Agenda - Council Work Session - 01/10/2012

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3. State Designated Basis Boost - Buildings Designated by State Housing Credit Agency [pursuant to 42(d)(5)(B)(v)]* It is the goal of Minnesota Housing to optimize the use of all available sources of funding for multifamily developments; including private investor equity, amortizing loans and deferred loans to produce the maximum number of affordable rental units in the most sustainable, quality, cost effective and geographically diverse developments possible which meet Minnesota Housing's strategic priorities. Consistent with this goal, the following criteria will be used to determine if, when, and in what amount, Minnesota Housing will provide a basis boost for housing tax credit developments on a building by building basis to obtain financial feasibility. a. Development must meet state identified housing priorities as evidenced by competitive tax credit score. b. Funding gaps remain for top ranking tax credit developments. c. Credits allocated in connection with the basis boost shall be no more than needed to achieve financial feasibility. *Note: Requests by Applicants/Developers to Minnesota Housing to apply the 30% State designated basis boost must be formally made in writing. The request should clearly outline the reasons supporting the request and clearly demonstrate how the proposal meets the criteria established by Minnesota Housing for receiving boost considerations. O. Reservations Once staff has ranked applications and determined allowable credit amounts for each application, staff will make recommendations to Minnesota Housing's Board of Directors for final approval of the reservation of credits. After the ten-day adjustment period (referenced below), the selected applicant will have 20 days to acknowledge selection by returning an executed project profile, and the appropriate reservation fee (See Chapter 9). A development selected for a reservation of tax credits is selected based upon many specific factors relating to the application including site location. Reservations are site specific. Changing a development's site could lead to the revocation of the tax credit reservation/allocation. Minnesota Housing's tax credit program permits its owners to elect the applicable percentage either at reservation or placed in service. If the election is not made at the time the reservation letter is issued, the percentage will be fixed for the month in which the building is placed in service. The Owner must be sure to consider the best options for this election and make sure the election is made at the correct time. Once made, the election is irrevocable. Upon receipt of the required documents, Minnesota Housing will complete its reservation review and send reservation agreements to be executed by the owner. Each reservation shall be conditioned upon receipt of written certification, evidence of timely progress toward completion of the project acceptable to Minnesota Housing, and evidence of compliance with federal tax requirements. Choosing the gross rent floor date as the date of allocation or the date of placed in service can be done at any time from reservation forward but the election must be made and the completed election form received by Minnesota Housing no later than the date the project is placed in service. If you choose to make the election as of the date of the reservation, submit a fully executed Gross Rent Floor Election Form (HTC 26) including each building of the development in which there are housing tax credit units. If the required Owner -executed forms with all elections made by the owner, are not submitted to Minnesota Housing by a date no later than the placed in service date, the gross rent floor date will be effective on the allocation date of the tax credits. Minnesota Housing maintains the right not to reserve tax credits for any project if it determines, in its sole discretion, that a reservation for such project does not further the purpose and goals as set forth in Chapter 1 of this plan. 11 12012 Housing Tax Credit Procedural Manual Rev. 04/2011