FULTON COUNTY/CITY OF ATLANTA LAND BANK AUTHORITY, INC. REQUEST FOR QUALIFICATIONS NSP DEVELOPERS FREQUENTLY ASKED QUESTIONS 1. If we are looking to rehabilitate the properties for both sale and rental, could you please provide some more clarity on the ownership structure. o For example in the rental model, if we purchase the property with our equity from the LBA and utilize NSP 3 funds, not to exceed $40,000, for the rehabilitation, after the 10 Year Affordability Period, does the deed restriction fall off? For homeownership projects, the affordability period would depend on the amount of direct subsidy provided to the homebuyer not the development investment or subsidy into the project. Please see the RFQ for these affordability periods. For rental projects, the affordability requirements will terminate after the full affordability period. The applicable periods are: Single-Family and Multi-Family Rental Projects Property Type NSP Investment Subsidy Per Unit Affordability Period Single-Family (1-4 Units) Less than $15,000 5 Years Single-Family (1-4 Units) $15,000 - $40,000 10 Years Single-Family (1-4 Units) $40,001 - $90,000 15 Years Single-Family (1-4 Units) More than $90,000 20 Years Multi-Family (5 + Units) Any Amount 20 Years *Note: NSP investment is equal to the total of funds from NSP1 and NSP3.
o Also, would the NSP 3 funding, up to $40,000, provided by the LBA for the rehabilitation be considered as a grant? The NSP funds will be structured as loans to the developers. The terms of those loans will be proposed on a per-project basis by each developer. o Furthermore, how does the LBA determine the Sales Price to the developer under this aforementioned model? The sales price is calculated based on the amount that the City of Atlanta paid to acquire the property plus holding costs. 2. How is affordability determined if we were to rent affordably to an Atlanta Housing Authority, Housing Choice Voucher Participant? For instance and simplicity, if the Total Rent amount is $1,000, and the Housing Choice Voucher Participant is responsible for 20% of the Total Rent and the Housing Assistance Payment (HAP) covers 80% of the Total Rent, would the Rent Affordability Metrics be taken on the $200 that the Housing Choice Voucher Participant is directly responsible for in this scenario or on the Total Rent Amount of $1,000? $1,000. Please see 24 CFR Section 92.252 for the HOME rules on how the maximum rents are calculated. The LBA will be utilizing the HOME standards as the safe-harbor affordability requirements under the NSP program. 3. Has the home on Mayson been tested for lead/asbestos? If so, was it positive and are we responsible for remediation? If not, should the contractors include testing in the bid? No, the Land Bank has not tested for lead or asbestos. Yes, the contractor should include this estimate in the bid. 4. Are we responsible for permitting (including site plans, LDP, etc)? Yes, all applicable permits will be required and checked with each rehab draw. 5. Can we redesign layout of the home? If so, can architect services be included in the hard cost? Architectural costs are an eligible expense, provided they are customary and reasonable. Layout redesign is permissible, as long as it meets any historical preservation (Section 106) requirements and is within budget. 6. Are you expecting us to remove plaster walls or feather out and cover with drywall? This is not a requirement of the program or the rehabilitation standards. Please propose what you think it appropriate for the home. 7. Do you want us to replace driveways?
This is not a requirement of the program or the rehabilitation standards. Please propose what you think it appropriate for the home. 8. Do you want contractors to add a deck to property? This is not a requirement of the program or the rehabilitation standards. Please propose what you think it appropriate for the home. 9. Since there was a fire that affected the exterior wall, was a structural assessment made? If so, will you provide for the C.O.? No assessment has been completed. 10. Is there a list of non-profit developers that have potential interest in these properties? LBA has not developed a list. Any non-profit developer would be eligible as described in the RFQ. 11. Is the RFQ only for the properties that are being held by the LBA, or are there properties that are controlled by other entities that will also be considered for redevelopment? Yes, the RFQ is only for the properties held by LBA and acquired with NSP funds. However, the developer will be eligible for other LBA programs that may require developer support. 12. Is there a specific date that the properties need to be in service by? Each development agreement will specify a placed in service deadline and they will vary by property. The developers will have a specific time period for rehabilitation and then a separate period for rental or sale of each property, as appropriate. We do not have a specific deadline for the entire program. 13. How many developers will be selected? We do not have a specific number of developers to select. 14. What is the definition of Developer? In the context of the NSP program it is the entity that is responsible for completed the rehabilitation and renting or selling the home to the eligible families. Please compare these to the grantee or the subrecipient as those terms are used in the NSP program to describe the initial recipient of the NSP grant funds. 15. Are there limitations on the Developer Fee? What is the value proposition? Please see the following definition included in the RFQ:
Developer's Fee is compensation to the developer for the time and risk involved to develop the project. It is typically based on the size of the project, the total development cost and the risk associated with the project. The City of Atlanta has determined that as all properties acquired by the Fulton County/City of Atlanta Land Bank Authority and developed by Developers will adhere to the following Developer Fee schedule and timeline: Activity Fee Schedule Payment Schedule Transfer of Property $4,000.00 Upon acquisition closing Rehab 12% of Hard Construction 50% paid during rehab, Costs commensurate with % of work completed 50% paid upon completion of rehab Disposition $6,000.00 Upon closing Please also note that the final Developer Fee is based on approval by the City of Atlanta, Office of Housing and cannot exceed $30,000.00 for any property. The Developer Fee is set at time of acquisition and cannot go up. If rehab costs decrease below the original estimate, the Developer Fee will be adjusted so that it does not exceed the 12% cap. Example: Total Development Cost (excluding Developer Fee) $150,000 Rehab Cost $50,000 Total Developer Fee Earned $16,000 Paid at Acquisition $4,000 Paid During Rehab $3,000 Paid After Rehab $3,000 Paid Upon Sale $6,000 16. What will be the typical condition of the property? Are they dilapidated or are they of decent value? It really varies by property. Some need substantial renovations and others need very little work. 17. Can the Developer be the builder? Yes. 18. Will not being a non-profit hurt your chances? Non-profit developers are awarded 5 points according to the scoring criteria contained in the RFQ. 19. What is the Developer Fee cap?
Please see #15, above. 20. Can a developer encounter a loss if the property has negative equity? Neither the City nor the LBA can guaranty a return on the developer s investment. 21. Can a group keep a commission if they have a real estate professional in the organization? Yes please include this in your proposed budget. A realtor commission is an eligible NSP cost provided that the commission is reasonable and customary for similar types of projects in their community. 22. How is the bonding requirement handled? Developer or contractor? During qualification round or at the time of bid? The fidelity bond is obtained by the Developer and the Contractor (if there is a separate one) provides the payment and performance bond. The payment and performance bonds are obtained at the time of the contract for each individual property. 23. Clarify what are allowable and reimbursable costs. The costs to complete the rehabilitation and a reasonable developer fee. Please see the budget form provided with the RFQ for a detailed listing of the eligible costs for this program. 24. Will there be back-end subsidy? If the developer wants to propose additional subsidy that should be included in your proposal. 25. Will Davis-Bacon apply? NSP funded projects follow CDBG requirements regarding the applicability of Davis- Bacon Prevailing Wage requirements. These are issued by the U. S. Department of Labor and required for all construction and rehabilitation work over $2,000. Davis-Bacon applies to projects with eight or more separate, contiguous units operated by a single entity as a single project (e.g., it applies to properties with eight or more units in a single structure). Grantees must comply with the Federal Prevailing wage requirements that are specific to the type of construction project and should follow the most stringent of the Federal, state, and local requirements that follow. The Davis-Bacon exemption applies to residential structures containing seven or fewer units per property where NSP funds are used for construction or rehabilitation. If the properties are single-family homes where each property is separately owned, then HUD views these as individual structures with one unit each. In this situation, Davis-Bacon does not apply. Note, however, that HUD considers condominiums or cooperatives to be multi-family properties because there are multiple units in one structure. 26. What types of financials are required?
Most recent 2 years of audited Financial Statements and current year unaudited financial statement. If your organization does not have audited statements then please submit copies of filed tax returns and unaudited Financial Statements for review. 27. Will they get all forms of money back (including debt or equity)? If the developer wants to propose a return of their equity then that should be included in their proposal. 28. Can you draw down Developer Fee during the process? Up to 50% of the developer fee is permitted to be drawn by the NSP program during the rehab phase. 29. Need to include sources and cases sheet? Please see the budget form provided. 30. Establish another date for visitation to 86 Mayson? No other dates are scheduled. 31. Is anyone already qualified as a developer? All developers will be selected pursuant to this RFQ process. 32. Will any debt be absorbed by Developer? This is permitted by the NSP program and if this is requested it should be included in the Developer s proposal. 33. What is acquisition cost of Mayson? 86 Mayson was acquired for $39,900. Currently the LBA s obligation to the City of Atlanta regarding this property is $44,084 34. What is average acquisition cost? $105,342.50 35. Clarify number of copies due and format. Please submit one (1) original and five (5) copies of the application and all attachments. An original copy of all information must be provided in a 3 ring binder. The agency s information should be organized, with a table of content serving as the first page based on the order of the application. The required supplemental information must be tabbed and identified in the application table of contents. Please retain a copy of the information requested for your records.