Potential Second CDBG Piggyback Funding Round
The Office of Community Development (OCD) is proposing to offer a second, smaller round of CDBG Piggyback funding to support the development of rental housing in Parishes most severely impacted by Hurricanes Katrina and Rita. Unlike the first round of Piggyback awards which was coupled with “9%” GO Zone Tax Credits, this round of funding is intended to work in conjunction with Tax Exempt Bond financing, available through the Louisiana Housing Finance Agency (LHFA), and “4%” Low Income Housing Tax Credits. OCD anticipates that projects funded through this second funding round will be smaller in scale than first round projects, with a funding cap of approximately $8 million in CDBG funds per project.
The State anticipates that applications will be due to OCD sometime in the Spring of 2008. Prior to the launch of the program OCD will solicit feedback from the development community and other stakeholders through the distribution of a draft program term sheet which will include a detailed time schedule and format for the CDBG-Bond link process as well as notices as to the time and place for an informational meeting. OCD is publishing this notice prior to release of the draft term sheet so that potential applicants can begin considering development concepts.
Key program design elements may include the following:
- Permanent Supportive Housing Commitment Projects must reserve at least 5% of total units for Permanent Supportive Housing (“PSH”).
- Deep Affordability Option Other than the PSH requirement described above, there is no deep affordability requirement. However, projects having 20% of total units affordable at or below 30% of AMI (and income-restricted to households at or below 30% AMI) will have a competitive advantage.
- Unit Mix and Affordability Option Projects that satisfy the PSH requirement and the CDBG National Objective may have any mix of affordable and market-rate units otherwise consistent herewith. Projects meeting the Mixed Income Project definition (below), and projects meeting the Permanent Supportive Housing Project definition (below), will have a competitive advantage.
- Mixed Income Projects Projects must reserve at least 30% of their units, but no more than 60% of their units, for market rate tenants. Market rate units are defined as units with no restrictions on rent or income. Developers will NOT be allowed to overlay any form of project based rental assistance on these units in order to serve low and moderate income tenants in market units.
- PSH Projects Projects must reserve at least 15% of their units for PSH housing but no more than 50% of their units, for PSH tenants.
- Homeless Permanent Supportive Housing Developments ponsors who are interested in creating new housing units for homeless individuals and families who are PSH eligible will have competitive advantages.
- GO Zone Requirement Projects must be located in the eight most-heavily-damaged Parishes within the GO Zone: Calcasieu, Cameron, Jefferson, Orleans, Plaquemines, St. Bernard, St. Tammany, Vermilion. Projects in Plaquemines and St. Bernard Parishes (for which few or no awards were made in previous GO Zone funding rounds) will have a significant competitive advantage. Other Parishes whose share of hurricane damage exceeds their share of Piggyback awards to date will have a competitive advantage as well.
- Local Support Option Projects which the local government has identified as a priority in its recovery plan, and for which the Local government is willing to contribute land and/or a significant financial investment, will have competitive advantages.
Potential applicants are cautioned that this notice does not constitute a commitment by LHFA or OCD to accept applications or make awards under such a program. All issues in this notice relate to compliance with 4% credits either under an existing QAP or amended QAP and compliance with tax rules for bond financing within the limits of volume cap to be made available by the Governor of the State. In addition, potential applicants are cautioned that any projects funded through such a program will be subject to a series of Federal requirements, including regulations that impact the site control process such as environmental review and the Uniform Relocation and Acquisition Act. Guidance on these requirements can be found on OCD’s website at http://www.doa.louisiana.gov/cdbg/drpiggy.htm or by contacting OCD’s Rental Housing Division at 225-219-9624.
OCD encourages potential applicants and other interested stakeholders to provide written feedback on this potential second funding round. Responses should be sent via email to firstname.lastname@example.org and submitted no later than March 2nd, 2008.