Seattle Bank Announces 2014 AHP Implementation Plan
December 9, 2013
The Federal Home Loan Bank of Seattle (Seattle Bank) is pleased to announce the release of its 2014 Affordable Housing Program (AHP) Implementation Plan. The plan will take effect on April 1, 2014.
The 2014 AHP Implementation Plan details requirements for the 2014 AHP and Home$tart Program, including a number of key program changes for 2014. These changes are summarized below for your convenience, but we encourage you to read the
2014 AHP Implementation Plan, which is available on the Community Investment section of the bank’s website (www.fhlbsea.com), for more complete information.
Home$tart Program Changes for the 2014 Program Year
Raised the annual per member cap for Home$tart funds to $300,000 from $200,000.
- Revised the language pertaining to “Member Incentives.”
- Homebuyer education provided by a state housing finance agency may now be used to satisfy the Home$tart homebuyer education requirement.
Affordable Housing Program (AHP) Changes for the 2014 Program Year
- Revised the definition of a Project Sponsor for a rental project.
- Scoring Criteria:
- Homeless and Special Needs Housing: Provided clarification to illustrate that points are awarded out two decimal places for these scoring criteria.
- Second District Priority – Farmworker Housing: Redefined farmworker from “seasonal and/or migrant” to meeting a “Federal or state definition.”
- Effectiveness (AHP Subsidy per Unit): Adjusted the point distribution range to zero to six points from 1.25 to six points, and raised the AHP subsidy ceiling to $30,000 per unit from $18,000 per unit.
- Community Stability: Redefined a requirement that a Reduction of Substandard Properties Form, rather than a certificate or letter, must be signed by a representative of a local jurisdiction to verify that a property is substandard.
- Introduced language governing AHP applications that tie in score.
- Monitoring and Compliance:
- Expanded rental project documentation requirements to include maintaining lease agreements or equivalent documentation for the duration of the AHP retention period.
- Feasibility Criteria:
Excluded the developer fee from the total of development costs when the fee is calculated as a percentage of total development costs.
- Added language to indicate that developer fees will be critically scrutinized for rehabilitation projects that do not involve a transfer of ownership or that involve a transfer of ownership to a related party.
- Limited capitalized operating reserves to 12 months of operating expenses, and excluded hard debt service and operating and replacement reserves listed on the project’s operating pro forma from the calculation of operating expenses.
- Changed the source for benchmarking the reasonableness of project costs to RSMeans, replacing FHA’s multi-family mortgage limits or HUD’s 221(d)(3) single-family mortgage limits.
- Introduced a hard cost contingency benchmark ranging from 5 percent to 10 percent of hard costs for new construction and from 7 percent to 20 percent of hard costs for rehabilitation projects.
- Introduced a soft cost contingency benchmark not to exceed 20 percent of soft costs.
- Introduced a soft cost benchmark of 30 percent of total development costs for projects financed by low income housing or historic tax credits, 25 percent of total development costs for new construction, and 20 percent for rehabilitation.
The Seattle Bank will announce the amount of funding available for the 2014 AHP and Home$tart Program with its release of 2013 operating highlights in late February 2014.
Every year, the Seattle Bank contributes 10 percent of its net income from the previous year to fund affordable housing under its AHP and Home$tart Program. Since the inception of these programs in 1990, the AHP has provided more than $149.0 million to help finance more than 28,000 affordable homes and the Home$tart Program has provided $43.5 million of downpayment assistance to more than 8,800 qualifying homebuyers.
We encourage your participation in our 2014 AHP and Home$tart Program. Please contact a member of the Community Investment department with any questions you may have.
Jennifer Ernst, VP/Community Investment Officer
Karen Mefford, VP/Director of Business Operations
DeAnna Poling, AVP/Community Investment Operations Manager