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Housing & Community | Programs
« Affordable Housing Program »
Affordable Housing Program
Monitoring Requirements
Approved AHP projects are required to be monitored
in accordance with AHP regulations. Approved AHP projects
will be subject to the following monitoring requirements:
Level One Monitoring
Semi-Annual Progress Report
During a project’s incomplete phase, Semi-annual
Progress Reports (SA
Report) must be filed by the member bank and project
sponsor. SA Reports detail a project’s level of
progress during the six-month periods ending June 30
and December 31. The June SA Report is due by July 31
and the December SA Report is due by January 31 of the
following year. SA Reports are required until a project
is deemed complete by FHLBank Pittsburgh. An owner-occupied
project is deemed complete when all AHP funds are disbursed
to the project and all homes are either sold or rehabilitated
with current occupants. A rental project is deemed complete
when all AHP funds are disbursed to the project and
at least 75% of the units are leased.
Owner-occupied Project Certification/Project
Sponsor
When an owner-occupied project is complete, the project
sponsor will execute an Owner-occupied
Project Certification certifying that the AHP
funds were used in accordance with the approved AHP
application, and the AHP homes are subject to an
AHP retention mechanism. This certification shall
be provided to FHLBank Pittsburgh within six months
of project completion.
Rental Project Certification/Project Owner
When a rental project is complete, the project owner
will execute a Rental
Project Certification certifying that the services
and activities committed to within the approved AHP
application were provided in connection with the project.
The project owner will also provide a list of actual
tenant rents and incomes for the project and certify
that the reported rents and incomes are accurate and
in compliance with the rent and income targeting commitments
made within the approved AHP application. The project
owner will also certify that the project is habitable.
Level Two Monitoring
Within one year of project completion (as determined
by FHLBank Pittsburgh), a full-scope monitoring review
will be performed to determine a project’s level
of compliance with the AHP regulations and the representations
and commitments made within the approved AHP application.
This review will focus on the following areas to determine
a project’s level of compliance:
- Income targeting
- Third-party income documentation for verification
of reported incomes
- AHP retention mechanism (copy of executed and recorded
retention document(s)
- Final Sources and Uses of Funds with verification
(Audited Cost Certification or invoices or AIA documents)
- Use of AHP funds
- Delivery of AHP funds (AHP Note)
- Project Feasibility (AHP feasibility guidelines)
- Fair Housing
- First and Second District Priorities (Scoring Priorities
Certification and Operating Cost Efficiency Certification)
The project sponsor/owner will be notified in writing
by FHLBank Pittsburgh that a compliance review has commenced.
This letter will detail the required documents that
must be submitted to complete the compliance review.
The required documents should be submitted within 30
days. Member banks may be required to submit documents
to complete the compliance review. Project sponsors/owners
should maintain documents and be prepared to submit
such documents to assist in the timely completion of
the compliance review. If the required documents are
not provided, a project will be deemed noncompliant
and AHP funds will be recaptured.
Level Three Monitoring (Rental Project Only)
For 15 years after a rental project is complete, the
following compliance process is required:
Long-term
Certification/Project Owner (pdf) - For
projects monitored long-term by the FHLBank Pittsburgh.
In the second year after project completion and annually
thereafter until the end of the project’s 15-year
retention period, the project owner must certify to
FHLBank Pittsburgh that the tenant rents and incomes
are in compliance with the rental and income targeting
commitments made within the approved AHP application.
For long term monitoring, rental projects will be
categorized based on the following criteria:
- Low-Income Housing Tax Credit projects
- Non-tax credit
projects monitored by a federal, state or local government
entity
- Bank-monitored projects
Low-Income Housing Tax Credit Projects
For rental projects that have been allocated federal
Low-Income Housing Tax Credits (tax credits), the Bank
will rely on the monitoring by the state-designated
housing credit agency administrating the tax credits
of the income targeting and rent requirements applicable
under the Low-Income Housing Tax Credit Program.
Monitored
by a federal, state or local government entity
For rental projects that received funds from a federal, state or local government entity, the Bank will rely on the monitoring by such entities of the income targeting and rent requirements applicable under their programs provided the income targeting requirements, rent requirements and retention period monitored by the entity for purposes of its own program are substantively equivalent and provided that the conditions enumerated within 12 C.F.R. § 951.7(a)(3)(ii) and (iii) are satisfied. For projects meeting these requirements, monitoring reports will be obtained in accordance with the following risk categories:
AHP Subsidy |
AHP as a % of TDC |
Risk Category |
< $250,000 |
< 20% |
Low |
> $250,000 |
> 20% |
Moderate |
$250,001 to $650,000 |
< 20% |
Moderate |
$250,0001 to $650,000 |
> 20% |
High |
Monitored by the Bank
Long term monitoring by the Bank shall be performed as follows:
AHP Subsidy |
AHP as a % of TDC |
Risk Category |
< $100,000 |
< 20% |
Minimal |
< $100,000 |
> 20% |
Low |
$100,001 to $250,000 |
< 20% |
Low |
$100,001 to $250,000 |
>20% |
Moderate |
$250,001 to $650,000 |
<20% |
Moderate |
$250,001 to $650,000 |
>20% |
High |
Monitored by Bank and Low Risk Category
Monitored long term starting in the second year after project completion as follows:
- Annual certification from project owner for 15 years; and
- The Bank will review project documentation for a 20% sample of the project's units once every 6 years after completion of the Level 2 review to determine whether the project’s household incomes and rents comply with the income targeting and rent commitments made in the approved AHP application or any approved modification(s).
Monitored by Bank and Moderate Risk Category
Monitored long term starting in the second year after project completion as follows:
- Annual certification from project owner for 15 years; and
- The Bank will review project documentation for a 20% sample of the project's units once every 4 years after completion of the Level 2 review to determine whether the project’s household incomes and rents comply with the income targeting and rent commitments made in the approved AHP application or any approved modification(s).
Monitored by the Bank and High Risk Category
Monitored long term starting in the second year after project completion as follows:
- Annual certification from project owner for 15 years: and
- The Bank will review project documentation for a 20% sample of the project's units once every 2 years after completion of the Level 2 review to determine whether the project’s household incomes and rents comply with the income targeting and rent commitments made in the approved AHP application or any approved modification(s).
In addition to the risk criteria described previously, rental projects that have the following issues will be assigned a High Risk Category:
- Material and outstanding compliance issues; and
- Issues involving project type, size, location, viability and sponsor experience.
In addition to being placed in the High Risk Category for monitoring purposes, projects with any of the above issues will be subject to a corrective action process that involves contact with the member bank and/or project owner on a frequent basis until the issue(s) are resolved.
Modifications
Any changes to the commitments and representations
made within the approved AHP application must be approved
by FHLBank Pittsburgh. Modification changes must be
in writing and may be submitted by either the member
bank or project sponsor/owner. Requests must include
the following information:
- A clear description of the modification(s);
- A reason for the modification(s), along with any
background information as to why the modification(s)
is/are necessary;
- A good cause for the modification(s);
- A description of how the modification(s) will impact
the scheduled completion date (incomplete projects);
- An updated Sources and Uses Statement; and
- Statement that remaining commitments and representations
made within the approved AHP application remain unchanged.
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