Final Text
CHAPTER 140
CONGREGATE HOUSING PROGRAM GUIDELINES (REPEALED)
Part I
Purpose of the Program
13VAC5-140-10. Purpose of the program. (Repealed.)
Responding to critical housing problems facing the
Commonwealth, as documented in the 1987 Annual Report of the Virginia Housing Study
Commission, the Governor and the General Assembly established the Virginia
Housing Partnership Revolving Loan Fund. The purpose of the fund is to create
and increase the availability of decent and affordable housing for low and
moderate Virginia residents. The primary purpose of the Congregate Housing
Program is to provide decent, affordable housing opportunities and to expand
the number of congregate housing units available for special needs population
throughout the Commonwealth of Virginia.
Part II
Definitions
13VAC5-140-20. Definitions. (Repealed.)
The following words and terms, when used in these
guidelines, shall have the following meanings unless the context clearly
indicates otherwise:
"Accessibility improvement" means a modification
to a property to make more accessible to individuals with physical impairments.
"Acquisition" means the purchase of real
property.
"Applicant" means an incorporated nonprofit,
for-profit, or government entity that makes application for funds under the Virginia
Housing Partnership Fund.
"Application" is the written request for a loan
or grant funding under this program.
"Appraised value" means the monetary worth of
property as determined by an appraiser.
"Area median income" means the median income established
by HUD for various areas or the state median income, as established by the
University of Virginia Center for Public Service.
"Assessed value" is the monetary worth of the
facility/property as determined by the real estate assessment office of the
local government where the same is located for tax purposes. The applicable
assessed value shall be that value in effect as of the application date.
"Borrower" means the individual, for-profit, or
nonprofit or government entity that has been approved for funding this program.
"Congregate housing" means a building or facility
with a central food preparation and eating area which houses persons with
special needs who must live in a supervised environment, but do not require
medical treatment or institutional care.
"DHCD" means the Department of Housing and
Community Development.
"Disabled person" means an individual who has a
physical or mental condition which limits his activities or functions either
temporarily or permanently.
"Energy-related improvements" means physical
improvements to structures which are being rehabilitated which contribute to
fuel cost savings and overall less energy consumption, and which have been so
designated by this department.
"Fire protection system" means a system including
devices and equipment to detect a fire or actuate an alarm or suppress or
control a fire or any combination thereof.
"Fund" means the Housing Partnership Revolving
Loan Fund.
"General improvements" means additions,
alterations, renovations or repairs made for the purpose of making housing more
habitable or more desirable to live in. These improvements must be permanent.
Improvements shall not include materials, fixtures, or landscapes of a type or
quality which exceed that customarily used in the locality for the properties
of the same general type as the property to be improved.
"Gross income" is the total income from all
sources and before taxes or withholdings of all residents, residing in a
housing unit, age 18 years or older.
"HQS" means the HUD Section 8 Housing Quality
Standard.
"HUD" means the Department of Housing and Urban
Development.
"Loan application" means the request for funding
for purposes as defined in the program guidelines.
"Loan application date" is the date on which a
completed application is received by DHCD.
"Lower-income" means 80% of median income for the
service area as established by the U.S. Department of Housing and Urban
Development also referred to as LMI.
"Oil Overcharge Expenditure Trust Fund" are
United States Department of Energy moneys awarded to the Commonwealth for
specific purposes to resolve alleged pricing violations in effect between 1983
and 1981 by crude oil providers.
"Program" means the Congregate Housing Program.
"SHARE" means State Homeless Housing Assistance
Resources.
"Site control" means the possession of or
authorization to use real property by means of ownership, lease or option.
"VHDA" means the Virginia Housing Development
Authority.
"VHPF" means the Virginia Housing Partnership
Fund.
Part III
Eligibility
13VAC5-140-30. Eligible applicants. (Repealed.)
A. Nonprofit organizations incorporated under the laws of
the Commonwealth of Virginia;
B. Governmental entities including Public Housing
Authorities; or
C. For-profit individuals and organizations.
13VAC5-140-40. Eligible properties. (Repealed.)
A. Eligible properties shall provide a central food
preparation and eating area even if individual units have kitchen facilities.
B. The Congregate Housing Program is intended to create permanent
housing; however, transitional housing projects are permitted if they are not
eligible for DHCD's SHARE (homeless) programs.
C. All projects that are required to be licensed by the
government must be licensed prior to closing.
13VAC5-140-50. Eligible use of funds. (Repealed.)
Loan funds may be used for the residential living portion
of any project and for other facilities which are an integral part of the
entire congregate housing facility. Examples of such facilities include cafeterias
and recreational areas that are part of a total residential project. The type
of construction activities which are eligible include the following:
A. Acquisition /rehabilitation. Loan funds may be used to
rehabilitate or acquire and rehabilitate existing properties to appropriately
serve special needs population.
B. Rehabilitation.
1. Funds shall be used to bring the property up to the
applicable Uniform Statewide Building Code.
2. Energy improvements which exceed the Uniform Statewide
Building Code are encouraged. Such improvements should comply with special
energy guidelines established by the Commonwealth and may be eligible to be
funded with grant funds from the Oil Overcharge Expenditure Trust Fund. Energy
grant funds will only be made available for projects involving rehabilitation.
3. Remaining funds may be used for general improvements.
4. Luxury improvements are prohibited.
5. Upon completion of the rehabilitation the property must
comply with zoning and other local requirements for planned use.
C. New construction. Loan funds may also be used for the
construction of new congregate housing. Oil Overcharge Expenditure funds may
not be used for energy improvements for new construction.
D. Installation of fire protection. Systems loan funds may
be used to install fire protection systems such as sprinkler systems as part of
rehabilitation or as a sole activity.
Part IV
Target Group and Occupancy Requirements
13VAC5-140-60. Target populations. (Repealed.)
A. Target group. The primary target groups to benefit from
loans made under this program will be special needs populations such as the elderly,
mentally disabled, physically disabled persons, and substance abusers.
B. Occupancy requirements. Loans made under this program
will be used only to provide residential facilities for low- and
moderate-income persons.
A minimum of 50% of the units must be reserved and occupied
by persons with incomes at 50% or less of the area median income as established
by HUD.
Part V
Distribution of Funds
13VAC5-140-70. Loan reservations. (Repealed.)
A. Maximum dollar amount per project. The maximum program
loan for developing an individual congregate housing facility is $250,000. The maximum
grant amount shall not exceed 15% of the total rehabilitation costs of low and
moderate income units.
B. Set aside period. Each successful applicant will receive
a set aside of funds for an initial six-month period. This will allow time to
complete project development activities including arranging for other financing
and assistance from other local, state or federal housing programs. Extensions
may be granted by DHCD, if applicable, but under no circumstances to exceed six
additional months.
Part VI
Loan and Grant Terms and Conditions
13VAC5-140-80. Loan and grant terms and conditions. (Repealed.)
A. Interest rate. The interest rate will range from 2.0% to
8.0%, except the eligible energy items funded from Oil Overcharge Expenditure Funds,
shall be in the form of a grant.
B. Term.
1. Loan requirements. The loan term shall not exceed 20
years. A longer amortization schedule may be permitted (not to exceed 30 years)
if necessary for project feasibility. Each will be determined during underwriting
at VHDA
2. Grant requirements. Grants are subject to repayment if
the borrower violates program requirements. Repayment must be made in full if
such violation occurs within a period determined by DHCD from the date the
grant is closed. This repayment obligation is reduced at the rate of 25% per
year based on a schedule established by DHCD. Notwithstanding the above, as of
July 1, 1998, any remaining grant repayment obligations shall be forgiven.
C. Instrument for security.
1. General requirements. The borrower or borrowers shall be
or have written permission from the sole owner or owners of the property which
secures the debt. A title opinion, title insurance, and hazard insurance will
be required for all loans.
2. Lien requirements. A lien will be recorded on every
property for which a program loan is made. The lien shall be divided into the
amount securing the general fund portion of the loan, and the amount securing
the Oil Overcharge Expenditure Trust Fund portion of the loan grant. The general
fund portion shall remain in effect until the loan is fully amortized. The
energy related portion of the lien shall be deferred and forgiven as described
in 13VAC5-140-80. The state will accept a subordinate position only to an
existing mortgage or where the primary rehabilitation financing is being
provided from another source.
D. Loan underwriting criteria. Specific underwriting
criteria which are applicable to these loans will be established by DHCD. These
will include an evaluation of the site, project design and amenities, the
market for the project, the experience and financial capability of the sponsors
and contractors, architectural and engineering studies, the value of the
project, financial risks and other considerations. Each project will be
evaluated to assess its potential cash flow to pay debt service and operating
expenses.
Services which will be available to residents must be
clearly defined and service providers must be identified. The Commonwealth
reserves the right to have outside review of service proposals from appropriate
community service agencies.
E. Loan servicing. VHDA will close the loans, conduct
construction inspections, disburse loan proceeds, service the loans and provide
ongoing management oversight.
F. Loan to value ratio. The loan-to-value ratio shall be
based on the appraised value of the structure after repairs and improvements. A
loan-to-value ratio of up to 100% will be considered for loans to nonprofit
housing sponsors and up to 90% to other sponsors. The Commonwealth may permit a
ratio to exceed 100% under special circumstances to be considered on a
case-by-case basis. In no case shall the total fund assistance exceed 100% of
cost as determined by DHCD.
G. Sale or transfer restrictions. Loans made under this program
shall be assumable as long as the property use, income and occupancy
restrictions, housing conditions and other state requirements are maintained by
the new owner.
H. Prepayment of loans. Prepayment of loans under this
program is prohibited unless approved by DHCD.
I. Assumptions. Loans under the program are assumable as
long as the property use, income and occupancy restrictions, housing conditions
and other state requirements are maintained by the new owner.
Part VII
Evaluation Criteria
13VAC5-140-90. Evaluation criteria. (Repealed.)
Due to the limited funds available and the expected high
demand for these loans, a competitive system will be used in deciding which projects
will receive loans. Criteria to rank the applications are described below:
A. Public purpose. Projects will be evaluated on project
need, income level served, and the creation of new beds. A needs assessment
must be provided and will be used to determine the demand for the proposed
facility and to indicate the impact on the community for the proposed project.
Projects that do not demonstrate a need will not be funded. Projects which
serve a higher proportion of lower income households than the minimum required
or which create beds shall be given higher priority.
B. Program design. Program design will examine support
services, intake procedures, case management plans, licensure, and fire
protection.
C. Leveraging. Leveraging will be evaluated using
documented support from sources other than VHPF programs by commitments,
letters of intent, grant agreements or other appropriate documentation.
Leveraging will only be applied to the percentage of total development costs
related to LMI person served.
D. Administrative capacity. Project sponsors will be
evaluated on development/construction experience, property management
experience, congregate care experience, organizational structure, and
completeness of application.
E. Project readiness and project feasibility. Project
sponsor will be evaluated by site control, status of zoning, tenant
displacement, firmness of financial commitments, developed final plans and
specifications, project timing, and project financial feasibility. A minimum
source points is required to be considered for funding.