Attachment A - OO Dev Program Combined.pdf

DEVELOPMENT OF

AFFORDABLE

OWNER-OCCUPIED

HOMES

PROGRAM

GUIDELINES &

APPLICATION FOR

FINANCING

Attachment A

Table of Contents

I. Background and Funding 1

II. Eligible Applicants and Project Eligibility 1

III. Form of Funding and Support 2

IV. Evaluation Criteria 2

V. Grant Award Distribution 5

APPENDIX A – APPLICATION

APPENDIX B - BUDGET WORKBOOK

I. Background and Funding

The Sun Prairie Affordable Housing Fund (AHF) was established in 2020. Funding is from utilization of the State of Wisconsin’s One-Year Tax Increment Financing (TIF) Affordable Housing. The purpose of the AHF is to fund initiatives which:

1. Strategically invest in new affordable housing and rehabilitation of existing housing units, prioritizing efforts where the housing market is falling short.

2. Foster stability in all housing types, with an emphasis on affordable housing units.

In 2026 the City has $600,000 available from the City’s AHF to support the development of new, affordable owner-occupied units.

II. Eligible Applicants and Project Eligibility

Projects that receive loans made through the Sun Prairie AHF must be dedicated to expanding the availability of affordable housing units through the construction of new owner-occupied units or acquisition/rehab to convert existing units to be affordable. Projects must meet each of these requirements:

• Funds can only be applied to units for households with low incomes (≤80% AMI).

• Projects are located within the City of Sun Prairie.

• All housing units must meet all applicable state and local building codes, ordinances, and zoning regulations at the time of project completion.

• The total financing secured for a project, from all sources, including any City funds awarded under this RFP, may not exceed 115% of the property's estimated valuation upon the project’s completion. A project for which a community land trust serves as the owner of the underlying land will also be eligible for funding so long as the secured funds-to-value ratio for the entire project - land and property – does not exceed 125%.

In order to be considered for financing, applicants and projects must also meet the following requirements:

1. Project must not have closed on primary financing or begun construction prior to application.

2. Applicant must have site control (for new development only) and must commit to a construction start date no later than one (1) year from the awarding of funds. For development proposals involving acquisition and rehab, an award is valid for two (2) years from the date the funds are awarded.

3. Project must demonstrate that the project is economically viable, has a financial gap, and the applicant(s) will have the economic financial ability to repay funds if the project is not completed consistent with the written agreement.

4. Project must demonstrate financial capacity and experience in producing affordable housing in whole or in part with local, state, or federal funds, on schedule and as proposed.

5. Contribute a minimum of 5% of the total project development costs, through ownership equity or a first mortgage, and demonstrate the ability to secure all funds that may be necessary or convenient to complete the project as proposed.

6. Homeownership dwellings must be transferred to owner-occupied status within nine (9) months of construction completion.

7. Eligible Use of Loan Funds:

a. At least 75% of the City funds must be spent on capital costs (e.g. construction, buying land)

b. Up to 25% can be used as grants to cover soft costs (e.g. developer fees, permits, design)

i. Developer fee can be up to 10% of the total award and are part of the 25% soft cost portion.

c. Developer shall use a portion of the City funds for mortgage reduction to the homebuyer. Developer will return un-allocated portion of the Deferred Loan as repayment to the City of Sun Prairie at the time of transfer to Homebuyer.

d. Pre-development costs are not eligible for funding. After commitment, a loan agreement will be available pending land use approval, if necessary.

If a collaborative activity/project is proposed, applicants should describe the purpose of the collaboration, how it is expected to enhance the activity/project and how it will operate, be governed and share resources. The proposal must identity a lead agency and include a Memorandum of Understanding (MOU) signed by each of the collaborating agencies.

III. Form of Funding and Support

This is a 0% interest, long-term deferred loan. Loans are due at time of sale or transfer of ownership of property.

City loans are in second position to the first mortgage holder and construction loan.

Maximum amount per owner-occupied unit: $200,000

IV. Evaluation Criteria

The applications will be scored using the following criteria. To be considered for funding, projects must score a minimum of 80 out of 100 total points:

Proposal Requirements Points

Project Description 30

Sustainability 10

Location 20

Development Team 20

Partnerships 10

Project Financing 10

TOTAL 100

Project Description

Application should provide a detailed description of the project proposed for City support.

Application should include planned location, zoning, land use, development costs, how project meets city’s housing goals found in its 2022 Housing Study and Strategy, and the minimum amount of City funding necessary to complete the project.

Higher point totals will be given to projects which include any of the following:

A. Shovel-ready projects.

B. Permanent affordability (i.e. 99+ year LURA).

C. Geographically located to maximize access to jobs, transit, schools and other key amenities.

D. Involve smaller scale, infill developments that will help expand and diversify homeownership choice. This includes, but is not limited to, pocket neighborhoods, bungalow courts, townhomes, rowhomes, condominiums, live/work units, co-housing, etc.

E. Are new construction proposals that demonstrate a commitment to incorporating Universal Design features for all proposed units and common areas.

F. Incorporate Energy Efficiency/Sustainability.

https://cityofsunprairie.com/DocumentCenter/View/13540/Sun-Prairie-Housing-Study-and-Strategy?bidId=

Energy Efficiency/Sustainability

Sun Prairie prioritizes affordable housing that is safe, comfortable, and energy efficient, aiming to reduce utility expenses for households. Applicants can earn points for pursuing these energy efficiency measures and sustainability standard for the project:

• Solar Photovoltaic System

• Level 2 or 3 Electric Vehicle Charging Stations

• Wisconsin Green Build Gold Standard

• 2020 Enterprise Green Communities Certification

• ENERGY STAR New Construction and EPA Indoor airPLUS certifications

• 2020 Enterprise Green Communities Certification Plus

• Passive House (PHIUS)

Location

Provide a description of where the project is located and how the specific site helps the City expand affordable housing opportunities where most needed.

Development Team & Partnerships

Provide a description of the organization including key staff who will be involved in the project, past projects the team has completed, and projects currently in progress.

Additional items that should be included in Development and Service Team Experience:

• Participating in public/private joint ventures

• Developing owner-occupied housing

• Experience with lease-purchase (if applicable)

• Partnerships with other organizations to provide support for homeowners

Project Financing

Funds will be provided in the form of a long-term deferred loan. Loans will be at 0% interest.

Developer shall use a portion of the City funds for mortgage reduction to the homebuyer. Developer will return un-allocated portion of the Deferred Loan as repayment to the City of Sun Prairie at the time of transfer to homebuyer.

Alternative Financing Terms

• Developers willing to commit to permanent affordability on the subject property, through a 99-year Land Use Restriction Agreement (LURA) can choose to have 50% of the Deferred Loan forgiven at time of sale to the first homebuyer of the property. The LURA will require https://www.weigogreener.org/g_mf.php https://nam04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.greencommunitiesonline.org%2F&data=04%7C01%7Cjlezaks%40slipstreaminc.org%7Cb2b853461f1e4597cfcc08d926b69b0d%7C14e9186db92e4c6db3d654b54c168413%7C1%7C1%7C637583387994847297%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=0Y5t2ym%2FhRkrtRF6PzpGqFu9xF4mbXzqIMvARH1vrt0%3D&reserved=0 https://nam04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.energystar.gov%2Fpartner_resources%2Fresidential_new%2Fhomes_prog_reqs%2Fmultifamily_national_page&data=04%7C01%7Cjlezaks%40slipstreaminc.org%7Cb2b853461f1e4597cfcc08d926b69b0d%7C14e9186db92e4c6db3d654b54c168413%7C1%7C1%7C637583387994847297%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=NYmLtX%2BqGlbvgxnvkeQUbiHzU3%2B9WXyUeVakodgBa80%3D&reserved=0 https://nam04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.epa.gov%2Findoorairplus&data=04%7C01%7Cjlezaks%40slipstreaminc.org%7Cb2b853461f1e4597cfcc08d926b69b0d%7C14e9186db92e4c6db3d654b54c168413%7C1%7C1%7C637583387994857267%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=l5xYdBo8wIQ%2BajkDzPuhPkbaqk%2BIuTiAwO1VcXVFmrc%3D&reserved=0 https://nam04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.greencommunitiesonline.org%2Foperating-energy&data=04%7C01%7Cjlezaks%40slipstreaminc.org%7Cb2b853461f1e4597cfcc08d926b69b0d%7C14e9186db92e4c6db3d654b54c168413%7C1%7C1%7C637583387994857267%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=XN1FbHk67G5N%2FOaMVtpYFGMXFV52%2BNnBNu8%2BPi1fpkw%3D&reserved=0 https://nam04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.phius.org%2Fhome-page&data=04%7C01%7Cjlezaks%40slipstreaminc.org%7Cb2b853461f1e4597cfcc08d926b69b0d%7C14e9186db92e4c6db3d654b54c168413%7C1%7C1%7C637583387994867209%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=NmJE%2FrdVh2oTyZb7msthLB%2BlTB%2BrTYCQOZCTlyEy1d0%3D&reserved=0 subsequent sales to benefit future low-to-moderate income households and require the non-profit to assist the homeowner in the resale process of the property.

• The City anticipates offering gap-financing awards of up to $200,000 per unit of affordable housing, depending on the scale or number of proposed units in the development. The amount of subsidy offered will reflect the extent to which proposals match the City's stated goals, objectives, and preferences as described in this RFP; the extent to which all other available financing sources are leveraged; and the availability of funds.

• An awarded applicant must make an equity contribution equal to a minimum of 5% of the project's budget. In lieu of making the required equity contribution, applicants may choose to defer a portion of the proposal's development fee, or provide a combination of owner equity and deferred development fee that equals at least 5% of the project budget.

• The City may alter the terms and conditions of its loans from those described above if deemed necessary to maximize the expansion of affordable housing units or better respond to stated preferences.

V. Grant Award and Distribution

Recipients must sign a Sun Prairie Affordable Housing Loan Agreement that lays out the responsibility of the recipient in carrying out the project, including reporting requirements. Recipient will also be expected to execute a note, mortgage, and Land Use Restrictive Agreement (if applicable) to secure funds. All written agreements must be approved by the Sun Prairie Common Council.

It is expected that recipients will secure all sources of financing for the project prior to execution of City documents. Significant changes to the project will not be considered without Common Council approval.

Funds awarded to projects that do not move forward will be released the following funding year.

APPENDIX A

APPLICATION FOR SUN PRAIRIE AFFORDABLE HOUSING FUND (AHF)

DEVELOPMENT OF NEW OWNER-OCCUPIED HOUSING

APPLICATION SUMMARY

APPLICANT NAME

MAILING ADDRESS

If P.O. Box, include Street Address on second line

TELEPHONE

LEGAL STATUS

PROJECT/PROGRAM

CONTACT

Private, Non-Profit Private, Non-Profit (CHDO)

For Profit

Other: LLC, LLP, Sole Proprietor

Federal EIN:

Unique Entity Identifier (UEI):

WEBSITE

(if applicable)

E-MAIL ADDRESS

FUNDS REQUESTED: Please list the amount and source of funding for which you are applying.

TOTAL PROJECT COST AMOUNT OF AHF FUNDS

REQUESTED

PECENT OF AHF FUNDS

TO TOTAL PROJECT COST

Signature of Applicant Title

Printed Name Date

PROJECT DESCRIPTION

A. PROJECT NAME AND LOCATION: Indicate the name, address, and parcel number where the Project will be located. Attach maps to the application indicating the location of the proposed project.

Project Address:

Parcel Number:

Project Type: New Construction Acquisition/Rehab

Total # of Units: Number of Affordable Units <80% AMI:

Number of Affordable Units

<50% AMI:

B. ZONING AND LAND USE: Provide the current zoning classifications of the site and describe any changes in zoning, variances, special or conditional use permits, or other items that are needed to develop this proposal. Indicate if the project is consistent with the City’s Comprehensive Plan or sub area plans.

C. PROJECT DESCRIPTION: Provide a detailed description of the project, including the impact of your proposed program on the community, key characteristics, and if applicable, targeted populations to be served. Examples of target populations can include BIPOC, LGBTQ+, immigrant, income-level, dis/ability, and/or individuals, households, and geographic clusters, etc.

D. REHABILITATION: For proposals that have identified a property that will require rehabilitation, summarize the scope of rehabilitation work.

E. DISPLACEMENT: Will any business, including churches and non-profit organizations, or residential tenants (owner or rental) be displaced temporarily or permanently? If so, please describe the relocation requirements, relocation plan and relocation assistance that you will implement or have started to implement.

F. GREEN TECHNOLOGIES/SUSTAINABILITY What is your organization’s track record of developing projects that incorporate extraordinary sustainable, energy efficient, and/or green building design techniques? Please describe how this proposed development will contribute to the City’s Sustainability Goals found in the City of Sun Prairie Task Force on Sustainability Report (2021) (page 8).

G. TIMELINE AND MILESTONES: List the estimated/target completion dates associated with the following activities/benchmarks to illustrate the timeline of how your proposal will be implemented.

Activity/Benchmark Estimated Month / Year of Completion

Acquisition/Real Estate Closing

Rehab or New Construction Bid Publishing

New Construction/Rehab Start

Begin Sales/Marketing

New Construction/Rehab Completion

Complete Sales

Request Final Draw of CDD Funds https://cityofsunprairie.com/DocumentCenter/View/11354/Sun-Prairie-Sustainability-Report---Final-?bidId=

LOCATION

H. NEIGHBORHOOD AMENITIES: Describe the neighborhood in which the project will be located noting access to public transit; social, recreational, educational, commercial, and health facilities and services; and other municipal facilities and services.

I. SITE SELECTION: Explain why this site was chosen and how it helps the City to expand affordable housing opportunities where most needed. Describe the neighborhood and surrounding community.

J. SITE INFORMATION: Enter the site address(es), if known, of the proposed housing and answer the questions listed below for each site.

# of Units Prior to Purchase

# of Units Post- Project

# Units Occupied at Time of Purchase

# Biz or Residential Tenants to be Displaced

# of Units Accessible Prior to Purchase

# of Units Accessible Post- Project

Appraised Value Current (Or Estimated)

Appraised Value After Project Completion (Or Estimated)

Purchase Price

Enter Address 1

Enter Address 2

Enter Address 3

DEVELOPMENT TEAM & PARTNERSHIPS

K. EXPERIENCE AND QUALIFICATIONS: Describe the development team’s experience with developing or rehabilitating owner-occupied affordable housing. If limited experience, describe the collaboration or mentorship that will be available to support you.

L. PRIOR WORK: Has your organization ever performed work for the City of Sun Prairie? If yes, please specify scope of work:

M. LEASE-PURCHASE: If proposing a lease-purchase program, describe the team’s experience with lease-purchase programs. Describe how the development team will operate the program and waitlist.

Identify if any prioritization will be a component of the program design. How will the agency help households or individuals on the waitlist qualify and prepare for the responsibilities of homeownership?

N. PROJECT TEAM: Identify all key roles in your project development team (i.e. architect, legal counsel, and any other key consultants, if known) and a main point of contact including name, phone number, and address for the person that will have primary responsibility for project management.

Contact Person Company Role in Development Email Phone Main Point of Contact

O. CONFLICT OF INTEREST: A conflict of interest may exist where an employee or close relative/family member has a connection to your business, and a third party may consider that this relationship may compromise the competitive process. Does any employee of your company have a possible conflict of interest with this process? Yes No

If yes, please specify the following:

Employee Name:_______________________________ Employee Phone Number:____________________

Employee’s Relationship:______________________________________________________________________

P. PARTNERSHIPS: Briefly describe your connection to relevant systems, collaborations, and networks in the homeownership system? What is your group/agency’s role and how long have you been in this role? Identify any partnerships that have been or will be formed to ensure the success of the developments.

Q. HOMEOWNER ENGAGEMENT: Describe how your agency builds relationships and authentically engages with individuals and households served. Specifically include information on previous and new strategies to engage individuals or households (who are BIPOC, LGBTQ+, immigrant, low-to-moderate income, and/or have a dis/ability), into your agency’s operations and housing programs.

R. HOMEOWNER SUPPORT: Describe how your team will support prospective program participants and homebuyers to ensure their success as homeowners. Describe what programs and services, if any, will be made available to potential homebuyers. Describe financial literacy, home maintenance, credit builder programs or HUD-approved education counseling available to potential buyers pre-and post-purchase. Indicate the team member(s) primarily responsible for this service.

S. REFERENCES: Please list at least three municipal/financing references who can speak to your work on similar projects completed by your team.

Name Project Location Contract Amount

Completion Date

Email Address

Phone

PROJECT FINANCING

T. BUDGET SUMMARY: Indicate the sources and uses of all funds for this project.

The City expects agencies to leverage additional funds for each project. Describe the capacity of your agency to secure the total financing necessary to complete your proposed project (i.e. list financial commitments already secured or partnerships already obtained with other funding sources).

SOURCE USES AMOUNT SECURED?

TOTAL

U. FUNDS NEEDED: In the space below, please describe why Sun Prairie AHF funds are needed to ensure the viability of this project.

Appendix B - Budget Workbook

APPLICANT & PROJECT NAME:

1. AGENCY OVERVIEW

This chart describes your agency's total budget for 3 separate years. Where possible, use audited figures for 2025.

Actual.

Account Description 2025 Actual 2026 Budget 2027 Proposed

A. PERSONNEL

Salary (including benefits)

Taxes

Subtotal A - - -

B. OPERATING

All "Operating" Costs

Subtotal B - - -

C. SPACE

Rent/Utilities/Maintenance

Mortgage/Depreciation/Taxes

Subtotal C - - -

D. SPECIAL COSTS

Subcontracts

Deposits to Reserves

Debt Service (Excl Mortgage)

Other: (Specify)

Subtotal D - - -

Total Operating Expenses: - - -

REVENUE

Direct Public Grants

Direct Public Support

Indirect Public Support

Miscellaneous Revenue

Restricted Funds Released

Program Income

Total Income - - -

Net Income - - -

APPLICANT & PROJECT NAME:

2. CAPITAL BUDGET

Enter ALL proposed project funding sources.

FUNDING SOURCES

Source Amount

Non- Amortizing

(Y/N) Rate (%) Term (Years)

Amort.

Period (Years)

Annual Debt Service

Permanent Loan-Lender Name:

Subordinate Loan-Lender Name:

Subordinate Loan-Lender Name:

Tax Exempt Loan-Bond Issuer:

City-AHF Loan

Other-Specify Lender/Grantor:

Other-Specify Lender/Grantor:

Other-Specify Lender/Grantor:

Historic Tax Credit Equity

Deferred Developer Fees

Owner Investment

Other-Specify:

Total Sources -$

Source of Funds

Construction Loan-Lender Name:

Bridge Loan-Lender Name:

Historic Tax Credit Equity:

Total

Estmated pricing on sale of Federal Tax Credits:

(if applicable)

Estmated pricing on sale of State Tax Credits:

Construction Financing

Amount Rate Term (Months)

(if applicable)

Remarks Concerning Project Funding Sources:

APPLICANT:

3. PROJECT EXPENSES

Enter the proposed project expenses

Acquisition Costs Amount

Land $0

Existing Buildings/Improvements $0

Other (List)

$0

Construction:

Construction/Rehab Costs $0 <---

Construction Profit $0

Construction Overhead $0

General Requirements $0 Total Cost:

Construction Supervision $0 $0

FF&E/Personal Property $0

Demolition $0

Site Work $0

Landscaping $0

Letter of Credit/P&P Bond $0

Construction Contingency $0

Other (List)

$0

Architectural & Engineering

Architect - Design $0

Architect - Supervision $0

Engineering $0

Other (List)

$0

Interim/Construction Costs

Builder's Risk/Property Insurance $0

Construction Loan Interest $0

Construction Loan Origination Fee $0

Real Estate Taxes $0

Park Impact Fees $0

Other Impact Fees $0

Other (List)

$0

Financing Fees

Cost of Bond Issuance $0

Permanent Loan Origination Fee $0

Credit Enhancement $0

Other Permanent Loan Fees $0

If applicable, please list the costs attributable to "above and beyond" green building/Net Zero construction components included in the Construction

Soft Costs

Appraisal $0

Market Study $0

Environmental Reports $0

Survey $0

Permits $0

Lease-Up Period Marketing $0

Accounting/Cost Certification $0

Title Insurance and Recording $0

Relocation $0

FF&E $0

Capital Needs Assessment (if rehab) $0

Legal $0

Other (List)

$0

Fees:

Bridge Loan Fees $0

Organizational Fees $0

Syndication Fees $0

Total Development Fee $0

Developer Overhead $0

Other Consultant Fees $0

Other (List)

$0

Reserves Funded from Capital:

Lease-Up Reserve $0

Operating Reserve $0

Replacement Reserve $0

Capital Needs Reserve $0

Debt Service Reserve $0

Escrows $0

Other: (List)

$0

TOTAL COSTS: $0