N.Y. Comp. Codes R. & Regs. tit. 21 § 2188.5

Current through Register Vol. 46, No. 45, November 2, 2024

Section 2188.5 - Threshold Eligibility Requirements for LIHTC Allocation

At each stage of processing, applications will be subject to a threshold eligibility review, which will include, but not necessarily be limited to, whether the project meets the following minimum requirements:

(a) The applicant is willing to enter into a regulatory agreement with HFA requiring the project to conform to the income, occupancy and rent restrictions of IRC §42.

(b) The applicant is willing to enter into a regulatory agreement with HFA for extended low income use of the project with a minimum extended use period, ending no earlier than thirty (30) years after the project is placed in service, that is in conformance with the requirements of IRC §42, includes an agreement to waive the right to request a Qualified Contract and provides that the extended use period will not be subject to early termination pursuant to the Qualified Contract provisions of the Code.

(c) The applicant agrees to comply with all applicable federal and state fair housing laws and regulations and not to engage in any illegal discriminatory conduct including discrimination against Section 8 voucher tenants.

(d) The project receives an acceptable Financial Feasibility Review and underwrites in accordance with the applicable HFA underwriting criteria including meeting any criteria limiting costs, fees or expenses contained in the relevant Term Sheet.

(1) If a project is being bond financed by HFA, the Financial Feasibility Review will be conducted using the standards in the Term Sheet for the program the project is being financed under.

(2) Otherwise the Financial Feasibility Review will be conducted using the standards in the most reasonably applicable Term Sheet published by the Agency.

(e) The eligible basis of all the buildings in a project divided by the number of units in a project, prior to any increase for buildings in high cost areas under IRC §42(d)(5)(B), in the applicant's request for LIHTC and/or in any Cost Certifications to support the allocation of such LIHTC, does not exceed the Per Unit Eligible Basis Limit or the eligible basis has been reduced to the maximum eligible basis permitted by the Per Unit Eligible Basis Limit under § 2188.3(e)(1)(ii), (f)(1), and (h)(5) hereinabove. This requirement may be waived by the Members if the Members make a finding that it is in the public interest to recognize a greater amount of eligible basis per unit.

(f) The project is of the appropriate type (new construction, substantial rehabilitation, moderate rehabilitation and/or acquisition) and design needed to address the housing needs in the area where project is located.

(g) The size of the units in the proposed project must be appropriate for the type of occupancy proposed.

(h) The applicant has site control, consistent with the Code, for the project real estate through a lease, option, purchase contract or deed.

(i) At the time of application, the project applicant has identified all required governmental approvals necessary to construct and operate the project. At each subsequent stage of processing, the applicant must secure all required governmental approvals to construct and operate the project.

(j) The project applicant has successfully developed and operated projects comparable to the proposed project and/or has, or will obtain, the capacity and experience to undertake, complete and operate the proposed project.

(k) The Agency has, prior to the second LIHTC underwriting, completed a credit and background review of the project developer, owner and/or manager and their principals with acceptable results.

(l) The project developer, owner and/or manager and their principals does not include anyone who has participated in a state assisted program or project, with HFA, DHCR or any other state entity, that has been determined to be out of compliance with statutes, rules, regulations, policies or agreements and has not been corrected or otherwise resolved as determined by the supervising agency. The project developer, owner and/or manager and their principals also does not corrected include anyone who, in sole judgement of the Agency, has initiated or been the decision maker in requesting a qualified contract under §42(h)(6)(F) after the effective date of this QAP. The project developer, owner and/or manager and their principals must inform the Agency in a timely manner of any notice of non-compliance issued at any time.

(m) HFA's Due Diligence Reports include an Appraisal and/or Market Study from a licensed third party appraiser or a market study consultant, which is satisfactory in HFA's sole judgment, concerning the demand for the units to be constructed, the value of the proposed project and any other matters or issues addressed in the Due Diligence Reports.

(n) If the project developer, owner and/or manager and/or their principals have had any prior involvement with HFA, there are no unresolved LIHTC compliance or other compliance issues. The project developer, owner and/or manager and their principals must inform HFA in a timely manner of any notice of non-compliance issued at any time.

(o) If the project developer, owner and/or manager and/or their principals have had any prior involvement with any state agency financing housing, there are no outstanding defaults or compliance problems which have not been resolved to the satisfaction of the agency involved.

(p) Projects which contain both Low Income and Market Rate Units must comply with the Agency's proportionality and distribution policy unless such compliance is waived by HFA.

(1) The Agency's proportionality and distribution policy provides that Low Income Units must be comparable to Market Rate Units; the Low Income Units must be acceptably distributed through all unit types and all floors and/or buildings in the project; and no floor and/or building should contain an undue concentration of Low Income Units.

(2) The average quality standard must be the same for the Low Income Units as for the Market Rate Units unless the Agency approves additional or modified amenities which cause the Market Rate Units to be above the average quality standard of the Low Income Units.

(3) If the Market Rate Units are above the average quality standard of the Low Income Units, the project is subject to the provisions of Code Section 42(d)(3) which reduces eligible basis where there are disproportionate standards for units and the applicant must advise the Agency, and any Cost Certification must certify, if the cost on a per square foot basis for the Market Rate Units is no more than 15% more than the cost for the Low Income Units and therefore meets the requirements of §42(d)(3)(B)(i)(I) of the Code and is, or will be, excluded from basis pursuant to IRC §42(d)(3)(B)(i)(II).

(q) The project's design and construction must comply with green and energy efficiency and sustainable building practices and measures appropriate for the type of building proposed as set forth in the Agency's currently effective published Termsheets and other guidance. Rehabilitation projects must take into account, among other factors, cost effectiveness based on the scope of reconstruction necessary and the historic nature of the project. All projects must identify how green and energy efficiency sustainable building requirements will be met and agree to provide, prior to construction closing, a certification from a responsible green and/or energy professional that the project will meet such requirements.

(r) All LIHTC-assisted first floor units in new construction projects without an elevator, all LIHTC assisted units in new construction projects with an elevator, and as many LIHC-assisted units as feasible in adaptive reuse or rehabilitation projects shall meet Visitability Standards, except when such standards are demonstrated to be irreconcilable with federal, state or local statutes, regulations, ordinances or codes.

(s) The minimum qualified basis for rehabilitation expenditures is three times the per low income unit qualified basis amount under IRC §42(e)(3)(A)(ii)(II) in effect at the time of a project's construction closing. This requirement may be waived by the Members upon a finding that it is in the public interest to permit a lower minimum qualified basis for rehabilitation expenditures.

(t) The applicant will agree to permit HFA to commission a cost audit of all the project related costs, agree to permit the Agency to commission an energy and green performance audit and include a provision in all contracts with contractors, design professionals and consultants that permits the Agency's auditors to examine the books and records relevant to the project.

(u) The project applicant agrees not to contract for any services related to the project with any entity on any Federal or New York State debarment list and include a provision in all contracts related to the project barring the participation of entities on such lists.

(v) The project applicant, developer, owner, general contractor and/or manager and their principals are in compliance with all relevant federal, New York State, Division, Agency policies and requirements, and local laws and regulations, including but not limited to the prohibition against discriminating against Section 8 Housing Choice Voucher holders, nondiscrimination and marketing policies, guidelines and requirements.

N.Y. Comp. Codes R. & Regs. Tit. 21 § 2188.5

Amended New York State Register May 26, 2021/Volume XLIII, Issue 21, eff. 5/26/2021