MDD Resolution No. 088 - Exhibit Revised January 29,2007
BAYTOWN REVOLVING LOAN PROGRAM(RLP)
GUIDELINES&CONDITIONS
I.I ntroduction:
Through funding fi-om the Baytown Municipal Development District(the
"District"),the Baytown Revolving Loan Program is created to provide duly
authorized small and micro businesses low interest loans for the acquisition
and development of assets that lead to the creation and retention of primary
job opportunities for the people of Baytown.
Because funds originated with the District,program participants must adhere
to certain rules,regulations,and requirements.Each applicant should review
the program guidelines to ensure he/she understands the requirements.
Il.Goals and Objectives:
A.To assist existing and startup small and micro businesses located
within the boundaries of the District lying within the Program
Boundaries with the promotion or development of expanded business
enterprises that create or retain"primary jobs,"as defined in the
Development Corporation Act of 1979,as amended("Primary Jobs").
B.To encourage conventional lenders to extend credit to existing and
startup small and micro businesses that they would normally consider
marginal.
C.To engender the establishment and growth of an entrepreneur base in
the Program Boundaries.
Ill.Definitions:
Small Business means a for-profit business with less than 25 employees or
full-time equivalents and located or locating within the Program Boundaries
at the time of application and at all times thereafter until the expiration of the
loan.
Existing Business means a duly licensed for-profit business enterprise,
actively conducting business and located or locating within the Program
Boundaries at the time of application and at all times thereafter until the
expiration of the loan.
EXHIBIT A
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Revised January 29,2007
Startup Business means a for-profit business venture that is in its earliest
stage of development and has no operating history and located or locating
within the Program Boundaries at the time of application and at all times
thereafter instil the expiration of the loan.
Startup financing means the initial infusion of money that advances an
entrepreneurial idea or intention into something tangible.
.Micro Enterprise is defined as a for profit commercial enterprise with five
(5)or fewer employees,one of whom own(s)the enterprise.
Foundation means the Baytown Area/West Chambers County Economic
Development Foundation.
Micro Loans are fixed-rate loans ranging from$1,000 to$10,000 and are
available to startup and existing micro enterprises on a graduated basis.
Novice Entreprenew-is someone who has had no previous business
ownership or management experience.
Operational business presence is defined as active revenue-generating
business operations with at least one(1)full-time employee or full-time
equivalent.with associated facilities/physical plant,licensing,and permits
located within the boundaries of the District.
Program Boundaries means boundaries of the District lying within the City
limits of the City of Baytown.
Proven Entrepreneur is someone who has demonstrated successful business
ownership and management experience.
RLP means the Baytown Revolving Loan Program.
Project Priority:
A.Priority will be given to loan requests that:
1)Create or retain the greatest number of primary jobs:
2)Demonstrate the ability to repay loans;and
3)Provide the best leverage of resources.
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Revised January 29,2007
N`.Eligibility Criteria:
A.The Borrower must warrant that the loan funds are essential for the
preservation and creation of primary jobs and but for-the District's
participation,the Borrower could not acquire sufficient funding to
move forward with the proposed project.
B.The Borrower must be an existing business or a startup business as
defined herein.
C.The Borrower may be a sole proprietorship,partnership or
corporation.If the Borrower is a sole proprietorship,the applicant
must be at least eighteen(18)years old and must demonstrate full-
time commitment to management and control of the business
throughout the loan period.
D.The Borrower must maintain operational business presence within the
Program Boundaries for the term of the loan.
E.The Borrower must fall within the District's definition of a"small
business,""micro enterprise"or"startup business."
F.The Borrower-must agree to use the funds only to purchase
equipment,machinery,specialized heavy-duty vehicles,new
construction,and furnishings that are carried on the fixed asset
depreciation schedule,the useful life of which is greater than or equal
to the term of the loan.Funds may not be used for reconditioning,
refurbishing or repairing.
G.The Borrower shall not use loan proceeds for:
1)activities such as land banking or developing non-residential
speculative buildings:and/or
2)refinancing existing debts,non-fixed improvements,inventory,
sweat equity,or improvements completed prior to closing.
H.The Borrower must adhere to all city codes and policies.Participation
in the RLP does not constitute a waiver of any regulations.
V1.Security:
A.The Borrower must be able to meet surety and collateral requirements
of the participating insured and accredited lending institutions(the
"Lender(s)")and the District.Additionally,the Borrower-must
provide evidence that sufficient cash flow and/or income exists to
meet operating capital and debt service requirements.
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Revised January 29,2007
B.The types and amounts of collateral will be governed by the relative
strengths and weaknesses of other credit factors,and may include
liens on real and/or personal property;leasehold interests,assignments
of income and accounts receivable:and liens on marketable securities.
V1I.Loan Terms and Conditions-Existing and Startup Businesses:
A.Subject to the availability of funds and project priority as determined
by the Foundation,the RLP shall loan up to S25,000 not to exceed
40%of the total amount borrowed for the project,at an interest rate of
2%per annum.The remainder of the project cost must be comprised
of conventional loans and Borrower's equity.Equity requirements are
to be determined by the Lender(s).
B.The minimum loan amount is TWO THOUSAND FIVE HUNDRED
AND NO/100 DOLLARS(52,500.00).
C.The District may take a subordinate collateral position to the
conventional lender.
D.The term of the RLP loan shall be the lesser of the term of the
conventional loan or the term indicated in the chart below:
Loan Amount Maximum Term
$2,500.00-$5,000.00 10 years
55000.01-S 15.000.00 20 years
S 15,000.01-525,000.00 1 30 years
E.It is required that the loan proceeds will be used to create or retain the
minimum number of primary job(s)or full-time equivalent(s)
specified in Borrower's application in accordance with the schedule
detailed therein.If creating a primary job,at least one primary job or
full-time equivalent must be created within one(1)year of the RLP
Loan.The primary job creation will be based on the employment
base documented at the time of application.
F.Loan funds may be used solely for the acquisition of equipment,
machinery,specialized/heavy-duty vehicles,fixed improvements,new
construction,and furnishings with a depreciable life as set forth by the
fixed asset depreciation schedule,the usefiil life of which is greater
than or equal to the term of the loan.Funds may not be used for
reconditioning,refurbishing or repairing.
RLP-Page 4
Revised January 29.2007
G.Borrower shall not engage in any discriminatory practices based upon
an individual's race,color,religion,creed,sex,gender,
marital/familial status,age,disability,public assistance status.or
national origin.
NTI 11.Loan Terms and Conditions-Micro Businesses:
A.Subject to the availability of funds and project priority as determined
by the Foundation,the RLP shall provide Certificate of Deposit(CD)-
secured micro loans up to$10.000 on a graduated basis at an interest
rate of 2%above the return rate for a CD purchased for that loan from
the participating lender.The remainder of the project cost must be
comprised of conventional loans and Borrower's equity.Equity
requirements are to be determined by the Lender(s).
B.The minimum micro loan amount is ONE THOUSAND AND
NO/100 DOLLARS(S 1,000.00).Borrowers can progress to
increasing levels of credit and needs-based training as established by
the Foundation as they prove credit worthiness and ability as business
owners and entrepreneurs.There are 3 levels of micro loans:
❑Level 1-S 1,000.00 to$2,500.00
❑Level 2-52,500.01 to 55,000.00
❑Level 3-$5,000.01 to$10,000.00
C.The District will take a primary lien position on all equipment and
other assets purchased with the micro loan and a lien on all other
equipment and assets.
D.The terns of the loan will be the same as the term of the CD.
E.It is required that the loan proceeds will be used to create or retain the
minimum number of primary job(s)or full-time equivalent(s)
specified in Borrower's application in accordance with the schedule
detailed therein.If creating a primary job,at least one primary job or
full-time equivalent must be created within one(1)year of the RLP
Loan.The primary job creation will be based on the employment
base documented at the time of application.
F.Loan funds may be used solely for the acquisition of equipment,
machinery,specialized/heavy-duty vehicles,fixed improvements,new
construction,and furnishings with a depreciable life as set forth by the
fixed asset depreciation schedule.Funds may not be used for
reconditioning,refurbishing or repairing.
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Revised January 29,2007
G.Borrower shall not engage in any discriminatory practices based upon
an individual's race,color,religion,creed,sex,gender,
marital/familial status,age,disability,public assistance status,or
national origin.
IX.Oversight and Account Servicing:
A.Throughout the life of the loan,the Foundation and the District
maintain the right to take any actions necessary to ensure that goals,
objectives,and requirements of the RLP are being met by the
Borrower.These actions include,but are not limited to periodic site
visits,physical inspection,photographic documentation,interviews.
and job counts.
B.If a Borrower is delinquent on a payment,the Borrower will be
required to submit monthly financial statements to the Foundation
until otherwise directed in writing by the Foundation.
X.Delinquent Accounts:
A.If an account is delinquent,the Foundation and the Lender will meet
with the Borrower to do a comprehensive analysis of the business.
The analysis should give an indication of the seriousness of the matter
and recommend possible solutions.
B.If it is determined that the account cannot be brought current
immediately,an alternative comprehensive plan may be offered,
which may include the following progression:
1)Work Out Situation:This recommendation should be made only if
it is determined that the Borrower has the ability to recover from
its financial problems and resume payment of its debt based upon
an agreed schedule.
2)Liquidation:If the analysis indicates that the business cannot
survive,the Borrower-may agree to a voluntary sale of assets.This
approach will be the preferred course of action.
3)Involuntary Liquidation:If the Borrower is not willing to
voluntarily sell assets,foreclosure will be instituted.If any
deficiency exists after foreclosure,a personal judgment will be
sought.
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Revised January 29.2007
X1.Application Procedure and Business Process-Existing&Startup
Businesses:
A.An application provided by and submitted to Foundation staff for
review by a potential Borrower shall include the following,at
minimum:
1)Project narrative detailing the company history and type of product
or service,number of primary jobs to be created or retained,and
proposed use of funds.For Proven Entrepreneur start-ups,a
business plan and detailed information related to previous business
experience and training are required.For Novice Entrepreneur
start-ups,a business plan and the completion of a needs-based
training plan established by the Foundation will be required.
Training costs will be borne by the Borrower;
2)Project budget,which includes line items identifying the proposed
use of funds;and
3)Identification of RLP requirements which are being fulfilled.
Borrowers will be required to provide annual written certifications
verifying that they have met the job creation goals specified in
their applications.
B.The Foundation staff will perform the following functions:
1)Review applications for compatibility with RLP guidelines;
2)Assist with preparation of applications;
3)Facilitate requisite training and development;
4)Serve as liaison between Borrowers and Lenders;
5)Monitor primary job creation and retention;and
6)Ensure that all program guidelines and requirements are followed
in operating the RLP.
C.Upon satisfaction of prerequisites and favorable review of a proposed
project by the Foundation,the Borrower-shall receive a"Letter of
Intent"frorn the Foundation staff.The letter will indicate that the
Borrower has met the eligibility requirements,as well as the loan
amount it may receive through the RLP along with other conditions of
the loan.The letter-can then be used by the Borrower-in negotiations
with Lenders as part of the program.The Letter of Intent will be in
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Revised January 29,2007
effect for forty-five(45)calendar days,after such time reevaluation of
Borrower eligibility will be required.
D.The Lender(s)will be responsible for the following:determining
credit worthiness,setting terms/amortization schedules,drafting loan
documents,performing all due diligence,and account service to
payout.
E.The usual and customary costs associated with effectuating these
loans will be borne by the applicant.
F.Upon approval of the total loan package by the Lender and the
Foundation,the Foundation will submit a requisition packet for funds
from the District.The District will disburse funds to the Foundation.
G.The Foundation will then purchase a Certificate of Deposit(CD)in
the Lender(s)for the guaranteed amount of the loan under this
program.The term of this certificate is one year.
H.A loan is then made for this same amount against the CD.The
Borrower shall sign the note along with an authorized Foundation
representative.
1.The Borrower makes monthly payments,as amortized,on both the
conventional loan and the CD loan.The Lender,as a facet of due
diligence,shall be responsible for collection and enforcement of both
the conventional loan and the District's CD loan.
J.Interest accrued on the CD is remitted back to the District on a semi-
annual basis.
K.On the annual renewal date of the CD,the CD loan shall be
restructured and reduced by the principal amount paid by the
Borrower during the year.The CD loan is then renewed at the new
loan balance and all excess funds are then distributed back to the
District.
XII.Application Procedure and Business Process-Micro Businesses:
A.An application provided by and submitted to Foundation staff for
review by a potential Borrower shall include the following,at
minimum:
1)Project narrative detailing the company history and type of product
or service,number of primary jobs to be created or retained,and
proposed use of funds.For Proven Micro Entrepreneurs,a
business plan and detailed information related to previous business
RLP-Page 8
Revised January 29,2007
experience and training are required;For Novice Micro
Entrepreneurs,a business plan and the completion of a needs-based
training plan established by the Foundation will be required.
Training costs will be borne by the Borrower;
2)Project budget,which includes line items identifying the proposed
use of funds:and
3)Identification of program requirements which are being fulfilled.
Borrowers will be required to provide annual written certifications
verifying that they have met the job creation goals specified in
their applications.
B.The Foundation staff will perform the following functions:
1)Review applications for compatibility with program guidelines;
2)Assist with preparation of applications;
3)Facilitate requisite training and development;
4)Serve as liaison between Borrowers and Lenders;
5)Monitor primary job creation and retention;and
6)Ensure that all program guidelines and requirements are followed
in operating the RLP.
C.Upon satisfaction of prerequisites and favorable review of a proposed
project by the Foundation,the Borrower shall receive a"Letter of
Intent"from the Foundation staff.The letter will indicate that the
Borrower has met the eligibility requirements,as well as the loan
amount it may receive through the RLP along with other conditions of
the loan.The letter can then be used by the Borrower in negotiations
with Lenders as part of the program.The Letter of Intent will be in
effect for forty-five(45)calendar days,after such time reevaluation of
Borrower eligibility will be required.
D.The Lender(s)will be responsible for the following:determining
credit worthiness,setting terms/amortization schedules,drafting loan
documents,performing all due diligence,and account service to
payout.The District will draft lien documents to attach loan-related
collateral.
E.The usual and customary costs associated with effectuating these
loans will be boi-ne by the applicant.
RLP-Page 9
Revised January 29,2007
F.Upon approval of the total loan package by the Lender and the
Foundation,the Foundation will submit a requisition packet for funds
from the District.The District will disburse fiinds to the Foundation.
G.The Foundation will then purchase a CD in the Lender(s)for the
guaranteed amount of the micro loan.The term of this certificate/loan
will be:
Level 1 Level 2 Level 3
Micro Business Loans Micro Business Loans Conventional RLP
Application
S 1000-S2,500 S2.500-S5000 S5,000-S 10,000
w/Nx Level training:Credit w/Nx Level training;CS of at w/Nx Level training:CS of at
Score(CS)of at least 525:and least 525;and collateral.least 625;and meet program
collateral.I I thresholds.
Term:6-18 months I Term:6-24 months I Term:Per program
H.A loan is then made for this same amount against the CD.The
Borrower shall sign the note along with an authorized Foundation
representative.
I.The Borrower makes monthly payments,as amortized,on the CD
loan.The Lender and the Foundation,as a facet of due diligence,shall
be responsible for collection and enforcement of the CD loan.
I Interest accrued on the CD is remitted back to the District on a semi-
annual basis.
XI11.Program Violations:
A.Violation of any of the program requirements will result in the CD-
secured Loan being voided by the Foundation with the remainder of
loan principal and accrued interest due within fifteen(15)days.
Violations include,but are not limited to:
1)Failing to locate and remain within the Program Boundaries
throughout the term of the loan;
2)Falsifying application information;
3)Default of loan terms;or
4)Failure to create or retain primary jobs.
XIV.Fair Lending:
A.In its evaluation of proposed loan(s),the Foundation shall apply the
same review standards for all applicants and shall not discriminate
RLP-Page 10
Revised January 29,2007
against or treat loan applicants differently based upon the applicant's
race or color,religion,national origin,sex,marital or familial status,
age,handicap,public assistance status,or the good faith exercise of
any rights under the Consumer Credit Protection Act.
R:'Xaren\Ftles 0tv Coun:d Municipal Development DtsrncuRe%ohtng Loan Program 20071RLP Program Outline Re%2007 Clean.doc
RLP-Page I I
MDD AFFORDABLE HOUSING DEVELOPMENT PROGRAM GUIDELINES
GENEtiai.GUIDELINES
The following are the general guidelines of the Affordable Housing Development Program
(AHDP)component of the Revolving Loan Program as funded by the Baytown Municipal
Development District(MDD).Applications must be received at least 30 days prior to the month
in which the Borrower wishes to seek approval by the MDD.MDD will endeavor to
accommodate Borrowers seeking approval within a particular time period.However.placement
of any project on the agenda for any particular month will not be guaranteed.All funding
requests are subject to approval by the MDD and its ability to reserve funds for the project.
1.Eligibility Criteria:
A.Purpose of the Project:The purpose of the project must be the development or re-
development of"for rent"multifamily units within the Eligible Zone.The Eligible Zone
is the City of Baytown's Community Development Block Grant(CDBG)target area
which is consistent with current revitalization and redevelopment efforts.The project
must satisfy all of the conditions of an eligible project under the Development Act of
1979,as amended.A multifamily sliall mean the use of a lot for four or more dwelling
units within a single building
B.Eligible Participants:Private developers(any individual.firm,corporation or entity,
other than a nonprofit corporation).
C.Demonstration of Need:The borrower must demonstrate that the project cannot proceed
"but for-the receipt of the AHDP loan.Note:In this regard the applicant must
demonstrate that alternative sources of funding have been considered and inform MUD if
it was determined that such sources were not available for the project or were insufficient
to bring the project to fruition.
D.Loan Amount:The loan amount may be limited based upon the amount of funds
available and the consideration of competing projects by the MDD.MDD reserves the
right to set minimum loan amounts.
E.Disclosure of FederaVState/County Participation:The Borrower must disclose the
participation,if any,of all governmental entities.
F.Evidence of Other Financing Sources and Security:The Borrower must demonstrate
that it will be able to pay for development costs not otherwise financed by the AHDP
loan being requested.Therefore,the applicant must submit to the Foundation acceptable
financial commitments from all other budgeted funding sources(to be verified at time of
application and at closing).This evidence will be in a form and value adequate to secure
the amount of the loan for the principal and interest for the life of the term.Evidence may
include,but is not limited to,the following:
❑"Hard"Equity Commitments as established by the primary lender;
❑Qualified Investor Notes;
EMU A
Affordable Housing Development Program-Page t
❑Qualified Letters of Credit:
❑Qualified Corporate Guaranty:and
❑Negotiated Project-Specific Collateral.
G.Experience of Development Team:The Borrower must provide information regarding
the identity and housing experience of officers,general and/or limited partners and other
principal personnel of the development team for the proposed project.The development
team(general partners,limited partner,developer,general contractor,and the
management company)must have satisfactory experience in successful housing
management and development.If any member of this development team is involved as a
general partner of another project currently not in good standing with MDD or TDHCA
programs,the application will be rejected.After all issues have been resolved to MDD's
satisfaction,any application must be resubmitted for the project to be reconsidered for an
AHDP loan.The Foundation reserves the right to assess the capacity of every member of
the development team at any time.
H.Conformity to program guidelines:The Borrower must demonstrate to MDD that the
housing development will be decent.safe and sanitary,and that the occupants of the
housing development will benefit from the savings resulting from the AHDP financing.
The developer must include in the AHDP Application a statement as to the public
purpose of the project.The proposed project must conform to all of the AHDP
guidelines,requirements and criteria,resulting in a determination by staff that it meets,or
exceeds.the requirements of Texas Department of Housing and Community Affairs
(TDHCA);and that the project is in the best interest of the citizens.The MDD and staff
reserve the right to impose additional requirements on a borrower at any time prior to
approval or closing of a project.
1.Project Narratives:A project narrative must be submitted with all applications for
AHDP Loans.
J.Tax Information authorization Disclosure:Each owner/general partner and,if
applicable.the controlling entity of the general partner must complete a Tax Information
Disclosure Authorization Form.The Foundation must be able to verify that no
delinquent taxes are owed to the City of Baytown and other local taxing entities.
K.Certification of ad valorem Tax Payment:Borrower must certify that the project has
not.and will not,apply for status or exemption that would make it exempt from payment
of ad valorem taxes.
L.Civil Rights Compliance.It is the responsibility of the owner/developer/borrower and
any of its employees,agents or sub-contractors in doing AHDP business with MDD to
adhere to and comply with all Federal Civil Rights legislation inclusive of the Fair
Housing Laws.Section 504 of the Rehabilitation Act of 1973,the Americans With
Disabilities Act as well as any state and local Civil Rights legislation along with any
required related codes and laws.Should MDD not specify any requirements.such as
design.it is nonetheless the owner's responsibility to be aware of and comply with all
non-discrimination provisions relating to race.color,religion.sex,handicap,familial
status,sexual orientation and national origin.This includes design requirements for
construction or rehabilitation.Equal Opportunity in regard to marketing and tenant
Affordable Housing Development Program-Page 2
selection,and reasonable accommodation and modification for those tenants covered
under the Laws.
Funding Terms and Conditions:
A.Amounts:Subject to the availability of funds and project priority as determined by the
MDD,the MDD under the ADHP may loan up to$100,000 per project.The remainder
of the project cost must be comprised of conventional loans and borrower's equity
requirements as detailed.
B.Interest Rate:The Interest rate will be 60%of Prime,but will not exceed the
"Applicable Federal Rate"at the time of closing.
C.Terms:Amortization may vary,but the maximum term will not exceed 15 years or 180
months.The loan documents will include a"Due on Sale'clause.a provision that
requires immediate payment of the balance of the loan if the borrower sells,in whole or
in part.the affected property.
D.Collateral:As previously described and prescribed during application review.
E.Escrow&Proof of Insurance:The amount as well as the type and limits of insurance
shall be determined by the primary lender.
F.Lien Position:The District may take a subordinate lien position.
G.Loan Administration:Program loans will be administered through participating lending
institutions.
H.Title Insurance:Title insurance shall be required.
1.Funding Availability:After conditional approval by the MDD,the MDD's reservation
of funds.and Foundation's verification of all items in the closing checklist,the borrower
must submit a formal request to the Foundation to close the loan.Depending upon the use
of the direct loan,submission of additional documentation may be required prior to the
disbursement of funds.MDD reserves the right to disburse funds on a progress-payment
basis.
J.Loan Commitment Period:The loan commitment period shall be established by the
MDD based upon the period requested by the borrower in its application.
Affordable Housing Development Program-Page 3
Threshold Requirements
FOR ADHP APPLICATIONS SUBMITTED
l.Borrower must complete the AHDP Application.
2.Borrower must submit letter(s)from the equity providers describing the equity
contribution both with and without the benefit of the AHDP Loan.
3.Each general partner must provide a signed letter acknowledging that they have read.
understood,and will abide by the AHDP Guidelines.
4.For all projects involving rehabilitation,borrower must provide an as-is appraisal
conducted by an independent,state licensed appraiser.which evidences that the total
development costs associated with the rehabilitation are at least 25%of the as-is
appraised value of the property.
5.Statement of public purpose.
6.Phase I Environmental Site Assessment.
7.Status of architectural and engineering designs at application and prior to conditional
fund approval.Preference may be given to projects consistent with specialty
programs,i.e.,Downtown Master Plan,Design Guidelines.Fagade Program,etc.,as
they apply.
8.Timeline for funding commitments,program approvals(if any).and final design and
construction.
In addition to the above noted information.MDD will evaluate the project's consistency with
AHDP Guidelines with respect to the following:
l.Project Narratives;
2.Evidence of Site Control;
3.Market Study;
4.Public Notification;
5.Affirmative Fair Marketing:
6.Preliminary Plans and Specifications:
7.Unit Cost Cap;
8.Utility Allowances:
9.Good Standing with TDHCA Housing Programs:
10.Adherence to HUD and TDHCA Standards;
11.Site Location,Photographs and Renderings:
12.Conformity with the Code of Ordinances.Baytown,Texas;and
13.Rental Projects must demonstrate positive cash flow for all aspects of the project.
Projects.which do not meet the minimum qualifications,will not be moved through the approval
process until all documentation and information has been provided evidencing that the minimum
Affordable Housing Development Program-Page 4
qualifications are met.MDD reserves the right to request any additional documentation deemed
necessary to thoroughly review a request for funding.
LOAN REVIENV AND NOTIFICATION SCHEDULE
Loan underwriting and processing is accomplished prior to a formal review process by the MUD.
It is therefore important to understand the processing cycle,which precedes each transaction
placed on the agenda for review and approval consideration.
Any requests for changes to originally approved loan commitments or loan applications must be
provided to the Foundation 30 days prior to the Internal Loan Review Meeting.Requests that are
not received at least 30 days prior to the initial Internal Review meeting may be placed on the
following month's MDD Agenda.
.After MDD approval of the AHDP Loan.MDD AHDP funds are encumbered for the period of
time as established by the MDD based upon the period requested by the borrower in its
application.MDD will provide the borrower with a binding letter of intent/approval for the loan
along with the approved Amortization Schedule,Executive Summary,and Loan Closing
Checklist.This commitment must be accepted in►vritinQ by the Applicant and forwarded to the
MQQ 30 days from the date of the letter.
POSr1'APPROVAL MATTERS
Subsequent Changes to a Proiect
Approval Process
The project ox,ner is required to contact the Foundation and the MDD immediately in the event
any changes occur to a project after it has been approved by the MDD including,but not limited
to,changes in the development team(ownership structure,developer.general contractor.limited
partner,and/or management company),the unit mix or affordability,nature of the project,etc.
The project on,ner must submit a formal written request to the Foundation explaining the
proposed change and why it is being made.The request will be reviewed by the Foundation and
the MDD.Once a decision has been made.the project owner will be notified by mail.
Foundation:The Foundation will review the request,along with any supporting documentation.
and make a recommendation to the MDD.The MDD has the option of referring the matter to
the Foundation for further review,if deemed necessary.The borrower will be notified by mail of
the decision made by the Foundation.
internal Loan Review:The borrower may appeal a negative decision made by the Foundation.
The appeal must be made in writing,sent to the MDD and must detail the grounds of the appeal.
The MDD will evaluate the appeal and the borrower will be notified by mail of the MDD's
decision.
Affordable Housing Development Program-Page 5
Commitment and Term Extensions
General Information
There are two types of extensions that can be requested in writing for consideration by MDD:
•Loan Commitment Extension(valid conrmitnrents only-Commitments that have not
expirecQ,and
•Loan Term Extension.
All extension requests must be received by MDD at least thirty(30)calendar days prior to the
commitment expiration date or the loan maturity date.Once an extension request has been
received,it will be reviewed as defined in the Approval Process,MDD will notify the borrower
by mail of any decision made(and invoice for appropriate fee,if necessary).Loan commitment
and term extension fees are due within 30 calendar days from the date of the MDD approval
letter,which includes information for forwarding payment.
To extend a commitment or term.the borrower must submit a formal written request,which must
include:
The project name and tracking number:
i The reason the request is being made,and
How much additional time will be necessary.
Request to Extend the Loan Commitment
It is the borrower's responsibility to ensure that all commitments are current.MDD will only
review requests to extend a current loan commitment.The granting of an extension will not
automatically backup/extend the closing date of any subsequent AIIDP loan.Applicants may be
required to submit additional information and a meeting may be scheduled with the borrower.
Expired Commitments
If a commitment expires,all funding commitments and obligations of the MDD are released.
Affordable Housing Development Program-Page 6