A. Prior to
submitting an application for reservation, applicants shall submit on such form
as required by the executive director, the letter for authority signature by
which the authority shall notify the chief executive officers (or the
equivalent) of the local jurisdictions in which the developments are to be
located to provide such officers a reasonable opportunity to comment on the
developments.
B. Application for a
reservation of credits:
1. Shall be commenced
by filing with the authority an application, on such forms as the executive
director may from time to time prescribe or approve, together with such
documents and additional information (including, without limitation, a market
study that is prepared by a housing market analyst who meets the authority's
requirements for an approved analyst, as set forth on the application form,
instructions, or other communication available to the public, that shows
adequate demand for the housing units to be produced by the applicant's
proposed development) as may be requested by the authority in order to comply
with the IRC and this chapter and to make the reservation and allocation of the
credits in accordance with this chapter. The executive director may reject any
application from consideration for a reservation or allocation of credits if in
such application the applicant does not provide the proper documentation or
information on the forms prescribed by the executive director. In addition to
the market study contained in the application, the authority may conduct its
own analysis of the demand for the housing units to be produced by each
applicant's proposed development.
All sites in an application for a scattered site development
may only serve one primary market area. If the executive director determines
that the sites subject to a scattered site development are served by different
primary market areas, separate applications for credits must be filed for each
primary market area in which scattered sites are located within the deadlines
established by the executive director.
2. Should include a breakdown of sources and
uses of funds sufficiently detailed to enable the authority to ascertain what
costs will be incurred and what will comprise the total financing package,
including the various subsidies and the anticipated syndication or placement
proceeds that will be raised.
3.
Shall include the following cost information, if applicable, to determine the
feasible credit amount:
a. Site acquisition
costs,
b. Site preparation
costs,
c. Construction
costs,
d. Construction
contingency,
e. General
contractor's overhead and profit,
f. Architect and engineer's fees,
g. Permit and survey fees,
h. Insurance premiums,
i. Real estate taxes during
construction,
j. Title and
recording fees,
k. Construction
period interest,
l. Financing
fees,
m. Organizational
costs,
n. Rent-up and marketing
costs,
o. Accounting and auditing
costs,
p. Working capital and
operating deficit reserves,
q.
Syndication and legal fees,
r.
Development fees, and
s. Other
costs and fees.
4. All
applications seeking credits for rehabilitation of existing units must provide
for contractor construction costs of at least $10,000 per unit for developments
financed with tax-exempt bonds and $15,000 per unit for all other
developments.
C. Any
application that exceeds the cost limits described in this subsection shall be
rejected from further consideration and shall not be eligible for any
reservation or allocation of credits. The higher of the following two cost
limit calculations: per-unit cost or per-square-foot cost may be utilized by an
applicant.
The authority will at least annually establish per-unit and
per-square-foot cost limits based upon historical cost data of tax credit
developments in the Commonwealth. Such limits will be indicated on the
application form, instructions, or other communication available to the public.
The cost limits will be established for new construction, rehabilitation, and
adaptive reuse development types. The authority will establish geographic
limits. For the purpose of determining compliance with the cost limits, the
value of a development's land and acquisition costs and such other expenses as
the executive director determines are appropriate for the good of the plan will
not be included in total development cost. Compliance with applicable cost
limits will be determined both at the time of application and also at the time
the authority issues the IRS Form 8609, with the higher of the two limits being
applicable at the time of IRS Form 8609 issuance.
D. Each application shall include:
1. Plans and specifications in such form and
from such person satisfactory to the executive director as to the completion of
such plans or specifications.
2. In
the case of rehabilitation, a physical needs assessment in such form and
substance and prepared by such person satisfactory to the executive director
pursuant to the authority's requirements as set forth on the application form,
instructions, or other communication available to the public.
3. An environmental site assessment (Phase I)
in such form and substance and prepared by such person satisfactory to the
executive director pursuant to the authority's requirements as set forth on the
application form, instructions, or other communication available to the
public.
4. Evidence of
a. Sole fee simple ownership of the site of
the proposed development by the applicant,
b. Lease of such site by the applicant for a
term exceeding the compliance period (as defined in the IRC) or for such longer
period as the applicant represents in the application that the development will
be held for occupancy by low-income persons or families, or
c. Right to acquire or lease such site
pursuant to a valid and binding written option or contract between the
applicant and the fee simple owner of such site for a period extending at least
four months beyond any application deadline established by the executive
director, provided that such option or contract shall have no conditions within
the discretion or control of such owner of such site.
Any contract for the acquisition of a site with existing
residential property may not require an empty building as a condition of such
contract, unless relocation assistance is provided to displaced households, if
any, at such level required by the authority. A contract that permits the owner
to continue to market the property, even if the applicant has a right of first
refusal, does not constitute the requisite site control required in subdivision
4 c of this subsection.
No application shall be considered for a reservation or
allocation of credits unless such evidence is submitted with the application
and the authority determines that the applicant owns, leases, or has the right
to acquire or lease the site of the proposed development as described in this
subsection.
In the case of acquisition and rehabilitation of developments
funded by Rural Development of the U.S. Department of Agriculture (Rural
Development), any site control document subject to approval of the partners of
the seller does not need to be approved by all partners of the seller if the
general partner of the seller executing the site control document provides (i)
an attorney's opinion that such general partner has the authority to enter into
the site control document and such document is binding on the seller or (ii) a
letter from the existing syndicator indicating a willingness to secure the
necessary partner approvals upon the reservation of credits.
5. Written evidence satisfactory
to the authority (i) of proper zoning or special use permit for such site or
(ii) that no zoning requirements or special use permits are
applicable.
6. A certification, in
a form required by the executive director, of previous participation listing
all developments receiving an allocation of tax credits under § 42 of the
IRC in which:
a. The principals have or had an
ownership or participation interest,
b. The location of such
developments,
c. The number of
residential units and low-income housing units in such developments,
and
d. Such other information as
more fully specified by the executive director.
7. Furthermore, for any such development, the
applicant must indicate whether the appropriate state housing credit agency has
ever filed a Form 8823 with the IRS reporting noncompliance with the
requirements of the IRC and that such noncompliance had not been corrected at
the time of the filing of such Form 8823. The executive director may reject any
application from consideration for a reservation or allocation of credits
unless the above information is submitted with the application. If, after
reviewing the information provided in this subdivision or any other information
available to the authority, the executive director determines that the
principals do not have the experience, financial capacity and predisposition to
regulatory compliance necessary to carry out the responsibilities for the
acquisition, construction, ownership, operation, marketing, maintenance and
management of the proposed development or the ability to fully perform all the
duties and obligations relating to the proposed development under law,
regulation and the reservation and allocation documents of the authority or if
an applicant is in substantial noncompliance with the requirements of the IRC,
the executive director may reject applications by the applicant.
8. No application will be accepted from any
applicant with a principal that has or had an ownership or participation
interest in a development at the time the authority reported such development
to the IRS as no longer in compliance and is no longer participating in the
federal low-income housing tax credit program.
9. A certification, in a form required by the
executive director, that the design of the proposed development meets all
applicable amenity and design requirements required by the executive director
for the type of housing to be provided by the proposed development.
E. The application:
1. Should include pro forma financial
statements setting forth the anticipated cash flows during the credit period as
defined in the IRC.
2. Shall
include a certification by the applicant as to the full extent of all federal,
state and local subsidies that apply (or that the applicant expects to apply)
with respect to each building or development.
3. May be required by the executive director
to include the submission of a legal opinion or other assurances satisfactory
to the executive director as to, among other things, compliance of the proposed
development with the IRC and a certification, together with an opinion of an
independent certified public accountant or other assurances satisfactory to the
executive director, setting forth the calculation of the amount of credits
requested by the application and certifying, among other things, that under the
existing facts and circumstances the applicant will be eligible for the amount
of credits requested.
F.
Each applicant shall commit in the application to provide:
1. Relocation assistance to displaced
households, if any, at such level required by the executive director. Each
applicant shall commit in the application to use a property management company
certified by the executive director to manage the proposed
development.
2. Unless prohibited
by an applicable federal subsidy program, a leasing preference to individuals:
a. In a target population identified in a
memorandum of understanding between the authority and one or more participating
agencies of the Commonwealth,
b.
Having a voucher or other binding commitment for rental assistance from the
Commonwealth, and
c. Referred to
the development by a referring agent approved by the authority. The leasing
preference shall not be applied to more than 10% of the units in the
development at any given time. The applicant may not impose tenant selection
criteria or leasing terms with respect to individuals receiving this preference
that are more restrictive than the applicant's tenant selection criteria or
leasing terms applicable to prospective tenants in the development that do not
receive this preference, the eligibility criteria for the rental assistance
from the Commonwealth, or any eligibility criteria contained in a memorandum of
understanding between the authority and one or more participating agencies of
the Commonwealth.
3.
Free Wi-Fi access in the community room of the development and such access
shall be restricted to resident only usage.
4. A disclosure, to be acknowledged by
tenant, of the availability of renter education from the authority.
G. Each applicant shall commit in
the application:
1. Not to require an annual
minimum income requirement that exceeds the greater of $3,600 or 2.5 times the
portion of rent to be paid by tenants receiving rental assistance.
2. To waive its right to request to terminate
the extended low-income housing commitment through the qualified contract
process, as described in the IRC.
Further, any application submitted by an applicant containing
a principal that was a principal in an owner that has previously requested, on
or after January 1, 2019, a qualified contract in the Commonwealth (regardless
of whether the extended low-income housing commitment was terminated through
such process) shall be rejected from further consideration and shall not be
eligible for any reservation or allocation of credits.
H. The authority is committed to
the long-term affordability of developments for the benefit of tenants and full
compliance by applicants and principals with the provisions of the IRC, the
extended use agreement and other program requirements. The authority similarly
has an interest in preserving the right of first refusal by a qualified
nonprofit organization at the close of the compliance period, as authorized in
§ 42(i)(7) of the IRC.
The executive director is hereby authorized to require any or
all of the following with respect to applications:
1. Provisions to be included in the
applicant's organizational documents limiting transfers of partnership or
member interests or other actions detrimental to the continued provision of
affordable housing;
2. A designated
form of right of first refusal document;
3. Terms in the extended use agreement
requiring notice and approval by the executive director of transfers of
partnership or member interests;
4.
Debarment from the program of principals having demonstrated a history of
conduct detrimental to long-term compliance with extended use agreements,
whether in Virginia or another state, and the provision of affordable tax
credit units; and
5. Provisions to
implement any amendment to the IRC or implementation of any future federal or
state legislation, regulations, or administrative guidance.
The decision whether to institute, and the terms of, any such
requirements shall be made by the executive director as reasonably determined
to be necessary or appropriate to achieve the goals stated in this subsection
and in the best interest of the plan. Any such requirements will be indicated
on the application form, instructions, or other communication available to the
public.
I. Any
application submitted by an applicant containing a principal that was a
principal in an owner that has, in the authority's determination, previously
participated, on or after January 1, 2019, in a foreclosure in Virginia (or
instrument in lieu of foreclosure) that was part of an arrangement a purpose of
which was to terminate an extended low-income housing commitment (regardless
whether the extended low-income housing commitment was terminated through such
foreclosure or instrument) shall be rejected from further consideration for
low-income housing tax credits and shall not be eligible for any reservation or
allocation of credits.
J. If an
applicant submits an application for reservation or allocation of credits that
contains a material misrepresentation or fails to include information regarding
developments involving the applicant that have been determined to be out of
compliance with the requirements of the IRC, the executive director may reject
the application or stop processing such application upon discovery of such
misrepresentation or noncompliance and may prohibit such applicant from
submitting applications for credits to the authority in the future.
K. In any situation in which the executive
director deems it appropriate, the executive director may:
1. Treat two or more applications as a single
application. Only one application may be submitted for each location.
2. Establish criteria and assumptions to be
used by the applicant in the calculation of amounts in the application, and any
such criteria and assumptions may be indicated on the application form,
instructions or other communication available to the public.
3. Prescribe such deadlines for submission of
applications for reservation and allocation of credits for any calendar year as
he shall deem necessary or desirable to allow sufficient processing time for
the authority to make such reservations and allocations. If the executive
director determines that an applicant for a reservation of credits has failed
to submit one or more mandatory attachments to the application by the
reservation application deadline, he may allow such applicant an opportunity to
submit such attachments within a certain time established by the executive
director with a 10-point scoring penalty per item.
L. After receipt of the local notification
information data, if necessary, the authority shall notify the chief executive
officers (or the equivalent) of the local jurisdictions in which the
developments are to be located and shall provide such officers a reasonable
opportunity to comment on the developments.
M. The development for which an application
is submitted may be, but shall not be required to be, financed by the
authority. If any such development is to be financed by the authority, the
application for such financing shall be submitted to and received by the
authority in accordance with its applicable rules and regulations.
N. The authority may consider and approve, in
accordance herewith, both the reservation and the allocation of credits to
buildings or developments that the authority may own or may intend to acquire,
construct, or rehabilitate.
O. Any
application seeking an additional reservation of credits for a development in
excess of 10% of an existing reservation of credits for such development shall
be rejected from further consideration hereunder and shall not be eligible for
any reservation or allocation of credits pursuant to such application. However,
such applicant may execute a consent to cancellation for such existing
reservation and submit a new application for the aggregate amount of the
existing reservation and any desired increase.
Notes
13 Va. Admin. Code §
10-180-50
Derived from
VR400-02-0011 §1, eff. June 21, 1995; amended, Virginia Register Volume
12, Issue 11, eff. February 19, 1996; Volume 13, Issue 12, eff. February 12,
1997; Volume 14, Issue 14, eff. March 4, 1998; Volume 15, Issue 14, eff. March
10, 1999; Volume 16, Issue 11, eff. January 24, 2000; Volume 18, Issue 10, eff.
January 9, 2002; Volume 19, Issue 16, eff. April 2, 2003; Volume 20, Issue 10,
eff. January 12, 2004; Volume 21, Issue 11, eff. January 14, 2005; Volume 22,
Issue 9, eff. January 1, 2006; Volume 24, Issue 11, eff. February 4, 2008;
Volume 25, Issue 7, eff. January 1, 2009; Volume 29, Issue 9, eff. January 1,
2013; amended, Virginia Register Volume 30, Issue 6, eff. January 1, 2014;
Amended,
Virginia
Register Volume 31, Issue 09, eff. 1/1/2015; Amended,
Virginia
Register Volume 33, Issue 08, eff.
1/1/2017; Amended,
Virginia
Register Volume 35, Issue 10, eff.
1/1/2019; Amended,
Virginia
Register Volume 38, Issue 11, eff.
1/1/2022.
Statutory Authority: § 36-55.30:3 of the Code of
Virginia.
