this - talk about this a little bit more in the question and answer -- is most of the administration that we re doing is being handled out of a Web portal that we established. We basically call this the NSP2 portal here for our purposes. So, all members basically tap into this portal, upload property information. And we basically monitor and handle all of the information that comes out of the portal at a national level and then sign off on drawdowns. And we re doing the same for program income. I think I ll talk a little bit about what we ve achieved in terms of expenditures and program income. But, you know, I m happy to say that we have generated some program income and again are handling that through our portal. Of course we all know how important program income and also the fact that, you know, we must account for program income and expend it first prior to any additional drawdowns. So, you know, the mechanism again through the portal is very important for us in terms of managing program income for our entire consortium.

23 In terms of partnerships we understood early on that, you know, again given that we re in - we were 13 nonprofits basically focused in 15 communities across the country there were specific relationships that each had in their local communities. ICF INTERNATIONAL, INC. Page 23 And so we honored that and definitely wanted them to leverage and strengthen those partnerships. So we have a slew of partnerships and arrangements and what not -- collaborations in local communities. What we really focus at the national level part of what my team does here out of Phoenix is establish and create those relationships that would, you know, create some of the leverage that we re looking to do at a national level or really to address issues that we saw early on that would affect every consortium members. So for example early on supply was an issue. I think we all can echo of that - all other NSP awardees out there across the country. But we really focused on partnering with folks like NCST who are already up and running with Fannie Mae -- those individuals that could really help us get over, you know, any hurdles that we saw in supply. So we, again, we really strengthened local relationships and then established national relationships to assist us in moving the grant forward. So in terms of management I think I talked a little bit about the Web based portal. We have a corporate compliance and monitoring division here within Chicanos Por La Causa.

24 And so (Judy Sitt) who is here in the room with me and is available for questions afterwards runs that side of the business for us. ICF INTERNATIONAL, INC. Page 24 And again, all of that is integrated into our portal in terms of compliance and whatnot. So I m - be happy to talk a little bit more in detail about the portal. Again, everything goes through the portal. That is the way we communicate through, you know, back to our agencies across the country in terms of information that we need when they look to finance draws for example. We monitor all the information that comes in, make sure that we re abiding by all NSP regulation and basically, you know, don t request vouchers to be created and drawdowns happen until we see that all the necessary documentation is in place. We have weekly calls at the national level here in Phoenix. We have the - our NALCAB folks join and CPLP folks for the most part to really move forward on, you know, what has happened in the last week, make sure that we re moving through any challenges for the week, et cetera. We then also have monthly calls with our entire consortium. And basically the premise of that call is to really talk about those issues that are really hindering, you know, progress. And so we have that on a monthly call. We have had two national conferences both held here in Phoenix. We just had one in April. Those are conferences that we have really to bring everybody together. It s for us what s really important is peer exchange, information exchange, talking about best practices, really focused on strategy so we understand obviously the challenge of expenditure and the 50% goal that we have immediately right now.

25 Page 25 So part of what we do in the national conference is really put our heads together to understand, you know, how we can achieve that and surpass that goal. We also early on I wanted to say, you know, part of the supply, you know, we had that supply issue if you will. That s why we ve established the national - our relationships. But also early on the environmental process was something that we really wanted to get our hands around. And I think the others can probably attest to that. So we established what we call the Competency Center that really was a bolt-on to our portal presence. And that Competency Center is run out of Phoenix. Tom Wilson who is here in the room as well is the National Technical Director for us and helps us to manage that entire 24 CFR part 50 that we must abide by as a nonprofit. So it was a very challenging process early on especially as you might imagine trying to manage, you know, other HUD offices across the country, different HOCs. There s a number of ways that we ve done clearances through MPRs, tier ones and site-specific. So what we did is we created the Competency Center to allow our members to use Tom and his knowledge basically of the process to move these forward expeditiously because that - we didn t want that to be a hindrance. And I m happy to say that we ve had as of last week I believe about 306 environmental approvals given through the Competency Center. So I can - I certainly would welcome the opportunity to talk a little bit more about the Competency Center.

26 Page 26 So as far as the expenditures I m going to - I have some additional notes that I want to talk about. But we obviously knew early on that the 50% goal was going to be key. It s built into the grant agreement with HUD. We actually established consortium spending agreements with individual members. And part of that CFA, part of the requirements of that - of those CFAs was we did have a bit more strict or challenging goals with our individual consortium members. So we, you know, we basically are trying to achieve greater than 50% expenditure. So that s our plan. I think, you know, (Judy) I think we re 25% or so is what our goal was internally. Female: ((inaudible)). Herman Reyes: Yes. So we actually have a, you know, a goal that we ve set. You know, we ve set the bar up a little bit higher, you know, hoping to overachieve the 50%. What was important for us early on again was strategy, okay, understanding how we were going to get there. Again we re running a number of different types of activities across the country. No one is really unique in terms of how they re running their program. They re all doing it differently. We re trying to assist all of them to ensure that we re not only expending the dollars but doing it smartly and in many cases maximizing program income so we

27 Page 27 can bring back more of the program income to do more, you know, to achieve more of the national objective. So early on we implemented a peer review process. And that was led in large part by NALCAB. And so that peer review was basically a number of site visits that we had with all our nonprofit consortium members to go over their plan and they re, you know, how they were going to meet the 75% attainment that we internally set. And so that was a very important piece of I think what that is left some of the accomplishments that we ve had. As part of the peer review we did identify, you know, some of the areas across the country that would likely have a challenge in meeting, you know, their expenditure goals. And for the most part that was market-driven. You know there s very specific - there s a lot of dynamics as you all know amongst different markets. And so we identified those what you might call high-risk areas. And so since the peer reviews we have gone back. We finished most of our follow-on visits to those challenge areas. And basically what we re doing is trying to figure out alternative approaches wherever possible to ensure that we meet the expenditure goals. So working with HUD has really been key to ensuring that we, you know, achieve our expenditure goals. So talking about, you know, how we - you know, how we have to tweak our plans as it relates to the individual categories, the five eligible categories for those members that were having challenges meeting, you know, specific activities.

28 So let me move forward here, capacity building. We established internal monitoring and auditing as part of this program. ICF INTERNATIONAL, INC. Page 28 So we have monitors that currently go out and again, this is CPLC internal process. We also have and auditing component. And I think that s been, you know, a very good thing that we ve done here internally. So we re out there making sure that all s well if you will with our consortium members. Recently through NALCAB we did hire a section 3 person. And that individual basically is going to be our liaison with all of our consortium members to ensure that we re doing the very best to meet section 3 requirements. So we re moving forward with that. Before I turn it over I did want to say that we have as of, I believe as of a couple days ago extended roughly 51 million of our grant. That s roughly 37%. But we re really happy with that progress. And, you know, I think we - we re well on our way to meet meeting are 50% goal by February. We have acquired approximately 275 properties across the country and of single-family. We acquired 400 multifamily properties; have as I mentioned early on, over 300 approvals in the queue. So we have more property in our pipeline if you will, that s due to close here in the next couple of two, three months. So anyhow with that I ll stop, apologize for my challenge here with running the screens. But thank you very much.

29 Page 29 Kelly Price: Thank you. That was great. I think there ll probably definitely be some follow-on questions with some of those things that you guys have established like the (report) on your Competency Center. That concludes the main presentation part of the webinar. Courtney, do you want to give instructions again on questions? And specifically I think we might ve skipped over earlier on how to write in questions? Courtney Smith: Sure. So one way to ask questions verbally over the phone if you press star 1 on your Touch-tone phone you ll get in the queue to ask your question verbally and the operator will assist that. The other option is to type in a question into the Q&A box which is in your upper left-hand screen. And if you want to type in your question as well we can address those questions through the Q&A box. Kelly Price: Thank you. Courtney Smith: So operator do we have any questions on the line right now? Operator: Not at this time. As a reminder it s star 1 on your touch-tone phone to place yourself in queue. If you re using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Star 1 please for a question. Courtney Smith: So Kelly, it does look - you have two questions typed in if you wanted to... Kelly Price: Yes.

30 Page 30 Courtney Smith:...address those? Kelly Price: Yes we ll go ahead to those (questions). And it's not clear who they re directed to. So for our panelists if you recognize a component of the question that's applicable to your grantee then - your NSP2 program then certainly feel free to answer. And we can have more than one person of course chime in. Our first question is from (Angela). And her question is: are the payments to the partner structured around performance? So I'm not sure who specifically that may be directed to or if different of our panelists want to speak to your counseling agency partners on how you have structured the payment, the funding to those partners. David Morton: This is David. I could elaborate just a little bit. In terms of our counseling we re paying so much for each session of training that they do. In other words we've rejected over the time period how many we would need. And the 108,000 that we set aside was based on the number of those sessions that they're doing. In the case of the environmental review the payments we re making there just - we re just picking up the monthly cost for the person who does this, so it's... Kelly Price: Okay. David Morton:...not, you know, how many reviews they do. It's whatever we need doing they do for us. So that's pretty much what we've done.

31 Page 31 Kelly Price: Okay. Tom Wilson: This is Tom Wilson... Kelly Price: Oh go ahead. Tom Wilson:...with CPLC. We have a Memorandum of Understanding with the counseling department wherein we schedule payments based on tiers, one for the intake and initial counseling session. The second tier is home buyer education. And the third tier is successful close of escrow. Kelly Price: Okay so two different models there for you for the person posing the question. Thank you. Pam, we have one directed to you regarding your predevelopment loans. And I'll read the question to you. Pam, can you describe the uses of your NSP predevelopment loan? Does expenditure under this loan before closing change the basis on your low income house credit supported projects? Pam Hallett: Okay. We use... Kelly Price: ((inaudible)) two parts, a little complicated. Pam Hallett: That s all right. The predevelopment we use for architectural engineering, acquisition if we want to go that far, this is of course after environmental has been approved.

32 It can be used for any kinds of expenditures that are eligible under the program. And they are eligible with - under the basis for low income housing tax credits as long as they're within a period of time from the time you actually put it in service. ICF INTERNATIONAL, INC. Page 32 So you need to go back only I think it's two years from the point it goes into service. So you need to be aware of that time differential. But yes we typically structure it so that it is to be included in the basis for tax credits. Kelly Price: Okay all right thank you. We have another question David for you. I'll pull this up here. What is the average cost of your acquisition and your average total development cost? David Morton: We re not exactly like we projected but most of our houses particularly in the three of the four target areas have been around $100,000 to $120,000 a house is what we re spending on buying them. Sometimes we go down as low as 95 in those areas. In this older neighborhood that I mentioned we could buy them a lot cheaper but then the rehab s a lot more. So rehab for us, I've forgotten the exact average but it's - it would range from probably a low of 10 grand with all the landscaping that we re doing. We re trying to do zero scape landscaping and some energy improvements. Up to in some of the older areas they could be, you know, 50 or 60 grand that we re spending. But the average would probably be my guess $30,000 thereabouts, that we would be spending on the houses in rehab.

33 Page 33 Kelly Price: Okay thank you. So it may have been someone in your area. Certainly they ll range as much as they possibly can across the country. David, we have another question. Are any of your project special units project based assistance which allow owner to charge project-based program rent, low home units, unit received project based assistance and unit is occupied by very low income tenants. Tenant does not pay for more than 30% of their adjusted income for rent. Okay that's a long one. David Morton: Yes can you restart? I'm not sure whether they're referring to the project-based voucher or just what the referring to? Kelly Price: Yes I'm not sure either. It's a little complicated. I may ask, this is from (Deborah King). Debra you may want to call in the question so that we can probe a little further into it. I guess in sum, are any of your units that you're doing given that you're a housing authority do you have project based assistance in any of those? David Morton: Not on any of the NSP properties. We have not tied the two together. We have a number of people who have exercised their regular portable, I mean their regular voucher, the Housing Choice Voucher and we are renting too many people who have Housing Choice Vouchers but we have not tied any of our vouchers to the NSP rentals. So that is not what we re doing. I mean it could have been an option but we were looking at trying to do that for some private investment. But as far as the NSP properties that we re buying with NSP money we have not tied any project based assistance to that...

34 Page 34 Kelly Price: Okay. David Morton:...if that's the question. Kelly Price: Right I think that was the gist of it with some explanation of what the project assistance means. But again Debra please feel free to call in, hit star 1 and you ll get in the queue and you can call in any more details to that if you'd like more information. This is directed to Steve or anyone else that can answer. How is the local housing authority eligible to participate as a developer under NSP? Male: Well hello Victor. I know this was a topic of great debate at the recent all grantees meeting in Philadelphia. Unfortunately I came in kind of on the tail end of the debate. But my understanding of the way it's structured is that the housing authority is not the developer. They are the property manager. Their contribution is these essentially screening of tenants, collecting the rents, maintaining the properties. It's our city Reading which is a nonprofit that s doing the actual construction and development. That the question may be on my - be beyond my scope of involvement with the program. But I know when the application for my consortium was submitted that Reading Housing Authority was one of the consortium partners and it was approved. So they re sort of just playing a little bit of a different role so they are not - because they're under NSP and John can certainly elaborate on this.