MDD Resolution No. 090 RESOLUTION NO. 90
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
MUNICIPAL DEVELOPMENT DISTRICT APPROVING REVISIONS TO THE
BAYTOWN REVOLVING LOAN PROGRAM CONCERNING THE
AFFORDABLE HOUSING DEVELOPMENT PROGRAM GUIDELINES; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL
DEVELOPMENT DISTRICT:
Section 1: That the Board of Directors of the Baytown Municipal Development District
hereby finds that the expenditures authorized herein are for the planning, acquiring, establishing,
developing, constructing or renovating one or more development projects, which satisfy the purposes for
which the funds can be expended pursuant to Chapter 377 of the Texas Local Government Code and
Section 4B(a), Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes).
All required findings pursuant thereto are hereby declared to have been made and adopted as findings of
the Board of Directors.
Section 2: That the Board of Directors of the Baytown Municipal Development District
hereby approves revisions to the Revolving Loan Program concerning the Affordable Housing
Development Program Guidelines. A copy of the Affordable Housing Development Program Guidelines
as revised is attached hereto as Exhibit"A,"and made a part hereof for all intents and purposes.
Section 3: This resolution shall take effect immediately from and after its passage by the
Board of Directors of the Baytown Municipal Development District.
INTRODUCED, READ and PASSED by the affirmative vot the Board of Directors of the
Baytown Municipal Development District,this the 51h day of April,2
S EP . DONCARLOS, Preside 't tkDY,
/
Assistant Secretary
APPROVED AS TO FORM:
NACIO RAMIREZ, SR.,beNeral Counsel
RAKarenTilesTity CouncillMunicipal Development District\Resolutions120071April\Amendment2Affordable HousingProgramGuidelines.doc
Exhibit "A"
MDD AFFORDABLE HOUSING DEVELOPMENT PROGRAM GUIDELINES
GENERAL 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.
I. 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
Corporation Act of 1979, as amended. A multifamily shall 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 MDD 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 Federal/State/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:
0 "Hard" Equity Commitments as established by the primary lender;
0 Qualified Investor Notes;
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0 Qualified Letters of Credit;
0 Qualified Corporate Guaranty; and
El 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.
I. 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
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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" established at the time of application to the Texas Department
of Housing and Community Affairs ("TDHCA"), or to the MDD for non-TDHCA
sponsored projects.
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: Mortgagee Title Insurance shall be required.
I. 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
1.Borrower must complete the AIIDP 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.Pref-erence 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:
1.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;
]I.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
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qualifications are met. MDD reserves the right to request any additional documentation deemed
necessary to thoroughly review a request for funding.
LOAN REVIEW AND NOTIFICATION SCHEDULE
Loan underwriting and processing is accomplished prior to a formal review process by the MDD.
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 writing b the he Applicant and forwarded to the
MDD 30 days from the date of the letter.
POST APPROVAL MATTERS
Subsequent Changes to a Protect
Approval Process
The project owner 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 owner 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 Extensions
General Information
There is one type of extension that can be requested in writing for consideration by MDD:
• Loan Commitment Extension (valid commitments only — commitments that have not
expired)
Extension requests must be received by MDD at least thirty (30) calendar days prior to the
commitment expiration 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 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, the borrower must submit a formal written request, which must
include:
i The project name and tracking number;
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 AHDP 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.
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