[Federal Register Volume 71, Number 70 (Wednesday, April 12, 2006)]
[Notices]
[Pages 18813-18821]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3528]
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DEPARTMENT OF VETERANS AFFAIRS
Notice of Funds Availability (NOFA): Inviting Applications for
Section 601 Loan Guarantees for Multifamily Transitional Housing
AGENCY: Department of Veterans Affairs (VA).
ACTION: Notice.
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SUMMARY: This NOFA announces the availability, submission requirements,
and deadlines to submit applications for the VA Multifamily
Transitional Housing Loan Guarantee Program. This is a pilot program,
which authorizes VA to guarantee up to 15 loans with an aggregate value
of $100 million to develop or implement housing and supportive services
for homeless veterans. This Notice describes the commitment of program
dollars, application process, eligibility requirements, minimum
underwriting criteria, and evaluation criteria that VA will employ to
select applications to receive a guarantee under the program. The
program is authorized under Title 38 U.S.C. 2051, et. seq.
A detailed manual outlining the standard operating procedures for
the program and other program information can be found on the VA Web
site: http://www1.va.gov/homeless/page.cfm?pg=8.
DATES: Applications will be accepted on an ongoing basis throughout the
year until all funds available under the program have been committed.
The application process is a two-staged process commencing with the
submission of a Stage 1 application. After review and analysis of each
Stage 1 application received, VA will invite those applicants who have
demonstrated both eligible and feasible projects to submit the Stage 2
application.
VA will not accept facsimile or postage-due applications. VA
recommends delivery by overnight carrier.
For the purposes of this NOFA, words used in the singular may
include the plural, and the plural may include the singular. VA
reserves the right to cancel or withdraw this NOFA at any time.
For a Copy of the Application Package: Stage 1 and 2 applications
may be downloaded from the VA Multifamily Transitional Housing Loan
Guarantee Program Web site at http://www1.va.gov/homeless/
page.cfm?pg=8. Hard copies may be obtained from VA by calling the
program hotline at (202) 273-7462 (This is not a toll free number) or
e-mailing Multifamily.Loan@va.gov.
VA will be holding free informational sessions to inform the public
of the program periodically throughout 2006. Details regarding the
sessions can be found on the VA Multifamily Transitional Housing Loan
Guarantee Program Web site at http://www1.va.gov/homeless/
page.cfm?pg=8. Applications may also be obtained at these events.
Submission of Application: Applicants must submit an original
completed and collated Stage 1 application plus four copies to the
following address: Office of Mental Health Services (116E), Department
of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420.
VA will invite applicants with eligible and feasible proposals to
submit Stage 2 applications.
FOR FURTHER INFORMATION CONTACT: The Department of Veterans Affairs
will be holding free informational sessions to introduce its new Loan
Guarantee Program for Multifamily Transitional Housing. The program
offers a 100 percent loan guarantee on program funds financed through
the Federal Financing Bank (FFB). Loan proceeds can be used for
combination construction and permanent financing or a permanent loan.
Informational sessions are being held on the following days: Chicago,
IL--May 11, 2006; Washington DC--June 2006. Register by calling (202)
273-7462 today or by e-mail at Multifamily.Loan@va.gov. For more
information about the Program, access the VA Program Web site
[[Page 18814]]
mentioned above or contact the VA Program at (202) 273-7462. Please
note: ``telephone numbers are not toll free.''
Note: This is not a single family housing Program.
SUPPLEMENTARY INFORMATION:
Background
VA's Multifamily Transitional Housing Loan Guarantee Program
statute, 38 U.S.C. 2051 et seq., authorizes VA to establish a pilot
program to guarantee up to 15 project loans, subject to total aggregate
of $100 million program cap. The purpose of this program is to promote
the development and continued operation of supportive multifamily
transitional housing for homeless veterans in geographic areas of
greatest need. It is anticipated that this pilot program will
positively impact the national goal to end chronic homelessness.
Although VA already has committed two loan guarantees totaling $7.9
million, this is the first NOFA issued for the remaining projects in
this pilot program. This NOFA applies to proposals for new projects
nationwide. The VA selection process will weigh heavily the size of the
chronically homeless veteran population in a given location, as well as
a sponsor's capacity to deliver supportive services to veterans, as
evidenced by a comprehensive local network of service providers and
professional staff. VA, at its sole discretion, may guarantee more than
one loan in each metropolitan statistical area. All eligible loan
applications will be considered.
The Federal Financing Bank (FFB), an arm of the U.S. Treasury
(http://www.ustreas.gov/FFB) will fund the program loans, and VA will
guarantee up to 100 percent of the maximum FFB loan amount. The maximum
FFB loan amount may not exceed 80 percent of the total development cost
of the project and in many cases may be significantly less. Project
sponsors are required to obtain additional sources of funding or the
provision of substantial property or services from State or local
governments or nongovernmental entities. Examples of such funding,
property, or services include, but are not limited to, grants, real
estate, private loans, capital contributions, and low-income housing
tax credits.
Definitions
Applicant--The sponsor, or its authorized agent, who is applying
for a loan guarantee under the program.
Borrower--A single purpose entity, that, (i) receives funds in the
form of a program loan, (ii) has the obligation of repaying the program
loan in full, with interest, (iii) is responsible for satisfying all
other requirements of the program, and (iv) maintains continuing
control over a multifamily transitional housing project. The Borrower
must be comprised in full or in part by the Sponsor or its authorized
agent and must be bankruptcy remote.
Chronically Homeless--An unaccompanied homeless individual with a
disabling condition who has either been continuously homeless for a
year or has had at least four (4) episodes of homelessness in the past
three (3) years.
Homeless veteran--A veteran who is a homeless individual.
Homeless Individual--An individual who lacks a fixed, regular, and
adequate nighttime residence; also, an individual who has a primary
nighttime residence that is: (a) A supervised publicly or privately
operated shelter designed to provide temporary living accommodations
(including welfare hotels, congregate shelters, and transitional
housing for the mentally ill); (b) an institution that provides a
temporary residence for individuals intended to be institutionalized;
or (c) a public or private place not designed for, or ordinarily used
as, a regular sleeping accommodation for human beings. The term
homeless individual does not include any individual imprisoned or
otherwise detained pursuant to an act of the Congress or a state law.
Metropolitan statistical area--A geographic area designated by the
U.S. Census Bureau for purposes of collecting and disseminating
demographic information.
Multifamily transitional housing--A supportive housing facility
that provides transitional housing to homeless veterans. Multifamily
transitional housing may be single room occupancy, but must, at a
minimum: provide supportive services at the facility site with the goal
of assisting residents in becoming self-sufficient; require each
resident to seek to obtain and maintain employment; charge a reasonable
fee for occupying a unit; and maintain strict guidelines regarding
sobriety as a condition of residency.
Program--The VA Multifamily Transitional Housing Loan Guarantee
Program established under subchapter VI, chapter 20, of title 38,
United States Code, and implemented by VA.
Program Funds--Funds loaned to the borrower by FFB and guaranteed
by VA for the purposes of the program.
Project--A project under the auspices of one or more sponsors for
the development, financing, construction (including renovation or
rehabilitation), operation, and management of multifamily transitional
housing, authorized by, and approved and conducted under the program.
Resident--A homeless veteran who is currently residing in
multifamily transitional housing provided under the program. Resident
may also include veterans who are not homeless and homeless individuals
who are not veterans, if VA, in its sole discretion, has determined
that the transitional housing needs of homeless veterans in the project
area have been met and that the housing needs of any such veteran or
homeless individual can be met in a manner compatible with program
requirements.
Sober--A person's body is free of alcohol or controlled substance
unless such substance is being used under the direction of a physician.
Sponsor--An artificial person or legal entity that is (i) created
by or under the authority of the laws of a State, territory, or
possession of the United States, (ii) comprised of officers, members,
managers, partners, and/or shareholders who are U.S. Citizens or
permanent legal residents, (iii) responsible for the coordination of
the project's financing and construction and, through the borrower, has
the primary responsibility for a project's long-term operation and
management, including the coordination and implementation of a
supportive services program. (Note: A project must have one or more
sponsors.)
Supportive housing facility--A facility that assists homeless
individuals to transition from homelessness to permanent housing by
providing short-term housing (generally not to exceed 24 months) and
supportive services. A supportive housing facility may also be referred
to as ``facility'' in this NOFA.
Supportive services--Services that may be designated by the sponsor
that address the needs of homeless veterans to be served by the
facility and provide appropriate services or assist such persons in
obtaining appropriate services. Supportive services include: Conducting
outreach activities; providing food, nutritional counseling, health
care, mental health treatment, alcohol and other substance abuse
services, and case management services; where applicable, establishing
and operating child care services for dependents of residents;
providing supervision and security arrangements for the protection of
residents and for homeless veterans using the services; providing
assistance in obtaining permanent housing; providing education,
employment counseling, and job training; establishing and operating
[[Page 18815]]
an employment assistance program; providing assistance in obtaining
other Federal, State and local assistance available for facility
residents including mental health benefits, employment counseling,
veterans' benefits, medical assistance, and income support assistance
such as Supplemental Security Income benefits, Temporary Assistance to
Needy Families, General Assistance, Food Stamps, etc.; and providing
housing assistance, legal assistance, advocacy, transportation, and
other services essential for achieving and maintaining independent
living. Inpatient acute hospital care does not qualify as a supportive
service.
Veteran--A person who served in the active military, naval, or air
service, and who was discharged or released therefrom under conditions
other than dishonorable, as defined in section 101(2) of title 38,
United States Code, for purposes of that title.
Eligible Uses of Funds
Program funds may be used for acquisition of land, or construction
of or rehabilitation of multifamily transitional housing or for
refinancing an existing loan therefore. Loan proceeds may include
reasonable amounts for financing the acquisition of furniture,
equipment, supplies, or materials for the project; or, except in the
case of a refinance, for supplying the borrower with working capital
relative to the project. The project may include space for neighborhood
retail services or job training programs.
Eligible Geographic Areas
Projects must be located within the United States, its territories
or possessions to be eligible for VA loan guarantees under the program.
General Program Information
Program Purpose: The program is intended to maintain and increase
the supply of supportive transitional housing for homeless veterans by
providing low-cost loans guaranteed by VA.
Eligible Financing Sources: Any Federal, State, local, and
conventional sources of financing may be used in conjunction with the
loan guarantee, including Home Investment Partnership Program (HOME)
grant funds, Community Development Block Grant (CDBG) funds, low income
housing tax credits, and private financing such as that provided by
banks, donations and capital contributions to the extent allowed by
these providers. (The VA guarantee applies only to program funds.)
Maximum Guarantee: The maximum VA guarantee for a permanent or
combination construction/permanent loan will be 100 percent of the
unpaid principal balance and interest on program funds.
Maximum Loan Amount: Program funds may not exceed 80 percent of
total project cost. VA anticipates that program funds will be
considerably less than 80 percent and most likely between 20 to 40
percent of total project costs depending upon the specifics of a
transaction.
Interest Rate: The basic interest rate applicable to each advance
of program funds shall be established by FFB at the time the respective
advance is made on the basis of the determination made by the Secretary
of the Treasury. The interest rate is determined on the date of the
disbursement of funds. During the permanent financing period, the
interest rate is set at the time of loan closing and is fixed for the
term of the loan. During the construction period, the interest rate
will be set at the time the funds are drawn. The disbursement of funds
(amount and timing) will be governed by the draw schedule established
between the borrower and VA. If the draw schedule identifies multiple
draws, each draw will be considered a separate disbursement and will be
assigned a new interest rate. The interest rate on each draw will be
determined by the interest rate environment at the time of that
disbursement. The borrower will have the ability to purchase an
interest rate cap, through FFB, to help mitigate the expected
volatility in interest rates. The price of the interest rate cap will
depend on the cap rate and term specified by the sponsor in the
application.
Term: The term of the loan shall not exceed 40 years and shall be
based on VA's perception of the reliability of the project income
stream. Determination of the term will be at VA's sole discretion.
Debt Service Coverage Ratio: The targeted minimum debt service
coverage ratio on the loan is 1.10; however, 1.15 or better is
preferred.
Program Fees
Assumption Fee: A non-refundable review fee in the amount of $3,000
and a transfer fee equal to one percent of the outstanding indebtedness
due immediately prior to the transfer or sale of the project.
Application Fees: No application fee will be charged.
Interest Rate Fee: A fee of one-eighth of one percent per annum
will be charged (calculated based on the outstanding principal balance
owed to FFB), in addition to the interest amount. (This fee will not be
included in the interest rate to be paid to FFB; it is a separate
charge added by the loan servicer and remitted to VA.)
Late Fee: If any monthly installment payment is not received by VA
prior to the 11th calendar day after the same is due (without regard to
any applicable cure and/or notice period), borrower shall pay to VA
upon demand an amount equal to the lesser of (a) four percent (4
percent) of such unpaid sum; or (b) the maximum amount permitted by
applicable law to defray the expenses incurred by VA in handling and
processing such delinquent payment, and such late fee shall be secured
by the loan documents.
Sponsors will be responsible for paying for all direct costs
required by the application process including costs associated with
third party reports, construction drawings, and site control. Should
the sponsor be successful in obtaining a VA Loan Guarantee, these costs
may be funded through the loan as mortgaged expenses.
Authority: The program was enacted by section 601 of Public Law
105-368 and is codified at 38 U.S.C. 2051, et seq. Funds made available
under this Notice are subject to the requirements of that law, as well
as applicable VA and FFB requirements and procedures. (See VA's Program
Manual found on the program Web site at http://www1.va.gov/ homeless/
page. cfm?pg=8.)
Allocation: VA is authorized to guarantee up to 15 loans or $100
million, whichever first occurs, under the program. Funding under the
program is currently available for up to thirteen (13) remaining
program loans, to be committed on a first-come, first-served basis, or
until the remaining $91.9 million in program funds has been guaranteed.
Funding Priorities: Loan guarantees will be awarded via commitment
letter on a first-come, first-served basis upon successfully completing
the two-stage application process. Although all applications will be
evaluated equally in accordance with the methodology noted below,
greater weight will be given to those applications that best
demonstrate a strategy and ability to help VA achieve all of the
following goals: (1) Increase the number of community beds for homeless
veterans nationally by at least 5000; (2) help homeless veterans
transition to permanent housing by providing supportive services and by
requiring that residents take personal responsibility to remain sober,
maintain employment, and pay monthly rent; (3) determine whether a
Federal loan guarantee program is an effective tool
[[Page 18816]]
for facilitating the development of transitional supportive housing for
homeless veterans.
Methodology: The application process will occur in two stages. In
Stage 1, sponsors will submit preliminary proposal information to VA.
VA will evaluate applications for eligibility and feasibility. VA will
invite sponsors who submit proposals that meet the evaluation criteria
to submit Stage 2 applications. At Stage 2, VA will conduct a
comprehensive feasibility assessment of the applications on the basis
of their feasibility and their performance on the evaluation criteria
defined in this Notice.
Evaluation Process
VA will have sole discretion to make guarantees under the program.
As noted above, VA will use a two-stage evaluation process that
includes two sets of criteria per stage. VA will invite those projects
that meet Stage 1 requirements to submit Stage 2 applications.
1. Stage 1 Application Evaluation
a. Eligibility Criteria. Eligibility Criteria assess whether a
proposal can meet the requirements outlined in the program authorizing
legislation;
b. Feasibility Criteria. Feasibility Criteria set minimum standards
for financial and practical viability, development team and service
provider capacity, and services plan appropriateness;
2. Stage 2 Application Evaluation
a. Feasibility Criteria. VA will prioritize those proposals that
are eligible and feasible based on a number of factors including the
strength of the services plan; minimum standards for site control,
commitments of support, site suitability and conformance with
applicable laws, design appropriateness, funding commitments,
construction costs, availability of transportation, and project
management.
b. Evaluation Criteria. VA will evaluate the sponsor's
creditworthiness, the project's repayment ability, and the Sponsor's
readiness to proceed.
Following are detailed explanations of the evaluation criteria:
Stage 1 Eligibility Assessment
A proposal must satisfy all eligibility criteria in order to
advance to consideration under the feasibility criteria.
------------------------------------------------------------------------
Eligibility Criteria--Proposals Must Meet
Number ALL Criteria
------------------------------------------------------------------------
1. The application is complete and on time.
The application package includes
all required information and requested
attachments and reports.
2. To be considered eligible, the sponsor
must meet the following requirements:
The sponsor must certify that it
is an artificial person or legal entity
that is (i) created by or under the
authority of the laws of a state,
territory, or possession of the United
States, (ii) comprised of officers,
members, managers, partners, and/or
shareholders who are U.S. Citizens or
permanent legal residents, (iii) is
responsible for the coordination of the
project's financing and construction
and, through the borrower, has the
primary responsibility for a project's
long-term operation and management,
including the coordination and
implementation of a supportive services
program.
The sponsor must agree to
establish before loan closing a single-
asset entity to serve as borrower.
The sponsor must certify that it
is able to, and intends to, maintain and
operate the project in accordance with
program objectives and requirements
identified in the authorizing
legislation, in this Notice and in any
other applicable rules, regulations and
program guidelines.
The sponsor must be in
compliance with all legal and regulatory
requirements and not be in default with
respect to any VA program and any
Federal debt.
In addition, the sponsor and its
principals, as well as the development
team members and their principals, must
meet the following requirements:
Are not presently debarred,
suspended, proposed for debarment,
declared ineligible, or voluntarily
excluded from covered transactions by
any Federal department or agency;
Have not within a three-year
period preceding this application been
convicted of or had a civil judgment
rendered against them for commission of
fraud or an offense in connection with
obtaining, attempting to obtain, or
performing a public (Federal, State, or
local) transaction or contract under a
public transaction; violation of Federal
or State antitrust statutes; or
commission of embezzlement, theft,
forgery, bribery, falsification or
destruction of records, making false
statements, or receiving stolen
property;
Are not presently indicted for
or otherwise criminally or civilly
charged by a governmental entity
(Federal, State, or local) with
commission of any of the offenses
enumerated in the immediately preceding
paragraph; and
Have not within a three-year
period preceding this application had
one or more public transactions
(Federal, State, or local) terminated
for cause or default.
Sponsors will be considered ineligible if
they or any of their principals have any
outstanding VA audit findings. No
organization may receive assistance that
has an outstanding obligation to VA that
is in arrears or for which a payment
schedule has not been agreed to, or
whose response to an audit is overdue or
unsatisfactory.
3. The proposed project is for an allowable
purpose. See NOFA section titled
``Eligible Uses of Funds'' for a list of
allowable purposes.
4. The sponsor has committed to running the
proposed facility as multifamily
transitional housing for a period of 20
years from the date of loan closing or
until the loan pays off, whichever is
longer or until such time as VA
determines that transitional housing for
homeless veterans is no longer necessary
in the particular location. In no event
will the facility be used for something
other than multifamily transitional
housing so long as any portion of the
FFB note remains outstanding.
[[Page 18817]]
5. The sponsor has committed to providing on-
site supportive services with the goal
of assisting the residents in becoming
self- sufficient. See definition of
supportive services at the beginning of
the NOFA for guidance.
6. The Sponsor has committed to requiring
each resident to seek to obtain and
maintain employment.
7. The Sponsor will charge a reasonable
residential occupancy fee, not to exceed
thirty percent (30 percent) of a
resident's gross monthly income.
The project must meet one of the
following criteria, as applicable:
1. Projects with rent subsidies charge
the minimum rent required by the subsidy
program.
2. Projects without rent subsidies charge
rents that when combined with other
sources of project revenue allow the
project to cover operating costs and
debt service. Sponsor must demonstrate
that such rents will be affordable to
the intended residents.
8. The sponsor has committed to maintaining
strict guidelines regarding sobriety as
a condition of residency.
9. The Sponsor has committed to seek funding
or the substantial provision of property
or services by a state or local
government or a nongovernmental entity.
Such funding or assistance is in
addition to the contemplated program
funds. Eligible support by a state or
local government or a nongovernmental
entity includes, but is not limited to:
Commitment of development funds
including, but not limited to, low-
income housing tax credits, CDBG, HOME,
and the Federal Home Loan Bank's
Affordable Housing Program funds.
Commitment of rent or operating
subsidies.
Commitment of supportive
services funding.
Donations that reduce total
development costs, including land,
leasehold interests, labor, buildings,
infrastructure or site improvements,
services, furnishings, and other items
included in the development budget, or
the provision of these at below-market
cost.
Donation of operating services
or the provision of these at below-
market cost.
Donation of supportive services
or the provision of these at below-
market cost.
Significant local or state
government fee or tax waivers.
Private financing such as bank
loans, capital contributions or
donations.
------------------------------------------------------------------------
Stage 1 Feasibility Assessment
VA will perform a Stage 1 feasibility assessment that comprises a
number of factors, including the following six criteria:
A proposed project must satisfy all feasibility criteria in order
to advance to consideration under Stage 2. The following table explains
each criterion in detail.
------------------------------------------------------------------------
Stage 1 Feasibility Criteria--
Number Proposals Must Meet ALL Criteria
------------------------------------------------------------------------
1. The development team has a
proven track record in
supportive housing facility
development and operation. At a
minimum, the development team
includes a sponsor and an
architect. The sponsor will
coordinate the project's
financing and construction and
will have primary
responsibility for its long-
term operation and management,
including the coordination and
implementation of a supportive
services program. Sponsors who
lack experience developing
affordable supportive housing
facilities must retain a
development consultant with
affordable supportive housing
facility development expertise.
A. The core development team is
in place.
B. The sponsor and/or sponsor's
development consultant has a
sufficient development track
record. To meet this
requirement, the Sponsor or its
development consultant must
have completed and placed in
service at least one currently
operating affordable supportive
housing facility of comparable
or larger size. If the Sponsor
seeks a VA construction loan
guarantee, the Sponsor or
development consultant must
have experience managing
construction.
VA will rate proposals relative
to others from the same
metropolitan statistical area,
based on the number of
facilities sponsors have placed
in service and are successfully
operating, with facilities in
service for more than three
years receiving greater
preference than those in
service for three years or
fewer. To receive consideration
under this subsection for
facilities in existence for
more than three years from the
filing deadline for the
application, the sponsor must
submit a certification from a
certified public accountant
that the facilities have
maintained a positive cash flow
for the year in which each
development's last financial
statement has been prepared
(must be no earlier than one
year prior to application
deadline) and demonstrate
funded reserves. Sponsors who
retain a development consultant
must provide track record
information for both themselves
and the consultant.
[[Page 18818]]
VA will also consider in its
evaluation whether any of the
sponsor's facilities or those
of its consultant has defaulted
within two years of being
placed in service, and whether
any of the sponsor's facilities
did not complete construction
because of cost overruns or
other factors directly within
the control of the Sponsor or
its consultant.
C. The Sponsor has a
demonstrated track record of
working constructively with
local and/or state governments
to develop housing. Evidence
may include securing government
housing-related funding
(including tax credits),
property donation, reduction or
dismissal of liens on property
to be developed as affordable
housing, and tax relief. Other
compelling evidence will be
considered as well.
D. The Sponsor demonstrates the
financial capacity to undertake
development and operation of
the project.
E. The Sponsor demonstrates
stability in the composition of
its board (if applicable) and
staff.
F. The architect has local
experience designing affordable
housing communities.
G. The Sponsor has successfully
managed at least one supportive
housing facility of similar or
larger size during the last
five years;
OR, if management will be
contracted,
The property management firm has
successfully managed at least
two supportive housing
facilities during the last five
years, one of which is of
comparable or larger size.
2. The supportive services plan is
appropriate for the target
population.
A.The sponsor has conducted a
needs assessment that
identifies the needs of
homeless veterans in the
metropolitan statistical area
and estimated the demand for a
project. The needs assessment
should reflect the findings of
the most recent VA CHALENG
report. VA will use the CHALENG
findings to evaluate the needs
assessment. To access this
report electronically, go to
http://www.va.gov/homeless/
page. cfm? pg=17.
B.The supportive services plan
addresses needs identified in
the needs assessment and
includes a comprehensive,
realistic strategy to foster
self-sufficiency in the
residents. The plan must:
Identify an ongoing
outreach plan for identifying
and screening potential
residents that ensures the
facility is fully occupied;
Discuss how residents
will be involved in making
facility decisions that affect
their lives, including how they
will be involved in selecting
supportive services,
establishing individuals goals,
and developing plans to achieve
these goals so that they
achieve greater self-
determination;
Include an employment
program designed to help the
residents attain long-term
employment once they leave the
facility.
Clearly identify how
residents will attain and
transition to permanent
housing.
Identify which
supportive services will be
provided on-site and off-site,
as well as who will provide
them.
Include a realistic
budget and a strategy for
obtaining funding.
Include a realistic
staffing plan that identifies
staff qualification
requirements.
Identify how residents
will be provided necessary
follow-up services to help them
achieve stability when
transferred to permanent
housing;
Identify how the
service needs of residents will
be assessed on an ongoing
basis;
Discuss how residents
will be assisted in
assimilating into the community
through access to neighborhood
facilities, activities and
services;
Discuss how and when
the progress of residents
toward meeting their individual
goals will be monitored and
evaluated;
Discuss how and when
the effectiveness of the
overall project in achieving
its goals will be evaluated and
how program modifications will
be made based on those
evaluations; and
Discuss how the
proposed project will be
implemented in a timely
fashion.
3. The service provider has the
resources and experience to
implement the supportive
services plan.
A.The service provider has
experience operating a services
plan of size and scope similar
to the plan being proposed,
with maximum operating
efficiencies.
B.The service provider
demonstrates ability to obtain
government program or private
subsidy funds for services for
homeless and/or other special-
needs populations.
C.The service provider
demonstrates ability in other
fundraising activities to
ensure continued organizational
operations with relative fiscal
stability.
D.The service provider
demonstrates stability in the
composition of its board and
its staff.
E.The service provider
demonstrates ability in
assessing and monitoring the
housing and relevant supportive
service needs of homeless
veterans and/or other special-
needs populations.
4. The financial model is viable.
A.The sources and uses budget is
adequate to implement the
development program.
B.The uses budget includes
reasonable preliminary
estimates for potential
environmental remediation and
geotechnical work.
C.The uses budget funds an
operating escrow account to
carry the project until
occupancy is sustained.
D.The development sources are at
least equal to uses.
E.Rents are affordable to the
target population.
F.The operating budget
adequately covers costs and
includes adequate replacement
reserves.
G.The services budget is
adequate for the proposed
services plan.
H.The applicant's financing
model reflects the requirements
of VA's term sheet, included in
the application package.
I.All key trending, income,
expense, and vacancy
assumptions are realistic and
justified.
5. Disbursement of the developer
fee is structured to help
ensure that the project will be
completed and leased up as
planned. At a minimum,
disbursement of the developer
fee must be tied to developer's
completion of project
milestones, with a 10 percent
holdback until three months of
stabilized occupancy.
6. The market supports the proposed
development program.
A comprehensive market study
conducted by a disinterested
third party demonstrates that
the proposed number and type of
units meet an existing and
identified need and can be
readily absorbed by existing
need in the local area if and
when homelessness among
veterans is no longer a
problem.
------------------------------------------------------------------------
[[Page 18819]]
Stage 2 Feasibility Assessment
At Stage 2, the sponsor must inform VA of any changes to the
information submitted at Stage 1. VA will review the changes for their
impact on the feasibility of the project. Changes that maintain or
improve the feasibility of the project under Stage 1 feasibility
criteria are encouraged. Any changes that make the project infeasible
under Stage 1 feasibility criteria will disqualify the application from
further consideration.
VA will review Stage 2 applications for feasibility based on a
number of factors, including the criteria summarized below.
A facility must satisfy all Stage 2 feasibility criteria to be
considered for funding.
------------------------------------------------------------------------
Stage 2 Feasibility Criteria--Proposals
Number Must Meet ALL Criteria
------------------------------------------------------------------------
1. The sponsor has site control. The sponsor
must provide evidence that it has and
will maintain control of the property
for which the VA Loan Guarantee is
requested through the anticipated
closing date. Acceptable forms of site
control may be any one of the following:
Deed or other proof of ownership
Executed contract of sale
Executed capital lease agreement
Executed option to purchase or
lease.
2. The sponsor has secured commitments for
funding or the substantial provision of
property or services by a State or local
government or a nongovernmental entity.
See Eligibility Criterion Number 9 for a
list of acceptable contributions.
Sponsor must have a commitment for at
least one of these contributions.
3. The site is suitable for the proposed
project, and the project complies with
all applicable laws and codes.
A. The proposed project has all required
zoning approvals needed by State and
local authorities.
B.The proposed project complies with all
applicable Federal, state, and local
codes, laws, ordinances, zoning
requirements, and health and safety
standards.
C.The site has utilities and
infrastructure that are adequate for the
needs of the project and that meet all
local building and zoning requirements.
D.Soil and geological conditions are
suitable for the type of construction
proposed.
E.The site layout adequately addresses
environmental issues.
4. The project's design is appropriate for
the tenant population and the
neighborhood.
A.The project design is appropriate given
community standards, surrounding
neighborhood, and site characteristics.
B.The design features secure, well-
designed unit interiors.
C.The design features security and crime
prevention measures, which may include
but are not limited to strategically
placed fencing, keyless entry systems,
and security cameras.
D.The design accommodates resident
privacy needs to the maximum extent
feasible given the development program.
E.The project design provides adequate
space for the supportive services
program. The design must consider space
needs for case management of residents,
meeting and/or classroom space for
service and program provision, and
integrated community living space.
5. The project construction cost is
reasonable and construction budget is
realistic and cost-efficient, based on
local norms. The construction budget
must include adequate funding to address
all identified and reasonably
foreseeable environmental and
geotechnical issues.
6. The project provides ready access to
transportation. The sponsor must
demonstrate fulfillment of at least one
of the following three criteria:
Project is located within
reasonable distance of public
transportation such as a bus or subway
stop.
Project provides regular shuttle
service to and from public
transportation, either directly or
through a partnership with a service
provider.
In areas without adequate public
transportation, Sponsor must provide a
plan for how residents will be able to
meet their transportation needs and have
ready access to services provided in the
local community.
7. The property management plan is
comprehensive and workable. The sponsor
must submit a plan for managing the
project that defines the roles and
responsibilities among the sponsor,
borrower, property manager, and social
services coordinator, and any other key
players in project operations, and
provides a workable plan for performing
the functions of property, financial,
and resident management.
VA will assess proposals relative to
those from the same metropolitan
statistical area based on length of
property management experience and
number of properties managed. Properties
managed for more than three years will
receive greater preference than
properties managed for three years or
fewer.
8. The proposed project increases the supply
of transitional housing available to
homeless veterans. VA will assess
proposals based on the number of new
beds for homeless veterans, prioritizing
those with the greatest number of new
beds.
9. The supportive service plan includes
coordination with other homeless and
veterans service groups. VA will
prioritize projects whose sponsors most
clearly demonstrate that they have
coordinated with Federal, State, local,
private and other entities serving
homeless individuals in the planning and
operation of supportive services.
Sponsors are required to demonstrate that
they have coordinated with the VA
medical care facility of jurisdiction
and VA Regional Offices of jurisdiction
in their area. Higher priority will be
given to those sponsors who can
demonstrate that they are part of an
ongoing community-wide planning process
that is designed to share information on
available resources and reduce
duplication among programs that serve
Homeless Veterans; and that they have
consulted directly with other providers
regarding coordination of services for
project residents In assessing the
strength of the sponsor's coordination
with other veterans and homeless groups,
VA will give greatest priority to those
proposals that have the greatest portion
of their supportive services program in
place, either through partnership or
funding commitments. Sponsors who wish
to receive points under this criterion
must submit documentation of supportive
service resources.
------------------------------------------------------------------------
[[Page 18820]]
Stage 2 Evaluation
VA will evaluate all feasible Stage 2 applications and make a
decision to issue a loan commitment based on a number of factors,
including the evaluation criteria summarized below.
VA will give greatest consideration to the sponsor's capacity to
develop and implement the program, the sponsor's ability to ensure
repayment of the loan, and the sponsor's readiness to proceed. VA
reserves the right not to issue any loan guarantees.
------------------------------------------------------------------------
Number Evaluation Criteria
------------------------------------------------------------------------
1. The proposal demonstrates strong
repayment ability. VA will prioritize
those proposals that represent the least
risk of default to the Federal
government. VA will evaluate a number of
factors, including the following, to
assess repayment ability:
A.The sponsor shows strong financial
capacity through net worth.
B.The sponsor has a strong track record
of timely debt repayment.
C.The project funding sources include a
large amount of equity (through sponsor
contributions, tax credits, grants, and
the like) and cash-flow-based debt.
D.The project shows a prolonged debt
service coverage ratio in excess of
1.10.
2. The sponsor demonstrates readiness to
proceed. Proposals that are closer to
start of construction will receive
priority. Proposals that do not include
construction and do not require public
reviews or approvals will be evaluated
only on the extent to which they have
secured financing commitments.
A.Alternative Funding is in place. VA
will prioritize proposals with the
greatest share of alternative funding in
place. Award letters signed by the
awarding entity/authority/institution,
indicating rate and term and that the
commitment is not subject to any
condition outside the control of the
developer, will be the only acceptable
evidence to receive consideration under
this criterion.
B.Construction financing is in place. VA
will prioritize proposals with the
greatest share of construction financing
in place. Award letters signed by the
awarding entity/authority/institution,
indicating rate and term and that the
commitment is not subject to any
condition outside the control of the
developer, will be the only acceptable
evidence to receive consideration under
this criterion.
C.All necessary public reviews and
approvals are complete except building
permits. The sponsor must provide
written evidence from appropriate
officials.
------------------------------------------------------------------------
Applications will be reviewed as they are received. Loan guarantees
will be awarded on a first-come, first-served basis in accordance with
the methodology noted above until all remaining program loan guarantees
or program funds have been awarded.
Timeline
------------------------------------------------------------------------
Number ACTION ESTIMATED TIMING \1\
------------------------------------------------------------------------
1. VA issues NOFA.............. Day 1
2. Completed Stage 1 Rolling Basis
applications are submitted..
3. VA reviews completed Within 60 days of
applications for submission
eligibility and feasibility
and notifies Stage 1
applicants of questions or
comments..
4. Revised Stage 1 applications Within 60 to 90 days
are due to VA.. from date of
notification.
5. VA either rejects the Stage Within 60 days of
1 application or issues a receipt of revised
conditional commitment and application.
requests Stage 2
applications for facilities
determined eligible and
feasible..
6. Stage 2 applications are due Within 90 to 120 days
to VA.. of receipt of request
for Stage 2
application
7. VA reviews and evaluates Within 60 days of
completed Stage 2 receipt of Stage 2
applications and notifies application
applicants of questions or
comments..
8. Revised Stage 2 applications Within 60 to 90 days of
are due to VA.. notification
9. VA reviews and evaluates Within 60 days of
completed Stage 2 receipt
applications and recommends
funding action to the
Secretary..
10. VA either rejects the Stage Within 60 days of
2 application or issues a submission to
guarantee commitment.. Secretary.
------------------------------------------------------------------------
\1\ The timing we propose is based on the timing of the first two pilot
loans.
Application Requirements: The specific application requirements
will be specified in the application package. The package includes all
required forms and certifications. Selections will be made based on
criteria described in this NOFA as well as the Program Manual found on
the VA Web site. Applicants will be notified of any additional
information needed to confirm or clarify information provided in the
application. Applicants will then be notified of the deadline to submit
such information. If an applicant is unable to meet any conditions
required in making a loan
[[Page 18821]]
guarantee under this program within the specified time frame, VA
reserves the right to not award a commitment and select another
applicant.
Dated: April 7, 2006.
R. James Nicholson,
Secretary of Veterans Affairs.
[FR Doc. 06-3528 Filed 4-7-06; 4:45 pm]
BILLING CODE 8320-01-P