Michigan State Housing

Development Authority

Comprehensive Program &

Resource Directory

Mission

The Michigan State Housing Development Authority provides financial and technical assistance through public and private partnerships to create and preserve decent, affordable housing for low and moderate-income Michigan residents.

Vision

We will address changing housing needs thereby empowering individuals and communities to be self-sufficient. We will provide excellent service within a quality work environment where trust, open communication, inclusive decision-making, and respect for one another are highly valued.

Table of Contents

· MSHDA Divisions…………………………………………………………...4

· MSHDA Senior Managers……………………………….…………………..5

· Rental Development……………………………………….….………..…….7

- HOME TEAM Advantage

- Modified Pass Through Program

- More Independence Through HOME (MI HOME)

- Taxable Bond Financing

- Tax-Exempt Apartments for Michigan (TEAM)

- Section 236/202 Preservation

Rental Development Appendix

· Low Income Housing Tax Credit Program (LIHTC)…….……….….……17

· Office of Existing Housing Programs……………………………….….… 19

- Housing Choice Voucher (HCV) Program

- HCV Guidelines for Landlords

- HCV Guidelines for Tenants

- Family Self Sufficiency (FSS)

- “Key to Own” Homeownership Program

· Home Purchase……………………………………………...………………27

- Down Payment Assistance

- Employer Assisted Housing Program

- LINKS to Homeownership

- Michigan Mortgage Credit Certificate (MCC)

- Single Family Home Mortgages

- HomeChoice Down Payment Assistance Program

· Community Development………………………………….…………….…34

- Commercial Economic Development Fund (CEDF)

- Contractors Assistance Program (CAP)

- County Allocation Program

- Home Improvement/Property Improvement Program (PIP)

- Homebuyer Construction Loan Program

- Homeless Program – Critical Needs

- Homeless Program – Emergency Shelter Grants (ESG)

- Homeless Program – Homeless Facilities Grant

- Housing Resource Fund (HRF)

- Neighborhood Preservation Program (NPP)

- Predevelopment Loan Program

- Technical Assistance (TA)

Community Development Appendix

· Asset Management…………………………………………….…………..48

- Section 8 Preservation

- Home Preservation

MSHDA Divisions

Executive
Agency administration; governmental relations; public relations; marketing research; planning; organizational development; education and training technology; human resources

Multifamily Development and Construction
Multifamily direct rental housing development loans and Section 236/202 preservation loans; supportive housing loans; technical services including design review, construction monitoring, inspection, appraisals, environmental review, energy conservation and fire safety

Legal
Legal aspects of loan underwriting and bond and note sales; loan closings; review of administrative procedures and legislation; public hearings; fair housing; compliance; Low Income Housing Tax Credit (LIHTC) and modified pass through lending

Office of Existing Housing Programs
Housing Choice Voucher (HCV) rental assistance through these programs: HCV, Family Self Sufficiency (FSS), and the “Key to Own” Homeownership Program.

Finance/Single Family
Capital formation and financial management; loan servicing; accounting; home mortgages; home ownership counseling and Mortgage Credit Certificates (MCC)

Community Development
Neighborhood Preservation Program (NPP); technical assistance; grants to nonprofit organizations and local governments; homeless programs and property improvement

Asset Management
Financial and physical property operations oversight of Multifamily direct loans; preservation and transfer of physical assets; mortgage workouts and Contract Administration for HUD

MSHDA Senior Managers

Executive

Michael DeVos (Executive Director)

Program Policy and Market Research

Gary Heidel

Multifamily Development and Construction

Marjorie Green

Legal Affairs/Compliance/Low Income Housing Tax Credit

Ted Rozeboom

Existing Housing Programs

Christine Collette

Finance/Single Family

Rick Laber

Community Development

Rick Ballard

Asset Management

Donna McMillan

HOUSING RESOURCES

RENTAL DEVELOPMENT

Introduction

MSHDA’s rental housing programs are financed through the sale of tax‑exempt bonds and notes and taxable bonds to private investors.

MSHDA’s loans are governed by federal law and tax policy, by state laws and statutes and by the Authority’s underwriting standards and guidelines. Borrowers repay the Authority, which in turn pays interest to the buyers of its bonds. Through a variety of methods, MSHDA is able to lend its funds at lower rates and longer terms than conventional lenders.

In this section:

HOME TEAM Advantage

Modified Pass Through Program

More Independence Through HOME (MI HOME)

Taxable Bond Financing

Tax-Exempt Apartments for Michigan (TEAM)

Section 236/202 Preservation

Rental Development Appendix

HOME TEAM Advantage

This program offers loans for the construction of new rental developments with 12 to 49 units in non-urban communities. Ten percent of the units are for households with incomes at or below 30 percent of area median income and 10 percent may be market rate. The remaining units are offered to households with an income between 31 percent and 60 percent of the median income.

How the Program Works

The program utilizes a variety of Authority resources to provide a comprehensive financing package for the construction of new developments totaling 12 to 49 units (a minimum of 24 units is recommended) in non-urban communities; up to 100 units for rehabilitation may be considered. This program makes available construction loans, fixed-rate permanent mortgages and HOME funds designed to complement and enhance the feasibility of projects located in underserved areas of the state. Projects designed for elderly occupancy are limited to 50 percent of the total production under this program.

Loan Term and Interest Rate

The program features tax-exempt, bond-financed, 35-year, fully amortizing, first mortgage loans for not less than 50 percent of the project’s total development cost. The interest rate for this program is one percentage point below the MSHDA TEAM lending rate.

Low Income Housing Tax Credit

The 4 percent Low Income Housing Tax Credit is available for qualified units financed with tax-exempt bond proceeds that meet the requirements of Michigan’s Qualified Allocation Plan without the need to compete. However, participation in the Low Income Housing Tax Credit program is mandatory and all requirements and underwriting standards of the Qualified Allocation Plan will apply.

HOME Investment Partnership Funding

The minimum amount of HOME funding is $1,000 per unit. The maximum amount of HOME assistance is the lesser of (1) the equity gap as determined by MSHDA, or (2) $16,000 per unit multiplied by the total number of units in the development. Up to $24,000 is allowed for rehabilitation or other difficult to develop proposals.

Determining the Number of HOME Units

The number of HOME-designated units is calculated using the amount of HOME funds necessary for the project’s feasibility, as determined by MSHDA, divided by the lesser of the per unit total development cost or the HOME subsidy limit. HOME-designated units are subject to a minimum 20-year affordability period, beginning after project completion.

Eligibility

For profit and nonprofit developers for the construction and rehabilitation of rental developments are eligible to apply. Borrowers must be eligible entities under the Authority's Act (i.e., limited dividend housing associations or corporations, limited liability corporations, consumer housing cooperatives and nonprofit housing corporations.)

Eligibility Areas

For program year 2005, project sites must be located in communities in non-urban areas of the state and meet targeting criteria. Michigan urban areas are listed in the Appendix (Figure 1) directly following this section. In addition, any proposal awarded funding under the USDA Rural Development Section 515 program is eligible to participate in the HOME TEAM lending program.

MSHDA Division:

Multifamily Development and Construction

Contact Information:

Director, Marjorie Green (517) 373-9348

TTY 1-800-382-4568

Modified Pass Though Program

Modified Pass Through Program

The Modified Pass Through program offers low-interest rate loans to for profit or nonprofit developers for new construction or rehabilitation of rental developments with 50 to 150 units. Sixty percent of the units must be used for households with incomes at or below 60 percent of the area median income, or 40 percent must be used for households at 50 percent of the area median income.

How the Program Works

This program uses a state tax-exempt bond volume cap for the issuances of limited obligation bonds that are credit-enhanced by a third party. The use of the 4 percent Low Income Housing Tax Credit is required, and the underwriting standards of that program are applicable. The Modified Pass Through program is sometimes referred to as “conduit” financing and is not a direct lending program.

Eligibility

Borrowers must be eligible entities under the Authority's Act (i.e., limited dividend housing associations or corporations, limited liability corporations, consumer housing cooperatives and nonprofit housing corporations.)

Eligible Projects

Loans must be for the production of affordable housing units by new construction or rehabilitation, with mandatory participation in the Low Income Housing Tax Credit program. Proposals are required to meet the threshold requirements for participation in the Low Income Housing Tax Credit Program.

For rehabilitation projects, the amount of the construction contract must be at least 40 percent of the acquisition cost, and two major building systems must be scheduled for replacement or significant upgrade. Consistent with the Low Income Housing Tax Credit program, an independent comprehensive needs analysis is required as a part of the application, verifying the proposed scope of rehabilitation and costs. If applicable, relocation planning must be completed.

Eligibility Areas

The program is eligible throughout the state; however, certain costs are reduced for projects in certain areas. Public Act of 346, Chapter One, Section 11, as amended, defines “eligible distressed areas.” The list is provided in the Appendix (Figure 2) directly following this section.

MSHDA Division:

Legal Affairs

Contact Information:

Director, Ted Rozeboom (517) 373-6010

TTY 1-800-382-4568

More Independence Through HOME (MI HOME)

MI HOME

This program is designed to facilitate the acquisition, rehabilitation and/or new construction of one to four unit rental properties by nonprofit groups who intend to house people with disabilities.

How the Program Works

The primary funding sources for this program are federal HOME allocations administered by MSHDA and debt financing from the Authority. Sponsors may also request Low Income Housing Tax Credits for proposals that cannot be fully funded or made feasible within the limits of available Authority and HOME funding. Mortgage loans will be made available at interest rates of 1 percent to 8 percent and for terms of up to 30 years. The maximum mortgage amount will be determined by the project’s ability to repay. The Authority will agree to provide permanent financing only or both construction and permanent financing if requested by the nonprofit sponsor.

Eligibility

Proposals will be accepted from nonprofit organizations that have been incorporated and active for at least one year. Newly created subsidiaries of parent corporations that meet these requirements also qualify. Applicants must have 501(c)(3) federal IRS status and must be determined by the Authority to have the financial capacity, technical and programmatic experience and sufficient management expertise to successfully complete the project.

MSHDA Division:

Multifamily Development and Construction

Contact Information:

Marjorie Green (517) 373-9348

TTY 1-800-382-4568

Taxable Bond Financing

The Taxable Bond Program combines application for the federal 9 percent Housing Tax Credit with MSHDA financing for rental developments in which both occupancy and rent levels for targeted units are restricted to households with incomes at or below 60 percent of the area median income.

How the Program Works

Mortgage loans under the Taxable Bond Program will be made at fixed interest rates of 7.0 percent and will be fully amortizing with 35-year terms. For development proposals located within “eligible distressed communities,” mortgage loans will have a current “pay” rate of 6.5 percent with the difference between the 6.5 percent charged and the 7.0 percent program rate accruing and payable upon resale or refinancing. Under the Taxable Bond Program, MSHDA’s loans are limited to 70 percent of total development cost or (as with the TEAM Program) 110 percent of the application for profit HUD 221(d)(3) Mortgage Limits, whichever is lower.

Eligibility

For profit or nonprofit developers for the construction or rehabilitation of rental developments with 50 to 150 units are eligible to apply. Borrowers must be eligible entities under the Authority's Act (i.e., limited dividend housing associations or corporations, limited liability corporations, consumer housing cooperatives and nonprofit housing corporations.)

MSHDA Division:

Multifamily Development and Construction

Contact Information:

Director, Marjorie Green (517) 373-9348

TTY 1-800-382-4568

Tax-Exempt Apartments for Michigan (TEAM)

TEAM

TEAM offers low-interest rate loans to for profit or nonprofit developers for the construction or rehabilitation of rental developments with 50 to 150 units. A minimum of 40 percent of the units must be for households with the incomes at or below 60 percent of area median income.

How the Program Works

The program features 35-year, 5.5 percent, fully amortizing, first mortgage loans of up to 90 percent of total development cost. For development proposals located within eligible distressed communities, mortgage loans have a current "pay" rate of 5.0 percent, with the difference between the interest currently charged and the 5.5 percent program rate accruing and payable upon resale or refinancing or after the original principal has been paid. At a minimum, owners must restrict occupancy for 40 percent of each unit type to households with incomes at or below 60 percent of area median income, adjusted for family size. This income restriction is in effect for as long as the Authority's mortgage loan is outstanding.

Eligibility

MSHDA Division:

Multifamily Development and Construction

Contact Information:

Director, Marjorie Green (517) 373-9348

TTY 1-800-382-4568

Section 236/202 Preservation

This program offers tax-exempt loans for the acquisition and preservation of Section 236 and Section 202 rental housing developments. These developments are eligible for mortgage loan prepayment and conversion to unregulated use and may be lost to the affordable housing inventory in Michigan. Proposals must usually satisfy all federal and state requirements for the use of private activity tax-exempt bond cap, HUD Section 236 “decoupling,” and the Housing Tax Credit, if requested.

How the Program Works

· The existing mortgage loan may be prepaid and the property refinance as part of a new MSHDA first mortgage based upon standard underwriting criteria, with rents (unless further restricted by Housing Tax Credit or HUD limitations) set at “market” levels, operation costs based on historical data unless modified by project improvements and rehabilitation and soft costs at levels appropriate for both the specific transaction and the program.

· The Section 236 Interest Reduction Payments (IRP) contract is generally “decoupled” from the original mortgage and retained, with the approval of HUD, as a stream of income to support a second part of the MSHDA mortgage.

· Program participants may be eligible to apply for and receive an award of Housing Tax Credit (4 percent) for all units occupied by residents with incomes at or below 60 percent of area median income.

· In the case of MSHDA-finance properties, existing project reserves and residual receipts may be available as sources for financing rehabilitation of the development.

· The development is renovated, and a new replacement reserve is established, base upon a Capital Needs Assessment (CAN), so as to assure a long-term extension of the useful life of the property.

· The rents are increased through a budget-based approach to a level necessary to support the acquisition and rehabilitation. Rents may not exceed comparable unassisted “market” rents. Controls are in place to protect the existing residents of the developments, including Section 8 Enhanced “Sticky” Vouchers and the retention of Rent Supplement or RAP contracts.

Loan Term and Interest Rate

It is anticipated that the current mortgages on these properties will generally be prepaid and that a new first mortgage will be made. The current loan terms and underwriting standards of the Authority for these transactions include:

· The Authority’s loan must be secure by a first mortgage on the property. The loan will be comprised of two parts. “Part A” is the debt that can be supported by the rental income of the property, less vacancy loss, operating expenses, reserves and escrows. “Part B” is the debt that can be supported by the continuing stream of income from the “decoupled” Interest Reduction Payments contract.

“Part A” of the first mortgage will be underwritten at a rate of 6.5 percent over a fully amortizing 35 year term and with a minimum of a 1.10 debt coverage ratio.

“Part B” of the first mortgage will be underwritten at an interest rate of 6.5 percent over a fully amortizing term not to exceed the term remaining on the Interest Reduction Payments contract and a 1.0 debt coverage ratio.

Interest rates are subject to periodic review of market conditions by the Authority and may be changed. The rate applicable to the project will be the rate effective on the date a completed application in received and the application fee is paid.

Project Eligibility

This program is available to all housing developments in Michigan with some or all units assisted under the Section 236 Interest Reduction program. The program is also available to Section 202 developments. Developments containing a significant number of “efficiency” apartments are discouraged unless a strong current market is demonstrated or the proposal envisions reconfiguration of these units to more marketable unit types.

All proposals that involve prepayment and tax-exempt bond refinancing must include rehabilitation in an amount that satisfies the 15 percent test of the Internal Revenue Code for the use of private activity bond cap. To be eligible for Housing Tax Credit, all proposals must include at least $5,000 per unit in hard construction costs.

At a minimum, the proposal must provide for income and rent restriction on 40 percent of the units, targeting those units to households with income at or below 60 percent of area median income. Except for developments specifically designated for elderly occupancy, the applicable percentage of each unit type must be targeted. The developer may elect to target and claim Housing Tax Credit for additional units.

Involuntary permanent relocation of existing residents is not permitted under the program.

MSDHA Division:

Multifamily Development and Construction

Contact Information:

Marjorie Green (517) 373-9348

TTY 1-800-382-4568

Rental Development Appendix (Figure 1)

HOME TEAM Advantage

MICHIGAN URBAN AREAS FOR HOME TEAM ADVANTAGE 2005

Bay County: Jackson County: Egelston Township

Bay City Jackson City Fruitport Township

Bangor Township Blackman Township Laketon Township

Hampton Township Columbia Township Muskegon Township

Kawkawlin Township Leoni Township

Monitor Township Spring Arbor Township Oakland County:

Summit Township Entire County is Urban

Berrien County:

Benton Harbor City Kalamazoo County: Ottawa County:

St. Joseph City Kalamazoo City Entire County is Urban

Benton Charter Township Portage City

Lincoln Charter Township Comstock Township Saginaw County:

St. Joseph Charter Township Cooper Township Saginaw City

Kalamazoo Township Birch Run Township

Calhoun County: Oshtemo Township (Flint/Genesee)

Battle Creek City Pavilion Township Bridgeport Charter

Bedford Township Richland Township Township

Emmett Township Ross Township Buena Vista Charter

Pennfield Charter Township Schoolcraft Township Township

Texas Township Carrollton Township

Clinton County: Saginaw Charter

Bath Township Kent County: Township

Dewitt Township Entire County is Urban Thomas Township

Tittabawassee Township

Eaton County: Livingston County:

Delta Charter Township Entire County is Urban St. Clair County:

Windsor Charter Township Entire County is Urban

Macomb County:

Genesee County: Entire County is Urban Washtenaw County:

Entire County is Urban Entire County is Urban

Monroe County:

Ingham County: Entire County is Urban Wayne County:

Lansing City Entire County is Urban

East Lansing City Muskegon County:

Delhi Charter Township Muskegon City

Lansing Charter Township Muskegon Heights City

Meridian Charter Township Norton Shores City

LOW INCOME HOUSING TAX CREDIT (LIHTC)

Low Income Housing Tax Credit (LIHTC)

This program, created by Congress as a part of the Tax Reform Act of 1986, as amended, is designed to assist in the creation and preservation of affordable rental housing for low-income households. This program provides a dollar-for-dollar reduction in federal tax liability for owners of and investors in qualified rental housing over a 10-year period.

The guidelines for the tax credit program are outlined in Michigan’s 2003 Qualified Allocation Plan (QAP). The QAP and Combined Application packet can be found online at www.michigan.gov/mshda.

How the Program Works

The tax credit itself is calculated as a fixed percentage of certain costs to acquire, renovate or develop rental property and is awarded either through a competitive application and review process conducted by MSHDA or in conjunction with tax-exempt bonds.

A rental development must have a minimum of either 20 percent of the units occupied by households with incomes under 50 percent of the median area income or 40 percent of its units occupied by households with incomes under 60 percent of the area median income, adjusted by family size. Once the choice of 20 percent at 50 percent or 40 percent at 60 percent is made, these limitations are irrevocable. MSHDA performs tenant file audits and physical inspections to insure that all requirements are met.

The amount of a tax credit allocated to a development depends on the type of project, the financing used and the amount of credit determined by MSHDA to be necessary for project feasibility.

Eligibility

Low-income rental housing developers and non-profit organizations are eligible to apply.

Eligibility criteria includes that a project be residential rental property, either new construction or rehabilitation of existing property. Credit for the acquisition cost of existing housing may be available provided the project meets certain conditions and incurs rehabilitation expenditures of at least $5,000 per unit. To obtain the credit for acquisition cost, the project must not have been transferred or sold within the past ten years. Credit is also available to pursue low-income housing. Most residential properties may be eligible, with the exception of transient housing, nursing homes, life care facilities, retirement homes and mobile home parks.

MSHDA Division:

Legal Affairs

Contact Information:

Ted Rozeboom (517) 373-6010

(TTY) 800-382-4568

OFFICE OF EXISTING HOUSING PROGRAMS

Introduction

MSHDA provides Housing Choice Voucher (HCV) rental assistance through a variety of programs. HCV’s allow very low-income families to choose and lease decent, affordable and privately owned rental housing.

In this section:

Housing Choice Voucher (HCV) Program

HCV Guidelines for Landlords

HCV Guidelines for Tenants

Family Self Sufficiency (FSS)

Key to Own Homeownership Program

Housing Choice Voucher Program (HCV)

Housing Choice Voucher Program

This program is funded by the U.S. Department of Housing and Urban Development (HUD), and administered by MSHDA to help eligible low-income households pay their rent. It is HUD’s primary program for assisting very low-income families and elderly or disabled individuals in affording decent, safe and sanitary rental units. HCV holders can choose any rental unit in the county in which their voucher was issued that meets HUD’s Housing Quality Standards (HQS) and that charges a rent consistent with HUD’s established Payment Standards.

How the Program Works

Participants fill out an application when the waiting list is open in the county in which they wish to reside. Applicants who live or work in that county receive a preference over all others. As a voucher becomes available, it is offered to the next person on the waiting list. At that time, the applicant must verify his family size, income, medical expenses, etc. to enable the assigned Housing Agent (HA) to determine his eligibility and need for bedroom size. After the applicant locates suitable housing, the HA will complete a HQS inspection, and a Housing Assistance Payment (HAP) contract will be formed with the landlord.

The tenant and the landlord enter into a lease in which MSHDA is not a party. If the landlord requires a security deposit, the tenant is responsible for paying it.

MSHDA’s portion of the rent HAP is paid directly to the landlord. Depending on the tenant’s income, he may be eligible to receive utility payment assistance from MSHDA. Tenant utility reimbursement checks are paid to the tenant. Tenants generally are not required to pay more than 30% of their income towards rent and utilities, and MSHDA pays the rest. Each year on the anniversary date of the contract, the HA will re-examine the tenant for continued eligibility, which includes a re-inspection of the rental unit.

Eligibility

Eligibility is determined by HUD guidelines, and is based on total annual gross income and family size. Eligibility is also limited to U.S. citizens and specified categories of non-citizens who have eligible immigration status. In general, the family's income may not exceed 50 percent of the median income for the county or metropolitan area in which the family chooses to live. The tenants must consent to a criminal history check. These records are used in accordance with federal regulations and MSHDA policy.

MSHDA Division:

Office of Existing Housing Programs

Contact Information:

(517) 373-9344,

TTY (800) 382-4568

HCV Guidelines for Landlords

Tenant Selection

MSHDA does not pre-screen tenants for suitability or behavior; this is sole responsibility of the owner.

Program Requirements and Details

Contract

MSHDA will enter into a HAP Contract with the landlord which identifies MSHDA’s and the tenant’s portion of the rent.

Lease

The landlord is required to provide a lease consistent with all local laws and the HAP Contract. MSHDA is not a party to the lease agreement. The lease must specify which utilities and appliances are provided or paid for by the tenant, and which are provided or paid for by the owner. HUD’s Tenancy Addendum provided by MSHDA must be attached as part of the lease agreement. A copy of the signed lease agreement must be submitted to MSHDA.

The tenant cannot reassign the lease or transfer the unit. Only persons approved in writing by the landlord and MSHDA and listed on the Lease Agreement can live in the unit.

Security Deposit

Landlords may collect a security deposit that does not exceed one and one-half month’s rent from the tenant. For an in-place tenant, an original deposit in excess of that amount may be retained.

Inspection

The unit will be inspected by MSHDA and must comply with HUD's minimum Housing Quality Standards (HQS). Landlords are responsible for any repairs required to keep the unit in compliance with the minimum HQS, except tenant-cause damages which must be corrected by the tenant. Required repairs must be made in order for MSHDA to make rental payments. The inspection does not have to comply with local or state laws, ordinances or codes.

Monthly Rent

Landlords are responsible for collecting the tenant's portion of the monthly rent. The landlord and the tenant will determine the monthly rent. However:

During the initial lease term, the tenant cannot pay more than 40 percent of their gross income towards rent and utilities;
The monthly rent cannot exceed the reasonable rent as determined by MSHDA;
Assuming the monthly rent is reasonable, MSHDA will contract for payment of the remaining amount of the rent;

Residence

The landlord cannot occupy the rental unit, nor be related to any member of the participant family. Relatives include parents, children, grand parents, grandchildren and siblings.

Landlord Registration

MSHDA will provide the owner with the required paperwork to complete in order to be registered as an owner on the State of Michigan's payment system.

Lease or Rent Adjustments

Before the end of the initial lease term, and annually after that, MSHDA will contact both the landlord and the tenant for additional information. Updated verifications will be required, and the unit will be re-inspected. Required repairs must be made within the designated time or MSHDA payments will be discontinued. The landlord will be contacted regarding a rent adjustment. The monthly rent may be increased, subject to the program reasonableness requirement; however, the tenant may be responsible for paying any increase.

Terminating a Lease or Termination of a Tenant from the Program

Tenant Termination

After the initial lease term, subject to the provisions in the lease, the tenant may terminate the lease with 30 days advance written notice to the landlord and to MSHDA.

Mutual Termination

Both the landlord and the tenant may agree to terminate the lease. However, the termination must be in writing on the Mutual Lease Termination Agreement form available from MSHDA.

Landlord Termination

All reasons for termination require that a Notice to Quit (eviction notice) be sent to the tenant with a copy to MSHDA at the same time. The landlord may terminate the lease at any time, but only for the following reasons:

Serious or repeated violations of the terms and conditions of the lease;
A family history of disturbance to neighbors or destruction of property, or of living/housekeeping habits that result in damage;
Criminal drug activity or alcohol abuse by family members, involving crimes of physical violence to persons or property;
Violation of federal, state or local law which imposes obligations on the tenant in connection with the occupancy or use of the dwelling unit and surrounding premises.

Tenant Termination from the Program

If a tenant becomes ineligible to receive assistance under the program, the landlord will no longer receive payments from MSHDA. The tenant could become ineligible for a number of reasons, such as excess income, failure to provide required information, failure to comply with a MSHDA repayment agreement, failure to provide and/or maintain tenant-supplied appliances or utilities or failure to correct any damages caused by the tenant, the tenant's family or guests.

MSHDA Division:

Office of Existing Housing Programs

Contact Information:

(517) 373-9344,

TTY (800) 382-4568

HCV Guidelines for Tenants

Income Eligibility

To be eligible, your gross income must not exceed federally established income limits for the county where you will reside.

Rent Payments

Generally, MSHDA HCV participants are not required to pay more than 40% of their income for rent and utilities.

Affect on Other Assisted Housing Programs

Applying for this program will not affect one’s place on other public or assisted housing waiting lists.

Criminal Screening

Each participant must consent to release criminal conviction records including sexual offenses and alcohol abuse and allow MSHDA to receive records from law enforcement agencies. The records will be used in accordance with federal regulations and MSHDA policy.

Housing Standards

All housing must be decent, safe and sanitary. The unit must have:

Adequate living area
Adequate light and ventilation
Adequate heating, electrical, water, sewer and structural systems
Freedom from any condition that endangers the health and safety of the occupants, including lead-based paint.

A MSHDA representative will be assigned to inspect each housing unit to see if it meets HUD’s Housing Quality Standards (HQS). This inspection does not necessarily comply with local or state laws, ordinances or codes.

Security Deposit

If the landlord requires a security deposit, the participant must pay it. The security deposit cannot exceed one and one-half month’s rent.

Annual Re-examination

MSHDA will inspect each rental unit to ensure compliance with HQS, and verify the participant’s eligibility each year. Updated information, including income verification, will be required. The amount each participant pays for rent may change based on this re-examination.

MSHDA Division:

Office of Existing Housing Programs

Contact Information:

(517) 373-9344,

TTY (800) 382-4568

Family Self Sufficiency (FSS)

Family Self Sufficiency

The Family Self Sufficiency Program (FSS) is a HUD initiative that encourages HCV participants towards economic independence. MSHDA develops an Individual Training and Service Plan with HCV participants, which serves to commit them to self-sufficiency by getting a job, going to school, or learning a trade. Local community agencies are involved to develop local strategies to help assisted families gain employment, acquire childcare, and obtain transportation.

While a HCV participant is enrolled in the FSS program, MSHDA provides rental assistance, and an interest-bearing escrow account. (See Escrow Account below.)

Participation Eligibility Requirements:

Must currently receive MSHDA HCV assistance.
Must enter into a five-year contract (with a possible two-year extension) where their FSS Resource Coordinator will assist them with step-by-step goals that are developed and monitored for achievement.
Participants must attend Financial Management/Economic Literacy counseling through a MSHDA LINKS counselor.

Participant Program Obligations:

The head of the household must obtain/maintain suitable employment after participating in appropriate training programs.
This person must also complete activities (goals) defined in the individual training and service plan.
All family members must be independent of welfare assistance for the final 12 months of the FSS contract.

How the Escrow Account Works:

Under the HCV Program, the family pays a portion of its housing costs relative to the family’s income and MSHDA subsidizes the balance. As the family’s income increases, so does their portion of the rent. As the tenant pays more for rent, MSHDA makes a monthly deposit into an escrow account established for each family based on their rental change.

When the family meets its goals and completes its FSS Contract, the family becomes eligible to receive their escrow funds. Escrow funds can be used to make a down payment for a home for a home purchase, pay for educational expenses, purchase a mode of transportation, or to pay of debts.

MSHDA Division:

Office of Existing Housing Programs

Contact Information:

(517) 373-9344,

TTY (800) 382-4568

“Key to Own” Homeownership Program

“Key to Own” Program

This program will offer a homeownership option for families that hold a MSHDA Housing Choice Voucher (HCV). Qualified tenants will be able to use their voucher subsidy toward a mortgage on a home rather than toward their rent. The purpose of this program is to provide the HCV Participant with pre-purchase counseling and training through MSHDA’s LINKS counseling network and other local partners to accomplish the goal of successful homeownership.

How the Program Works

Participant will fill out a pre-application to determine their eligibility by contacting MSHDA’s Office of Existing Housing Programs. Eligible applicants will complete the pre-purchase Homebuyer Education courses conducted by a MSHDA certified LINKS counseling agent. Participants should seek out mortgage financing once they are determined to be mortgage ready. After pre-approval on a mortgage, participants then begin shopping for a new home. A purchase agreement will be executed once a home is found, and it must then be inspected by both an independent inspector and by a MSHDA representative. After inspections have been passed, and financing requirements are met, participants can close on their home.

Minimum down payment is 3 percent of the purchase price of the home with at least 1 percent from personal savings and the balance from the Family Self-Sufficiency account, gifts, or other sources.

Eligibility

To qualify for the HCV Homeownership Program the participant(s) must be a person in good-standing in MSHDA’s HCV tenant-based rental assistance program for a minimum of one-year. Also, a participant must be a first-time homeowner or have not owned a home in the last three years. Participants must be enrolled and actively participating in the Family Self-Sufficiency Program and free of cash welfare, (except elderly or disabled persons). Participants are required to have been employed full-time continuously for the last year, earning at least $15,000 per year (except elderly or disabled persons only need earned income of $10,300); and be within the household income eligibility and other guidelines of the program.

MSHDA Division:

Office of Existing Housing Programs

Contact Information:

(517) 241-4474 or (517) 335-7868

TTY (800) 382-4568

HOME PURCHASE

Introduction

MSHDA offers low-interest rate loans for families and individuals to purchase homes. The loans are available through participating lenders who take applications on behalf of MSHDA.

In this section:
Down Payment Assistance (DPA)

Employer Assisted Housing (EAH)

LINKS to Homeownership

Michigan Mortgage Credit Certificate (MCC)

Single Family Home Mortgages
HomeChoice Down Payment Assistance Program

Down Payment Assistance (DPA)

Down Payment Assistance

The Down Payment Assistance program offers up to $5,000 for down payment assistance to eligible homebuyers. This program is available with MSHDA/Conventional 97 percent Loan to Value (LTV) or MSHDA/Federal Housing Administration (FHA) insured first mortgages. The funds may be used towards cash requirements needed to close, including the down payment, closing costs and prepaid expenses. At least 1 percent of the sales price must be invested from the borrower.

How the Program Works

This program is available to homebuyers who meet certain income limits, which are adjusted for family size. Eligible individuals may receive a 0 percent non-amortizing loan of up to $5,000 for eligible homebuyers. This loan is due on sale if the home is transferred, sold or refinanced.

The maximum purchase price is $209,400 in most urban centers and $182,100 in other areas of the state.

Eligibility

To be eligible, applicants must qualify under federal and state income and home purchase price limits. Participants must have a household income no higher than $69,800 in most urban centers. In other areas of the state, a maximum household income of $60,700 may be applicable.

In some areas of Michigan, prospective homebuyers must be first-time homeowners. Prospective homebuyers must have reasonable consumer credit or readily repairable credit.

MSHDA Division:

Finance/Single Family

Contact Information:

(517) 373-6840

1-800-327-9158

(TTY) 1-800-382-6840

http://www.michigan.gov/mshda

Employer Assisted Housing Program

EAH Program

This program is a partnership initiative being targeted to potential employers in urban settings across the state. This partnership is to encourage Employer Assisted Housing programs is being funded through two existing programs – Down Payment Assistance (DPA) and Single-Family Home Mortgages.

How the Program Works

Funds for these programs come from the regular sale of bonds, so the matching funds offered to employers for Employer Assisted Housing will continue to be available. The loans will be priced at 1/8 of a percent below the other down payment assistance programs offered by MSHDA.

Through this program, participating employees will receive the benefits of a pre-purchase homeownership education class delivered by local Homeownership Counselors and funded by MSHDA. Committed lenders will also be available to help make the home buying experience a smooth process.

Eligibility

Participating employees must have a household income no higher than $69,800 in most urban centers. In other areas of the state, a maximum household income of $60,700 may be applicable. Purchase price limits also apply, a housing price limit of $209,400 in most urban centers and limits of $182,100 in other areas of the state. The limits are the product of new legislation and vary by city and county. Individual employers may also add other guidelines in return for the benefit, such as status (full or part-time), geographic boundaries, and loan repayment strategies for early exit from the program.

MSHDA Division:

Office of Single Family

Contact Information:

(517) 373-9344

TTY (800) 382-4568

LINKS to Homeownership

LINKS to Homeownership

The LINKS to Homeownership program assists in home purchase and homeownership counseling. The program provides pre-purchase counseling, down payment assistance of up to $5,000, pre-purchase credit repair assistance not to exceed $5,000, home maintenance training and pre-purchase home inspections.

How the Program Works

Links to Homeownership is a HOME PURCHASE counseling program. This program is designed to ensure successful homeownership by screening candidates for purchase potential and by providing pre-purchase counseling and down payment assistance up to $5,000. It also provides pre-purchase credit repair to assist buyers to qualify for a MSHDA/Conventional or Rural Development (RD) mortgage, home maintenance training and pre-purchase home inspections.

Eligibility

To be eligible, applicants must qualify under federal and state home purchase price limits and must have an annual income lower than 80 percent of the county median income adjusted for family size. Additionally, the applicant household must have at least one adult member and a related minor child (or pregnant applicant/co-applicant.)

In some areas of Michigan, prospective homebuyers must be first time homebuyers. Prospective homebuyers must have reasonable consumer credit or readily repairable credit.

MSHDA Division:

Finance/Single Family

Contact Information:

(517) 373-6840

1-800-327-9158

(TTY) 1-800-382-6840

http://www.michigan.gov/mshda

Michigan Mortgage Credit Certificate (MCC)

Michigan Mortgage Credit Certificate

This program was authorized by Congress in the 1984 Tax Reform Act as a new method for providing housing assistance to homebuyers. This program offers a federal income tax credit that gives homebuyers more income to qualify for a mortgage and to make monthly payments.

How the Program Works

The federal government allows eligible homebuyers to claim an itemized federal income tax credit for all of the interest paid each year on a mortgage loan. A certain percentage (20 percent for a household with income of $ 30,000 or less, 10 percent for a household with income over $30,000) of the mortgage interest will be credited (a dollar-for-dollar reduction of tax liability). However, the amount of the credit cannot be more than annual federal income tax liability after all other credits.

A number of banks, savings and loan associations, mortgage companies, and other lenders participate in this program. Homebuyers may obtain a credit certificate in conjunction with financing a home purchase through any lender that has signed a Michigan Mortgage Credit Certificate participation agreement with MSHDA. Income and sales price limits apply and are available at www.michigan.gov/mshda/. MCC cannot be used with MSHDA mortgages.

Eligibility

To be eligible, applicants must qualify under federal and state income and home purchase price limits. This program can be used in conjunction with mortgage loans for new and existing homes, condominiums and certain manufactured homes. Homebuyers must occupy the dwelling as their principal residence.

MSHDA Division:

Finance/Single Family

Contact Information:

(517) 373-6840 or 1-800-327-9158

TTY 1-800-382-4568

Single Family Home Mortgages

Single Family Home Mortgages

The Single Family Home Mortgage program offers low-interest rate loans for new and existing homes, condominiums and certain new and used multiple section manufactured homes on permanent foundations and new single-section mobile homes on permanent foundations.

How the Program Works

The mortgage loan term is 30 years. MSHDA offers below-market fixed rate loans, as well as a “step loan” option, featuring a reduced interest rate for the first three years and stepping up to a higher rate for the balance of the 30-year term. Federal Housing Administration (FHA), Veterans Administration (VA), Rural Development (RD) and conventional loans are available. Minimum down payments range from zero with a VA or RD loan to 1 ¼ to 2 ¼ percent for an FHA loan and 0 percent to 5 percent for conventional loans. Homebuyers may apply for a MSHDA loan at local participating lenders such as banks and mortgage companies that offer the loans. The lender may charge the homebuyer a 1 percent loan origination fee.

Eligibility

To be eligible, applicants must qualify under federal and state income and home purchase price limits. Additional assistance for down payment and closing costs may also be available. Eligible borrowers must have acceptable credit and the ability to repay the mortgage loan. Homebuyers must occupy the dwelling as their principal residence. In some areas of Michigan, the borrower must be a first-time homebuyer.

Applicants can pre-qualify online for a mortgage. Go to: http://www.michigan.gov/mshda/0,1607,7-141--50993--,00.html

MSHDA Division:

Finance/Single Family

Contact Information:

(517) 373-6840

1-800-327-9158

TTY 1-800-382-6840

HomeChoice Down Payment Assistance Program

HomeChoice Down Payment Assistance Program

This MSHDA HOME funded down payment assistance program is used in conjunction with a Fannie Mae HomeChoice mortgage or a USDA Rural Development Direct Loan for families with disabilities. MSHDA provides up to $10,000 in down payment, pre-paids and closing cost assistance for eligible households. The MSHDA second mortgage is a 0% non-amortizing loan and is due on sale, transfer, or refinance of the property.

How the Program Works

The Michigan Homeownership Coalition is comprised of non-profit agencies, mortgage lenders, and governmental agencies. The Coalition was formed to assist individuals and families with disabilities access homeownership throughout Michigan. Coalition partners consist of MSHDA, USDA Rural Development and Fannie Mae, who provide the mortgage financing and down payment assistance for eligible households. The lending partners pre-qualify and assist applicants in securing a Fannie Mae HomeChoice or RD Direct loan for families with disabilities. MSHDA-certified housing counseling agencies provide extensive pre- and post-purchase housing counseling services. These non-profit agencies resolve issues that act as barriers, keeping disabled persons and families from achieving their goals of purchasing and retaining safe and affordable housing.

Eligibility

To be eligible for the program, the applicant must be permanently disabled or have a family member living in the household that is permanently disabled. Applicants must qualify under federal and state income and home purchase price limits. In some areas of Michigan, prospective buyers must be first time homebuyers. Prospective buyers must have reasonable consumer credit.

MSHDA Division:

Finance/Single Family

Contact Information:

(517) 373-6840

1-800-327-9158

TTY 1-800-382-6840

COMMUNITY DEVELOPMENT

Introduction

The Office of Community Development helps nonprofit organizations and local units of government implement local initiatives to improve Michigan’s affordable housing stock, promote self-sufficiency among persons at risk of homelessness, and to enhance the quality of life in communities throughout the state.

In this section:

Commercial Economic Development Fund (CEDF)

Contractors Assistance Program (CAP)

County Allocation Program

Home Improvement/Property Improvement Program (PIP)

Homebuyer Construction Loan Program

Homeless Program – Critical Needs
Homeless Program - Emergency Shelter Grants (ESG)

Homeless Program - Homeless Facilities Grants

Housing Resource Fund (HRF)

Neighborhood Preservation Program (NPP)

Predevelopment Loan Program

Technical Assistance (TA)

Community Development Appendix

Commercial Economic Development Fund (CEDF)

Commercial Economic Development Fund

The Commercial Economic Development Fund (CEDF) provides funds to seven nonprofit community foundations throughout the state; Community Foundation for Southeastern Michigan, Grand Rapids Foundation, Community Foundation of Greater Flint, Capital Region Community Foundation, Community Foundation for Muskegon County, Saginaw Community Foundation, and Kalamazoo Community Foundation, which, in turn, fund local area projects. The desired outcomes include: generation of Foundation resources to fund economic development in neighborhoods; increase of retail, commercial and human services in neighborhoods; complement MSHDA investments and increase economic development capacity of nonprofit organizations.

How the Program Works

MSHDA awards funds to the community foundations, and they in turn, generate Notices of Funding Availability and receive and review applications. Separate advisory committees for each of the participating foundations make funding decisions. Eligible activities include: development, (façade improvements, rehabilitation), pre-development (site evaluation, market analysis, etc.); and organizational development (general land use studies, strategic planning, etc.). Proposed projects should not duplicate others in place, but be innovative and serve to strengthen or act as a catalyst for other revitalization programs and investment.

Eligibility

Applicants are nonprofit organizations, or local units by special authorization. Applicants submit proposals for funding directly to their local participating CEDF Foundation. MSHDA will direct funding inquiries to the appropriate entity for consideration.

(CEDF participants are listed in the Appendix following this section-Figure 1)

MSHDA Division:

Community Development

Contact Information:

Program Specialist, Julie Hales-Smith (517) 373-6026

Contractors Assistance Program (CAP)

Contractors Assistance Program

The Contractors Assistance Program was started by MSHDA in 1992 to provide opportunities for small, minority and/or female contractors to achieve success and independence. The CAP program offers 12-week training sessions twice a year to small contractors. Qualifying participants may access a network of service providers who provide general business assistance at no charge to the participant. In partnership with National City Bank, the CAP program helps secure lower interest, and working capital loans of up to $50,000 for contractors selected and working on MSHDA-funded projects.

How the Program Works

The program offers training from three strategically located offices within the state, CAP West in Grand Rapids, CAP Central in Flint, and CAP East in the Detroit area. Through a contract with MSHDA, program coordinators handle enrollment, schedule training sessions, secure instructors and provide on-going coaching and support.

Eligibility

Applicants must own construction-related businesses or must have been involved in their trade for at least two years. The current annual sales volume of applicants must be less than $2.5 million, and he/she must have a current net worth of less than $1million.

MSHDA Division:

Community Development

Contact Information:

MSHDA: Ann Grambau

(517) 373-8870

CAP Central: Diane M. Bransford

(810) 233-0986

CAP West: Cynthia J. Vanden Bosch

(231) 767-9430

CAP East: Lawrence F. Jackson

(800) 820-7662

County Allocation Program

The County Allocation Program provides a biennial allocation of affordable housing funds based on population to non-Community Development Block Grant (CDBG) Entitlement county governments statewide. The funding provided is usually from CDBG funds, but the Office of Community Development may substitute HOME funds at its discretion.

How the Program Works

Funds are awarded to provide county governments with a resource to address housing needs in their jurisdiction. While funds may be used for any eligible activity (homeowner, homebuyer or rental) benefiting households under 80 percent of the area median income, the vast majority of funds are used to fund countywide homeowner rehabilitation programs. The Office of Community Development requires that rehabilitation assistance for homeowners be secured by a lien against the property for the amount of the assistance so that when the property is sold, the county will recover the funds to use for additional affordable housing projects.

Eligibility

Non-CDBG Entitlement Counties may apply in alternate years once their previous allocation is at least 75 percent expended.

MSHDA Division:

Community Development

Contact Information:

Jacquelyn Williams-Armstrong (517) 373-3383

Home Improvement/Property Improvement Program (PIP)

Property Improvement

The Property Improvement Program (PIP) was established to provide decent, sound, safe and sanitary housing for eligible residents of the State of Michigan. MSHDA offers interest rates of 4 percent to 8 percent on loans that can be used to improve homes. In addition to general remodeling, homeowners may add energy conservation improvements, make the home more accessible to a family member with physical disabilities, and repair serious hazards to health and safety and/or repair damage from a declared natural disaster.

How the Program Works

With a low-interest rate Property Improvement Program loan, homeowners can improve their home or rental property. Almost any type of permanent general improvement can be made. For example, one could install insulation, replace the heating system, paint the building, add new siding, replace the roof, install new windows, remodel the kitchen or bathroom, upgrade electrical wiring or even add new rooms.

PIP is authorized to provide funds for the repair, improvement and rehabilitation of existing housing under the following programs:

Residential Properties 1 to 11 units – Individuals may apply directly to a participating lender (bank, savings and loan, etc.) located in their community or to a participating local unit of government or nonprofit organization (the "Community Agent.") After preliminary local approval, the loan package is sent to MSHDA for final approval and commitment. PIP loans are available in most areas of the state.

Eligibility

Homeowners and landlords of rental property can apply for this program. Borrowers must have reasonable credit and the ability to repay the PIP loan. Income limits will apply to the borrowers and the limits differ by region.

MSHDA Division:

Community Development

Contact Information:

Program Specialist, Bill Parker (517) 373-1462

Homebuyer Construction Loan Program

Homebuyer Construction Loan

In 2004, MSHDA created a new Homebuyer Construction Loan Program to provide construction financing to market-rate homeownership projects in high-density, mixed-use, pedestrian oriented neighborhoods. Eligible projects include both new construction and rehabilitation or adaptive re-use; projects can be mixed-use—involving both residential and commercial space—or exclusively residential.

How the Program Works

Unlike traditional MSHDA programs, which tend to focus primarily on income and price restricted affordable housing, the Homebuyer Construction Loan is specifically designed to help Michigan’s core cities attract and sustain new market-rate housing options. We believe there is a growing, but often overlooked, set of homebuyers who are looking for housing in mixed-use neighborhoods where housing is only a short walk from entertainment, shopping, employment, and cultural or educational institutions. The Homebuyer Construction Loan Program is designed to facilitate the re-introduction of such housing in markets that have been overlooked for too long.

Eligibility

Borrowers must be eligible mortgagees (LDHA or Nonprofit Housing Corporation) under MSHDA’s enabling legislation. Loans will be full-recourse mortgage loans in either a first or second lien position. Borrowers must provide equity of at least 10 percent of the total project cost. Interest rates will vary based on an analysis of MSHDA’s risk and the interest rate market, but current conditions suggest that typical interest rates will be around 6 percent to 7 percent. Loan terms will typically range from 12-36 months (maximum of 60 months) with repayment required from the proceeds of unit sales. Maximum loan amount for any single project is $3 million.

MSHDA Division:

Office of Community Development

Contact Information:

Stephen Lathom, Homebuyer Development Specialist

(517) 373-8853

(517) 373-9344

TTY (800) 382-4568

Homeless Program - Critical Needs

Critical Needs

Critical Needs (CN) grants of up to $10,000 are awarded as needed year round to shelter or transitional housing programs facing needs regarding unanticipated facility costs.

How the Program Works

Critical Needs resources are available to assist homeless facilities in meeting onetime, emergency needs when the health, safety and/or well being of the residents are at risk. Examples include furnace replacement, plumbing repairs, roofing repairs and other necessary rehabilitation.

Eligibility

Nonprofit organizations and public agencies with homeless facilities are eligible for this grant. Funds are available year round but agencies are limited to one request per year.

MSHDA Division:

Community Development

Contact Information:

Homeless Program Coordinator, Chuck Kieffer (517) 335-4473

Homeless Program – Emergency Shelter Grants (ESG)

Emergency Shelter Grants

Emergency Shelter Grants (ESG) are awarded to programs providing emergency shelter, transitional housing and/or services to homeless individuals and families.

How the Program Works

ESG funds are allocated to and distributed through local Continuums of Care planning bodies. There are currently 60 Continuums of Care areas throughout the state, encompassing every county in Michigan. Each year, the local Continuum is required to submit and updated plan for addressing homelessness in the community, including recommendations for distribution of ESG funding to specific programs and agencies. Eligible activities under the ESG program include operating costs of a shelter or transitional housing program, essential services or expenses associated with providing direct services to clients, homeless prevention activities, homeless management information expenses and Continuum of Care coordination.

Eligibility

Non-profit organizations and units of local government with at least one year’s experience in providing services to homeless populations are eligible to apply. All applications must be recommended through an annual Continuum of Care funding submission.

MSHDA Division:

Community Development

Contact Information:

Homeless Program Coordinator, Chuck Kieffer (517) 335-4373

Homeless Program - Homeless Facilities Grants

Homeless Facilities Grants

Homeless Facilities Grants are available to assist in the development of facilities that serve homeless persons through rehabilitation, acquisition and/or new construction projects.

How the Program Works

Housing Resource Fund grants of up to $100,000 are awarded year round through this program. A separate Homeless Facilities Grants application is required. Agencies serving the homeless with transitional housing and/or permanent supportive housing may also apply for larger awards through the Rental Development component of the Housing Resource Fund.

Eligibility

Facilities that serve homeless persons, emergency shelter, transitional housing programs and/or permanent supportive housing are eligible.

MSHDA Division:

Community Development

Contact Information:

Homeless Program Coordinator, Chuck Kieffer (517) 335-4473

Housing Resource Fund

Housing Resource Fund

The Housing Resource Fund (HRF) is a blend of HOME and Community Development Block Grant (CDBG) dollars to support housing and community development strategies implemented by nonprofit organizations and units of local government. (MSHDA also budgets some of its own funds for HRF to be used for projects that cannot be feasibly undertaken using the Federal HOME or CDBG funds.) Projects eligible for funding include Homebuyer Assistance, Rental Development and Homeowner and Rental Rehabilitation. In eligible Neighborhood Preservation Program (NPP) target areas, funding for non-housing activities (demolition, beautification, infrastructure, etc.) may be awarded in conjunction with funding for housing activities that support a comprehensive neighborhood revitalization strategy.

How the Program Works

Applications are accepted during two funding windows, normally held in September-October and in January (applications for NPP and Rental Development projects will be accepted at any time.) The Office of Community Development funds projects that maximize and enhance affordable housing projects in the communities in which they are implemented. Since one of the intended outcomes of the Housing Resource Fund is improved quality of life in communities, projects most likely to be funded are those which (a) develop housing in communities with schools and other public services and (b) help make these communities more attractive for private investment in housing and/or economic development by improving housing stock, revitalizing neighborhoods, and/or increasing the supply of affordable housing. Applicants must demonstrate sufficient capacity to complete the project within two years.

Eligibility

Eligible applicants include: (a) units of local government with over 3,000 residents which are not also local HOME Participating Jurisdictions (PJ) and (b) nonprofit organizations statewide. HOME funds will be awarded to nonprofits within a local HOME Participating Jurisdiction only if (a) the nonprofit has been designated by MSHDA and the local government as a Community Housing Development Organization and (b) the organization has a 100 percent match from the local unit of government.

MSHDA Division:

Community Development

Contact Information:

Jacquelyn Williams-Armstrong

(517) 373-3383

or the Community Development Specialist

assigned to your area (517)373-1974

Neighborhood Preservation Program (NPP)

Neighborhood Preservation Program

The Neighborhood Preservation Program (NPP) is a comprehensive approach to creating healthy neighborhoods or revitalizing struggling ones. The objective is to make these neighborhoods worthy of the investment of time, money and energy, and a place where neighbors manage change successfully. In a Neighborhood Preservation Program target area, MSHDA invests in improvements in the following four areas: image, market, physical condition and management.

How the Program Works

MSHDA will invest up to $500,000 over a 2 to 3 year period to build upon an existing comprehensive plan for the neighborhood or community. Communities with a high level of support from the local unit of government and well-organized resident involvement from people with a true sense of identity and a spark of passion for revitalization, will be more likely to have successful NPPs. High capacity groups are necessary to administer the NPP since many complex activities must take place simultaneously. Eligible activities include all housing components currently offered under the Office of Community Development Housing Resource Fund, as well as special NPP activities including: beautification, demolition, marketing, and public improvements.

Eligibility

Eligible applicants include: (a) units of local government with over 3,000 residents that are not also local HOME Participating Jurisdictions and (b) nonprofit organizations statewide. HOME funds will be awarded to nonprofits within a local HOME Participating Jurisdiction only if (a) the nonprofit has been designated by MSHDA and the local government as a Community Housing Development Organization and (b) the organization has a 100 percent match from the local unit of government. Local units of government, nonprofits or the two together may apply for a target area designation by completing outcome and result-based planning requirements and by showing how NPP funding is the catalyst necessary to move an existing comprehensive strategy that addresses the market, image, physical conditions and management of a target area to a successful conclusion.

MSHDA Division:

Community Development

Contact Information:

Program Specialist, Julie Hales-Smith (517) 373-6026

Or (517) 373-1974

Predevelopment Loan Program

Predevelopment Loans

The Pre-Development Loan Program is designed to provide a readily accessible source of below market rate funds. These funds can help nonprofit developers pay for predevelopment expenses related to planning affordable housing developments from project conception through submission for financing.

How the Program Works

Predevelopment Loans may be used to pay for market studies, consulting fees, preliminary architectural plans, site options, appraisals, surveys, soil tests, legal fees or application fees. Loans may not exceed customary project preparation costs. These loans may not be used to pay general staff or administrative costs, and all costs must relate to a specific project. For example, a pre-development loan can fun the time of an architect to develop a plan or the time a staff appraiser spends to produce and appraisal but cannot be used to pay the general salary of the organization’s Executive Director.

The loan applicant must have a site or potential site(s), must have identified appropriate development team members and must submit a preliminary development budget that includes proposed sources and uses for hard and soft costs.

Loans will be zero percent interest and must be repaid from construction loan proceeds or other project income. The repayment requirement may be waived if there are impediments to project development that MSHDA determines are reasonably beyond the control of the borrower.

Eligibility

Nonprofit sponsors seeking to develop affordable housing with development financing from the Office of Community Development, the Office of Multifamily Development and Construction and/or the Low Income Housing Tax Credit Program are eligible for this program.

MSHDA Division:

Community Development

Contact Information:

Tamika Hale, (517) 241-6667

Technical Assistance

Technical Assistance

The purpose of the Technical Assistance (TA) program is to increase the capacity of nonprofit organizations and local units of government to produce affordable housing in Michigan. To this end, direct technical assistance and training workshops are provided using funds from MSHDA, HUD and the Michigan Economic Development Corporation (MEDC).

How the Program Works

The TA program supports the overall efforts of the Office of Community Development by providing direct one-on-one technical assistance as well as by providing training workshops. The TA program offers technical assistance in the following areas:

Planning and Resource Development – including housing needs assessments, strategic thinking, business planning and fund development.
Board governance – including helping emerging nonprofit housing organizations develop or revise Bylaws and Articles of Incorporation, establish appropriate committees and define board roles.
Personal/Administrative Management – including guidance in establishment of personnel policies. TA is available to help nonprofits and local units of government improve program design and administration, including budgeting, forecasting and reporting.
Housing Development – including training on the real estate development process, understanding housing markets, project design and feasibility and construction management.
Portfolio/Asset Management – covering policies and procedures needed to insure long-term viability of housing developments.

Eligibility
The Office of Community Development offers TA to nonprofit organizations, Participating Jurisdictions and other local governments when seeking MSHDA financing.

MSHDA Division:

Community Development

Contact Information:

Technical Assistance Program Specialist, Tiffany King (517) 241-1155

Community Development Appendix

Commercial Economic Development Fund Participants List – (Figure 1)

The Community Foundation for Southern Michigan

333 West Fort Suite 2010

Detroit 48826

(313) 961-6675

The Grand Rapids Foundation

161 Ottawa NW Suite 209-C Waters Building

Grand Rapids 49503

(616) 454-1751

Community Foundation of Greater Flint

502 Church Street

Flint 48502

(810) 767-8270

Capital Region Community Foundation

Drive Suite 104

Lansing 48911

(517) 272-2871

Community Foundation for Muskegon County

425 West Western Avenue Suite 200

Muskegon 49440

(231) 722-4538

Saginaw Community Foundation

100 South Jefferson Suite 501

Saginaw 48607

(517) 775-6524

Kalamazoo Community Foundation

151 S. Ross Street Suite 232

Kalamazoo 49007

(616) 381-4416

ASSET MANAGEMENT

Introduction

The MSHDA Asset Management Division oversees the physical and financial operations of nearly 450 MSHDA financed and nearly 390 HUD Financed (as the HUD Performance Based Contract Administrator) multi-family housing developments throughout Michigan. These developments are privately owned and managed and are financed under a variety of MSHDA and HUD programs. This rental housing is primarily available to low and moderate-income families, the elderly, and persons with special needs. Many of these developments are now eligible to prepay their government-assisted mortgages and many also have physical needs that exceed their escrows. In an effort to preserve quality affordable housing units, Asset Management Division administers the following preservation programs.

In this section:

Section 8 Preservation

HOME Preservation

Section 8 Preservation

MSHDA Section 8 Preservation

The purpose of this program is to preserve the existing inventory of HUD Section 8 assisted housing. Approximately 78 MSHDA-financed Section 8 properties have 20-year mortgage prepayment restrictions, which have or will expire soon. Preservation of this stock is critical as residents of these developments pay only 30% of their adjusted family income for rent. Additionally, MSHDA's override from Section 8 portfolio mortgage loans provides major financial support for production of new low and moderate-income rental housing.

How the Program Works

The MSDHA Section 8 Preservation program allows an equity take out loan, an interest reduction on the first mortgage loan and an increase in the annual limited dividend. Additionally, MSHDA will loan 20% to 40% of excess development reserves. Owners agree to forego their prepayment rights and lock in low-income occupancy and rent restrictions for the original mortgage loan term or beyond.

Eligibility

Owners or purchasers of Section 8 MSHDA financed developments are eligible to apply. Acceptance of MSHDA as contract administrator is a threshold requirement for receipt of incentives. Evaluation factors include funding of physical needs and adequate reserves.

MSHDA Division:

Asset Management

Contact Information:

Director, Donna McMillan

(313) 456-3579

Home Preservation

HOME Preservation

HOME is short for the HOME Investment Partnership Program, which became law in 1990. The HOME Program can be used to create or rehabilitate affordable rental housing. An allocation of HOME is set aside and loaned out to MSHDA financed developments to pay for necessary renovations and repairs. Owners must agree to restrict occupancy to low-income residents in HOME renovated units for a specified period of time. Rents are strictly controlled in assisted units. Residents who live in assisted units must have low or very low incomes.

How the Program Works

The owner must agree to the HOME affordability restrictions, waive the right to pre-pay the first mortgage loan, and waive the right to collect Limited Dividend payments until the HOME loan is repaid. Occupancy in HOME assisted units is restricted to residents whose annual household income does not exceed 60% of area median income. Additionally, 20% of the units are restricted to residents whose income does not exceed 50% of area median income.

Eligibility

Owners of MSHDA Financed developments may apply. However, this resource is limited. Priority is given to developments, which serve as important community anchors. Priority is also given to chronically deficient MSHDA financed developments, those with non-profit ownership, and those ready to proceed.

MSHDA Division:

Asset Management

Contact Information:

Director, Donna McMillan

(313) 456-3579