Next Steps for Developers after Loan Closure

Setup Requirements

The process to set up your loan disbursements may take four to five weeks and requires that you register as a vendor with the City Finance Department along with your banking information if you want to receive Automated Clearing House disbursements. We recommend starting this process before your loan closes.

Vendor Responsibility

• Registering as a Vendor: You must register the Borrower’s name as a vendor on Austin Finance Online (AFO) exactly as it appears on the loan agreement, including any spaces, commas, and abbreviations if not already registered. For funds disbursed for property acquisitions, the title company must be registered as a vendor to receive funds. Review the How to Register as a Vendor (PDF).
• Register Banking Information: Once registered as a vendor, contact vendor@austintexas.gov and request forms to register your banking information. Return the forms with the required information and signatures, and you will be contacted once the registration has been completed.
• Deliver Certificate of Insurance(s): Reference your loan agreement for the project's insurance requirements. Submit the Certificate of Insurance to the HDA Compliance Team. The HDA Compliance Team will forward them to the City’s Insurance Manager for review and approval. Insurance approval is required before disbursements can take place. We recommend obtaining your required insurances prior to loan closing.

City Responsibility

• Master Agreement and Delivery Order Setup: Once the Borrower has registered as a vendor, the required insurances have been approved, the executed loan documents have been received, and the AHFC receives copies of the Filed and Recorded Restrictive Covenants and Deed of Trust from the County Clerk, the Compliance Team begins the process of establishing a Delivery Order for your loan. Staff submits a request for a Master Agreement for the Delivery Order to the City’s Central Procurement Office. Once established, a Delivery Order can be issued. This process takes four to five weeks.

We refer to HUD 24 CFR Part 5 income guidelines for all programs. This calculation takes into consideration income and assets to compute a forward-looking 12-month average. Guidance on determining whose income to count within the household, what type of income must be included or excluded, and the calculation of imputed income from assets is found in the Technical Guide to Determining Income and Allowances for the HOME Program (PDF) HUD Guide.

• All potential buyers and tenants should be screened for income eligibility prior to signing a contract and be certified by the developer at the time the contract is signed.
• For buyers: Contracts, income documentation, and buyer affidavit should be sent to the compliance department to confirm income eligibility for every homebuyer.
• For leaders: Tenant Income Certification should be sent to the Compliance Department for all tenants, and copies of all income documentation should be kept with the property manager for at least 5 years.

2023 Median Family Income Chart (PDF)

Projects awarded with federal funds have a second layer of due diligence to make sure people in the community are given the opportunity to work on the project.

Community Housing Development Organization (CHDO)

A Community Housing Development Organization (CHDO) is a private, non-profit, community-based service organization with the capacity to develop affordable housing in the community it serves. Such organizations must apply for the certification on a yearly basis.

Section 3

In reference to the HUD Act of 1968, as amended, “Section 3” requires projects receiving $200,000 or more in federal funds for any activity that involves housing construction, rehabilitation, or other public construction, to the greatest extent feasible, provide job training, employment, and contracting opportunities for low or very-low-income residents in connection with projects and activities in their neighborhoods. Review the Frequently Asked Questions (FAQs) for Section 3 (PDF).

Davis Bacon

The Davis-Bacon and Related Acts (DBRA), applies to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for construction, alteration, or repair (including painting and decorating) of public buildings or public works. DBRA requires laborers and mechanics employed under contract to be paid no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area.

Once all project deliverables have been completed and all loan terms have been met, the Development is ready for close-out as an active loan agreement.

Borrower must submit:

• Final Development Summary, including but not limited to total development cost,  number of days from start of construction until construction completion, total construction hard costs, summary of tenant/owner selection process and tenant protections, number of leased/sold units at all MFI levels, number of accessible units leased/sold, any awards or recognitions received, name and contact info of the property management company and/or enforcing entity, and photos of the completed project;
• Final Accounting; and
• Final Draw, if any.

During the affordability period the developer, management company, or enforcing entity must maintain adequate records including, but not limited to documentation of costs and contracts associated with the development, tenant waiting lists, tenant selection policies, and documentation for all tenant files for five years after the affordability period has ended.

Requirements for Enforcing Entities for OHDA

• Confirm primary residence of all units yearly.
• Receive and enforce Right of First refusal for resales.
   

Property Manager Requirements for RHDA

• The Development is affirmatively marketed to qualified applicants.
• Households are appropriately screened for income eligibility.
• HUD-published rent limits are observed.
• The property is continually maintained in accordance with the Uniform Physical Conditions Standard (UPCS) developed by HUD.
• Insurance is maintained.
• Audited Financial Statements are submitted annually.

If the development is to be sold, the development owner entity must provide a Right of First Refusal (ROFR) to AHFC that permits AHFC (or an affiliate) to purchase the development by matching a bona fide offer from an unrelated, third party to purchase the development. The AHFC ROFR will be subordinate to any TDHCA ROFR.

The Affordability Period shall not be shortened for any reason, including if the loan is repaid before the end of the Affordability Period. Affordability requirements and restrictions will remain in force throughout the Affordability Period regardless of transfer of ownership unless ownership of the property is transferred through foreclosure proceedings.