Housing Contract Administration HOME INVESTMENT PARTNERSHIPS PROGRAM (HOME) & AFFORDABLE HOUSING TRUST FUND (AHTF) February 2018 SINGLE-FAMILY ONLY APPLICATION GUIDELINES Kentucky Housing Corporation 1231 Louisville Road Frankfort, KY 40601 (502) 564-7630 Kentucky Housing Corporation prohibits discrimination based on race; color; religion; sex; national origin; sexual orientation; gender identity; ancestry; age; disability; or marital, familial or veteran status.
Contents Section I Introduction and Program Purpose... 4 Affordable Housing Trust Fund (AHTF)... 4 HOME Investment Partnerships Program (HOME)... 4 Section II: Program Policies... 5 Section III Available Funds... 6 Community Housing Development Organization Set-Aside... 6 Non-CHDO HOME and AHTF Applicants... 6 Section IV: Pertinent Dates... 7 Section V: Application Fee... 7 Section VI - Eligible Applicants... 8 Section VII Minimum Thresholds... 8 Section VIII Maximum Funding Requests... 9 Section IX: Match, Leverage, and Community Collaboration Bonus... 9 Community Collaboration Bonus... 10 Section X: Eligible Activities... 10 AHTF Eligible Activities... 10 AHTF Ineligible Activities... 10 HOME Eligible Activities... 11 HOME CHDO Set-Aside... 11 Eligible Costs for HOME Funds... 12 HOME Ineligible Activities... 12 Section XI Competitive Application Process... 13 Public Information and Open Records Act Requests... 13 KHC Capacity Scorecard... 13 1. Capacity Scorecard Threshold Requirement... 13 2. Capacity Scorecard Self-Certification... 14 3. Capacity Scorecard Overall Performance... 14 Analysis of Impediments to Fair Housing... 14 Application Preparation and Minimum Submission Requirements... 15 General Guidance... 16 Section XII: Application Review Process... 16 Notice to Applicants... 16 Application Scoring Response Period... 17 Section XIII: Reconsideration Processes... 17 Page 2
Disqualification Decisions Review Request... 17 Scoring Decision Reconsideration Request... 18 Communications with Credit Committee Members... 18 Section XIV: Conditional Approval Process... 19 Section XV Additional Policies... 19 Page 3
Section I Introduction and Program Purpose Kentucky Housing Corporation (KHC) is pleased to offer a competitive funding application process to affordable housing developers, builders, and organizations across the state through the HOME Investment Partnerships Program (HOME) and the Kentucky Affordable Housing Trust Fund (AHTF). Through this funding process, KHC provides financial resources and technical support to enable the development and rehabilitation of safe, quality, single-family affordable housing. The primary goals of the competitive funding process are to ensure that the most viable projects are funded expeditiously and to enhance the state's capacity to create and preserve affordable housing by effectively blending resources. This guide explains program criteria, application directions, and application review processes. KHC reserves the right to amend these guidelines to fully implement and utilize the HOME and AHTF resources and to administer the programs as efficiently as possible. Affordable Housing Trust Fund (AHTF) The AHTF was established by the Kentucky State Legislature to provide housing for very low-income Kentuckians (at or below 60 percent area median income) in meeting their basic housing needs. The fund was created in response to economic conditions, federal housing policies, and declining resources, which adversely affected the ability of very low-income persons to obtain safe, quality, and affordable housing. There are four priorities for use of AHTF financing. 1. New construction projects for families (as defined in 24 CFR 5.403) submitted by nonprofits or local governments. 2. Projects using existing, privately-owned housing stock. 3. Projects using existing, publicly-owned housing stock. 4. Applications from local governments for projects that demonstrate effective zoning, conversion, or demolition controls for single-room occupancy units. As noted in KRS 198A.720 (6), a minimum of 40 percent of all funds received is for use in rural areas of the Commonwealth. For a project to meet the rural designation, projects must be in areas defined as rural by USDA Rural Development (RD). KHC reserves the right to make funding decisions to meet this requirement. Applicants can determine if the property is in a rural area by accessing the RD Property Eligibility Site, Single family and then entering the property address. A copy of the eligibility determination must be provided with the project set-up if an agency is awarded funding for projects in rural areas. KHC will use at least 40 percent of the available AHTF funding for projects located in rural communities through this application round. HOME Investment Partnerships Program (HOME) Created by Congress in 1990, the HOME Program provides funding to applicants for various types of affordable housing production and rehabilitation. KHC administers and monitors the program for the U.S. Department of Housing and Urban Development (HUD), awarding funding to eligible applicants, including local governments, housing authorities, private developers, and nonprofit housing providers. Page 4
The purpose of the HOME Program is to expand the supply of quality, affordable housing for low- (at or below 80 percent area median income) and very low-income (at or below 50 percent area median income) families. The HOME Program can be utilized to expand the supply of decent, safe, and sanitary housing through either new construction or rehabilitation of existing structures or by providing Tenant Based Rental Assistance (TBRA) to address local housing needs and priorities. (Note: TBRA will be awarded through a separate competitive application round anticipated for Spring 2018). The HOME Program's flexibility empowers local communities to design and implement strategies tailored to their own needs and priorities. Section II: Program Policies New This Year: Separate Policy Manuals KHC has created two separate policy manuals one for the HOME Program and one for the AHTF Program. In the past, program policies for both programs were contained within one document. Also in the past, KHC has included detailed information about most program requirements and administration for these programs within these application guidelines. Most of this information (e.g., homebuyer cost containments and value limits, underwriting standards, construction management, inspections, etc.) has been removed from this application document, but can be found within the policy manuals located on the Housing Contract Administration Help Desk. Applicants are required to read and understand the program policy manual(s) relevant to the program funding being requested. Proposed projects must be in accordance with policies contained therein. Some information requested through the application, such as the cost summaries, will require familiarity with the program policies, which may or may not be detailed in this document. It is the responsibility of the applicant to read and understand the policy documents. Applicants should not rely solely on program details provided within this application guidelines document. HOME ONLY projects must adhere to the policies outlined in the KHC HOME Program Policy Manual. AHTF ONLY projects must adhere to the policies outlined in the KHC AHTF Program Policy Manual. HOME/AHTF COMBINED projects must adhere to the policies outlined in the KHC HOME Program Policy Manual, including for the portion of AHTF funds used in the project. Page 5
In addition, applicants are expected to be familiar with all applicable federal regulations, state and local requirements, the HOME Program, and AHTF Administrative Certifications, and to incorporate them into their project design and implementation procedures. If funded, single-family projects will be governed by and must adhere to the cumulative information contained in these guidelines, the HOME Program regulations, KHC s HOME Policy Manual, KHC s AHTF Policy Manual, KHC s CHDO Manual, the Consolidated Plan, Annual Action Plan, the applicant s application for funding, the grant agreements, and the HOME/AHTF Administrative Certifications. Section III Available Funds Applicants may apply for either HOME or AHTF funding or a combination of the two. Funding Source HOME** AHTF Amount Available* $3,000,000 $3,500,000 * Amount of available funds is approximate. ** A minimum of 15% of HOME will be set-aside to fund projects proposed by Community Housing Development Organizations (CHDO). KHC reserves the right to award more than 15% of the total amount of HOME funds available to CHDOs. Community Housing Development Organization Set-Aside The HOME Program regulations require that participating jurisdictions set aside a minimum of 15 percent of the annual allocation to fund applications submitted by Community Housing Development Organizations (CHDOs) on a statewide basis. Only CHDOs designated by KHC prior to the application submission date are eligible to apply under this set-aside. CHDOs may apply for homebuyer new construction and/or acquisition/rehabilitation/resale projects from the CHDO set-aside. CHDOs acting in the role of sub-recipients may also apply for homeowner rehabilitation activity, but use of HOME funds in this manner is not a CHDO set-aside eligible activity. KHC s CHDO Certification Manual is currently available on KHC s Web site, www.kyhousing.org, under Development, Single Family, Community Housing Development Organization (CHDO), Resources, and 2015 CHDO Manual. CHDOs are expected to comply the policies in this manual as well as all HUD requirements, as defined in 24 C.F.R. 92.300-92.303. Non-CHDO HOME and AHTF Applicants Applicants that do not meet the criteria for the CHDO set-aside may still apply for funding in the general competitive funding process. KHC reserves the right to use recaptured funds to assist a HOME-eligible project that lies within another participating jurisdiction's area, if deemed necessary by KHC and if HOME funds are available. In addition, KHC may, at its discretion, reallocate HOME Program funds from the competitive allocation to the CHDO set-aside allocation, or vice versa, to meet funding demands. Page 6
Section IV: Pertinent Dates Below are the deadlines relevant to this funding round: February 2, 2018 Application Opens in the KHC Universal Funding Application (UFA) February 23, 2018 by 11:59 p.m. ET Capacity Scorecard Must be Submitted within the UFA (See Section XI of these guidelines) March 7, 2018 at 11:59 p.m. ET Application closes. March 14, 2018 Last day to pay Application Fee (see Section V of these guidelines) September 30, 2019 Entities awarded funding through this application round must have all funds committed by this date. Section V: Application Fee There is a $100 non-refundable application fee for nonprofit organizations and units of local government and a $250 non-refundable application fee for for-profit applicants. Applicants may pay the application fee via check, money order, or through KHC s online payment system within the Universal Funding Application (UFA). APPLICATION FEE Application fee must be received no more than seven days after the application deadline. If KHC has not received the application fee by 5:00 p.m. ET on Wednesday, March 14, the application will not be reviewed. ATTENTION: Online Payments Applicants are strongly encouraged to pay their fee using KHC s online payment system within the UFA. Please note, this online payment option is ONLY AVAILABLE PRIOR TO APPLICATION SUBMISSION. Once the applicant submits the application via the UFA, they will not be able to access the online payment system without recalling (and then resubmitting) the application. Recalling the application is not possible after the March 7, 2018 application submission deadline. At that point, the applicant will only be able to submit a check or money order and it must be received by the deadline stated above. Make check or money order payable to Kentucky Housing Corporation and mail to the following address. Please include on the memo line HOME/AHTF Application Fee : Kentucky Housing Corporation Attn: Jamie Pinkston 1231 Louisville Road Frankfort, KY 40601 Page 7
Section VI - Eligible Applicants The following organizations may apply for HOME and/or AHTF: Nonprofit organizations, including Community Housing Development Organizations, faith-based organizations, and community service organizations; Local governments The following organizations may apply for HOME, but not AHTF: Private developers (Note: Private developers are not eligible to apply for HOME owner-occupied rehabilitation projects) The following organizations may apply for AHTF, but not HOME: Public Housing Authorities Section VII Minimum Thresholds To be eligible to apply in the competitive application round, previous HOME/AHTF subrecipients (including from the Gap and Houseworks Programs) must meet the following thresholds, regardless of activity: HOME and/or AHTF funds awarded in 2014 or earlier (project numbers beginning with HB14 or HR14): 100 percent committed and 100 percent expended. All project completion report packets must be submitted to and approved by KHC no later than the application submission deadline of March 7, 2018. HOME and/or AHTF funds awarded in 2015 (project numbers beginning with HB15, HR15, GW15, or GF15): 100 percent committed and 90 percent expended no later than the application submission deadline of March 7, 2018. HOME and/or AHTF funds awarded in 2016 (project numbers beginning with HB16, HR16, GW16, or GF16): 100 percent committed and 50 percent expended no later than the application submission deadline of March 7, 2018. HOME funds awarded in 2017 (project numbers beginning with HB17 or HR17): 100% committed. Threshold waivers will be granted on a case-by case basis at KHC s sole and absolute discretion. Page 8
Section VIII Maximum Funding Requests Applicants may submit multiple applications; however, the total allocation any one entity can receive for all applications is limited to $500,000 for non-chdo applicants and $600,000 for CHDO applicants. KHC limits the amount of funds an applicant may request: AHTF-Only Projects Maximum request is $200,000 of AHTF funds, inclusive of administrative fees. HOME ONLY or HOME/AHTF Combined Projects (non-chdo) Maximum request is $500,000 of HOME and AHTF funds, inclusive of HOME developer fees, HOME administrative fees, and/or AHTF administrative fees, with a cap of $200,000 of AHTF funds. HOME ONLY or HOME/AHTF Combined Projects (CHDO Set-Aside) Maximum request is $600,000 of HOME and AHTF funds, inclusive of HOME developer fees and AHTF administrative fees, with a cap of $200,000 of AHTF funds. KHC reserves the right to award lesser or greater amounts than requested. This determination may be based on such factors as, but is not limited to, a project s readiness to proceed, the number of applications received, geographic distribution of funds, applicant capacity, and any other factors that KHC deems appropriate and necessary. Section IX: Match, Leverage, and Community Collaboration Bonus New This Year: Match and Leverage not required for HB18 or HR18 projects In previous years, applicants for HOME funds have been required to match a minimum of 10% of the total award. For projects funded through this competitive application round, match is not required. Please note that match requirements for projects funded prior to this application round are still in effect. Furthermore, in future competitions, KHC may reimpose match requirements. There is no match requirement for AHTF projects for this funding round. Page 9
Community Collaboration Bonus While traditional match and leverage are not required for HOME or AHTF projects funded through this application round, applicants may receive bonus points in proportion to the amount of Community Collaboration (cash or in-kind) brought to the project. KHC is electing to use the term Community Collaboration to avoid confusion with traditional match and leverage that are not required this year. Eligible Community Collaboration costs include; The categories that are defined as match under the HOME Program (24 CFR 92.221); or All funding sources not HOME-match eligible, which are considered leverage. Leverage funds include all federal dollars, loaned funds, and owner cash. AHTF funds blended with HOME funds and vice versa will not count towards Community Collaboration. All Community Collaboration funds committed to the awarded project must be expended before completion of the project (i.e., submission of the project completion reports). To receive bonus points, applicants must attach commitment letters to their applications within the UFA. KHC reserves the right to monitor fulfillment of any Community Collaboration commitments. Section X: Eligible Activities AHTF Eligible Activities AHTF activities eligible for funding shall include: (a) Provision of matching funds for federal housing dollars requiring a local or state match including, but not limited to, the National Affordable Housing Act of 1990; (b) Acquisition of housing units for the purpose of preservation or conversion as very low-income housing; (c) New construction or rehabilitation of very low-income housing units (including down payment, closing costs, and principle reduction); (d) Matching funds for technical assistance directly related to providing housing for persons pursuant to KRS 198A.700 to 198A.730; and (e) Administrative costs (up to 7.5% of total AHTF funded project costs) for housing assistance programs or organizations eligible for funding pursuant to subsection (3) of this section, if the grants or loans will substantially increase the recipient's access to housing funds other than those available under KRS 198A.700 to 198A.730. AHTF Ineligible Activities KHC considers the following activities ineligible for AHTF units: Finished basements. Partial unfinished basements may be permitted on a case-by-case basis if the existing topography of the site would yield a sub-surface area large enough to be usable by the assisted household. This activity would require prior approval from KHC. Luxury items including but not limited to: o Swimming pools. o Garages, unless required by a neighborhood or subdivision covenant, or are an existing Page 10
attached structure. o Fences (other than those required for security). o Television satellite dishes. o Upgrades to surfaces, furnishings, fixtures, appliances, etc. except as may be deemed appropriate and necessary to improve accessibility. Non-essential landscaping (unless installed as part of a green building design) and other yard or nonstructural improvements. Rehabilitation of accessory structures, unless specifically authorized by KHC for health and safety reasons. Additional rooms, except to comply with Kentucky Residential Code. Rehabilitation damaging to the historical character or value of a structure as determined by the State Historic Preservation Office of the Kentucky Historical Commission. Refinancing of existing debt. AHTF assistance of less than $1,000. Down payment, closing costs and/or principal reduction without construction financing. Provide assistance (other than assistance to a homebuyer to acquire housing previously assisted with AHTF or HOME funds,) to a project previously assisted with AHTF or HOME funds during the period of affordability established by the written agreement. Pay delinquent taxes, fees or charges on properties. HOME Eligible Activities HUD allows a wide variety of activities under the HOME Program. KHC strives to maintain a great deal of flexibility in how the funds can be utilized in order to maximize the opportunities to create or maintain affordable housing of all types across Kentucky. The following project types may be eligible for HOME funding as identified in KHC s Consolidated Plan and Annual Action Plan (NOTE: See section below on specific activity requirements for CHDO Set-Aside projects): New construction. Acquisition, rehabilitation, and re-sale of existing single-family dwellings. Site development combined with new construction. Construction financing. Rehabilitation of owner-occupied units. Demolition and reconstruction of owner-occupied units. Relocation expenses, when combined with other HOME-eligible expenses. Reasonable administrative costs. Conversion of existing affordable housing. HOME CHDO Set-Aside For organizations to utilize CHDO set-aside funds, the activity must include one of the following: Acquisition and moderate-to-substantial rehabilitation of existing home (minimum of $5,000 in rehabilitation); or New construction of home buyer property. HOME CHDO set-aside funds must be used during the construction or rehabilitation. All CHDO set-aside funds must be expended within 5 years of the date KHC receives its formula allocation. Page 11
Eligible Costs for HOME Funds 1. Project costs (24 CFR 92.206). HOME funds may be used to pay development hard costs, acquisition costs, related soft costs (including architectural, engineering, or related professional services if incurred not more than 24 months before the commitment of HOME Funds if the Funding Agreement expressly permits these costs), CHDO costs set forth in 24 CFR 92.301; relocation costs; and costs relating to payment of loans, all of which are described in 24 CFR 92.206(g). Note: KHC does not allow for refinancing costs. 2. Administrative Costs (24 CFR 92.207). KHC may provide an allocation of HOME funds to recipients of no more than 10 percent of the project award. Those funds may be used for reasonable administrative and planning costs in accordance with 24 CFR 92.102(b) to meet or exceed threshold requirements for that fiscal year. Reasonable administrative and planning costs include: a. General management, oversight and coordination costs; b. Staff and overhead costs; c. Public information costs; d. Fair housing costs; e. Indirect costs; f. Other Federal requirements in subpart H (Environmental review costs may be charged as administration costs or as project costs); and g. Costs for preserving affordable housing already assisted with HOME funds. HOME Ineligible Activities In addition to the activities that are prohibited by the HOME regulations, KHC considers the following activities ineligible for HOME funding: Finished basements. Partial unfinished basements may be permitted on a case-by-case basis if the existing topography of the site would yield a sub-surface area large enough to be usable by the assisted household. This activity would require prior approval. Luxury items including but not limited to: o Swimming pools. o Garages, unless required by a neighborhood or subdivision covenant, or are an existing attached structure. o Fences (other than those required for security). o o Television satellite dishes. Upgrades to surfaces, furnishings, fixtures, appliances, etc. except as may be deemed appropriate and necessary to improve accessibility. Non-essential landscaping (unless installed as part of a green building design) and other yard or nonstructural improvements. Rehabilitation of accessory structures, unless specifically authorized by KHC for health and safety reasons. Additional rooms, except to comply with Kentucky Residential Code. Rehabilitation damaging to the historical character or value of a structure as determined by the State Historic Preservation Office of the Kentucky Heritage Commission. Refinancing of existing debt. Page 12
HOME assistance of less than $1,000. Down payment, closing costs, and/or principal reduction without construction financing. Reconstruction of a unit that was not standing at least 12 months prior to the commitment of HOME funds. Payment of delinquent taxes, fees, or charges on properties. Section XI Competitive Application Process Public Information and Open Records Act Requests Applicants are advised that materials contained in applications are subject to the requirements of the Kentucky Open Records laws at KRS 61.870-61.884, and the application materials may be viewed and copied by any member of the public. Applicants seeking to claim a statutory exemption to disclosure from open records requests must place all documents viewed as confidential in a sealed envelope marked Confidential. If an open records request is made for any of the application materials, KHC will make an independent determination of confidentiality and may or may not agree with the applicant s determination regarding the confidentiality of the materials. KHC will publish via the egram an announcement of all awarded applications for the current application round. The list will be made available within sixty days of the current application deadline. KHC Capacity Scorecard ***IMPORTANT DEADLINE REMINDER*** Applicants MUST submit a completed KHC Capacity Scorecard through the UFA System by 11:59 p.m. ET on February 23, 2018. Applicants who do not meet this requirement will NOT be able to submit a full application. To create consistency and equity, KHC utilizes a Capacity Scorecard for all program areas that have competitive applications or a formula grant allocation process. The scorecard is used to determine the overall capacity of the Entity or Development Team member(s) that will administer the proposed project and/or program they are applying for. The scorecard was revised in January 2017, so applicants applying through this funding round may be using the new version for the first time. The scorecard is divided into three (3) sections: 1. Capacity Scorecard Threshold Requirement The first section of the scorecard consists of minimum thresholds that must be achieved. If the Entity or Development Team member(s) answers yes to any of the Capacity Scorecard Threshold Requirements, the application may not be eligible for submission. All yes answers are required to provide an explanation as to circumstances of the infraction. KHC will review the response when determining whether the applicant may apply through this funding round. Capacity Scorecard Threshold Requirements will be verified at both the submission of the application and reviewed again prior to funding award announcement. If the status of a Capacity Scorecard Threshold Requirement changes prior to announcement of funding, the application may Page 13
be disqualified. Depending on the circumstances, an Entity may be asked to correct the outstanding issue prior to a funding award. 2. Capacity Scorecard Self-Certification The Capacity Scorecard Self-Certification section of the scorecard is a series of statements to which the applicant preparer must certify. This is a non-scoring section, but will be used by KHC review staff to ensure there are no outstanding issues that could prevent the project from being awarded funds. There is a response section in the self-certification section that can be used to provide additional information to any of the self-certification questions. KHC review staff may request additional information for clarification purposes. The Entity will need to complete the certification acknowledgement that states the responses to the self-certification statements are true and accurate, to the best of their knowledge. Falsification of these statements could result in a recapture of funds or suspension/disbarment from KHC. 3. Capacity Scorecard Overall Performance The Capacity Scorecard Overall Performance section is the part of the scorecard where KHC staff will indicate if a capacity deduction will be applied. Guidance on the type of infractions that KHC will consider for possible capacity deductions is provided in a list in this section of the scorecard. Please note, the list is not all inclusive, but provides guidance as to what criteria are used to determine a potential capacity deduction. A capacity deduction can be determined at any time throughout the administration of a project/program and through the affordability/compliance period. The capacity deduction can apply to the Entity or any member of the Development Team. Please note, it is not KHC s intention to issue capacity deductions on minor occurrences. A capacity deduction can occur if the Entity has repeated administrative issues or unresolved compliance findings for which corrections have been requested and not received. At the time a capacity deduction is issued, the agency or organization will receive a written notice from KHC explaining the reason for the capacity deduction and the amount of time the deduction will be applicable. KHC typically looks back 3 years, from the date of application submission, to determine capacity related issues. KHC Capacity Scorecard deductions will be applied to the overall score for the Agency Experience and Capacity Section. For example, if the Agency Experience and Capacity Section of the application is worth a total of 25 points and a capacity deduction of -2 was determined, then the application will be docked 2 points and will receive 23 out of a total 25 possible points. Once submitted, KHC staff will review the capacity scorecard, respond with any questions, and determine a total capacity deduction, if applicable. While KHC is reviewing the scorecard, applicants may proceed to the rest of the application sections, but should be aware that responses on the scorecard may result in the applicant not being allowed to ultimately submit the application or be awarded funding if the application has already been submitted. Analysis of Impediments to Fair Housing Impediments to fair housing are outlined in KHC s Our Right to Choose Where We Live. Applicants must identify which of those impediments to fair housing their project will address. In addition, applicants must address how the project will reduce or eliminate impediments to fair housing. Page 14
If the application does not identify which impediments to fair housing will be addressed and explain how the project will reduce or eliminate these impediments, your application will not be reviewed. Application Preparation and Minimum Submission Requirements The application is created and submitted through KHC s online application system, the Universal Funding Application (UFA). A complete application must be transmitted to KHC. KHC will send an e-mail notification to the applicant once the application has been transmitted successfully. Applications that do not meet the following minimum submission requirements will not be eligible for application review. All applications must meet the following criteria: Be submitted to KHC by 11:59 p.m., ET, March 7, 2018. Be submitted in the current application version and all applicable attachments must be uploaded through the UFA system as part of the application submittal. Be limited to the applicable caps for funding. Be proposed by an eligible applicant type for an eligible activity. Not include funding from any previous KHC-approved HOME and/or AHTF projects, including awards made to any other applicants. Pay the application fee (see Section V) and ensure it is received by KHC no later than 5:00 p.m. ET on March 14, 2018. All applicants must request all KHC funds required for the project in one application. Previously-funded projects cannot access additional funds through the competitive application process. Applicants requesting HOME Project funds for Homebuyer and Homeowner Rehab must also submit to the State Clearinghouse via the Department of Local Government s online system, at https://kydlgweb.ky.gov. Successful submission to the online Clearinghouse system will generate a confirmation that includes the State Application Identification (SAI) number. A copy of this confirmation is a required checklist attachment for the KHC application. For the application to be complete, the Cost Summary in Excel format must be uploaded to the electronic application. The application attachments must be identified with the name of the attachment. If the application does not meet the minimum submission requirements, the applicant will be notified that the application has not been accepted for review. If contradictory statements appear in the application, KHC reserves the right to request clarification from the designated applicant contact person. Page 15
General Guidance The application will be evaluated on the specifics of a proposal as it relates to each priority in the application point system. Your application must: Include only responses to the HOME/AHTF Application and required attachments. Any other information provided will not be reviewed for use in scoring the application. In addition, applicants should provide responses in the following manner: When writing narrative responses, do not assume that the KHC application reviewer already knows your organization or program based on previous knowledge or responses to questions earlier in the application. Make sure to write responses to each response as if the reviewer does not know anything about your program or your processes. Demonstrate to the reviewer your knowledge of HOME and/or AHTF requirements, policies and procedures and ensure application responses are consistent with KHC HOME and/or AHTF policies and federal regulations. In some cases, you may be asked to answer questions that are similar to questions asked in other sections of the application. Do not assume because you provided information in one section (especially non-scored sections) that the reviewer will use that information to score you on another question where you did not provide the information. Pay attention to the instructions listed in the application itself, especially when it tells you what you must include to receive maximum points. You might provide a lengthy response, but if you are not being responsive to the specific information requested, you will not receive full points. Review the sample scoresheet to fully understand the criteria used to score your projects and use that information to complete your responses. Fully review these guidelines for additional information on what is expected in your responses. On the scoresheet, when it says applicant described or applicant explained, applicants will be scored on the extent to which a thorough explanation was provided, but also on the quality of the response and plan. Section XII: Application Review Process Notice to Applicants It is the applicant s responsibility to submit all required documentation to adequately support its Application. Any material deficiency in the Application or omission from the mandatory submissions may result in an immediate rejection of the application. In addition, the Application must meet all eligibility requirements set forth in the guidelines. Any application which does not contain sufficient information to be reviewed will be rejected. Page 16
Although KHC intends to award funds to the highest scoring projects, KHC will make every effort possible to ensure that funds are geographically distributed across the state. KHC reserves the right to allocate funds to lower scoring applications to ensure equitable allocation of resources in each congressional district throughout the state. KHC may, at its discretion, request information from applicants to address and resolve issues identified during application review. The application will be reviewed and scored as submitted. Application Scoring Response Period Once all applications have been fully reviewed and scored, and prior to submission to the KHC Credit Committee, KHC will make the preliminary project score sheet available to the appropriate contact for each application. Applicants will not be made aware how other applications have scored. KHC will establish a time by which applicants can review their initial scores and offer a written response if they disagree with their preliminary score. This is not a cure period; therefore, applicants will not be able to submit any additional or revised documentation. The purpose of the scoring response period is to allow the applicant the opportunity to address any oversights or calculation errors by KHC staff. Section XIII: Reconsideration Processes The processes described in this section are the exclusive means by which an applicant may request reconsideration of a decision by KHC regarding disqualification, scoring, or the award of KHC resources. Information submitted to KHC outside of these processes, whether in writing or otherwise, will not be considered. Disqualification Decisions Review Request If KHC identifies a deficiency in an application during its review that results in the disqualification of an application, KHC will issue a preliminary decision letter to the applicant identifying the grounds for the disqualification. The applicant may then provide a written response specifically identifying the reasons why the applicant believes the application should not be disqualified. Written responses must be delivered via electronic mail with the subject line Application Decision Review Request, by hand delivery, or overnight mail, to the attention of the managing director of Housing Contract Administration. Only the application and documents already existing in KHC s file will be considered when reviewing the applicant s written response. No additional documentation will be accepted unless such documentation only explains previously submitted documentation. The burden is on the applicant to demonstrate why the application should not be disqualified or the amount of KHC resources should not be reduced. The managing director of Housing Contract Administration will forward the review request, along with the applicant s response, to KHC staff involved with the initial scoring of the application and to KHC s Credit Committee for review and decision. The Credit Committee shall review the request and KHC s staff s response and issue a final determination. The Credit Committee may, in its sole discretion, request additional information or documentation or conduct a meeting or conference with the applicant and KHC staff. The Credit Committee s decision on the review request will be final, and KHC will provide a copy of the written decision to the applicant. The Credit Committee shall consist of members of KHC s Executive Staff or as appointed by KHC s Executive Director. Page 17
Applicants may request a meeting with KHC s Credit Committee or its representatives within five (5) business days of the final written decision. The applicant may offer additional explanations; however, the Credit Committee will only consider the information that is in the project file at the time of the review. The Credit Committee may modify or affirm its final decision based on information presented at the meeting. Scoring Decision Reconsideration Request Any applicant wishing to request a reconsideration of a preliminary scoring decision by KHC or a reduction in funding may do so in writing to the managing director of Housing Contract Administration. Applicants may only request reconsideration for applications in which they have an ownership interest. Requests must be sent via electronic mail with the subject line Scoring Decision Reconsideration Request, hand delivery or overnight mail. Reconsideration requests must specifically identify the basis for the reconsideration request. The burden is on the applicant to demonstrate any alleged errors in the review and/or scoring process. KHC will review the applicant s written responses and, if KHC concurs with the applicant, appropriate scoring corrections will be made. KHC s final scoring decision will be shared in writing with the applicant. The final scoring decision will be shared with the KHC Credit Committee at the same time funding recommendations are made to the Committee for its review and approval. If, during the scoring review process, applicants dispute their preliminary scoring and KHC does not concur, the applicant s written request along with KHC staff s written determination will be shared with the Credit Committee for their information and review as part of their consideration of the funding recommendations. The Credit Committee may, in its sole discretion, request additional information or documentation or conduct a meeting or conference with the applicant and KHC staff. The Credit Committee s decision regarding the reconsideration request will be final and will be provided in writing to the applicant. The Credit Committee shall consist of members of KHC s Executive Staff or as appointed by KHC s Executive Director. Applicants may request a meeting with KHC s Credit Committee or its representatives within five (5) business days of the final written decision. The applicant may offer additional explanations; however, the Credit Committee will only consider the information that is in the project file at the time of the review. The Credit Committee may modify or affirm its final decision based on information presented at the meeting. Communications with Credit Committee Members Applicants, members of applicants Development Teams, or other persons operating on behalf of Development Teams are expressly prohibited from having ex parte communications with KHC s Credit Committee regarding any reconsideration or review requests or any related topic, from the issuance of the preliminary scoring decision until KHC renders its final determination. Any violation of this prohibition may result in disqualification of the pending application and suspension from participation in the next competitive funding cycle for the applicant and all its Development Team members, regardless of which team member initiated the prohibited contact. Page 18
Section XIV: Conditional Approval Process Funding recommendations are made by the application review team within KHC s Housing Contract Administration Department. The recommendations are based on application review as submitted by the applicant with possible minor scoring adjustments. Staff recommendations are presented to KHC s Credit Committee for conditional project approval. Once conditional approval is received, they will be posted on KHC s website and will also be sent through KHCs egram system. Approved projects will receive a preliminary award letter based upon technical submission requirements. To be funded, the applicant will be required to comply with the terms and conditions. If a conditional funding award is cancelled, the applicant may reapply in the next competitive funding round. Execution of the HOME funding agreement will occur after the successful completion of the conditional award of funding and all terms and conditions are met. Section XV Additional Policies KHC reserves the right to: Withdraw its conditional funding award if technical submission items are not submitted by the applicant by the date referenced in the award letter. Deobligate funds if funds are not committed and/or expended and construction completed by the dates referenced in the funding agreement, or if the project substantially changes after funding commitment. Periodically review the applicant s progress toward timely commitment and expenditure of the HOME allocation. If KHC determines that the project is no longer feasible or is not progressing timely so that the imposed deadlines will be met, funds may be deobligated. KHC's goal is to avoid any federal recapture of funds and KHC will take the necessary steps to ensure this does not occur. KHC will deobligate funds for any applicant who becomes suspended or debarred in accordance with KHC Suspension and Debarment Policy. For this competitive funding application, the following guidelines will apply: All funds (HOME and AHTF) must be committed in accordance with the deadlines in the funding agreement. If the property is sold, leased, refinanced, or no longer used as the primary residence of the assisted homeowner, KHC may recapture the HOME or AHTF funds. In the event the net proceeds from a sale are insufficient to repay KHC, the HOME investment and the agency, KHC will recapture the net proceeds. In the event of foreclosure, if the shared net proceeds are insufficient to repay the HOME funds, the HOME affordability may be terminated, subject to 24 CFR 92.254(a)(5)(ii)(A). Page 19
KHC may, at its discretion, award an amount of funds less than that requested by the applicant. KHC reserves the right to reduce or limit professional fees, developer fees, or any fees that KHC deems excessive. No applicant will be allowed to change the type of activity for which they were funded. Applicants are responsible for retaining legal counsel on any legal matter pertaining to the administration of the project. Page 20