State of Georgia, 2002 qualified allocation plan for low income housing tax credits and affordable housing resources [Jan. 2002]

STATE OF GEORGIA 2002
QUALFIED ALLOCATION PLAN for
LOW INCOME HOUSING TAX CREDITS and
AFFORDABLE HOUSING RESOURCES
January 2, 2002
THE GEORGIA DEPARTMENT OF COMMUNITY AFFAIRS THE GEORGIA HOUSING & FINANCE AUTHORITY

MEMORANDUM

TO:

All Interested Parties

FROM;

Office of Affordable Housing

DATE:

January 2, 2002

SUBJECT: Notice of Funding Availability

The Georgia Department of Community Affairs (DCA) is releasing the 2002 Qualified Allocation Plan (Plan) that is intended to encourage the development of affordable rental housing in both rural areas and urban neighborhood redevelopment areas. The Plan sets forth the conditions and policies to which applications in Georgia for the State and Federal Low-Income Housing Tax Credit and HOME loan program resources will be subject in 2002. The 2002 Plan differs considerably from the 2001 Plan.

Please take special note of the following critical dates for the 2002 funding round:

February 1

General Questions Deadline- Applicant must have general questions concerning Application submission to DCA by this date. Answers will be published and sent to all applicants.

February 28

Project-Specific Questions Deadline- written project-specific questions will be entertained. Answers will be considered the following week and responses sent by March 15

March 1

Maximum Per-Unit Cost Waivers Deadline- Applicants must have request to DCA offices by 5:00p.m. on this date. No late submissions will be accepted for any reason.

April 18

Application Submission Deadline- Complete Applications must be received by DCA no later than 5:00p.m. No late submissions will be accepted for any reason.

August 31

(Tentative) Announcement of 2002 HOME and Tax Credit reservations.

Written general questions regarding Application submission, as well as project specific questions, may be mailed to Christie Shafer, Georgia Department of Community Affairs, 60 Executive Park South, N.E., Atlanta, Georgia 30329-2231; emailed to cshafer@dca.state.ga.us or facsimile attention: Christie Shafer, 404-327-6849.

We appreciate your interest in affordable rental housing and look forward to working with you during the coming year.

2002 Qualified Allocation Plan Table of Contents

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Section 12 Section 13 Section 14 Section 15 Section 16 Section 17 Section 18 Section 19
Exhibit A
I-1 I-2 I-3 I-4 I-5 I-6 I-7 I-8 I-9 I-10 I-11 I-12 I-13 I-14 I-15 I-16 I-17
I-18 I-19 I-20 I-21 I-22

CORE PLAN
Purpose Definitions Legislative Requirements Affordable Rental Housing Needs Affordable Rental Housing Objectives Affordable Rental Housing Priorities Financing Resources Credits Financing Resources Bond Financed Projects Financing Resources HOME Loans Policies Eligibility Application Submission Deadline Project Reconfiguration/Application Modification Fees Evaluation of Applications Georgia Open Records Act Monitoring and Compliance Performance Scoring Modification of the Plan
Metropolitan Statistical Areas (MSAs)
APPENDIX I -- THRESHOLD CRITERIA
Project Feasibility, Viability analysis, and Conformance with Plan Gross Rent Restrictions Unit Cost Limitation Site Control Environmental Requirements Terrain Characteristics Site Zoning Operating Utilities Public Water/Sanitary Sewer/Storm Sewer Market Feasibility (Market Study and Appraisal) DCA Commissioned Appraisals Project Amenities Site Accessibility Physical Needs Assessment (Rehabilitation Projects Only) Conceptual Design and Schematic Documents Accessibility Standards Preliminary Financing, Limited Partner Equity, Deferred Developer's Fees and Other Financing Commitments Owner/Developer Experience and Capacity Non-owner/Developer's Experience and Capacity Eligibility for Credit Under the Nonprofit Set-Aside Eligibility for HOME Loans under the CHDO Set-Aside Compliance History
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Page
1 1 5 6 6 7 7 9 10 13 20 22 23 24 24 26 26 27
28
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9 9 12 13 12

APPENDIX II -- SCORING CRITERIA

Project Scoring Summary

Scoring Criteria

II-1

Application Completeness/Organization

II-2

Project Locational Characteristics

II-3

Tenancy Characteristics

II-4

Additional Rent and Income Elections

II-5

Government Support and Financial Assistance

II-6

Project Characteristics

II-7

Readiness to Proceed

II-8

Compliance Status

Page
1
2 2 4 13 16 17 21 22

2002 Qualified Allocation Plan

Table of Contents

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STATE OF GEORGIA 2002 QUALIFIED ALLOCATION PLAN
FOR FEDERAL LOW INCOME HOUSING TAX CREDITS
STATE HOUSING TAX CREDITS HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS
Section 1. Purpose
The purpose of the 2002 Qualified Allocation Plan (Plan) is to set forth:
the legislative requirements for distributing affordable housing financing resources, a description of federal and state resources available from DCA for financing affordable rental
housing, the priorities established by DCA for the types of affordable rental housing, the process of evaluating funding requests and awarding of these resources, and certain aspects of program compliance requirements and procedures.
Section 2. Definitions
The following definitions shall apply for the purposes of this Plan:
"4% Credits" means Federal Credit available to Bond Financed Projects which meet the requirements of this Plan.
"9% Credits" means Federal Credit allocated on a competitive basis under the provisions of this Plan.
"AMI" means Area Median Income as defined by HUD.
"Applicant" means any person and any affiliate of such person, corporation, a partnership, joint venture, association, or other that submits an Application to DCA requesting an allocation pursuant to the Plan. The Applicant is also the Project Owner, unless the Applicant transfers or assigns its interest in the Project (which assignment can only occur with the consent of DCA). Each Project Owner and each of the Project Owners shall be obligated to carry out the commitments made to DCA by the Applicant.
"Application" means the set of documents, in paper and electronic form, submitted by an Applicant to DCA under this Plan.
"Application Submission" means the date and time, as stipulated in Section 12 of the Plan, by which the Application must submitted to DCA in order to be eligible for funding under this Plan.
"Bond Financed Projects" means affordable housing developments financed with tax-exempt bonds and therefore eligible for 4% Federal Credit.
"Capital Improvements" mean improvements to the real estate, the cost of which exceeds $10,000 for items such as re-roofing, structural repairs, or major projects to replace or upgrade existing furnishings, but not including replacement of individual appliances or minor repairs.

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12/28/01Core Plan

"CHDO" means a Community Housing Development Organization, as defined in the HOME regulations at 24 CFR Part 92.2.
"CHDO Loan Program" means that program designed to make HOME rental housing loans to CHDOs.
"CHDO Predevelopment Loan Program" means that program designed to make loans exclusively to inexperienced CHDOs for predevelopment activities involving the preparation of Applications for loans through the CHDO Loan Program.
"Code" means Internal Revenue Code, primarily Section 42.
"Competitive Scoring" means the process described in this Plan by which DCA ranks the Applications received. Only those Applications meeting Threshold requirements will be advanced to the Competitive Scoring process. The ranked outcome of the Competitive Scoring process will be a significant factor in DCA's determination of Applications selected for funding.
"Compliance Period" means the 15-year period over which a property must operate in accordance with the Credit requirements to avoid Federal Credit recapture. The Compliance Period commences with the first taxable year of the Credit period.
"Credits" means the State Credit and the Federal Credit together.
"DCA" means the Georgia Department of Community Affairs, an executive government agency in the State of Georgia. By state law, DCA administers the programs of GHFA.
"Developer Fee" means the sum of the developer's overhead, developer's profit, consultant's fee, and reserves funded from the development budget held for less than the Period of Affordability. If a consultant is acting in the capacity of developer or construction manager, or providing technical assistance to the developer or construction manager, the consultant's fee is considered part of the Developer Fee.
"Elderly Housing" means housing intended for and solely occupied by persons 62 years of age or older, including a family in which all members are at least 62 years of age or two or more persons who are at least 62 years of age living together. All household members must be at least 62 years of age (no children, and no disabled persons under the age of 62).
"Federal Credit" means the Low Income Housing Tax Credit established by the federal government for the purpose of encouraging the development of affordable housing and governed by the Code.
"FMR" means the Fair Market Rents issued by HUD.
"General Multifamily" means projects designed to be marketed to the general tenant population, and not specifically designed for or marketed to the Special Needs Households tenant population.
"GHFA" means the Georgia Housing and Finance Authority, a public corporation created by the Georgia General Assembly and designated by the Governor as the State Allocating Agency for Federal Credit and the state-level grantee for federal HOME funds.
"HOME" means the HOME Investment Partnership Program administered by HUD under the provisions of 24 CFR Part 92.

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"HOME Loans" means the HOME Rental Housing Loan Program loans and the CHDO Loan Program loans collectively.
"HOME Rental Housing Loan Program" means the program that is designed to provide below market, favorable term financing for affordable rental housing. In Georgia, this program is intended to serve those individuals who have incomes up to 60% AMI.
"Housing for Older Persons" means housing intended and operated for occupancy by persons 55 years of age or older. According to Georgia law, the property must also have significant facilities and service serving the elderly population even though the requirement has been eliminated from the federal definition of elderly project. At least 80% of the units must be occupied by at least one person 55 or older. Up to 20% of the units may be occupied by others, including the landlord's employees, the surviving spouses or children of residents who were 55 years of age or older when they died, and caregivers. DCA will monitor the required facilities and services during the applicable Compliance Period.
"HTF" means the Housing Trust Fund for the Homeless established by O.C.G.A. 8-3-300.
"HUD" means the U.S. Department of Housing and Urban Development.
"Identity of Interest" means a situation exists in which a person, principal, or entity with an interest in the ownership of the property contracts with the owner to provide services.
"IRS" means the Internal Revenue Service, a division of the U.S. Department of Treasury.
"Local Government" means the controlling elected governing body of the local jurisdiction (as defined in its Charter) in which the property is located at the time of Application (e.g., city council if within the city limits, or county commission if in an unincorporated area).
"Manual" means the Application Manual published by DCA for Applications submitted in 2002.
"O.C.G.A." means the Official Code of Georgia Annotated.
"Period of Affordability" means the time during which HOME Loan financed units must remain affordable to eligible households, as defined by HOME program regulations and this Plan. The Period of Affordability shall commence upon completion of the project and shall run for twenty years or the term of the HOME Loan, whichever is greater. Completion shall be defined as set forth in the HUD regulations for the HOME program.
"PJ" means a Participating Jurisdiction, which is an agency of state or local government that administers the HOME Program in its jurisdiction. GHFA is the PJ for the non-entitlement areas of the State of Georgia. The local PJs include the cities of Albany, Atlanta, Macon, and Savannah; Clayton, DeKalb, and Gwinnett Counties; the consolidated governmental units of Athens-Clarke County, AugustaRichmond County, and Columbus-Muscogee County; the counties and cities comprising the Georgia Urban County Consortium (Cobb, Marietta, Cherokee, Canton) and the Fulton County Consortium (Fulton, Roswell).
"Plan" means this 2002 Qualified Allocation Plan.

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"Probationary Participation" means Project Participants that have been ineligible to participate for the last two competitive rounds and remain ineligible for the 2002 round may apply to participate in the 2002 competitive round in a probationary status.
"Project Owner" means any person and any affiliate of such person, corporation, a partnership, joint venture, association, or other participant that has ownership interest in the project. The Project Owner is also the Applicant.
"Project Participants" means the owner/general partner, developer, management company, consultants or syndicator proposed to be involved with a project for which an Application is submitted.
"PHA" means local public housing authority.
"Rent Standards" means the most recent AMI, FMR and UA issued by HUD.
"Reservation of Funds" means the securing of funding for a particular project proposal based on the understanding that the project will fully satisfy program and Plan requirements.
"Rural Counties" means those counties that are outside of the Metropolitan Statistical Areas (MSAs) as defined by the Census Bureau and shown in Exhibit A.
"Scoring Criteria" means the criteria detailed in Appendix II by which points are assigned for the purpose of Competitive Scoring.
"Special Needs Households" means the Homeless, Elderly, Older Persons, persons with disabilities (mental, physical, developmental), abused spouses and their children, persons with alcohol or other drug addiction, persons living with HIV/AIDS, and migrant farm workers.
"State Credit" means the Housing Tax Credit established by the Georgia General Assembly, as set forth in O.C.G.A. 48-7-29.6.
"Threshold" means the criteria described in Appendix I, which is the first phase of review for Applications submitted under the Plan. Only those Applications that meet the Threshold criteria will be advanced to the Competitive Scoring process of the Application evaluations.
"UA" means the utility allowances as described in the Plan.
"URFA" means the Urban Residential Finance Authority.
"USDA" means the United States Department of Agriculture.

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Section 3. Legislative Requirements
Federal Credit. O.C.G.A. 50-26-8(a) 32 gives GHFA certain powers and authority. As the agency administering the programs of GHFA, DCA is authorized to:
"... allocate and issue low income housing credit under Section 42 of the Internal Revenue Code of 1986, as amended, and to take all other actions and impose all other conditions which are required by federal law or which in the opinion of the agency are necessary or convenient to ensure the complete, effective, efficient and lawful allocation of and utilization of the low income housing credit program. Such conditions may include barring Applicants from participation in the tax credit program due to abuses of the tax credit program and imposing more stringent conditions for receipt of the credit than are required by Section 42 of the Internal Revenue Code..."
A. Section 42 of the Code mandates that:
1. Each state adopt an annual plan for Federal Credit allocation; 2. The Plan applies to projects awarded Federal Credit from the state's annual allocation, and
projects financed by tax-exempt bonds and eligible for Federal Credit outside of the annual Federal Credit allocations; 3. Draft versions of the Plan are made available for public comment; 4. After consideration of those comments, amendments are made to the Plan; 5. The final Plan be approved by the GHFA Board and transmitted to the Governor for final review and approval.
B. Code Section 42(m)(1) requires that each state:
Set forth the project selection criteria appropriate to local conditions; Give preference in allocating Federal Credit to projects that:
1. serve the lowest income tenants, 2. obligate to serve qualified tenants for the longest time periods, and 3. are located in Qualified Census Tracts, the development of which contributes to a concerted
community revitalization plan; Establish procedures to monitor projects receiving Federal Credit for compliance with program
provisions, and to notify the IRS of significant noncompliance issues; and, Consider the following in allocating Federal Credit:
1. project location, 2. housing needs characteristics, 3. project characteristics, 4. Applicant characteristics, 5. tenant populations with special housing needs, 6. public housing waiting lists, 7. projects serving families with children, and 8. projects intended for eventual tenant ownership.
State Credit. DCA also administers Georgia's housing tax credit. The State Credit is applied in conjunction with the Federal Credit on a dollar-for-dollar matching basis. For each dollar of Federal Credit allocated, an equal amount of State Credit will be automatically allocated by DCA. This State Credit will be administered under the same rules and regulations prescribed for the Federal Credit supplemented by any rules, policies, or regulations established by the Georgia Department of Revenue. DCA will underwrite the combined Credit allocations to ensure that no development proposal is oversubsidized.

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HOME Program. The State's Annual Action Plan for FFY2002 Consolidated Funds identifies the proposed distribution method, geographic allocation, and guidelines for meeting federal requirements for all HOME funded programs of the State. The HOME Program regulations require that each PJ distribute its HOME resources in accordance with the priorities and objectives outlined in its most current approved Annual Action Plan for Consolidated Funds prepared in accordance with established HUD regulations (24 CFR Part 91). The Annual Action Plan incorporates the Plan as the established policy and procedures for the State's review and evaluation of Applications for the HOME Rental Housing Loan and CHDO Loan programs.
Section 4. Affordable Rental Housing Needs
The State's Annual Action Plan identifies the housing needs of low and moderate income Georgians as follow:
a. Households with incomes less than 60% of AMI;
b. Special Needs Households, including: the Homeless Elderly Housing Housing for Older Persons persons with disabilities (mental, physical, developmental) abused spouses and their children persons with alcohol or other drug addiction persons living with HIV/AIDS migrant farm workers
Applicants are referred to the State's 2002 Consolidated Plan for complete information regarding Georgia's housing needs.
Section 5. Affordable Rental Housing Objectives
The State's Annual Action Plan establishes priorities and objectives to improve affordable housing and community development opportunities across Georgia. This plan is guided by two major priorities of the State:
1) To increase the number of Georgia's low and moderate-income households that have obtained affordable rental housing that is free of overcrowded and structurally substandard conditions.
2) To increase the access of Georgia's Special Needs Households to a continuum of housing and supportive services which address their housing, economic health and social needs.
To achieve these mandates, DCA makes Federal and State resources available under this Plan to Applicants that support either of the following purposes:
Provide quality affordable rental housing, designed to last at least through the Compliance Period and the Period of Affordability, in those areas of Georgia having the greatest need.
Make available quality, affordable rental housing that incorporates supportive programs for Special Needs Households.

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Section 6. Affordable Rental Housing Priorities
DCA is committed to making quality affordable housing available for low-income Georgians in all parts of the State. Accordingly, DCA will direct its financing resources as described under the Plan to those Applications that best address Georgia's affordable housing needs.
The Plan is designed to direct financing resources to affordable housing developments that:
promote the revitalization of urban and downtown areas through renovation, re-building and/or new construction in infill areas.
provide affordable housing in Rural Counties. provide affordable rental housing for families with children. incorporate smart growth concepts that focus on the maintenance of quality of life, management of
the impact of growth, protection of the environment and a return to the more traditional, less automobile-dependent, development patterns. include neighborhood characteristics and services that encourage resource protection, land conservation, open space planning techniques and smart growth principles. incorporate energy efficient project design and site design through sustainable building techniques and protection of existing resources.
Section 7. Financing Resources Credits
Federal Credit. The annual Federal Credit dollar amount allocated to the State of Georgia equals $1.75 multiplied by the federal government's estimate of Georgia's population. The amount of Federal Credit available for the 2002 funding cycle will be comprised of the State's 2002 Federal Credit allocation, returned Federal Credit, and any national pool Federal Credit available to the State less any Federal Credit forward committed. The total estimated amount of Federal Credit available for 2002 is expected to be approximately $13.7 million.
The Credits are available annually for a 10-year period. With certain exceptions, owners may receive annual Credits of the discounted present value of 30% of the qualified basis for developments involving acquisition, and annual Credits of the discounted present value of 70% of the qualified basis for developments involving new construction or rehabilitation. Bond Financed Projects may also be eligible for 4% Federal Credits in addition to the State's annual Federal Credit ceiling.
State Credit. The annual State Credit dollar amount will equal that of the Federal Credit. The State Credit will be automatically allocated on a dollar-for-dollar basis with the Federal Credit (for both 9% and 4% Federal Credit) and will be available for the same time period discussed above. The Federal and State Credit may be bifurcated and sold to separate investors.
Set-asides. This estimated amount of Federal Credit available includes the following set asides:
Nonprofit Set-aside - 10% of the available Credits are set-aside for nonprofit-sponsored Applications pursuant to the Code. Qualified nonprofit organizations must materially participate in the project within the meaning of Section 469(h) of the Code and meet all requirements set forth in Code Section 42(h)(5).

Not Applicable to Bond Financed Projects

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Rural Set-aside*- 30% of the available Credits will be set-aside for Applications proposing affordable housing developments in Rural Counties. Applications funded under the Rural County set-aside will receive preference in the allocation of Loans.
Note: If a nonprofit development in a Rural County is selected for funding, that project's funding will be counted towards meeting both the nonprofit set-aside and the Rural County set-aside.
Maximum Project Credits Award.* No project will be awarded more than Seven Hundred Fifty Thousand and No/100 Dollars ($750,000) of Georgia's annual Federal Credit authority and an equal amount of State Credit authority.
Maximum Ownership Interests/Tax Credit Award.* Applicants will be limited to ownership interest in a maximum of three projects, of which the total Federal Credit from the 2002 competitive funding round cannot exceed $1,750,000. This limitation applies to ownership interests of all proposed Project Participants, except syndicators. Any Application proposing ownership interest by a Project Participant having proposed ownership interests in three other projects that score higher will be deemed ineligible for funding. Also, Applications proposing ownership interest by a Project Participant having proposed ownership interests in other projects scoring higher will be deemed ineligible if the additional Credit, combined with the other projects scoring higher, exceeds the $1,750,000 limitation.
The exceptions to the three-project/$1,750,000 limit include; 1) an Application in which an experienced For Profit or nonprofit developer partners with an inexperienced nonprofit that is applying under the Plan's Credit nonprofit set-aside or the HOME CHDO Loan Program set-aside; or 2) an Application in which an experienced for profit or nonprofit developer partners with an inexperienced For Profit developer. However, experienced for profit developers or nonprofit developers are limited to two projects for which they can partner with an inexperienced nonprofit or for profit developer. Inexperienced nonprofit developers and inexperienced for profit developers are limited to one project.
Eligibility. Any individual, corporation, partnership, trust or other legal entity which owns, or intends to construct or acquire one or more eligible residential buildings for occupancy by low and very low income households as set forth in the Plan, the Manual, and Code, may apply.
Eligible buildings contain one or more units designed for long-term, continuous residential rental use. Buildings used as transitional housing for the Homeless also may be eligible.
Carryover Allocations.* No project can receive more than one Carryover Allocation of 2002 Credits. If the owner determines that more Credits are necessary to make the project financially feasible, the owner may apply to DCA for additional Credits only under the Application process set forth in the Qualified Allocation Plan in the year the project is placed in service and the owner applies for the IRS Form(s) 8609.
To qualify for Credits, a building generally must be placed in service during the year in which it receives an allocation. An exception is provided in the case where the owner has expended an amount equal to at least ten percent (10%) of the reasonably expected basis in the building by the later of (1) the end of the calendar year in which the allocation is made, or (2) six months after receipt of the allocation.

* Not Applicable to Bond Financed Projects

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Commencement of Construction/Rehabilitation.* Owners of projects receiving Credits for new construction or rehabilitation in the 2002 round must commence construction or rehabilitation no later than June 30, 2003. Failure to commence construction as scheduled may cause an automatic recapture of the Credits. DCA will closely monitor construction start dates.

To certify the commencement of construction and/or rehabilitation, the Project Owner will be required to provide DCA with copies of the following on or before than June 15, 2003:

construction drawings, specifications project construction schedule copies of project building permits and the Project Owner's Notice to Proceed

The owner will be required to provide DCA a schedule of values no later than June 15, 2003. In reviewing the commencement and completion schedules, DCA, in its sole and absolute discretion, reserves the right to grant waivers upon written request.

Completion of Work Scope. Owners of projects receiving Credits in the 2002 round for the rehabilitation of an existing property must perform 100% of the rehabilitation work scope in accordance with the original physical needs assessment submitted with the Application no later than December 31, 2004. Owners of properties receiving Credits for new construction in the 2002 round, must perform 100% of the work scope as set forth in the DCA approved construction drawings and specifications no later than December 31, 2004. DCA will inspect projects requesting IRS Form(s) 8609 to ensure that all work has been completed prior to issuing Form(s) 8609. If a lesser percentage is completed, DCA reserves the right to recapture all Credits allocated. At its sole and absolute discretion, DCA may approve modifications to the proposed work scope upon written request.

Placement-In-Service. Owners of projects receiving Credits in the 2002 round must place all buildings in the project in service by December 31, 2004.

Failure to Pay Compliance Monitoring Fee. All compliance monitoring fees must be paid within 18 months of issuance of the carryover allocation document, but no later than the placed in service date. Failure to do so may adversely affect the Applicant's ability to compete in future funding rounds. In no case will the final Federal Credit allocation (IRS Form 8609) be issued before these fees are paid.

Final Allocation Deadline. Owners of projects receiving Credits in the 2002 round must apply for Final Allocation and request for issuance of IRS form(s) 8609 by January 15, 2005. IRS form(s) 8609 for a project will be issued only once for the entire project as proposed in the Application. Form(s) 8609 will not be issued as buildings are placed in service.

Section 8. Financing Resources Bond Financed Projects

To be eligible for an allocation of 4% Credit, Bond Financed Projects must satisfy the Threshold requirements set forth in Appendix I of the Plan (except for sections 9,12,13,15 & 18 and portions of section 10) and the requirements contained in of the Plan. The tax-exempt bond issuer is responsible for determining whether the project meets the Plan requirements. In cases where the owner requests such a determination, DCA will issue its opinion as to the project's 4% Credit eligibility. The project must comply with the Plan in effect at the time of bond allocation.

* Not Applicable to Bond Financed Projects

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Regardless of who makes the determination, no Form(s) IRS-8609 will be issued until DCA is satisfied that the project is eligible for the 4% Credit. In making Application to DCA for a letter of determination, an owner must complete the standard Application, as well as provide all supporting documentation necessary to meet all applicable requirements and pay the appropriate Application fee. The Application must be submitted at least 45 days before bond closing. DCA will provide its opinion within 45 days of the receipt of a complete Application.
After being placed in service, Bond Financed Projects must apply for Form(s) IRS-8609 by completing a final allocation Application. (See Section 15 for applicable fees.)
In cases where the local issuer made the determination of eligibility, the owner must still submit a complete Application to DCA as well as the appropriate Application fee at the time of final allocation Application.
DCA's Application review will include a physical inspection of the property and review of the plans and specifications to ensure the quality of construction, and a compliance review to ensure adherence to state and federal requirements relating to the Credit.
DCA will make the final determination of the Credit amount. DCA will not issue a favorable opinion or Form(s) IRS-8609 when an Applicant exhibits a continual pattern of noncompliance, or when the Applicant demonstrates an inability or an unwillingness to resolve noncompliance matters in a timely manner.
Section 9. Financing Resources HOME Loans*
Resources Available. HUD annually allocates HOME funds to states and larger local governments. The Federal Fiscal Year (FFY2002) HOME allocation is expected to be available to the State on July 1, 2002, following approval of the Annual Action Plan for FFY2002 Consolidated Funds (Annual Action Plan). In the event FFY 2002 HOME funding is not made available to the State, DCA will not be obligated to provide any HOME Loans to Applicants.
As of the date of publication of the Plan, approximately Thirteen Million ($13,000,000) is expected to be available for HOME Loans under the Plan. DCA reserves the right to adjust the amount of HOME funds available for HOME Loans pending final notification from HUD of its FFY2002 HOME allocation and DCA's determination of the funding needs of all of its HOME-funded programs as described in the Annual Action Plan for FFY 2002 Consolidated Funds.
CHDO Loan Program. Fifteen percent (15%) of the State's total FFY 2002 HOME allocation will be set aside for projects owned by nonprofits that have been pre-qualified by DCA as CHDOs. All or part of the CHDO set-aside will be met with funding under this Plan. HOME funds awarded to CHDOs under other DCA programs may also count towards this set-aside. CHDOs funded under this Plan must act as sole or joint owners of newly constructed or rehabilitated rental housing for occupancy by low and very low-income households as set forth in the Plan, the Manual, and the HOME regulations.
All HOME Loans made to CHDOs under this Plan are collectively considered the CHDO Loan Program. Organizations seeking funds under the CHDO Loan Program may apply for funding to cover predevelopment expenses through DCA's CHDO Pre-Development Loan Program. Information on the PreDevelopment Loan Program is available on DCA's website or by calling DCA at (404) 679-0680.

* Not Applicable to Bond Financed Projects

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In the event HOME Loan funds remain unallocated after the Competitive Scoring process described in the Plan is complete, DCA reserves the right to apply the remaining HOME Loan funds to other DCA programs at its sole and absolute discretion. Further, DCA reserves the right to adjust the amount of HOME funds allocated to the HOME Rental Housing Loan and CHDO Loan Programs in its sole and absolute discretion.
HOME-Funded Project Location. Applicants will be awarded HOME funds only if the proposed project is located outside of the political boundaries of any local PJ. Two exceptions to the non-PJ location requirement are:
Those organizations applying to the CHDO Loan Program, and Those Applicants whose project will serve a Special Needs Households population and receives
points as a Special Needs Households Project (does not include Elderly Housing and Housing for Older Persons projects).
Maximum HOME Loan. The maximum HOME Loan will be $2 million per project, except that projects located in Rural Counties will be eligible for loans up to $2.8 million if no other lender is involved or a second lender agrees to a second-lien position.
Maximum Ownership Interest/HOME Award. Applicants will be limited to ownership interest in a maximum of three projects, of which the total funding cannot exceed thirty percent (30%) of the total HOME Loan resources available. This limitation applies to ownership interests of all proposed Project Participants, except syndicators.
Any Application proposing ownership interest by a Project Participant having proposed ownership interests in three other projects that score higher will be deemed ineligible for HOME Loan funding. Applications proposing ownership interest by a Project Participant having proposed ownership interests in other projects scoring higher will be deemed ineligible if the additional HOME Loan funding, combined with the other projects scoring higher, exceeds 30% of the annual HOME Loan resources.
The exceptions to the three-project/30% limit include: 1) an Application in which a for profit or nonprofit developer partners with an inexperienced nonprofit developer that is applying under the Plan's Credit nonprofit set-aside or the HOME CHDO Loan Program set-aside; or 2) an Application in which an experienced for profit or nonprofit developer partners with an inexperienced for profit developer. However, an experienced for profit developers or nonprofit developers are limited to two projects for which they can partner with an inexperienced nonprofit or for profit developer. Inexperienced nonprofit developers and inexperienced for profit developers are limited to one project.
Eligibility. For profit or nonprofit owners of newly constructed or rehabilitated rental housing for occupancy by low and very low-income households as set forth in the Plan, the Manual, and the HOME regulations may apply. Eligible activities are the construction to permanent financing for the costs of constructing or rehabilitating rental housing as defined in the Plan. Rental dwelling units financed through the HOME Loan program must be affordable by low-to-moderate-income households as defined in the Plan, the Manual, and the HOME regulations.

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HOME Loan Terms. The following provisions are applicable to projects awarded HOME Loans:
Applicants requesting permanent HOME Loan financing must also use HOME Loans for construction financing.
Construction loans will be made in an amount sufficient to cover hard construction costs only, but not to exceed the lesser of 90% of unrestricted appraised market value or $2 million in non-Rural Counties or $2.8 million in Rural Counties.
The minimum loan amount is $100,000.
No interest will be charged during construction loan period.
Construction loan terms will be set depending upon the projected construction and lease-up schedule.
Construction loans will convert to permanent loans in the amount of construction financing being retired.
The interest rate on the permanent loan will be no less than 1%, but DCA reserves the right to adjust this rate at its sole and absolute discretion.
Repayment schedules will vary depending upon projected economics of the development.
In general, permanent HOME Loans will be fully amortizing, with a maturity and amortization period ranging from 15 to 30 years.
DCA reserves the right, at its sole and absolute discretion, to adjust the term according to its own underwriting projections and all applicable policies and procedures.
Non amortizing HOME Loans are available for projects in Rural counties only, except as provided in below.
Non amortizing HOME Loans are eligible for Special Needs Households throughout the state. In such cases the term will be set by DCA with monthly payment and interest payments determined by DCA's underwriting projections and a balloon payment due at maturity.
Written agreements shall be entered into between GHFA and the borrower.
HOME Loan proceeds will be disbursed on a draw basis during the construction period. The HOME loan documents will describe the policies and procedures for obtaining a draw.
HOME Loans will "convert" to permanent loans upon the satisfaction of certain conditions outlined in the loan documents.
Loans will be scheduled to "convert" to permanent loans within twenty-four months.

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Section 10. Policies*
Policies governing the administration of the Credits and HOME Loans are found throughout the Plan, the Manual, the Compliance Manual, and other documents published by IRS, HUD, and DCA. Included in this section of the Plan are policies to which DCA wishes to draw specific attention. In no way, however, should exclusion of a policy from this section be construed to limit its applicability to funding resources allocated under the Plan. DCA reserves the right to formulate new policies to address operational issues that may arise during the course of the funding cycle.
General Requirements. Generally, a project must:
be supported by market demand as determined by DCA; meet DCA feasibility and viability standards; meet DCA site and construction quality standards; demonstrate readiness to proceed to loan closing and commencement of construction (with funds
available to cover project costs during construction) and lease-up; evidence of proper zoning and infrastructure; identify sources of funds to pay for any amenities or services proposed, and; consist of an ownership, development, and management team without a history of significant
noncompliance problems.
Underwriting Policies (Program Applicability is Indicated as "Credits" "HOME" or "Both")
Annual Operating Expenses. Annual budgeted operating expenses, excluding reserve contributions, must be no less than $3,000 per unit for urban projects, $2,600 for Rural County projects, and $2,000 for Rural County projects that include USDA loans as a funding source. (The lower amount for an USDA project is allowable due to USDA's other more restrictive underwriting policies.) However, DCA reserves the right to determine the reasonableness of budgeted operating expenses. DCA will consider waivers for projects that can clearly demonstrate that annual operating costs can be reasonably maintained at a lesser amount. Approval of such waivers shall be at DCA's sole and absolute discretion. Requests for waivers and fees shall be forwarded to DCA on or before March 1, 2002, to the attention of the Director of the Office of Affordable Housing. (Both)
Assumptions for Building Basis. For purposes of underwriting acquisition Credits, the building basis must be limited to the appraised value of the building(s). (Credit)
Assumptions for Land Purchase. For purposes of underwriting HOME Loans, the cost assumed for acquisition of land and existing buildings will be limited to the lesser of the sales price or the appraised "as-is" value. (HOME)
Builder Cost Limitations. Builder's overhead, general requirements, and builder's profit are limited to percentages of the total construction contract (net of builder's overhead, general requirements, and builder's profit) as follows: Builder's overhead two percent (2%); General Requirements (including cost for Payment and Performance Bonds) Six Percent (6%); and Builder's profit six percent (6%). (Both)

* Sections that apply to HOME only are not applicable to Bond Financed Projects

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Construction Contingency. The construction contingency amount must be at least 2% but no greater than 5% of the total construction cost for new construction projects. For rehabilitation projects, the construction contingency amount must be at least 5%, but no greater than 7% of the total construction cost. DCA reserves the right to adjust development budgets in this regard, for underwriting purposes, in its sole and absolute discretion. (Both)
To the extent feasible, DCA funds should be allocated to cover disbursements from the construction contingency. Regardless of how the contingency is funded, DCA must approve all change orders. Any unused balance in the construction contingency at the time of HOME Loan conversion from construction to permanent must be used to reduce the principal amount of the HOME Loan or the senior lender loan as appropriate, with the monthly principal and interest payments adjusted accordingly. (HOME)
Construction Hard Cost Financing. HOME Loan funds can be used to finance only construction hard costs. Soft costs, acquisition costs and other project costs must be financed by other financing sources. (Not applicable to CHDO Predevelopment Loans). (HOME)
Construction Loan Recourse. All construction loans will be full recourse against the borrower and/or the principals of the ownership entity until full and final completion of the project as determined by DCA. (HOME)
Consultant Portion of the Developer Fee. Consultant fees will be limited to no more than 20% of the Developer Fee.
Debt Coverage Ratio. The debt coverage ratio for all tangible debt after funding expenses and other required reserve funding must be between 1.10 and 1.30 for the first full year of operation. For purposes of determining the debt coverage ratio, the deferred Developer Fee will not be considered tangible debt. The debt coverage ratio cannot drop below 1.10 during the 15-year Compliance Period, HOME Loan term, or the Period of Affordability, whichever is longer. The Credits and/or HOME Loan amount may be reduced if DCA's underwriting indicates a debt coverage ratio greater than 1.30 in the first full year of operation. (Both)
Developer Fee Limitation. DCA restricts the maximum Developer Fee as follows:
15% of total development costs less the budgeted Developer Fee and the cost of land. For acquisition and rehabilitation projects, the Developer Fee on the rehabilitation portion will be limited to 15% of the total development cost less the budgeted Developer Fee, the acquisition cost of the buildings, and the cost of land.
When an identity of interest exists between the owner and the general contractor, the maximum Developer Fee is restricted to 15% of the total development cost less the cost of the land, the budgeted Developer Fee, and the builders profit. If the Application budgets a Developer Fee of less than 15%, the percentage proposed will be substituted for 15% in determining the maximum Developer Fee.
Consultant's fee, working capital, rent up reserves and operating reserves held for less than the term of the loan are considered part of the Developer Fee. (Both)

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Developer Overhead and Consultant Fees. The amount of the developer's overhead and consultant's fee (if applicable) that can be drawn during construction must not exceed the lesser of (1) 20% of the maximum allowable Developer Fee, or (2) 50% of the total Developer Fee requested. None of the developer's profit will be disbursed until all DCA conversion conditions have been met and the HOME Loan for construction has been converted to a permanent loan. These disbursement conditions will be reflected in the HOME Loan documents and in an agreement with any other funding source(s) that will be funding these line items. (HOME)
Management Unit Designation. For Applicants electing to house management personnel in a project unit, the management unit can be either designated as part of the unit count or part of common space. If the management unit is designated as part of the low-income unit count, it must be occupied by an income eligible household that may be the on-site manager, and rent can be charged or collected by the owner for this unit. If the management unit is designated as part of common space, it need not be occupied by an income-eligible household, but must be occupied by the on-site manager, and no rent can be charged or collected by the owner for this unit. (Both)
Non-Amortizing Loans--Excess Cash Flow. For all permanent non-amortizing HOME Loans, one-half of the after-debt-service cash flow (minus audit fees) will be deposited into an interestbearing account approved and jointly controlled by DCA, which will be used for principal reduction or capital improvements. These funds (with the exception of those approved by DCA for capital improvements) must remain in the account until the HOME Loan is repaid. (HOME)
Non-Amortizing Loans--Future Market Value. In the case of a non-amortizing HOME Loan, DCA will require a projection from the appraiser of the future market value of the property at the maturity of the HOME Loan. This value will be used by DCA to determine the likelihood of retirement of the outstanding balance by refinance or resale of the property. The future market value of the property must be greater than the projected outstanding DCA Loan balance at maturity in order for the HOME Loan to be considered financially feasible. In the case of a nonamortizing HOME Loan, the outstanding interest and a portion of the principal must be paid every year. (HOME)
Operating Deficit Reserve. All developments financed in whole or in part with HOME Loans must budget for and fund an operating deficit reserve in an amount of no less than six times the secured monthly debt service to lenders plus no less than six months projected operating expenses. The funding of the operating deficit reserve must be completed prior to the permanent HOME Loan conversion. If drawn upon, no further distribution to owners will be authorized until such time as the operating deficit reserve is restored to full funding.
The operating deficit reserve must be held by DCA or the senior lender and must remain in place for the term of the HOME Loan or the Period of Affordability, whichever is longer. With the exception of instances in which Fannie Mae is the sole senior lender, if DCA is a subordinate lender, but makes a HOME Loan in an amount greater than the senior lender, DCA must hold the reserves. All withdrawals from the operating deficit reserve must be requested in writing and approved in advance by DCA. Interest earned on the operating deficit reserve account shall be added to the account as an additional contribution and will not be credited against the required monthly cash contributions. (HOME)

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Replacement Plan. A Replacement Plan and schedule must be included in the Application. The calculations and assumptions used in the Replacement Plan should take into account the fact that over the life of the project, capital items such as building roofs, parking lots, HVAC systems, major appliances, etc., will need to be replaced. At a minimum, the Replacement Plan must reflect reserve contributions and, depending on the projects characteristics, may require contribution amounts greater than the minimum Replacement Reserves requirements. (HOME)
Replacement Reserve. A Replacement Reserve, based on a Replacement Plan, is required for all projects awarded funding under the Plan and must be included in the operating budget. Contributions must be made to the reserve account, starting at or before the conversion date of the construction loan to permanent loan and must be funded for the term of the loan in accordance with the Replacement Plan. The following minimum contributions must be used:
1. Rehabilitation - $25.00 per unit per month ($300 per unit per year) 2. New Construction - $16.70 per unit per month ($200 per unit per year)
Replacement Reserve funds may be used only for capital improvements and system replacements, and must not be used for general maintenance expenses. Replacement Reserves must escalate at a rate of 3% per year. If the Replacement Plan indicates that an amount greater than the minimum reserve outlined above is necessary, then this greater amount will be required and must be escalated at a rate of 3% per year. DCA will, at its discretion, adjust the Replacement Reserve to reflect reasonable and customary capital and replacement expenditures. (Both)
All withdrawals from the Replacement Reserve account must be approved by DCA in advance. The senior lender must maintain the Replacement Reserve account in a FDIC insured financial institution or maintained by DCA. Interest earned on the Replacement Reserve account shall be added to the account as an additional contribution and will not be credited against the required monthly cash contributions. (HOME)
Revenue, Vacancy, and Expense Trends. Revenue should be trended at 2% per year, operating expenses at 3% and vacancy and collection loss at 10%, with the exception of those proposals that include rental assistance. Proposals that include rental assistance should apply a 7% vacancy factor for the rental assistance units for the period in which the rental assistance will be committed to the project. (Both)
Rural County Projects. DCA recognizes that Rural County projects may involve greater financial risk than non-Rural County projects. While a sufficient economic base to support a proposed Rural County project may exist at the time of Application, the loss of a predominate industry or employer, or other extenuating circumstances out of the control of the Applicant could result in a major economic impact on the project. To mitigate this increased financial risk, DCA will consider loan modifications during the course of the HOME Loan for projects which have suffered a demonstrated major economic impact as a result of the loss of a predominate industry or employer or other extenuating circumstances. The loan modification may be structured to allow the Project Owners to maintain ownership and control of the property and to continue providing affordable housing to the extent it is needed in the community. (HOME)

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Soft Cost Contingency. "Soft cost" or "total project" contingency, over and above the allowed construction contingency, will not be permitted as a budgeted line item. (Both)
Stabilization. Projects will be considered stabilized when occupancy reaches 90% for three consecutive months, or actual revenue reaches 90% of budgeted revenues for three consecutive months. (Both)
Utility Allowance (UA). Applicants should use the UA provided by the agency administering the Section 8 Rental Assistance Program in the jurisdiction in which the project is located. For example, if a local housing authority administers Section 8 in the area, they would provide those UA, but if DCA administers Section 8 in the area, the DCA UA would be used. If a building receives USDA assistance, or any tenant in the building receives USDA assistance, the lowincome units must use the applicable USDA UA. If HUD reviews rents and UA on a building, the low-income units must use the applicable HUD UA. In all other cases, the owner is required to follow the applicable PHA UA or DCA UA. (Both)
Working Capital and Rent-Up Reserves. A working capital/rent-up reserve is required for projects receiving a DCA HOME Loan only if a lease-up cash flow analysis results in a cash flow deficit. For those developments, the required rent-up reserve would equal the amount of the projected lease-up deficit. A required rent-up reserve will only be used to cover operating cash flow deficits during the period prior to converting a construction loan to a permanent loan. Loan documents and intercreditor agreements must reflect this requirement and DCA's approval authority. (HOME)
Other Policies.
Construction Start Date. Projects receiving HOME Loans must not begin construction prior to the HOME Loan closing. Exceptions may be granted by DCA at its sole and absolute discretion, but must be requested prior to construction commencement. Failure to comply with this policy may result in cancellation of the HOME Loan Commitment or other penalties. (HOME)
Contract Bidding and Bid Bonds. Project Owners are not required to solicit bids for construction contracts to be financed with DCA HOME Loans, and bid bonds are not required when bids are solicited, unless otherwise required by law. However, prior to closing a HOME Loan, DCA must approve both the general contractor and the contract documents; DCA will not close a Home loan unless the approved contract with the general contractor has been fully executed. (HOME)
Conversion. Projects receiving HOME Loans must be scheduled to convert within twenty fourmonths of closing.
Distribution Across Unit/Bedroom Sizes
1. Rent. Projects with a multi-tiered rent structure must distribute the rents equally across unit sizes. These units need not be fixed but may float in the same way high HOME rent and low HOME rent units may float within a project.
2. Accessibility. Handicapped equipped units must be distributed across all bedroom sizes (Both)

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Final Draw. The final payment of funds shall be made at the time of substantial completion of construction, to be evidenced by submission of all items on the DCA form "Requirements for Final Draw", including but not limited to: final payment request in AIA form, copies of all certificates of occupancy for all buildings, final lien waivers, construction consultants' final inspection, and approval for release of funds. (HOME)
Identity of Interest.
1. Owner-Contractor--If there is an identity of interest between the Project Owner and the contractor, a third party front-end analysis of the construction costs will be commissioned by DCA during the DCA underwriting period. Additionally, industry standards for such ownerprovided construction services shall be used to determine reasonableness for the services. (HOME)
2. Other--If there is an identity of interest between the Project Owner and any other provider of service, material, or supplies, three (3) bids must be submitted to DCA. Such owner-supplied services, materials, or supplies must not exceed the amount ordinarily paid for the service, material, or supply. (HOME)
Intercreditor Agreements. When DCA is not the only construction lender on a project, an intercreditor agreement shall be executed with the other lenders to ensure DCA's required involvement in all significant aspects of the administration of the construction loans. At a minimum, the intercreditor agreement should contain at least the following essential elements:
1. An approved development cost budget indicating the source(s) of funding for each line item; 2. A process and timetable for reviewing and approving change orders to the construction
contract; 3. A process and timetable for reviewing and approving draw requests, including site inspection
and documentation standards; and 4. A process and timetable for amending the approved development cost budget. 5. Limitations on disbursements for Developer Fee (owner's profit and risk) and consultant fees. 6. Other matters, such as subordination of one lender's interest to another lender's interest.
(HOME)
Land Use Restrictions. When there is more than one financing source imposing land use restrictions on a project, e.g., a HOME Loan and Credits, there may be restrictions from one program that are more restrictive than similar restrictions in the other program(s). In such instances, the most restrictive requirements will apply to the project. (Both)
Over-Income Tenant Restriction. The Code provides that a tenant's income may increase during tenancy to exceed 140% of the allowable household income. DCA requires that the lease for tenants who exceed this limit for two (2) successive years may not be renewed for the third year. The penalty for failure to adhere to this DCA policy may be forfeiture of the right to participate in all DCA programs in one or more future years depending upon the severity and nature of the particular circumstances.

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When DCA HOME Loans are used, additional over-income restrictions shall apply. Upon recertification of a previously eligible tenant, if it is determined that the tenant's income exceeds 60% of AMI, the tenant's rent must be increased to the lesser of: 30% of the tenant's adjusted annual income, HUD's fair market rent limitations, or the maximum amount allowable by the Land Use Restriction Agreement governing Credits, not to exceed limitations set by state or local laws (if any). Any exceptions to this requirement must be approved in writing by DCA.
Owner-Contractor Agreements. If the owner is not also the general contractor, all developments financed in whole or in part with a HOME Loan for construction must use an AIA Standard Form Agreement between owner and contractor, with Standard Form Terms and Conditions. The contract can be either stipulated sum or cost plus a fee with a maximum. (HOME)
Partnership Agreements. The partnership agreement and any amendments must be fully executed prior to the HOME Loan closing. The Partnership Agreement and any amendments must reflect the terms of the HOME Loan transaction on all material points. (HOME)
Payment and Performance Bonds. A 100% payment and performance bond will be required for all developments funded with DCA HOME Loans. The cost of these bonds shall be included in the sixpercent general requirements limit of the Builders Cost Limitations. A waiver may be granted only when there is an identity of interest between the owner/developer and the contractor, regardless of the contract amount, since such a relationship is usually not bondable.
A waiver will not be considered unless:
1. The owner agrees to provide a construction completion guaranty, secured by a letter of credit with a value of at least 50% of the total construction cost, including profit and overhead; or
2. The owner agrees to secure a construction loan with private financing. DCA will disburse funds during the construction period, in an amount not to exceed $2,500 per construction draw.
Public Housing Units. HOME and Credits cannot be used for the construction or rehabilitation of public housing units except in mixed income projects that include public housing units and a portion of the total development cost is from another clearly identified funding source.
Retainage. The construction contract must state that at least 10% of the cost of the completed work will be withheld as retainage until DCA has determined that the construction is substantially complete. (HOME)
Stored Materials. DCA will not pay draw requests that include the cost of stored materials. Stored materials are considered to be materials that will not be incorporated into the construction within thirty days. (HOME)
Subordination. The decision whether to subordinate DCA's regulatory agreement and/or lien position to a private lender's security deed will be made only after DCA considers the individual circumstances of each HOME Loan. Factors that will be considered include, but are not limited to, the senior loan amount, DCA's HOME Loan amount, debt coverage ratio, private lender's interest rates, loan maturity, type of loan, etc. In no instance will DCA subordinate to a public entity's loan. (HOME)

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Relocation and Displacement of Tenants. For all HOME Loan and Credits projects, tenant household data forms must be submitted with the Application for every occupied unit in each building to be rehabilitated. The Applicant is responsible for the accuracy of the information on the data forms. Applications for HOME Loans that require relocation of existing tenants due to rehabilitation work will be accepted only with a relocation plan (including a sufficient budget) that in the opinion of DCA, meets the requirements of the Uniform Relocation Act and any other applicable laws.
Funding sources other than the HOME Loan must be used to finance the relocation costs. For Credits projects, DCA will not allow permanent displacement of tenants, if avoidable. If the Applicant anticipates displacing tenants, the Applicant must include in the Application a detailed displacement plan, which sets forth the specifics of the displacement, including a projected budget, and an explanation of efforts planned by the Applicant to mitigate the impact of the displacement. Any displacement of tenants will be subject to DCA's prior written approval. (Both)
Section 8 Rental Assistance. No owner may deny a unit to Applicants possessing a Section 8 Rental Assistance certificate or voucher unless that Applicant fails to meet the minimum requirements for all lease holders. Federal statutes prohibit discrimination against Section 8 certificate and voucher holders. DCA will closely monitor whether the tenant application process is structured to avoid such discrimination or whether any actions are taken to discourage Section 8 Rental Assistance certificate or voucher holders from applying. Likewise, all lease provisions must be compatible and not in conflict with Section 8 leases. (Both)
Tri-Party Agreements. A Tri-Party Agreement will be required for all DCA HOME Loan transactions involving another permanent lender that is not financing construction costs. The TriParty Agreement must clearly state, at a minimum, that the permanent lender has reviewed and approved the DCA HOME Loan documents, plans and specifications, development budget, tenant lease, environmental assessment, construction contract, title exceptions legal description, management agreement, partnership agreement, borrower's certificate of limited partnership, survey, appraisal, form of subordination agreement, and items necessary to satisfy the permanent commitment regarding completion of construction of the improvements of the collateral property. (HOME)
Section 11. Eligibility
A. Applicants. Proposed Project Participants may be ineligible to receive funding under the Plan if the proposed Project Participant falls within any one of the following categories:
1. Continuing Non-Compliance, Disqualification in DCA Programs Principals of projects awarded Credits or HOME Loans in previous award cycles must remain materially in compliance with all applicable requirements of the Credits and the HOME Loan and CHDO Loan programs to remain eligible to compete for future Credits or HOME Loans. Material non-compliance status exists when, in the judgment of DCA, an Applicant exhibits a continual pattern of noncompliance or when an Applicant demonstrates an inability or an unwillingness to resolve noncompliance matters in a timely manner. Additionally, Project Participants must start and complete outstanding DCA Loan or Credits projects in a timely manner and meet all material obligations under applicable loan documents and/or carryover allocation to remain eligible to compete for future Credits or HOME Loans.

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Project Participants must remain qualified to participate in all DCA-administered programs to remain eligible to compete for future Credits or HOME Loans. DCA will have the sole and absolute discretion to determine those parties ineligible to receive funding under the Plan due to non-compliance, default or disqualification status.
2. Federally Debarred & Suspended Entities Any person (individual, corporation, partnership, association), principal (officer, director, owner, partner, key employee, or person who has critical influence), or agent for a Project Participant that is under debarment, proposed debarment, or suspension by a federal agency is ineligible to participate in the 2002 Competitive Scoring process. Such Applications will be rejected. Each Applicant must also include in the Application a statement concerning all criminal convictions, indictments, and pending criminal investigations of all general partners, and provide dates and details of each circumstance, unless otherwise prohibited by court order, statute or regulation.
3. Failure to Use Previously Awarded Credits An Applicant, including principals or officers of the ownership entity, awarded or allocated Credits in a previous year, which went unused for reasons other than for acts of God, the exercise of the power of eminent domain by a governmental body, or for reasons approved by DCA, will be ineligible to apply for Credits for a period of one year.
An owner will be barred from reapplying for Credits for the specific project for which Credits went unused and buildings were not placed in service within the required two years. In its sole and absolute discretion, DCA may allow an Applicant who returned Credits allocated, for reasons other than those listed above, in a previous year to apply for Credits on the condition that if the Application is approved, the owner will pay a reservation fee equal to 17% of the annual allocation amount.
DCA reserves the right to perform a full criminal, employment, and credit investigation of all Project Participants, excluding the syndicator.
B. Projects.
1. Scattered Sites. DCA will not accept Applications for scattered-site projects for single family buildings, multifamily buildings, or combinations thereof.
2. Detached Single-Family Rental Housing. Detached single family housing proposals will be eligible for funding if they satisfy the following requirements:
a. The Application must include in its development budget the costs associated with the continuous upkeep of each rental house, including ground maintenance, at the project owners' expense. These costs must be supported by a detailed maintenance plan.
b. The Application must have a detailed Replacement Reserve analysis and plan. c. The house designs must reflect architectural diversity through the use of different elevations
and styles. d. Landscaping must be appropriate for detached, single family housing.

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Section 12. Application Submission Deadline*. DCA will conduct one Application cycle for funding resources during 2002. The Application must be delivered by the deadline to:
Georgia Department of Community Affairs Housing Finance Division 60 Executive Park South, N.E. Atlanta, Georgia 30329-2231
The complete Application is due at DCA by 5:00 p.m. on April 18, 2002. After this precise time, irrespective of any extenuating circumstances, no Applications or portions thereof will be accepted.
A complete Application package must include one original binder and two copies, a scoring binder and an electronic original copy of the Application on a floppy disk. In the event any copy or electronic disk does not conform to the original print out of the Application, the original print out of the Application shall be deemed the correct Application.
Applicants must submit complete Applications according to the directions and format prescribed in the 2002 Manual. No additional documentation will be accepted after the Application Submission deadline described in this Section unless specifically requested by DCA. The use of a third party or common carrier to deliver the Application does not relieve the Applicant of its responsibility for meeting the Application Submission deadline. Consequently, there will be no exceptions to this deadline. In addition, no assemblage, packaging, or other form of Application preparation will be permitted at any time on DCA premises.
Applicants will be required to self-score their Applications and fully explain their rationale in support of the scoring decision for each criterion. Applicants' self-scores must be done in strict accordance with the provisions of the Plan and the Application Manual. Any Application that does not include a completed self-scoring binder, prepared in accordance with the provisions of the Plan and the Application Manual, will be deemed incomplete.
Maximum Number of Applications. DCA will assign sequential project numbers to all Applications in the order they are received, and prior to any form of Application review. Applicants will be permitted to submit a maximum of six Applications for funding resources under the Plan. This limitation applies to ownership interests of all proposed Project Participants except for syndicators. Ownership interests of all Project Participants in the proposed Applications will be reviewed. If it is determined that a Project Participant has proposed ownership interest in more than six Applications DCA will only evaluate the first six project Applications submitted to DCA. Any other Applications, which include the same Project Participant, will be considered ineligible and will not be evaluated.
Market Studies. Applicants seeking 9% Credits and HOME Loans must pay a fee that includes the cost of a market study to be commissioned by DCA. Applicants must pay this fee at the time of Application Submission. The resulting market study is the sole property of DCA. However, after the Competitive Scoring process is complete and reservations have been announced, each Applicant will receive one copy of their respective project's market study.
In accordance with federal law enacted during December 2000, Applicants applying for 4% Credits involving Bond Financed Projects must submit a market study prepared by a disinterested third-party analyst approved by DCA.

* Not Applicable to Bond Financed Projects

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Section 13. Project Reconfiguration/Application Modification*
Generally, Applicants will not be allowed to make any changes to the Application after Application Submission to DCA. If Applicants believe extenuating circumstances warrant a change, and the change would not significantly alter the project's original concept, a written request for such a change will be considered by DCA. However, changes cannot be made without DCA's written approval, and such approval will be at DCA's sole and absolute discretion. This provision applies to any changes proposed after Application Submission, and if an award is made, throughout the project's Compliance Period or Period of Affordability, whichever is longer. Applicants' written requests must clearly establish the importance of the change, and why it is necessary to ensure the project's long-term financial feasibility and economic viability.
DCA will determine, in its sole and absolute discretion, whether or not a requested change will be authorized. The prohibition against changing any part of the Application without the prior written approval of DCA includes direct or indirect transfers of the general partner's or developer's interest. Failure to abide by this provision will adversely affect the Applicant's eligibility to receive future DCA funding.
DCA may allow Applicants to correct deficiencies in the Application if DCA does not approve a sufficient number of Applications to use all the Credits authority available in an Application cycle and it receives Applications that are acceptable except for minor deficiencies that the Applicant can address within a reasonable period of time (generally not to exceed 10 business days).
Section 14. Fees
The fees indicated in this Section will be charged based on the legal status of the Applicants. All fees must be paid by certified funds or money order made payable to the Georgia Department of Community Affairs.
Compliance Monitoring Fees for Multiple Programs. When DCA is required to monitor projects for compliance with tenant income and/or rent limitations of more than one program e.g., Credits and FDIC, the applicable monitoring fees for each program will be charged. Credits compliance fees must be paid no later than one year after the first building is placed in service. Failure to do so may adversely affect the Applicant's ability to compete in future funding rounds.
Late Fees. Any late fees imposed by DCA will not be considered as a project cost for underwriting purposes.

* Not Applicable to Bond Financed Projects

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FEE SCHEDULE For Profit and For Profit/Nonprofit Joint Ventures

2002 Credit (only) Application Fee (includes market study )
2002 HOME (only) Application Fee (includes market study )
2002 HOME Loan/ Credit Application Fee (includes market Study fee)
Credit Allocation Fee

Fees
$6,000 For Profits $6,000 For Profit/Nonprofit Joint Venture $5,000 Nonprofit $5,000 For Profits $5,000 For Profit/Nonprofit Joint Venture $4,500 Nonprofit $6,500 For Profits $6,500 For Profit/Nonprofit Joint Venture $5,500 Nonprofit 7% of annual allocation

Credit Compliance Monitoring Fee (Fees apply on a per-low income unit basis)
Bond/4% Credit Eligibility Opinion Letter Bond/4% Credit IRS Form 8609 Fee Appraisal Fee (HOME Loans only) Probationary Participation Application Fee Unit Cost Limitation or Per Unit Annual Operating Expense Waiver or Experience Waiver Request Fee

$150 USDA projects $150 URFA bond projects $600 Bond/4% Credit projects $600 Others $2,000
2% of annual Federal Credit amount
Based on DCA cost $2,500
$1,000 per waiver

Section 15. Evaluation of Applications*

Due Date
Application Submission
Application Submission
Application Submission
At time carryover allocation sent in Within 18 months of issuance of carryover allocation, but no later than the placed in service date Application Submission Prior to issuance of IRS Form 8609 Denoted in Commitment Letter No later than 3/01/02 No later than 3/01/02

Completeness Review. The 2002 DCA funding resources will be made available to projects through a Competitive Scoring process. Applications received by DCA will be reviewed for completeness, as set forth in the Manual, including:
Organization of the Application; Inclusion of all required Application forms; and Submission of all required supporting documents.

Threshold Review. Complete Applications will be reviewed to determine if the project meets the Threshold requirements set forth in Appendix I. Those Applicants whose Applications fail to meet Threshold requirements will be notified in writing (by facsimile) of the specific requirement(s) that the Application did not meet. If an Applicant believes the Threshold requirement(s) was met, the Applicant must respond in writing within 10 calendar days from the date of the DCA notification letter. The response must provide a clear and specific explanation of why the Applicant believes DCA's initial determination was incorrect. DCA will review the response and if DCA decides that the initial determination was incorrect, the Application will be considered to have met Threshold requirement.

* Not Applicable to Bond Financed Projects

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Cure Period. If an Application contains Threshold deficiencies which, in the determination of DCA, are either administrative in nature or are caused by a missing or incomplete document or the need for clarification of information submitted in the Application, DCA may request correction or clarification of such deficiencies. Such request is referred to as the "cure request". DCA will provide this request in the form of a facsimile to the Applicant.
Applicants receiving a cure request may supply missing or incomplete information and may clarify any inconsistencies related to the specific items identified by DCA in the cure request. The cure period will begin on the date of the cure request and shall end at 4:00 p.m. Eastern Time, on the date specified in the cure request, which date shall be five (5) business days from the date that the cure request is faxed to the Applicant. The cure request shall specify the means and methods by which missing items may be supplied, incomplete items completed and inconsistencies clarified. Applicants may not submit additional items for the purpose of increasing their score.
Application Selection. Complete Applications that meet the Threshold requirements described in Appendix I will be allowed into the Competitive Scoring process as set forth in Appendix II. Scored Applications will be ranked in descending order by total point score. Generally, the highest scoring Applications with favorable market studies will be allocated resources without regard to resource type requested, geographical location, or other factor deemed relevant to the state's affordable housing mission, except as noted below and elsewhere in the plan:
DCA reserves the right to allocate resources to lower ranked proposals to achieve a better mix of resource usage or a better geographical distribution of resources
If available Credits will be depleted by funding Credit-only Applications, then, DCA may elect to fund lower scoring Applications that are requesting a combination of Credits and a HOME Loan.
If sufficient HOME funds are not available to fund the next ranked Credit/HOME Application or HOME-only Application, DCA may elect to fund a lower scoring Credit and HOME or HOME only project for which the remaining funds are sufficient;
If a geographic area of the state will receive an inequitable share of the available resources as determined by the Competitive Scoring process, DCA may choose to fund other proposals even though they have a lower relative ranking.
Applications meeting the Plan's minimum scoring requirements, which do not score high enough to receive an award, will be placed on a waiting list. If additional funding becomes available the next highest-scoring Application on the list will be eligible, subject to DCA's discretion.
DCA's Administrative Discretion. DCA reserves the right to allocate resources to lower ranked proposals to achieve a better mix of resource usage or a better geographical distribution of resources as described above, or for any other reason judged by DCA to be meritorious. Such actions will be made at DCA's sole and absolute discretion. Any decision DCA makes, and any action or inaction by DCA in administering, managing, and operating the system, shall be final and conclusive and shall not be subject to any review, whether judicial, administrative or otherwise, and shall not be covered by, subject to, or required to comply with or satisfy any provisions of Chapter 13 of Title 50 of the Official Code of Georgia Annotated, the "Georgia Administrative Procedure Act."
Special Allocation Considerations. In its sole and absolute discretion, and where warranted by extenuating circumstances, DCA reserves the right to allocate Credits, up to the first day of the allocation round, based on the prior year's allocation plan with all applicable terms and conditions to projects that received an allocation in the prior year.

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Notification. DCA will provide the results of the Competitive Scoring process to all Applicants as soon as possible after the process has been completed. A separate letter will notify those Applicants whose projects are selected for awards. Also, if a DCA HOME Loan is proposed, DCA will issue to the Applicant/borrower a preliminary loan commitment letter. This commitment letter, while not fully guarantying that the HOME Loan will be forthcoming, will set forth all conditions that, if met, will result in a HOME Loan.
Section 16. Georgia Open Records Act
All Applications are subject to disclosure under the Georgia Open Records Act (GORA). Applicants must agree in the Application to hold harmless DCA and GHFA for any and all losses associated with disclosures in accordance with GORA.
Requests to examine records or request copies of DCA documentation should be made in writing to ensure accuracy and proper processing. DCA will provide a timely acknowledgement of the request, and will estimate the costs, if any, for the services requested. A party may also elect to review the documents at the DCA offices. Under these circumstances, the party should forward to DCA a request to review specific documents and coordinate with DCA a time that is mutually agreeable. GORA allows the agency to charge a fee to cover the cost of a document custodian to access and review the requested records, to monitor the review process, and for the cost of copying requested documents.
Section 17. Monitoring and Compliance
The Applicant's compliance responsibilities begin with the award of the HOME Loan and/or Credits and will continue through the end of the Compliance Period or the Period of Affordability.
DCA is required to monitor projects for compliance with the requirements of the Code, the HOME regulations, the representations set forth in the Application, the requirements stated in the Plan, and the requirements set forth in the DCA's various program manuals and training materials.
DCA will hold the Applicant/owner responsible for all representations made in the approved Application. The Applicant/owner also is responsible for ensuring that the property abides by the rules, regulations, and restrictions specified in the Plan, the Land Use Restriction Agreement or Covenant, the Georgia HOME Rental Housing Loan and CHDO Loan programs and Credit Compliance Manuals, the HOME regulations, and the Code. Although DCA is responsible for monitoring the owners' compliance with these rules, regulations, and restrictions, this responsibility does not make DCA liable for owners' noncompliance.
Properties with Multiple Sources of DCA Funding. Projects receiving more than one source of DCA funding (e.g., HOME Loans and Credits) are required to comply with the monitoring provisions of each of the individual funding sources and with the Land Use Restriction Agreements/Covenants. In the event of inconsistencies between the funding program requirements, agreements, or covenants, the most restrictive requirements will always govern.

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Compliance Standards
a. Assessment of Noncompliance. Principals of projects awarded Credits in previous award cycles must remain materially in compliance with Credits and the HOME Program requirements (if applicable) to remain eligible to compete for future Credits or HOME Loans. Material noncompliance status exists when a party exhibits a continual pattern of noncompliance, or when a party demonstrates an inability or an unwillingness to resolve noncompliance matters in a timely manner. DCA will have sole and absolute discretion in determining those parties ineligible to participate in the DCA financing resources due to noncompliance status.
b. Compliance Cure Period Standards. DCA will notify the owner in writing of any possible findings of noncompliance. Each item of noncompliance will have an assigned cure period. The cure periods will typically range from thirty to ninety days.
Section 18. Performance Scoring*
Overview of Performance Scoring. Effective January 2, 2002, the performance scoring criteria will address compliance and administrative deficiencies not related to specific property audits. No points can be earned for performance scoring issues, but points can be lost. Points in this area will be assessed in absolute terms with no compliance factors or other formula considerations. In the 2002 Application cycle, performance points accumulated by a Project Participant will be accumulated as an educational and advisory exercise only. The final score in the competitive funding cycle will not be affected by any performance point assessments. In future rounds, DCA will determine the final project score by deducting any performance points acquired by a Project Participant during the prior year (Application Submission Deadline to Application due date) from the preliminary project score. A notice of noncompliance for failure to meet certain compliance or administrative requirements will be sent by DCA to the property owner of record. Notices will include an explanation of the nature of the deficiency and will specify a date by which the deficiency must be corrected. If the stated deficiency is corrected by the said date no performance points will be deducted. If the stated deficiency is not corrected by said date, one quarter (1/4) of a point will be assessed. A final notice of non-performance will be sent to the owner of record for each assessed uncured deficiency.
Compliance or administrative deficiencies that will be considered for performance scoring purposes may result from failure to comply with state or federal rules and regulations, or with the requirements specified in a binding DCA loan or Credit documents, including but not limited to, project Applications, Land Use Restriction Agreements/Covenants, and Loan agreements. Examples of performance compliance scoring issues include, but are not limited to:
Any compliance issue that would normally be addressed in a scheduled compliance audit that comes to DCA's attention and is addressed outside the scope of a regularly scheduled audit.
Unused Credits resulting from failure to meet the 10% carry over requirement or not placing a project in service with in 24 months of the carryover.
Failure to notify DCA of disposition/sale of property. Failure to meet project reporting requirements (e.g., annual owner's certification and report, project
completion reports submitted within 120 days of the final draw, etc.). Failure to maintain required reserve levels, or failure to provide, on a timely basis, required proof of
insurance on HOME Loan properties. Failure to provide necessary underwriting documentation in a timely manner. Failure to close HOME Loan within 60 day of DCA underwriting approval. Failure to convert HOME Loan from constructions to permanent status on or before conversion date.

* Not Applicable to Bond Financed Projects

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DCA recognizes that extenuating circumstances may occur that could result in unavoidable timing difficulties. We will carefully consider the circumstances on a case by case basis when determining whether point deductions are appropriate. However, the final determination will be at DCA's sole and absolute discretion.
Section 19. Modification of the Plan
Without limiting the generality of DCA's power and authority to administer, operate, and manage the allocation of Credits and HOME Loans according to federal law, federal procedures, and the Plan, DCA shall make such determinations and decisions, publish administrative rules, require the use of such forms, establish such procedures, and otherwise administer, operate, and manage allocations of Credits and HOME Loans and funds in such respects as may be, in DCA's determination, necessary, desirable, or incident to its responsibilities as the administrator, operator, and manager of allocations of Credits and HOME Loans.
The Governor recognizes and acknowledges that DCA will encounter situations which have not been foreseen or provided for in the Plan and expressly delegates to DCA the power to amend the Plan, after the public has had the opportunity to comment through the public hearing process, and to administer, operate, and manage allocations of Credits and HOME Loans in all situations and circumstances, both foreseen and unforeseen, including, without limiting the generality of the foregoing, the power and authority to control and establish procedures for controlling any misuse or abuses of the Credits or HOME Loan allocation system and the power and authority to resolve conflicts, inconsistencies, or ambiguities, if any, in the Plan or which may arise in administering, operating, or managing Credits or HOME Loan allocations pursuant to the Plan. The Governor further expressly delegates to DCA the authority to amend the Plan to ensure compliance with federal law and regulations as such federal law may be amended and as federal regulations are promulgated governing Credits and the HOME Loan Program.

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STATE OF GEORGIA 2002 QUALIFIED ALLOCATION PLAN
APPENDIX I THRESHOLD CRITERIA
To be considered for DCA financing resources, Applications must meet the Threshold requirements described below.
1. Project Feasibility, Viability Analysis, and Conformance with Plan
In analyzing project economic forecasts, Applicants must use DCA's project economic pro forma assumptions and abide by the Plan and the Manual. Rent Standards derived from the most recent AMI, FMR, and UA will be used to determine project rent and rent restrictions.
For each project that meets all other Threshold criteria, DCA will determine whether that project is financially feasible and may require documentation not specifically included in the minimum documentation requirements established in the Plan. Additionally, project assumptions may be adjusted by DCA to reflect characteristics more representative of the project or its economic environment. DCA will determine whether an Application is financially feasible in its sole and absolute discretion. DCA's determinations will be final.
Balloon Loans. Balloon loans will be considered only for projects located in Rural Counties (See Exhibit A in the Core Plan) and for Special Needs Households projects located in any county of the State if the project qualifies for points under the Special Needs Households, Elderly Households or Older Persons Housing criteria discussed in Appendix II of the Plan.
HOME Loans. When DCA underwrites a HOME Loan, it will consider the policies set forth in and the provision of the Plan to determine the debt capacity, the loan amount, and the terms to satisfy the debt. Project cash flow must be sufficient to ensure financial viability over the term of the HOME Loan and provide for adequate reserves that will be maintained for the life of the HOME Loan. The use of other public financing sources and shorter HOME Loan terms will be favorably considered. For Applications proposing HOME Loans, the proposed return on investment for the owner/developer must be fair and reasonable with no windfall profits anticipated.
Construction and Construction Costs. DCA will review the type of construction and associated hard construction costs. Applications for the rehabilitation of a substandard property will not be funded if, in the opinion of DCA, the rehabilitation will not result in improved, safe and decent long-term housing, or if new construction would be more appropriate. A similar review of project financial feasibility and economic viability will be conducted for all Applications proposing new construction to ensure that each project's construction hard costs will produce high quality housing for the targeted tenant market.

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The minimum review standards for both rehabilitation and new construction projects are as follows:
The expected life of the completed property must exceed by five years the greater of the Compliance Period or the Period of Affordability whichever is longer; and
All construction must meet the requirements set forth in the Manual. Rehabilitation projects will be considered for funding only if the average per unit rehabilitation hard costs equal or exceed $12,000. In addition, the total hard cost of any rehabilitation project must not exceed 90% of the as-completed unrestricted appraised value of the property. The appraisal will be commissioned by DCA and will be based on market rents. Note that the Applicant will pay the cost of the appraisal.
2. Gross Rent Restrictions
HOME Rents.* For HOME Loans, rents must be affordable at initial lease-up and must remain affordable over the term of the HOME Loan. DCA will not underwrite rents below 30% of 50% of AMI unless a DCA-commissioned market study indicates that there is a substantial need and/or that the market will require rents to be lower for the property to achieve initial and long-term lease-up.
Applications proposing rents for General Multifamily projects below 30% of 50% of AMI must set tenant income restrictions at no more than 5 AMI percentage points above the AMI percentage used to set rents (i.e., rents underwritten at 30% of 40% of AMI must be income restricted at no greater than 30% of 45% of AMI).
Applicants proposing rents for EH, Housing for Older Persons or Special Needs projects below 30% of 50% of AMI must set tenant income restrictions at no more than 10 AMI percentage points above the AMI percentage used to set rents (i.e., rents underwritten at 30% of 40% of AMI must be income restricted at no greater than 30% of 50% of AMI).
For HOME projects, rents may not exceed Fair Market Rents for the appropriate bedroom size.
Credit Rents. For low-income units outside of the Atlanta MSA receiving Credits, the gross rents may not exceed 30% of 60% of the effective AMI table. For low-income units included in a Credit project other than a 4% Bond project in the Atlanta MSA, the maximum gross rents may not exceed 30% of 54% of the effective AMI tables for the duration of the Compliance Period. Applicants should assume 1.5 persons per bedroom.
Credit and HOME Rents.* Dwelling unit rents must conform to the Code's and/or the HOME regulation's gross rent (contract rent and tenant UA) restrictions. Tenant UA must conform to the requirements set forth in the Plan and the Manual. In the event Credit, HOME, or other funds are requested, the most restrictive gross rents will govern. For Credit and HOME projects, rents may not exceed fair market rents. Applicants should assume 1.5 persons per bedroom.
Many DCA projects will combine Credits and a HOME Loan. As a result, the income targeting requirements are more stringent than for Credits alone. Specifically, at least 40% of the assisted units in each building of the project must be targeted to families at 50% of AMI, adjusted for family size. All remaining assisted units must be targeted to families at 60% or less of AMI, adjusted for family size.

* Not Applicable to Bond Financed Deals

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Mandatory Maximum Rents for Projects in the Atlanta MSA*. The maximum rents charged for the units occupied by tenants at 50% or less of AMI must be equal to or less than the lesser of the applicable Credit rent based on the 50% rents from the rent chart or the area FMR. The remaining rents for the assisted units must have rents no greater than the lesser of the Credit rents based on the 60% (or a maximum of 54% in the Atlanta MSA) rents from the rent chart or the area FMR. The Manual provides more details on the Tax Credit Program.

3. Unit Cost Limitations

Per unit costs must for not exceed the following limits:

Unit Type Efficiency 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom +

Cost Limit $64,000 $75,000 $88,500 $93,500 $98,500

DCA will consider waivers to the limitations stated above only for Special Needs Households, Elderly Housing and Housing for Older Persons, mixed income projects, and those receiving historic tax credits. Waivers and applicable fees must be submitted to DCA by 4:00 p.m. on or before March 1, 2002. Within 15 business days of the receipt of such waiver request, DCA will provide a response to the waiver request. If DCA determines that the project is not eligible for a cost waiver, any Application submitted for such project must reflect cost that are within the above unit cost limitations.

For HOME funded projects, the following subsidy limits will apply in addition to the cost limits above:

Unit Type Efficiency 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom +

Subsidy Limit $ 55,932 $ 64,114 $ 77,963 $100,857 $100,710

4. Site Control

Site control must be in the form of (1) a warranty deed or a legally binding contract to purchase the proposed project site in the name of the ownership entity (or which provides for an assignment to the ownership entity), or (2) a binding long-term ground lease or an option for a binding long-term ground lease, with a minimum term of forty-five (45) years. Contracts must be executed prior to Application Submission deadline, must include a legal description of the property and must provide legal control of the site to the proposed ownership entity at least through September 28, 2002.

* Not Applicable to Bond Financed Projects

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In the event the contract provides the ownership entity with the option to renew the contract for specific periods of time, with the initial period ending prior to September 28, 2002, the renewal option in such contract must be enforceable by the ownership entity until September 28, 2002. A copy of a recorded warranty deed or a fully executed contract must be submitted with the Application. Contracts must meet the specifications set forth in the Manual.

5. Environmental Requirements

On-site and off-site specific environmental concerns identified in an environmental study are to be considered in the context of the criticality of the housing to be provided. DCA shall consider the public benefits of the housing and then weigh the benefits against the costs to mitigate the hazard, the potential health risks, and other financial and public policy implications. The project will not be funded until all environmental matters are resolved in a manner satisfactory to DCA, in its sole and absolute discretion.

Environmental Study. A Phase I environmental study prepared in accordance with the Environmental Review Guide contained in the Manual must be included in the Application. This Phase I Environmental Study should fully address all recommendations of the consulting environmental engineer, and all such recommendations, including Phase II environmental studies (if required) or any additional testing, must be completed at the time of Application Submission. The Phase I (and Phase II where required) Environmental Study must have been conducted within six (6) months of the Application Submission.

If an Environmental Study was completed prior to this six-month period, a copy of this earlier Environmental Study (and any others that are available) must be included in the Application along with an updated Environmental Study. If an updated Environmental Study is necessary, it must meet all requirements set forth in the Environmental Review Guide located in the Manual. In addition to these requirements, the updated Environmental Study must include: details of the new reconnaissance with updated photos; an update of all regulatory reviews including federal and state lists; all original material and updates; and, a professional opinion, provided by the engineer completing the update and addressing any changed conditions to the site.

Site Owner's Environmental Questionnaire. The owner of record of the proposed development site must complete a Site Owner's Environmental Questionnaire and include it in the Application. The Site Owner's Environmental Questionnaire must be signed and notarized in the spaces provided no earlier than 90 days prior to Application Submission.

Flood Plains/Wetlands. Applications that propose disturbing more than one tenth of one acre of wetlands as a result of project construction, or that propose the placement of buildings in the 100-year flood plain, will not meet this Threshold criteria.

Flood plain development will be permitted only if sufficient documentation is included in the Application to clearly establish that there will be no buildings in the flood plain, and that any other site development has been approved by all applicable regulatory authorities (e.g. National Flood Insurance Agency). An architectural site plan must be included in the Application that clearly defines the areas to be developed and the impact on the existing wetland and flood plain areas. NOTE: Properties that propose development of flood plains will not be eligible for points under site characteristics in Appendix II. A letter from the environmental engineer indicating the acreage of wetlands that will be disturbed by the proposed project (along with supporting documentation) must be included in the Application. Wetlands Delineation and USGS Maps are required to document the existence (or absence) and the delineation of the wetland areas on the site and must be included in the Application.

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6. Terrain Characteristics
A desirable site is one that is relatively flat or has an existing slope less than 15% on at least 75% of the undeveloped property. Applications not meeting this criterion at Application Submission must include preliminary site plans that clearly demonstrate that the finished site will be graded as necessary to ensure that this criterion is met.
The terrain characteristic criteria must be documented by a letter from the civil engineer that specifically addresses the requirements stated above and certifies that the Accessibility Standards discussed in Section 16 of this Appendix are met.
7. Site Zoning
Zoning must be in place on or before the Application Submission deadline. Zoning of the development site must conform to the site development plan and must be confirmed, in writing, by the authorized Local Government official. The letter from the authorized Local Government official must be included in the Application. The letter must include the zoning and land use classification of the property and be accompanied by a clear explanation of the requirements and all conditions of these zoning and land use classifications. If the Local Government does not have or enforce a zoning ordinance, the Applicant must include a letter from a local government official to that effect.
The Applicant must provide documentation that demonstrates that the site layout conforms to any moratoriums, density, setbacks, or other imposed requirements of the Local Government. It is the responsibility of the Applicant to ensure that all issues and questions surrounding the zoning and land use classification of a proposed site are clearly defined prior to Application Submission. Any unclear or unresolved issues of zoning and land use could result in Threshold failure of the Application.
8. Operating Utilities
Required project operating utilities (gas and electric service), as applicable, must be available to the proposed development site as of the Application Submission. To be considered "available" for the purposes of this section, at a minimum, all necessary easements, and commitments from the utility providers to extend utilities to the property must be secured at the time of Application. The Application must include a letter from the appropriate utility company confirming the availability and capacity of operating utilities at the proposed development site. The letters bearing signatures from the appropriate utility companies must be included in the Application. Any charges for the off-site extension of utility services are not eligible for funding as project costs under the funding resources in the Plan.
Operating utilities cannot be contingent on annexation of the property, improvement of infrastructure or funding to the utility provider from an outside source. Verification of the annexation and improvements must be submitted with the Application. Any unclear or unresolved issues regarding operating utilities may result in Threshold failure of the Application.

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9. Public Water/Sanitary Sewer/Storm Sewer
Public water and sewer service must be available at the proposed development site as of the Application Submission. To be considered "available" for the purposes of this section, at a minimum, all necessary easements, and commitments from the water and sewer authorities to extend water and sewer services to the property must be secured at the time of Application Submission. A commitment can be subject only to conditions within the control of the Applicant. Letter(s) from the local public water and sewer authorities must document the availability and capacity of public water and sewer service to the site. These letters from the appropriate public water and sewer authorities must be included in the Application. Any charges for the extension of off-site services are not eligible for funding as project costs under the funding resources in the Plan. Public water and/or sewer availability cannot be contingent on annexation of the property or funding to the utility provider from an outside source. Verification of the annexation and improvements must be submitted with the Application. Any unclear or unresolved issues regarding the public water/sanitary sewer/storm sewer may result in threshold failure of the Application.
10. Market Feasibility (Market Study)
DCA recommends that, prior to submitting Applications, Applicants independently obtain a market analysis sufficient to satisfy their own concerns as to market viability. Applicants are encouraged to submit any market information with the Application that they believe may be helpful in determining the market feasibility of their proposal. An Applicant may submit an independent market study in the Application. However, DCA will not be bound by the opinion or conclusions reached by the Applicantcommissioned market study. The DCA-commissioned market study will take precedence. Any market information or market study provided by the Applicant will be given to DCA's market analyst. By submitting this information or market study, Applicants are afforded the opportunity to provide input that may be important in the determination of market feasibility
Project feasibility as determined by the DCA market analyst will be based on, but not be limited, to the following factors:
Market capture rates less than 30 percent for all units in the project, An absorption period less than 24 months to reach stabilized occupancy, Stabilized occupancy rate of 90% or above, Unit mixes or targets populations supported by the market, No adverse impact to the market and financial health of existing assisted rental housing properties in
the market area. Assisted rental housing properties include those financed by Credits, USDA , HUD 202 or 811 (as appropriate), DCA or locally financed HOME properties, HTF, and HUD 221(d)(3) and 221 (d) (4) and other market rate FHA insured programs. DCA does not regard public housing as competitive with programs administered through the Plan; therefore, this policy does not apply to public housing properties, Competing proposed projects in the same geographic market area where, in part, location, unit mix, rent structure, market demand, and other factors favor one project compared to another, Ability of market rate units to lease at the projected rents.
DCA reserves the right, in its sole and absolute discretion, to independently evaluate the demand for additional affordable rental housing in the geographic/market area. DCA's judgment will be the final determination.

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Bond Financed Projects Market Studies. In accordance with federal law enacted during December 2000, Applicants for 4% Credits involving Bond Financed Projects must submit a market study with the initial Application. A disinterested third-party analyst approved by DCA must perform the market study. Generally, DCA will require that the analyst be selected from a list comprised of the analysts selected to perform the DCA-commissioned market studies. However, if a market study was started prior to February 15, 2001, and completed within six months prior to Application Submission, the Applicant may request that DCA approve the analyst that was used. DCA will consider such requests, but approval or denial will be at DCA's sole and absolute discretion.
11. DCA Commissioned Appraisals*
For all projects awarded HOME Loans, DCA will commission an appraisal prepared in accordance with DCA policies. DCA 's determination is final with respect to the appraisal information.
When preparing project development budgets, Applicants should use a reasonable estimate for the appraisal cost based on the Applicant's experience with projects of a similar size and scope. The DCA appraisals will be assignable to other lenders. In instances where the senior lender obtains the appraisal, DCA will accept such appraisal as long as DCA requirements are met.
DCA will use a bid process to select property appraisers and will charge the Applicant a fee to cover the cost of the appraisal report, due on the date specified in the HOME commitment letter. The commissioned appraisal reports shall include the tax credit value, "as is" value, "as built" (encumbered), and "as built" (unencumbered) values of the proposed subject property. The appraiser will be asked to provide an estimate of the market value (unencumbered) of the property at loan maturity. The total hard cost of any rehabilitation project may not exceed 90% of the as completed unrestricted appraised value of the property. Any rehabilitation project found not to meet this requirement, once the commissioned appraisal is done, will have their funding award revoked.
12. Project Amenities
All properties must include HVAC systems, refrigerators, stoves, dishwashers and disposals, an on-site laundry (1 washer and 1 dryer per every 25 units) and one equipped recreation area suitable for the proposed tenant base. If washers and dryers are installed and maintained in every unit at no additional cost to tenants, an on-site laundry is not required. All amenities, with the exception of the on-site laundry, must be available to the tenants at no additional charge.
13. Site Accessibility
All sites proposed for development must be legally accessible by paved roads. The Application must include the appropriate drawings, survey or other documentation that reflects such paved roads. If such paved roads are not in place at the time of the Application Submission, documentation evidencing a local commitment for funding and timetable for completion of such paved road must be included in the Application. This restriction does not apply to private driveways accessing only the proposed project through property that is not part of a proposed site. However, if the use of such a private drive is proposed, site control of the private drive must be documented by proof of ownership or by a properly executed easement on the private drive, and the plans for paving the private drive, including associated development costs, must be adequately addressed in the Application.

* Not Applicable to Bond Financed
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14. Physical Needs Assessment (Rehabilitation Projects Only)
For rehabilitation projects only, a physical needs assessment must be included in the Application, and prepared in accordance with instructions set forth in the Manual. This assessment must be completed no more than ninety (90) days prior to the Application Submission.
15. Conceptual Design and Schematic Documents
Conceptual design and schematic documents prepared in accordance with the instructions set forth in the Manual must be securely attached within each Application binder. In addition, location maps, photographs, a description of the surroundings, and the physical address of the site, if available, must also be included in the Application. All Applications (original and copies) must have color photographs or color copies of the photographs. Black and white photographs do not meet DCA requirements.
16. Accessibility Standards
All projects funded under the Plan will meet the most stringent federal accessibility standards and the requirements of State law. Projects funded under the Plan must meet all three of the following DCA accessibility standards by the placed-in-service date:
At least 5% of the total units (but no fewer than one unit) must be equipped for the mobility disabled, including wheelchair restricted residents; and
At least an additional 2% of the total units (but no fewer than one unit) must be equipped for hearing and sight impaired residents; and
All first floor units including single family residences and all community facilities including parking lots must be accessible to the disabled in accordance with federal law.
Applicants must submit in the Application a letter from the project architect or a statement must appear on the drawings indicating that the above criteria will be met. These requirements must be applied proportionally among subsidized and market rate units. (See Architectural Standards in the Manual for guidance.)
17. Preliminary Financing, Limited Partner Equity, Deferred Developer Fees and Other Financing Commitment*
Formal firm commitments for equity and non-DCA debt must be submitted to DCA within 75 days of the receipt of the carryover allocation.
Preliminary Commitments. Original preliminary commitments for the types of financing listed below must be submitted with the Application:
Construction financing; Non-DCA permanent financing; Equity bridge loans, if required; Any grants or other forms of assistance included in the construction period or permanent financing
sources and uses statement;

* Not Applicable to Bond Financed Projects

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Developer or general partner equity (financial statements to substantiate such equity must be included if such contribution exceeds the developers fee); and
Limited partner (Tax Credit) equity.
The preliminary commitments must disclose, at minimum, the purpose, property address, amount of equity contribution (if applicable), loan amount (if applicable), interest rate, terms and fees. DCA, in its sole and absolute discretion, reserves the right to determine the adequacy of all preliminary financing commitments submitted in the Application. Any financing source for which the applicable federal rate of interest applies must be clearly noted.
Rental Assistance. A project that requires some project-based rental assistance for feasibility must include in the Application a letter or notice of commitment from the funding entity (which must be unrelated to the Project Participants) for the amount of rental assistance that will be provided, the number of units assisted, its duration, and any qualifying terms and/or conditions. The Application must include financial statements of the funding entity that reflect the ability to fund the rental assistance proposal.
Deferred Developer Fee. When determining the amount of Credit necessary to make a project financially feasible, DCA will include the deferred Developer Fee as a source of funding.
Any owner's equity shown in the Application, excluding the general partner's contribution required by the Limited Partnership Agreement will be included as a source of funding in the calculation of Credit. This policy will apply at reservation, carryover, and final allocation. A developer should either take the deferred Developer Fee in the form of a note, or incorporate the deferred Developer Fee into the limited partnership agreement along with a detailed repayment schedule and specific terms.
DCA will accept either method as long as the terms of the deferred Developer Fee meet the requirements as set forth in the Plan. (Note that the deferred Developer Fee should be shown in last lien position in the debt service section of the project cash flow proformas). For purposes for calculating the minimum debt coverage ratio of 1.10, the deferred Developers Fee will not be included as debt service.
18. Required Legal Opinions
A legal opinion regarding the acquisition Credit eligibility is required for projects involving acquisition and rehabilitation.
A legal opinion regarding Credit eligibility is required for projects operated as assisted living facilities.
19. Experience and Capacity
(A) Owner Experience and Capacity
The owner (individual, corporation, or in the case of a limited partnership, the general partner(s)) of a proposed development must submit a DCA experience summary for each Project Participant in this category, and any other documentation that demonstrates its ownership experience beginning with the development phase, through project lease-up, and extending for a period of at least three years thereafter, for at least two rental housing projects of similar size and type (in terms of the number of dwelling units and physical configuration), within the last five years. The organizational entity as well as the principal must meet these experience requirements.

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(NOTE: Owners who applied in accordance with the 2001 Plan may elect to submit an update as part of their Application to the information included in the 2001 Application. The update filed with the 2002 application must identify experience gained since the 2001 Application or certify that no work experience occurred, if that is the case.)
CHDOs and nonprofits applying for a CHDO Loan or Credit nonprofit set-aside without the requisite experience may meet the owner experience requirement in one of two ways: (1) by submitting a partnership or contractual agreement with a for-profit developer who has the required experience as described above, or (2) by providing an executed contract with a consultant (which can be a nonprofit intermediary) who has the required experience. The partnership or contractual agreement must remain in place through project lease-up and stabilization, and must provide for the training on the responsibilities of housing ownership by the consultant/partner as described further in the Consultant/Partnership Agreement Guide in the Manual. All communication between DCA and the ownership entity must be through the CHDO or nonprofit.
Also, the following conditions must be met:
The CHDO/nonprofit must be eligible and compete for funding under the CHDO Loan Program or Credit nonprofit set-aside;
The Application must include an executed agreement between the CHDO/nonprofit and a consultant/partner describing the responsibilities of each party.
The agreement must include the implementation of a housing development ownership training plan, providing for the training of the CHDO/nonprofit by the consultant/partner;
The training plan must specify that the training services to the CHDO/nonprofit will be provided through construction, lease-up, and permanent loan conversion, and include timetables, milestones, and training hours per week;
The plan must be attached to the agreement as an exhibit; and The plan must be approved by DCA at its sole and absolute discretion.
DCA reserves the right to determine, in its sole and absolute discretion, whether a proposed owner meets this criterion and whether the Applicant has the capacity to successfully complete the proposed development with regard to projects in progress, prior performance in meeting construction commencement, meeting conversion and placed in service dates, completion deadlines as well as the number of outstanding incomplete DCA-funded developments.
(B) Developer's Experience and Capacity
The developer of a proposed development must submit a DCA experience summary for each Project Participant in this category and any other documentation that demonstrates its experience in the development of at least two rental housing projects of similar size and type for at least three years within the last five years. The developer must submit a detailed summary of its housing development experience, including information on the role(s) played in each development, the number of units in each development, and the length of the entity's participation in every development listed in the summary. The developer may include a principal's experience gained as a principal in another firm, but not as an employee of another firm. Also, the developer may not include an employee's experience in another firm. (NOTE: Developers who applied in accordance with the 2001 Plan may elect to submit an update to the information included in the 2001 Application. The update must identify experience gained since the 2001 Application or certify that no work experience occurred, if that is the case.)

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CHDOs and nonprofits applying for a CHDO Loan or Credit nonprofit set-aside without the requisite experience may meet the developer experience and capacity requirement in one of two ways: by (1) providing a partnership or contractual agreement with a for-profit developer who has the required experience as described above, or by (2) providing an executed contract with a consultant (which can be a nonprofit intermediary) who has the required experience. The partnership or contractual agreement must remain in place through project lease-up and stabilization, and must provide for the training of the inexperienced nonprofit in the housing development process by the for-profit or consultant/partner as described further in the Consultant/Partnership Agreement Guide in the Manual. All communication between DCA and the ownership entity must be through the CHDO or nonprofit.
Also the following conditions must be met:
The CHDO/nonprofit must be eligible and competing for funding under the CHDO Loan Program or Credit nonprofit set-aside;
The Application must include an executed agreement between the CHDO/nonprofit and a consultant/partner describing the responsibilities of each party to the agreement for the development of the project;
The agreement must include the implementation of a housing development training plan, providing for the training of the CHDO/nonprofit by the consultant/partner;
The training plan must specify that the training services to the CHDO/nonprofit will be provided through construction, lease-up, and permanent loan conversion, and include timetables, milestones, and training hours per week;
The plan must be attached to the agreement as an exhibit; and The plan must be approved by DCA at its sole and absolute discretion.
An Application from an experienced non-profit or for profit developer partnering with an inexperienced for profit developer must include an executed agreement between the experienced and inexperienced developers. At a minimum, the executed agreement must contain the following terms and/or conditions:
The defined relationship of the parties must be that of co-developers; The responsibilities of each party to the agreement for the development of the project must be
described in detail; The inexperienced co-developer must materially participate in the development process commencing
upon the submission of the Application of the project, through project lease up and stabilization; If one of the co-developers is the owner of the project, the term of the agreement must be through
three years after lease up or issuance of 8609 (whichever is later); and If the co-developers are not the owners of the project, the term of the agreement must be through
conversion (for a HOME project) or issuance of an 8609 for a Credit only project.
DCA reserves the right to determine, in its sole and absolute discretion, whether a proposed developer meets this criterion and whether the Applicant has the capacity to successfully complete the proposed development with regard to projects in progress, prior performance in meeting construction commencement, projects with recaptured credits and completion deadlines, as well as the number of outstanding incomplete DCA-funded developments.

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C. Management Company's Experience
The proposed property management company of a proposed development must submit a DCA experience summary and any other documentation that demonstrates its management experience beginning with the lease-up phase and extending for a period of at least three years thereafter, for at least two rental housing project of similar size and type (in terms of the number of dwelling units and physical configuration) within the last five years. The proposed management company must submit with the Application a detailed summary of its housing management experience, including information on the role(s) played in each development, the number of units in each development, and the length of the entity's participation in every development listed in the summary.
DCA will determine whether a proposed property management company meets this criterion in its sole and absolute discretion, and its determinations will be final. (NOTE: management companies that applied in accordance with the 2001 Plan may elect to submit an update as part of their Application to the information included in the 2001 Application. The update must identify experience gained since the 2001 Application or certify that no work experience occurred, if that is the case.)
D. Experience Waiver
An owner, developer, or management company that does not meet the experience requirements set out above, may request that DCA "waive" that requirement. An owner, developer, or management company that had been previously grandfathered by DCA yet does not meet the experience requirements must submit an experience waiver pursuant to this section. The waiver request must be submitted to DCA on or before March 1, 2002. The granting, or denial of waivers, is in the sole and absolute discretion of DCA. DCA may include limitations with respect to the number and size of projects when waivers are granted.
20. Eligibility for Credit under the Nonprofit Set-Aside*
To be eligible for Credit under the nonprofit set-aside:
The organization must be a qualified nonprofit, defined as a 501(c)(3) or 501(c)(4) organization, which is not affiliated with or controlled by a for-profit organization and has included the fostering of low income housing as one of its tax-exempt purposes.
The qualified nonprofit may be the sole general partner of the ownership entity or a general partner with another qualified organization meeting the experience requirements set forth above and must materially participate in the project as described in IRC Section 469(h)
The qualified nonprofit must be the managing general partner of the ownership entity.
If the nonprofit is a general partner with another entity, the nonprofit must have at least 51% of the ownership of the general partnership interest (or wholly owned and controlled affiliate).
The nonprofit must receive a percentage of the Developer Fee greater than or equal to its percentage of its ownership interest.

* Not Applicable to Bond Financed Projects

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A copy of the general partnership joint venture agreement which indicates the nonprofit's general partnership interest, and Developer Fee amount must be included in the Application; and,
Nonprofit organizations applying for Credit under the nonprofit set-aside must include in the Application an opinion of an attorney who specializes in tax law on the nonprofit's current federal tax exempt qualification status in accordance with the prescribed format contained in the Manual. If such an opinion has been previously obtained, this requirement may be satisfied by submitting the opinion with documentation demonstrating that the nonprofit's bylaws have not changed since the legal opinion was issued.
21. Eligibility for HOME Loans under the CHDO Set-Aside*
All nonprofits seeking funds under the CHDO set aside must submit CHDO prequalification or renewal of Applications by February 28, 2002. A copy of the State CHDO pre-qualification/renewal letter must also be included in the Application. The CHDO must be either the sole general partner of the ownership entity or the managing general partner of the ownership entity. In the event the CHDO is a general partner with a for-profit or nonprofit general partner, the CHDO must own at least 51% of the general partnership interest. The CHDO (or a wholly owned or controlled affiliate) must receive a percentage of the Developer Fee greater than or equal to the percentage of ownership interest. All DCA communication with the ownership entity will be with the CHDO managing general partner. A copy of the general partnership/joint venture agreement indicating the CHDO's general partnership interest and its share (or the share of the wholly owned and controlled affiliate) of the Developer Fee must be included in the Application.
22. Compliance History
Applications with compliance scores falling at or above negative twenty (-20) points, and with all Project Participants' (excluding syndicators) compliance score(s) falling at or above -20 points, will meet this threshold criterion.

* Not Applicable to Bond Financed Projects

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COMPETITIVE SCORING
The Scoring Criteria are summarized in the table below and detailed on the following pages. The maximum total score possible is 180 points.

PROJECT SCORING SUMMARY

1

APPLICATION COMPLETENESS/ORGANIZATION

A. Complete Application

B. Organization

2

PROJECT LOCATIONAL CHARACTERISTICS

A. Adjacent Residential Development

B. Desirable/Undesirable Characteristics

C. Infill Site

D. Previous Project within a Local Government

3

TENANCY CHARACTERISTICS

A. Family Housing

B. Special Needs Housing

C. Elderly Households

D. Housing For Older Persons

4

ADDITONAL RENT AND INCOME ELECTIONS

A. Public Housing Authority Development and Rental Subsidy

B. Very Low Income Tenancy Exceeding Requirements

C. Project-Based Rental Assistance

D. Very -Very Low Income Tenancy Exceeding Requirements

E. Mixed Income Projects

F. Extended Use Period

5

GOVERNMENT SUPPORT AND FINANCING ASSISTANCE

A. Local Government Support

B. Government Financial Assistance

C. CHDO Predevelopment Loans

6

PROJECT CHARACTERISTICS

A. Neighborhood Redevelopment

B. Energy Efficiency Requirements

C. Project Design

D. Accessibility

. E. Ownership Makeup

7

READINESS TO PROCEED

8

COMPLIANCE HISTORY STATUS

Total Score Value
6 2
6 8 5 4
25 20 20 20
15 8 6 6 9 3
6 15 6
15 6 19 6 4
4
10

TOTAL POSSIBLE SCORE

180

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To be considered for DCA financing resources, Applications must meet the Competitive Scoring requirements described below.

1. Application Completeness/Organization

A. Completeness

6 points

All required Application forms and supporting documentation are included and complete

at the time of Application Submission. For each missing or incomplete document, one of

these possible points will be deducted up to a maximum of three (3) points. Each

adjustment made by DCA, at its discretion, to ensure consistency with DCA project

economic pro forma assumptions and the Plan and Manual requirements, will result in a

deduction of one (1) point up to a maximum of three (3) points.

B. Organization

2 points

The Application is organized in the format prescribed by DCA in the Application binder

tab checklist. Documents not filed in the appropriate tab may not be reviewed by DCA.

2. Project Locational Characteristics

A. Adjacent Residential Development

6 points

Points will be awarded if the site is adjacent to (or directly across a street from) stable,

occupied residential development.

B. Desirable and Undesirable Activities/Characteristics

8 points

Two (2) points will be awarded for each desirable activity or characteristic that is near a

proposed site. One (1) point will be deducted for each undesirable activity or

characteristic that is near a proposed site. A maximum of eight (8) will be awarded. A

negative total will be awarded zero (0) points.

1. Desirable sites.

(a) In determining whether a desirable activity/characteristic is "near" a proposed site, the following factors must be used:

For non-Rural County sites, only activities and/or characteristics, which are located within a one (1) mile walking/driving distance from the proposed site, will be considered. For non-Rural County sites, the walking route to desirable activities/characteristics must be along all-weather or paved sidewalks.
For Rural County sites, only activities and/or characteristics that are located within a one and a half (1) mile walking/driving distance from the proposed site will be considered.

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(b) Desirable activities/characteristics may include, but are not limited to the following: retail stores grocery stores recreational facilities libraries school(s) day care services medical facilities employment centers civic centers access to the proposed site off of a street with frontage of more than 100 feet.
2. Undesirable Sites
(a) In determining whether an undesirable activity/characteristic is near a proposed site, the Application must consider any undesirable activity/characteristic that is located within one half () mile of the proposed site.
(b) Undesirable activities/characteristics include but are not limited to the following: junkyards hazardous or chemical activities, sources of noise, odor, or other nuisance pollution, access to the proposed site off of a street with frontage of less than 100 feet.
3. Documentation In order to document desirable and undesirable activities/ characteristics, the Application must include:
(a) A site map indicating the specific locations of each desirable and undesirable activity/characteristics. The map must contain a key stating the type of activities/characteristics identified, and must include the following: location of site including an indication of major access roads; indication of distances in 1/4 mile and one mile increments; areas of residential development adjacent to or near the site; indication of any major industrial or commercial development; and all desirable and undesirable activities/characteristics.
(b) Photographs of the site and the surrounding neighborhood. All photographs are to be either color originals or color copies. Black and white photographs are not acceptable.

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C. Infill Sites

5 points

To qualify for four (4) infill points, the proposed site must exhibit all of the following: The site must be surrounded on three sides by established development. The site must maximize the use of existing utilities, infrastructure and
transportation. At a minimum, the established development on one side must consist of residential
development. (Edge of town, scattered single family housing does not constitute established residential development for the purposes of this category.)

One (1) additional infill point will be awarded if the proposed development replaces substandard existing or demolished buildings or housing units.

D. Previous Projects within a Local Government

4 points

Four (4) points will be added if the proposed development site is within the boundaries of a Local Government in which a 9% Credit project has not been awarded within the last three (3) DCA funding cycles, or two (2) points will be added if the proposed development site is within the boundaries of a Local Government in which a 9% Credit project has not been awarded in the last two (2) DCA funding cycles. For example, if no projects were awarded in unincorporated Cobb County for the last three DCA funding cycles, but one was awarded in the City of Marietta in 2001, an application for a project from an unincorporated area of Cobb County would receive four (4) points .

3. Tenancy Characteristics

A. Family Housing

25 points

This section is designed to foster development of housing for families and to encourage

community activities from within the neighborhood. In order to qualify for six (6)

points, the proposed project must have all of the basic requirements and documents

outlined in sections (1) and (5) below. Additional points may be awarded for inclusion

of optional amenities and optional services outlined in section (2) and (3) if Applicant

receives points for meeting the basic requirements.

1. Basic Requirements

All properties must include community spaces or a community building. For one-story garden style projects, all units must have sheltered
exterior areas such as porches or patios. In buildings that are not garden style, lobbies and corridors must have
small gathering areas in several locations. The site must have sheltered exterior gathering areas, such as a gazebo
located in a central area or a large covered porch at the community building. The Application must include two (2) on-going services designed for the physical or social needs of the tenant population.

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2. Optional Amenities Points will be awarded for each optional amenity that is included in the Application, as outlined below, to a maximum of sixteen (16) points. Physical improvements on the site such as attractively fenced community gardens, equipped walking path with exercise stations or sitting areas, and equipped picnic areas and recreational facilities. (Points are not available for inclusion of the recreation area required to meet Threshold.) (one (1) point per area to a maximum of 3) Large open playing fields (of at least 5,000 square feet) (two (2) points) Covered pavilion with picnic/barbecue facilities to encourage community or family reunion type functions (two (2) points) Washer/dryer hookups in all units in addition to required central laundry or washers and dryers are installed and maintained in every unit at no additional cost to tenants (five (5) points) Exercise/Fitness Center (four (4) points) Complete built-in fire sprinkler system in every unit and the community center, including an exterior audio and visual alarm system (two (2) points) Other optional amenities as proposed by the Applicant; two (2) points per amenity. To document these optional amenities, Applicant must provide a detailed description of the amenity and justify the appropriateness of the amenity for the targeted population.
3. Optional Services One (1) point to a maximum of three (3) points will be awarded for each additional service that is included in the Application.
4. Examples of services which are designed for families include, but are not limited to: Daycare After-school programs Financial and budgeting seminars Job training Homebuyer training and seminars Supervised recreational activities for children Transportation to seminars Preventive health care programs which are designed for families Transportation to facilitate access to social services, doctors, shopping Computer labs/internet hookup and/or tutors Library Dry-cleaning and/or laundry Grocery pickup and/or delivery On-site full time management and/or security staff Social and recreational programs planned and overseen by the project manager. (Monthly birthday parties/holiday dinners and/or parties/potluck dinners, movie nights, bingo)

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5. Documentation The Application must also provide the following for all required and optional services and/or amenities (where applicable): A letter and drawings from the project architect indicating that all of the requirements set forth in section (1) have been met. In addition, the project architect's letter and drawings must also indicate any optional amenities (see section (2)) which are included in the project and for which the Application seeks to have points awarded. A detailed letter of intent from an experienced, licensed (or otherwise qualified and acceptable to DCA) service provider for each proposed service. This letter must also contain a comprehensive description of the service to be provided, explain how said service is to be managed and a commitment to providing the service for a term of no less than 6 months.

6. Additional Policies Related to Services A final, binding contract for all proposed services must be submitted before HOME Loan closing or Credits carryover, whichever is earlier. Any proposed changes of supportive services or providers from those proposed in the Application must be approved by DCA prior to contracting with that service provider. Services must be committed for the Compliance Period or the Period of Affordability, whichever is greater. Services may be provided at a charge sufficient to cover the cost of the supportive services only, but the services must be clearly optional to the tenants. A full-time activities manager will be allowed in the operating budgets for those properties that are 150 units or more in size Temporary staffing during lease-up to handle activities set-up and sign-up will be considered on a case-by-case basis. Part-time (on a proportional basis) activity managers will be allowed in the operating budgets for smaller projects. Owners will be required to submit annual certifications and documentation regarding the ongoing provision of the supportive services.

B. Special Needs Projects This section is designed to foster development of housing for the homeless, persons with disabilities (mental, physical, developmental), abused spouses and their children, persons with alcohol or other drug addiction, person living with HIV/AIDS, and migrant farm workers. In order to qualify for six (6) Special Needs Project points, the proposed project must have all of the basic requirements and documents outlined in section (1) and (3) below. Additional points may be awarded for inclusion of optional amenities and optional services outlined in section (2) if an Applicant receives points for meeting the basic requirements.

20 points

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1. Basic Requirements
At least 50% of the total project dwelling units must be restricted to Special Needs Households (excluding Elderly Housing and Housing for Older Persons)
The Application must provide at least three (3) supportive services and three (3) amenities applicable to the designated Special Needs Households
The Application must demonstrate that the project can be self-supporting with available resources including rent subsidies as necessary
2. Optional Amenities/Services
Two (2) Points (to a maximum of 14) will be awarded for each optional service or amenities provided. Each optional amenity or service for which points are awarded must be designed to meet the special needs of the targeted tenant population.
3. Documentation
The Application must also provide the following documents for all services and amenities (where applicable): A letter and drawings from the project architect indicating that all of the
requirements in section (1) for Special Needs Households have been met. The project architect must also provide a letter and drawings indicating any
optional amenities which are included in the project and for which the Application seeks to have points awarded. If rent subsidies are applicable, the Application must contain a detailed letter of intent to provide rental assistance from the Georgia Department of Human Resources, HUD, or another federal, State, or local rental assistance provider. A final binding contract for the rental subsidy must be submitted before HOME Loan closing or Credits carryover, whichever is earlier. For each Special Needs Households Service, the Application must contain a detailed letter of intent from an experienced, licensed provider for the appropriate service. This letter must contain a comprehensive description of the service to be provided, explain how said service is to be managed and its effective impact on the Special Needs Household tenant and a commitment to providing the service for a term of no less than 6 months.

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4. Additional Policies Related to Services A final, binding contract for all proposed services must be submitted before HOME Loan closing or Credits carryover, whichever is earlier. Any proposed changes of supportive services or providers from those proposed in the Application must be approved by DCA prior to contracting with that service provider. Services must be committed for the Compliance Period or the Period of Affordability, whichever is greater. Services may be provided at a charge sufficient to cover the cost of the supportive services only, but the services must be clearly optional to the tenants. A full-time activities manager will be allowed in the operating budgets for those properties that are 150 units or more in size Temporary staffing during lease-up to handle activities set-up and sign-up will be considered on a case-by-case basis. Part-time (on a proportional basis) activity managers will be allowed in the operating budgets for smaller projects. Owners will be required to submit annual certifications and documentation regarding the ongoing provision of the supportive services.

C. Elderly Households

20 points

This section is designed to foster development of housing for Elderly Households. In

order to qualify for six (6) Elderly Household points, the proposed project must have all

of the basic requirements and documents outlined in sections (1) and (3) below.

Additional points may be awarded for inclusion of optional amenities and optional

services outlined in section (2), if the Applicant receives prints for meeting the basic

requirements.

1. Basic Requirements

100% of the HOME and/or Credits units must be reserved for Elderly Households.
100% of the units must be accessible and adaptable (as defined by the HUD Fair Housing, the Americans with Disabilities Act and Section 504).
All units must have an installed call system, including a buzzer and light to the exterior.
All properties must include community spaces or a community building. Elevators must be provided for access to units above the ground floor. For one-story garden style, projects, all units must have sheltered exterior
areas such as porches or patios. In buildings that are not garden style, lobbies and corridors must have small
gathering areas in several locations distributed on each floor. The site must have sheltered exterior gathering areas such as a gazebo located
in a central area or large covered porch at the community building. The Application must include at least one activity/service designed to meet
the physical or social needs of elderly persons, in at least two (2) of the following categories: recreation/social, transportation, health/wellness, education, counseling, and security. (Total of two (2) different services) Examples of activities/services are set forth in Section (2) below.

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2. Optional Amenities and Services
Points will be awarded for each additional amenity or service that is designed for Elderly Households. Optional amenities and services are amenities and services that are provided in addition to the amenities and services included to meet the basic requirements for Elderly Households. Each additional service or amenity shall receive two additional points unless otherwise specified below. The maximum points received under this section shall be fourteen (14) points.
(a) Examples of amenities designed for Elderly Households include, but are not limited to the following: Physical improvements on the site such as attractively fenced community gardens, equipped walking path with exercise stations or sitting areas, equipped picnic areas and/or recreational facilities. (excluding the recreation area required to meet threshold.) (one (1) point to the maximum of three (3) points) Washer/dryer hookups in all units in addition to required central laundry or washers and dryers are installed and maintained in every unit at no cost to tenants (five (5) points ) Complete built-in fire sprinkler system, in every unit and the community center to be monitored by an exterior audio and visual system (two (2) points) Other amenities designed for the elderly and proposed by the Applicant: (two (2) points per amenity). To document these optional amenities, Applicant must provide a detailed description of the amenity and justify the appropriateness of the amenity for the targeted population
(b) Examples of activities/services specifically designed to meet the physical or social needs of elderly persons may include, but are not limited to the following: Social and recreational programs planned and overseen by the project manager. (Monthly birthday parties/holiday dinners or parties/potluck dinners, movie nights, bingo) Continuing education Information and senior counseling Recreational instruction appropriate for amenities Homemaker/housekeeping Preventive health care programs/health screening on a regular basis Transportation to facilitate access to social services/doctors/shopping Meals 24 hour security/neighborhood watch programs Community pets (cost of care provided by project) Computer lab/internet hookup/tutors Community gardening Weekly exercise class Grandparent mentoring programs Weekly "day trips" to shopping centers/specialty shopping Reading service and library Dry-cleaning, laundry, and grocery pickup and delivery Prescription management information
3. Documentation

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The Application must include the following documentation for each required and optional, amenity and service for which points are awarded:

A detailed letter of intent from an experienced, licensed (or otherwise qualified and acceptable to DCA) service provider for each proposed service which must contain a comprehensive description of the service to be provided, how said service is to be managed and a commitment to providing the service for a term of no less than 6 months.
A letter and drawings from the project architect indicating that all of the requirements for Elderly Households have been met. The project architect's letter and drawings must also indicate any optional amenities which are included in the project and for which the Application seeks to have points awarded.

4. Additional policies related to services

A final, binding contract for all proposed services must be submitted before HOME Loan closing or Credits carryover, whichever is earlier.
Any proposed changes of supportive services or providers from those proposed in the Application must be approved by DCA prior to contracting with that service provider.
Services must be committed for the Compliance Period or the Period of Affordability, whichever is greater.
Services may be provided at a charge sufficient to cover the cost of the supportive services only, but the services must be clearly optional to the tenants.
A full-time activities manager will be allowed in the operating budgets for those properties that are 150 units or more in size
Temporary staffing during lease-up to handle activities set-up and sign-up will be considered on a case-by-case basis.
Part-time (on a proportional basis) activity managers will be allowed in the operating budgets for smaller projects.
Owners will be required to submit annual certifications and documentation regarding the ongoing provision of the supportive services.

D. Housing for Older Persons

20 points

This section is designed to foster development of Housing for Older Persons. In order to qualify for six (6) points, the proposed project must have all of the basic requirements and documents outlined in sections (1), (2), (3), and (4) below. Additional points may be awarded for inclusion of optional amenities and optional services outlined in section (2) if the Applicant receives points for meeting the basic requirements for Housing for Older Persons.

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1. Basic Requirements
At least 80% of the units must be occupied by at least one person 55 or older. Up to 20% of the units may be occupied by others, including the landlord's
employees, the surviving spouses or children of residents who were 55 years of age or older when they died and caregivers. DCA will monitor the required facilities and services during the applicable compliance period. The project must have significant services. Significant services means that the Application must include at least four different activities and/or services designed to meet the physical or social needs of tenants aged 55 and older in at least three of the following categories: recreation/social, transportation, health/wellness, education and counseling, and security. Examples of services are set forth below. Physical improvements on the site such as attractively fenced community gardens, equipped walking path with exercise stations or sitting areas equipped picnic areas and/or recreational facilities. (excluding the recreation area required to meet threshold.)
2. Optional Amenities/Services
Points will be awarded for each additional amenity or service that is designed for persons 55 and older. Optional amenities and services are amenities and services that are provided in addition to the amenities and services included to meet the basic requirements for Housing for Older Persons. Each additional service or amenity shall receive two additional points unless otherwise specified below. 14 maximum points may be awarded under this section.
(a) Examples of amenities for Housing for Older Persons include, but is not limited to the following:
Washer/dryer hookups in all units in addition to required central laundry or washers and dryers are installed and maintained in every unit at no additional cost to tenants (five (5) points)
Complete built-in fire sprinkler system in every unit and the community center including an exterior audio and visual alarm system (two (2) points)
Other amenities designed for Older Persons and proposed by the Applicant: two (2) points per amenity. To document these optional amenities, Applicant must provide a detailed description of the amenity and justify the appropriateness of the amenity for the targeted population.

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(b) Examples of activities/services for Housing for Older Persons may include, but are not limited to the following:
Social and recreational programs planned and overseen by the project manager. (Monthly birthday parties/holiday dinners or parties/potluck dinners, movie nights, bingo)
Continuing education Information and senior counseling Recreational instruction appropriate for amenities Homemaker/housekeeping Preventive health care programs/health screening on a regular basis Transportation to facilitate access to social services/doctors/shopping Meals 24 hour security/neighborhood watch programs Community pets (cost of care provided by project) Computer lab/internet hookup/tutors Community gardening Weekly exercise class Grandparent mentoring programs Weekly "day trips" to shopping centers/specialty shopping Reading service and library Dry-cleaning, laundry, and grocery pickup and delivery Prescription management information
3. Documentation
The Application must include the following documentation for all amenities and services for which points are awarded.
A detailed letter of intent from an experienced, licensed (or otherwise qualified and acceptable to DCA) service provider for each proposed service which must contain a comprehensive description of the service to be provided, how said service is to be managed and a commitment to providing the service for a term of no less than 6 months.
Applications must include a letter and drawings from the project architect indicating that all of the basic requirements for Housing for Older Persons have been met. The architect's letter and drawings must also indicate any optional amenities which are included in the project and for which the Application seeks to have points awarded.

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4. Additional policies related to services
A final, binding contract for all proposed services must be submitted before HOME Loan closing or Credits carryover, whichever is earlier.
Any proposed change of supportive services or providers from those proposed in the Application must be approved by DCA prior to contracting with the new service provider.
Services must be committed for the Compliance Period or the Period of Affordability, whichever is greater.
Services may be provided at a charge sufficient to cover the cost of the supportive services only, but the services must be clearly optional to the tenants.
A full-time activities manager will be allowed in the operating budgets for those properties that are 150 units or more in size.
Temporary staffing during lease-up to handle activities set-up and sign-up will be considered on a case-by-case basis.Part-time (on a proportional basis) activity managers will be allowed in the operating budgets for smaller projects.
Owners will be required to submit annual certifications and documentation regarding the ongoing provision of the supportive services.

4. Additional Rent and Income Elections

A. Public Housing Authority Development and Rental Subsidy

15 points

The proposed project is a component of a PHA tenant initiative program (including the PHA's development program or project), as evidenced by: (1) the PHA's investment in the project's physical plant and/or contribution to the long-term economic feasibility of the project via operating cost contributions or tenant rent subsidies for a minimum period of five years; and (2) an executed agreement between the PHA and the project ownership entity or such agreement provides for the assignment to the entity setting forth the project ownership entity's responsibility to rent dwelling units to public housing tenants. The PHA's investment must come from a source independent of the project. Developer's Fees earned or deferred by the PHA on the subject project, a loan (or any other form of debt) from a PHA, funds from any non-PHA general partner, limited partner, or other development team member will not be considered a PHA investment in the project.

To be eligible for scoring points under this criterion, the Application must include a copy of the executed agreement between the PHA and the ownership entity or such agreement provides for the assignment to the entity. The executed agreement must set forth the type, term and amount of the PHA's equity investment in the proposed project and/or the PHA's long-term equity contribution to the long-term (at least five years) economic feasibility of the project via operating cost contributions and/or tenant rent subsidies as well as the number and type of rental units the proposed owner will hold and rent to public housing tenants. "Hold and rent" means that the Applicant agrees to rent the designated units exclusively to public housing tenants or households currently on a PHA waiting list. Scoring points under this criterion will be awarded as follows:

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Rental Assistance and/or Equity Investment 10% of units reserved and rented to public housing tenants 20% of units reserved and rented to public housing tenants 30% of units reserved and rented to public housing tenants

5 points 10 points 15 points

Points under Section 4B and 4C of this Appendix will not be available to projects that are eligible for ten (10) or fifteen (15) points under this Section. However, Applications that qualify for only five (5) points under this section, and otherwise qualify for points under Section 4B will be awarded points under Section 4B, but will not be eligible for points under this section. Also, points under Section 4C of this Appendix, "ProjectBased Rental Assistance" will not be available to projects that are eligible for points under this section.

B. Very Low Income Tenancy Exceeding Requirements

8 points

Applications that reserve and rent more dwelling units with rents affordable by very low-income households (those earning annual gross incomes of 50% or less of the AMI) than is required by the appropriate program(s) will be awarded additional points. Owners will be required to execute restrictive covenants stipulating the number of dwelling units to be reserved and rented to very-low income households for the term of the Compliance Period or the Period of Affordability, whichever is longer. Points will be awarded as follows:

Percentage of units above program minimum 5 20 21 40 41 +

6 points 7 points 8 points

Points under this section will not be awarded to projects that are eligible for 10 or 15 points under Section 4A , "Development or Tenant Support Program or, to those units that meet the criteria for points under Section 4D, "Very-Very Low Income tenancy Exceeding Requirements". However, an Application that qualifies for only five (5) points under Section 4A, but otherwise qualifies for six (6) points under this section will be awarded six (6) points under this section, but will not be eligible for five (5) points under Section 4A.

C. Project-Based Rental Assistance

6 points

Applications proposing project-based tenant rental assistance for a minimum of five years for at least 10% of the rental units will receive six (6) points. To be eligible for points under this criterion, the Application must include a copy of an executed agreement between the ownership entity and the funding entity that must state that the funding entity is unrelated to any Project Participant. Points under this section will not be awarded to projects that are eligible for points under Section 4A, Public Housing Authority Development and Rental Subsidies. The project based rental assistance, must be 40% of the fair market rent or the balance of the rent when the tenant pays 30% of their income towards the rent. If less than 100% of the rental units will receive rental assistance the Applicant must submit a plan on how tenants will be selected to receive rental assistance.

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D. Very Very Low Income Tenancy Exceeding Requirements

6 points

Applications that reserve and rent at least five (5) but no more than twenty (20) dwelling units with rents affordable by very-very low-income non-public housing households (those earning annual gross incomes of 30% or less of the AMI) will be awarded a maximum of up to six (6) points. Owners will be required to execute restrictive covenants stipulating the number of dwelling units to be reserved and rented to very-very low income households for the term of the Compliance Period or the Period of Affordability whichever is longer. Points will be awarded as follows.

5-10 units 11-15 units 16-20 units

2 points 4 points 6 points

E. Mixed Income Projects

9 points

Projects designed for both low income and market-rate tenants are eligible to receive points based on the percentage of low income and market rate units in the total project. Market rate units cannot be rented for less than the subsidized units.

Percentage of units receiving Credits: 50-60% Tax Credit 61-80% Tax Credit 81-90% Tax Credit

9 points 6 points 3 points

F. Extended Use Period

3 points

The Code requires that all low-income units in a project receiving Credits remain rentrestricted and income-restricted for the 15-year Compliance Period and for 15 years after the close of the Compliance Period. However, owners have an option to request DCA's assistance in procuring a qualified contract for acquisition of the building(s) after the 14th year of the Compliance Period. If DCA is unable to present such a contract within a one-year period, the owner may terminate the extended use agreement.

Owners willing to forgo this "cancellation option" for at least five years after the close of the Compliance Period, or submit a plan for tenant ownership at the end of the 15year Compliance Period, will be eligible for one (1) point for each five year period that the cancellation option is foregone, to a maximum of three (3) points for 15 years. Agreement to forgo the cancellation option or a plan for tenant ownership will be included in the Land Use Restrictive Covenants as part of the Terms of Agreements. Projects requesting HOME funds are not eligible for the one (1) point for the first five year period, but are eligible for the other points provided that the HOME loan is not a balloon loan.

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5. Government Support and Financial Assistance

A. Local Government Support

6 Points

Six (6) points will be awarded if the Local Government adopts a resolution of support for the proposed project. The resolution must clearly indicate that the Local Government understands the nature of the proposed project by identifying at a minimum, the type of project, the number of anticipated units, and the specific project location. Additionally, the resolution must clearly express the Local Government's support of the proposed project, as opposed to merely expressing indifference.

If the Local Government is governed by only one elected official (as specified in its Charter), a letter from the elected official outlining all the information required in the governing body resolution will be accepted in lieu of a resolution. A letter in the form provided by DCA, with an attached certified copy of the resolution (or letter if the jurisdiction is governed by only one elected official in accordance with its Charter) must be included in the Application.

B. Government Financial Assistance

15 Points

Up to fifteen (15) points will be awarded if the Local Government reduces project development costs, if the jurisdiction in which the project is located funds the project with HOME or CDBG funds, USDA, Federal Home Loan Bank AHP or other governmental assistance/funding is obtained. Local Governments may reduce total project development costs by:

Waiving water and sewer tap fees; Waiving building permit fees; Foregoing real property taxes during construction; Contributing land for project development; Providing below market rate construction and/or permanent financing; Providing an abatement of real estate taxes; Providing other project operational cost subsidies, and/or; making other financial
contributions.

USDA, FHLB-AHP, CDBG, HOME or other governmental assistance/ funding must be obtained in the form of loans, grants, rental assistance, or a combination of these forms. Points under this scoring category will be calculated based on the percentage reduction in total project development costs and/or project operating cost subsidies, as follows:

2% but less than 4% of total project development cost and/or average annual operating cost reduction (five (5) points)
Greater than or equal to 4% but less than 7% of total project development cost and/or average annual operating cost reduction (ten (10) points)
7% or more of total project development cost and/or average annual operation cost reduction (fifteen (15) points)

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Reductions in annual operating costs must occur in each of the first 10 years of the Period of Affordability or Compliance Period. Operating cost reductions for less than this 10-year period beginning with the first year of the Compliance Period or the Period of Affordability, will not be eligible for points under this section. Documentation from the Local Government clearly showing the types, amounts, and terms and conditions, along with a letter from the chief executive officer of the Local Government certifying the Local Government's contribution to the proposed project's development and/or operation must be included in the Application. PHA assistance does not qualify for points in this section.

In the case of USDA, FHLB-AHP, CDBG, HOME or other governmental assistance/ funding, a "notification of award" letter must be included in the Application if the funding has been awarded at the time of Application Submission. If the funding has not been awarded at the time of Application Submission, documentation (such as the USDA letter of recommendation) indicating that the project is under final consideration for such funding must be submitted with the Application. The Applicant must notify DCA as to whether the funding has been awarded on or before July 2, 2002. (Points will not be awarded unless the funding is actually awarded.)

If the funding is not awarded, the Applicant may secure alternate financing and revise and resubmit all applicable Application documents by July 15, 2002. The revised Application will be evaluated based on the revised documents, but the Application will not be eligible for points under this criterion and will not be eligible for additional points under any other criteria based on revisions to the original Application.

C. CHDO Predevelopment Loans

6 points

Applications presented by qualified CHDOs that have used the DCA CHDO Predevelopment Loan Program to develop their project will be awarded six (6) points.

6. Project Characteristics

A. Neighborhood Redevelopment

15 points

This scoring category is available to all Applicants. For allocation of points, documentation including maps must be submitted to verify the directives and activities for each of the following categories. Points will be allocated for each of the following categories as set forth below. A maximum of fifteen (15) points will be awarded.

(1) One (1) point will be awarded if the proposed development site is located in a difficult to develop area or Qualified Census Tract.

(2) One (1) point will be awarded if the proposed development site is located in an enterprise community or an empowerment zone within a community.

(3) Two (2) points will be awarded if the proposed development is an adaptive reuse of an existing building.

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(4) Two (2) points will be awarded if the proposed development is a reuse of an existing building that has received a historic designation and for which Historic Tax Credits have been or will be applied for.
(5) Three (3) points will be awarded if there is an adopted redevelopment plan formulated by the community based non-profit or the Local Government, that clearly targets the specific neighborhood in which the project is located. The plan must have been adopted at least six months prior to the Application Submission and must be included in the Application. The proposed development project must support at least one of the goals of the redevelopment plan. For the purposes of this category, in Rural Counties a neighborhood may be as large as one county.
(6) Two (2) points will be awarded if the project developer/owner has formulated a plan to mitigate serious neighborhood challenges within the defined community area of the proposed development site.
(7) A maximum of three (3) points will be awarded if the mitigation plan includes documentation evidencing partnerships with other organizations that will work in cooperation with the Applicant entity to eliminate or control the identified neighborhood challenges. (Community based non-profit entities that can evidence the capacity to accomplish the goals of the mitigation plan without such partnerships may be awarded the points with sufficient documentation of such capacity.) One (1) point will be available in this category for each neighborhood challenge addressed, to a maximum of three (3) points.
(8) One (1) point will be awarded if documentation is submitted that evidences at least two (2) previous redevelopment activities by either the community based non-profit or the Local Government within the last 12 months, that has occurred within the defined community area of the proposed development project. This activity may be evidenced as either services or construction of residential or support facilities.
B. Energy Efficiency Requirements
To receive these points, projects must incorporate products that meet the following performance criteria. The components must be clearly and individually listed in an original stamped letter from either the architect or engineer of record. The letter must also clearly state that the entire construction envelope exceeds the Georgia State Energy Code. Manufacturer's cut sheets must be submitted to document the energy efficiency of each component for which points are claimed. Points will be awarded as set forth below. A maximum of eight (8) points will be awarded.
1. Windows
All windows and sliding glass doors must meet the following criteria to receive two (2) points in this category U-value of 0.4 or less (R-value 2.5 min.) Solar Heat Gain Coefficient of 0.4 or less All windows and sliding glass doors must have a ten-year warranty from
date of delivery against breakage of the glazing panel's seal.

6 points

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2. HVAC
One (1) point will be awarded for each of the following criteria met for a maximum of two (2) points. Energy Star furnace (90% AFUE) or heat pump (HSPF 7.8) Energy Star air-conditioner (SEER 12)
4. Appliances
One (1) point will be awarded for each criterion met for a maximum of two (2) points. Energy Star refrigerator and dishwasher Water heater: Gas (Energy Factor of 0.62 or higher) or, Electric (Energy
Factor of 0.92 or higher)
C. Project Design
DCA encourages the construction of projects that reflect the character of the community in which they are located. The marketability of the property and appearance of the site are important components in the final product. Longevity and low maintenance are to be considered in the design of the property. The allocation of these points will be at the discretion of DCA and the interpretation of the appropriateness of the proposed features and materials by DCA will be final. These points are intended to encourage the integration of new construction/rehabilitation into the existing community, and to promote sustainable design and the protection of resources. Points will be awarded as set forth in the categories below. A maximum of nineteen (19) points will be awarded.
1. Exterior Material and Architectural Features A maximum of ten (10) points will be awarded in this category.
(a) Exterior wall faces have an excess of 40% brick or stone of the total wall surface. This is applicable to all sides of the buildings including the sides and rear wall faces. On all exterior walls the brick must extend to all areas of grass, landscaping and other areas of soil or mulch. (three (3) points)
(b) Attractive features such as shutters, decorative exterior porch, patio railings, roof profiles, hips, and gables, cupolas etc. are used. There must be at least two features DCA considers appropriate for these points and the features must be included on the sides and rear of all buildings. (two (2) points)
(c) Materials are upgraded from the minimums as delineated in the Manual. To qualify for these points there must be at least two major exterior finishing materials upgraded, and all manufacturing cut sheets must be included with the Application to document these upgrades. (three (3) points)

19 points

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(d) The entry to all buildings are prominently and attractively delineated and covered to protect the residents. The entry stairs must be covered to qualify in this category. The entries to the buildings and community areas shall be located to provide direct access to either the parking areas or access streets. In a rehab project, if existing entries are already (or have been) covered and the construction includes reconstruction of the historic elements that will cover the entry, these will be applicable. (two (2) points)
2. Landscaping and Site Design The integration of existing trees and vegetation along with the existing drainage patterns into new developments are important elements in the preservation of existing resources. A maximum of nine (9) points may be awarded in this category as outlined below
(a) Existing mature trees are preserved and the integration of existing vegetation and drainage patterns are integrated into the finished landscaping design. This can be supported by integrating the principles of xeriscaping or drought tolerant plantings in the design of these existing areas into the new landscape design and must be clearly delineated on a preliminary landscape plan submitted with the Application.
To qualify for these points, the areas to be preserved and enhanced must be defined and must be within the development of the property. If these areas of tree protection occur only at the edges of the property or if there are no trees or vegetation on the property, the landscape design may qualify for these points by clearly defining areas of replanting on the preliminary landscape plan submitted with the Application. To qualify under this requirement, the new plantings must provide for trees a minimum of 8" in diameter and a minimum of one tree per ten units, integrated with other plantings and located to enhance the residents' use of the property and site amenities. (four (4) points)
(b) Freestanding shelters for mail pickup, transportation stops, etc. and not included in any other point scoring category, are eligible for points in this category. These shelters are to be located adjacent to areas of shade from natural plantings and be coordinated into the overall landscaping design. (two (2) points)
(c) A maximum of three (3) points for substantially upgraded landscaping features such as entry streetscapes with larger trees, berms and other definition; decorative fencing special lighting and signage; areas of sodded lawn along with seasonal plantings and landscaping sprinklers in central focal point areas of the property. (three (3) points)

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D. Accessibility
DCA has a basic requirement that 5% of the units (with a minimum of one) be equipped for the mobility disabled, and an additional 2% of the units (with a minimum of one) be equipped for the hearing and sight impaired. In addition DCA requires all community spaces and first floor units, including single family units, are to be "visitable," as defined by the Americans with Disabilities Act and the Federal Housing Administration. (Refer to the guidance included in the Manual for the requirements for these units.)
Points will be available in the following categories to provide greater accessibility for impaired residents.
Two (2) points for the selection of a site that requires little or no re-grading to create a multi-family community that is 100% accessible to the disabled.
Two (2) points for an additional 2% of the units, beyond the number required above, which are equipped for the mobility disabled. These units must include the installation of a roll-in shower to qualify in this category.
Two (2) points for a development that creates an accessible route to every building on the property from every parking and community area. The maximum length of travel to any building from an adjacent parking area must not exceed 200 feet. There must be no exceptions to creating an accessible route to each building to qualify for these points.
E. Ownership Makeup
Ownership entities comprised of 100% nonprofit organizations will receive four (4) points. Only two (2) points will be awarded if a for-profit entity partners with a nonprofit that is applying (and eligible) under the Plan's Credits nonprofit set-aside or the CHDO Loan Program set-aside.
7. Readiness to Proceed
To obtain these points the Applicant must apply for all land disturbance and building permits as required by the Local Government. To qualify for the points the Applicant must supply:
A copy of the building permit obtained, dated appropriately to allow construction to commence within a time frame that allows for completion in accordance with DCA requirements; and,
An original letter from the Local Government indicating that all documentation has been received and all fees have been paid to allow construction to commence as indicated on the permits. The letter must also reference the project name, address and number of units

6 points
4 points 4 points

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8. Compliance History Status
A. General
This section is designed to consider prior compliance experience and administrative performance with HOME, HTF, FDIC and Credit properties as part of the overall scoring process. Project Participants with no prior experience in Georgia or a contiguous state (Florida, Alabama, North Carolina, South Carolina, Tennessee) will have no positive or negative impact on the final compliance score. Project Participants with experience will be scored in accordance with the process discussed below. The scores for the Project Participants with experience will be weighted along with the neutral scores of those Project Participants with no experience to arrive at an overall development team compliance score. This final compliance score may result in an addition of up to ten (10) points or a reduction of as many as twenty (20) points to/from the overall Application score.
Although syndicators will be scored using the same criteria used for other Project Participants, their specific scores will not be used in the calculation of the overall development team score. They will be scored on a pass/fail basis, and those syndicators scoring 20 or less will not be eligible to participate in projects funded from Credits awarded under the Plan. If a proposed syndicator is deemed ineligible to participate, the Applicant may select another syndicator.
If the syndicator for a proposed project is not known at the time of Application Submission, DCA will accept the Application with this information excluded. In such cases, Applicants should notify DCA of the proposed syndicator and submit required compliance documentation regarding the syndicator experience at the earliest possible time, but no later than 75 days after the receipt of carryover allocation. DCA strongly recommends submitting the syndicator information as early as possible to avoid potential problems that may arise if the syndicator is deemed ineligible. DCA will score the syndicators and will notify both the sydicators and the Applicants of the results.
(Note that syndicators will be required to submit a complete and accurate experience summary along with all required property audit documentation. Incomplete and inaccurate experience summaries and experience summaries without the required documentation will result in the syndicator being deemed ineligible to participate in the 2002 competitive round. Syndicators will not be required to submit self-scoring worksheets).
Project Participants that have been ineligible to participate for the last two competitive rounds, and remain ineligible in the 2002 competitive round, may apply for Probationary Participation. DCA, at its sole discretion, may approve participation based upon further review of the circumstances that resulted in the determination of ineligibility and of corrective actions taken. However, an individual compliance factor of 42 will apply to that participant for computing the Preliminary Compliance Score. Procedures for applying for Probationary Participation, and the requirements for such participation, are outlined in the Manual.

10 points

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B. Required Documentation
Five fully executed DCA Uniform Release Forms (included in the Manual) must be submitted.
Internal Revenue Service Form 8821 may be requested by DCA for any Project Participant listed on the Experience Summary at anytime during DCA's review of a Project Participant's compliance history.
C. Compliance History Evaluation Process Overview
A numerical value will be applied for each instance of noncompliance (see table I). The total number of units audited (not the total number of units at property) for each Project Participant designated in the Application will be divided by the total of the numerical values to determine a Participant Compliance Factor (see table II).
Project Participants with no experience/audits within the three-year period will receive a score of zero (0). The Overall Compliance Factor will be the combined Compliance Factors of the basic categories of Participants (excluding the syndicator). An Applicant's preliminary compliance score can then be determined from the Compliance Scoring Table included in this Section (see table III).
To score individual participants, multiply the individual Participant Compliance Factor by three (3) and refer to the Compliance Scoring Table. Note that a syndicator's compliance score will not affect the proposed project compliance score, but to be eligible to participate, the syndicator must score 20 or higher.
D. Examples of Major and Minor Instance of Noncompliance
The following examples are intended to provide general guidance to determine whether a particular instance of noncompliance will be treated by DCA as major of minor for scoring purposes. This list of examples does not include every possible category of noncompliance and is not intended to be all-inclusive. DCA will make the final determination on a case by case basis. Based on this general guidance, Applicants must use their own judgement for self-scoring purposes.
1. Major Noncompliance Numerous or repetitive rent charged to tenants that exceeds the applicable property rent limits. Failure to follow the Next Available Unit Rule Failure to follow the Vacant Unit Rule Numerous or repetitive instances of administrative noncompliance (failing to execute the policies and procedures stated in DCA Program Manuals, Land Use Restrictive Covenants, Land Use Restrictive Agreements, Loan documents and federal rules and regulations)

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Significant health and safety violations generally affecting more than one unit (structural problems, sever water damage, heavy mold, fire hazards, infestations)
Down units (not suitable for occupancy for extended periods of time, generally more than 90 days)
Failure to maintain or provide tenant income certification and documentation
Failure to provide items listed on the Application (amenities, support services, architectural elements)
2. Minor Noncompliance Isolated instances of administrative noncompliance (failing to execute the policies and procedures stated in DCA Program Manuals, Land Use Restrictive Covenants, Land Use Restrictive Agreements, Loan documents, and federal rules and regulations) Less critical or isolate instances of health and safety violations (loose handrails, inoperable stove burner, minor leaks)

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Table I NONCOMPLIANCE CATEGORIES NUMERICAL VALUES
Minor Noncompliance Per Unit Project-Wide

Major Noncompliance Per Unit Project-Wide

Isolated instances of

0

0

2

3

noncompliance resolved during

the DCA assigned cure period

Isolated instances of

1

2

3

4

noncompliance resolved after the

DCA assigned cure period

Other instances of noncompliance

2

3

4

5

resolved during the DCA assigned

cure period

Other instances of noncompliance

3

4

5

6

resolved after the DCA assigned

cure period

Incurable instances of

1

2

5

6

noncompliance measures taken

to prevent further instances of

noncompliance

Curable instances of noncompliance left uncured

6

10

Applicable participant

Ineligible to participate

Incurable instances of

6

noncompliance no measures

taken to prevent further instances

of noncompliance

10

Applicable participant

Ineligible to participate

Default of a HOME Loan

Dependent upon circumstances. Will be determined at determined at DCA's sole and absolute discretion

Submission of fraudulent information or equivalent acts

Applicable participant Ineligible to participate

Debarred from participation in similar programs in any of the contiguous States at the Application deadline date

Applicable participant Ineligible to participate

Debarred from participation in similar programs by any Federal agency at the Application deadline date

Applicable participant Ineligible to participate

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Table II

EXAMPLES OF COMPLIANCE SCORING PROCESS

Example 1 assumes all three participants have been audited within the three-year period

Project Participants

Number of Units

Participant

Audited Within Compliance =

Three-Year Period Numerical Value

Developer

330

5

Owner/ General Partner (see

45

0

note 1)

Management Company (see note 1)

120

1

Overall Compliance Factor

Preliminary Compliance Score From Compliance Scoring Table

Participant Compliance
Factor 66.0 100.0
100.0 266
7

Example 2 assumes two of the three Participants have been audited within the three-year period, and that Co-Developers are participating.

Participants

Number of Units

Participant

Audited Within Compliance =

Three-Year Period Numerical Value

Participant Compliance
Factor

Co-Developer # 1 Co-Developer # 2

330

5

66.0

45

0

100.0

Co-Developers' Average

Compliance Factor (see note 3)

83

Owner/General Partner (see note 2)

0

0

65

Management Company

120

1

100.0

Overall Compliance Factor

248

Preliminary Compliance Score From Compliance Scoring Table

5

Note 1 The maximum participant compliance factor is 100.

Note 2 An unaudited participant will receive a participant compliance factor of 65, which will have no Positive or negative impact on the final compliance score.

Note 3 Co Participants To arrive at the Co-Developer Average Compliance Factor, first determine the Factor for each Co-Developer, and average the Compliance Factors.

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Table III

COMPLIANCE SCORING TABLE

Overall Compliance Factor
290 300 280 289 270 279 260 269 250 259 240 249 230 239 220 229 210 219 200 209 190 199 185 189 180 184 175 179 170 174 165 169 160 164 155 159 150 154 145 149 140 144 135 -139 130 134 125 129 124 OR LESS

Example 1 Example 2

Preliminary Compliance Score
10 9 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 -11 -12 -20 Ineligible Project

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