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2012-02-07 Board of Selectmen Handout - Part 2
TO: Board of Selectmen From: Peter I. Hechenbleikner, Town Manager Date: Tuesday, February 07, 2012 Re: Town of Reading - Affordable Housing Trust Fund (AHTF) As part of the discussion about the AHTF prior to the 2011 Annual Town Meeting, there was considerable discussion about the "allocation plan" to be established annually by the Board of Selectmen. The allocation plan as presented last year is adequate for that purpose again this year. The Board of Selectmen asked last year that we establish more specific guidelines for use of the AHTF, and develop an application form and procedures. Since that time I have been doing some research on Affordable Housing Trust Funds, and I am attaching some pertinent materials to this memo. What I have found in my research is that the following issues need to be addressed in order to move this process forward: Source of Revenue to the AHTF Most successful Affordable housing Trust Funds have a sustainable dedicated source of revenue, most often not related to the tax levy. In Massachusetts these include: o Development mitigation payments, usually for commercial development o Community Preservation Act income An additional source could be a portion of 40R payments to the community, especially if there are multiple projects that will span some period of time. In Reading, the AHTF balances are: Initial Balance 1-1-11 $ 458,000 Payment to Oaktree -$299,000 Current balance $ 258,000 Additional sources of funds might be: Repayment by Oaktree up to $ 200,000 Transfer from 40R up to $ 200,000 Maximum balance $ 658,000 The Town has not adopted the Community Preservation Act, and this is therefore an unlikely source of ongoing revenues. 0 9 Page 1 There is unlikely to be any new large scale commercial development in Reading and therefore mitigation payments are unlikely to be an additional source of funding. To the extent that there is new commercial development in Downtown, it is expected that these will be done under Chapter 40R and that the affordable housing component of this development will have already been met. Dedicating a portion of 40R payments to the AHTF may generate some additional funding, but certainly not a sustainable stream of reliable funding. Possible Uses of AHTF The source of funding available to the AHTF will provide some guidance on how the AHTF is to be spent. Common uses of AHTF include: o Grants to developers of affordable housing - developers could be the Local Housing Authority, other non-profit housing providers such as Peter Sanborn Place or Habitat for Humanity, limited dividend corporations or partnerships, or under some circumstances for profit developers o Loans to developers of affordable housing o "Buying down" the price of owner occupied housing units in exchange for affordable housing restrictions. o Rehabilitation grant or loans for existing housing with requirements that all or a portion of units be maintained as affordable. o Rental subsidies, similar to Section 8 where payments are made to property owners to subsidize rents between market rate and "affordable rents o Renter assistance with security deposits o Assistance to first time homebuyers with down payments and/or closing costs o Funding the local share of a regional collaborative to monitor and preserve existing affordable housing units (especially expiring use properties). Conclusions When the AHTF was established, primarily from developer payments arranged by CPDC, the general intent was to address projects, not rental subsidies and home owner opportunities. This general intent is probably still valid due to : o The cost and effort of administration of some of the other options is beyond the Town's staff ability to manage, and to hire outside assistance could be expensive and would erode the principal on the AHTF, and reduce the amount of funds available to actually provide affordable housing. o Because there is no established recurring revenue stream, efforts such as rental assistance are not sustainable, and the AHTF efforts are better put towards one time efforts which will produce affordable housing units. Attachments: o Chapter 140 of the Acts of 2001, establishing an Affordable Housing Trust Fund o Affordable housing Trust Funds - FannieMae, November 2001 o Affordable housing Trust Fund - MassHousing web site o Cambridge Affordable housing Trust - Cambridge MA web site o Affordable Housing Trust Fund - Somerville MA web site o Affordable housing Trust Fund - Salem MA web site 2 Session. Laws C;I-1AYC'l: R 140 of the Acts 0.1'2001 Page l of't Print Acts 2001 CHAPTER 140 AN ACT AUTHORIZING THE TOWN OF READING TO )=STABLi51-1 AN AFFORDABLE HOUSING TRUST FUND. (see House, No. 4235) Approved by the Acting Governor, November 21, 2001 Be it enacted by the Senate and House of Rew'eserrtatives in General Court assernbled, and by the authorii y of the san"E?, gas o1/ows: The town of Reading may establish a separate fund to be known as the Affordable Housing "Trust Fund for the purpose of creating or preserving affordable housing by the town of Reading, the Reading l-lousing Authority or a housing trust,. community development corporation or similar entity created under the laws of the cf mmomvealth for the purpose of creating, maintaining or operating affordable housing. All expenditures from the fund shall be used for low or moderate income housing as defined in section 20 of chapter ,106 of the General Laws. The funds may specifically be used to: (a) purchase and Improve land; (b) purchase dwelling units; (c) develop new or rehabilitate existing dwelling units for purchase or rental by low and moderate income housing purchasers or tenants; and (d) preserve existing subsidized housing inventory as maintained by the department of housing and community development pursuant to said chapter 408, Expenditures shall follow an allocation plan submitted by the board of selectmen annually to town meeting at the annual town meeting, and approved by town meeting. The allocation plan may be amended by town meeting at: any special town meeting, The hoard of selectmen may request the advice of the Reading Housing Authority, the community planning and development commission, and others in developing any allocation plan, The allocation plan shall be a general plan of how funds from the fund will be expended over the next fiscal year, and a report on how funds were spent during the previous fiscal year. All expenditures from the fund, including funds for capital purchases of land or buildings, shall be in accordance with the allocation plan and approved by a majority vote of the full combined memberships of the board of selectmen and the Reading Housing Authority. The fund may also be the repository of any allocation for affordable housing purposes made under chapter 441B of the General ..aws, if the town votes to accept sections 3 to inclusive of said chapter 4413. The town treasurer shall be the custodian of the fund and shall invest the funds in the frianner authorized by sections 55, 55A and 55B of chapter 44 of the General Laws. Any income or proc..ceds received from the investment of funds shall be credited to and become part of the fund. Approved November 21, 2001. llttp:l/rwww,iiialegi.sla.Lure.gav/l..,a~,5<'Sestiionf..,aws.i'Act::s/2001/C haptet-140/print 4/14/201 FannieMae i. FOUNDATION *Fannie Mae Foundation Issue Brief Affordable Housing Trust Funds Many policy leaders are increasingly aware of the limited availability of affordable housing for lower- income residents, and the critical need to find ways to increase the supply of low-cost housing. Affordable housing trust funds are public sector tools used to direct financial resources to the development of affordable housing for low- income households. Nearly 150 affordable housing trust funds are in operation around the nation, including 37 state- administered funds. This brief provides background infor- mation on the use of affordable housing trust funds, examining several existing state- administered affordable housing funds and providing details on how they are funded and administered. The Continuing Crisis Despite an historic period of economic vitality, poverty and its related hardships continue to confront large numbers of families across the United States. In 1999, at a time when poverty rates had reached a 20- year low, more than 32 million Americans (11.8 percent) remained below the official poverty line. Single-parent families and households with children tend to be dispropor- tionately affected by poverty. Families with low and moderate incomes often find it especially difficult to obtain affordable housing, and housing problems frequently contribute to further family crises. Given the changing federal role in assisted housing-including the conversion of assisted units to market rates as use restric- tions expire and the demolition of aging public housing units- the availability of subsidized low-income housing has de- creased in recent years. At the same time, market pressures associated with the strong economy have contributed to ever-rising housing costs. To address the decline in the availability of affordable low- cost housing, communities increasingly rely on nonprofit housing development organi- zations, but such groups have historically been unable to develop sufficient numbers of additional affordable units to resolve the crisis.' With-a limited supply of affordable housing units, many households must spend a greater share of their income on housing. The U.S. Department of Housing and Urban Devel- opment (HUD) considers a housing unit "affordable" if it costs no more than 30 percent off household income. The Joint Center for Housing Studies of Harvard University reports that more than two- thirds of "working poor" households-those working for minimum wage-spend 30 percent or more of their incomes for housing, and one- fourth spend more than 50 percent. Affordable Housing Trust Funds As communities search for resources to create the needed supply of affordable housing, many have established housing 1 Michigan State University Center for Urban Affairs. 2001. Organizational Capacity and Housing Production: A Study of Nonprofit Organizations in Michigan. East Lansing: Michigan State University. * This issue brief was prepared for Fannie Mae Foundation by Justin Linker, Chris Shay, and Christine Hall of Michigan State University. November 2001. © Fannie Mae Foundation. All Rights Reserved. l~ Fannie Mae Foundation Issue Brief. Affordable Housing Trust Funds trust funds to provide affordable capital for the construction and rehabilitation of low-cost housing. In addition to 39 counties and 34 cities around the nation, 37 states have established government-administered affordable housing trust funds.2 Although housing advocates support establishing a national housing trust fund,3 such a proposal has not met with support in Congress. The purpose of an affordable housing trust fund is to establish a dedicated source of revenue to provide ongoing funding for low-income housing programs that would not otherwise receive funding. Is administered by a government agency. Housing trust funds are typically administered by an existing housing agency of the sponsoring state or local government. In the case of state-administered funds, this is commonly the state housing finance agency. Awards low-interest loans, grants or other forms of financial assistance to provide affordable housing. Typically, funds supply financial assistance to housing developers, local units of government, housing author- ities, or other service providers to address the needs of low- and very low income households. A typical housing trust fund: Taps a continuous, dedicated source of revenue. Ideally, housing trust funds are charac- terized by a permanent source of revenue rather than being funded by annual approp- riations. Dedicated revenues are often derived from taxes, fees, or interest on pooled accounts; this revenue is held separately and can only be used for the purposes set forth when the fund was established. z Brooks, M. 1997. A status Report on Housing Trust Funds in the United States. [http://www.communitychange.org] See, e.g., the National Housing Trust Fund Campaign [accessible online at www.nhtf.org]. Finances a variety of housing activities. Funds are usually designated to support new construction, rehabilitation, rental assistance, home purchase assistance, project- based subsidies, and other housing-related services specifically targeted to meet the needs of low-income households.4 Revenue Sources The central feature of a housing trust fund is its source of revenue. At least 16 different revenue sources are used to finance the existing state housing trust funds. The size of revenue streams tapped by the 37 state housing trust funds 4 Brooks, op. cit 2 ranges from $300,000 to $122 million per year.5 One significant revenue source is the real estate transfer tax. Twelve of the 37 state housing trust funds use such a tax, and most funds that receive more than $10 million a year collect revenue from a real estate transfer tax as one of their sources of income. Another common source of revenue is capturing the interest accum- ulated on pooled accounts associated with real estate transactions. Other revenue sources for affordable housing trust funds include penalties on failure to pay or late payments of real estate excise taxes, or fees on a variety of other real estate related transactions. In practice, several revenue streams may be combined to generate acceptable levels of funding; in some states, dedicated revenue streams are supplemented by general fund appropriations by the legislature. Methods of Administration The second defining feature of a housing trust fund is its method of administration. Of the 37 existing state housing funds, 18 are administered by state housing finance agencies or their equivalents. Different agencies of the state, such as the departments or divisions of housing and community development or community affairs, commerce, economic s Ibid. 0 Fannie Mae Foundation Issue Brief: Affordable Housing Trust Funds Profiles of Selected State Housing Trust Funds Year Estimated State estab- annual lished revenues Arizona 1988 $ 6 million Illinois 1989 $20-$22 million Minnesota 1989 $ 2 million Missouri 1994 $ 4 million Nebraska 1996 $ 4 million Revenue source(s) . Percentage of unclaimed property fund Portion of real estate transfer tax Interest on pooled real estate deposits; interest on fees; appropriations Real estate document recording fee Portion of real estate transfer tax; securities registration fees Appropriations Uses of funds New construction/ acquisition and/or rehab of housing for ownership or rental, transitional, or emergency shelter New construction, acquisition/rehab, adaptive reuse of nonresidential buildings, special-needs housing New construction; acquisition, preservation, and rehab for renters and owners Rental housing production, rental subsidies, services for the homeless Rehab, new construction of single- and multifamily units, and technical assistance to nonprofit housing development organizations Predevelopment costs, rental assistance, home- buyer counseling and assistance, handicapped accessibility modification, rehab, home repair, and new construction Ohio 1991 $ 25 million (from interest on various funds) development, or business and industry, administer 18 others A quasi-public board established for that purpose administers one housing and conservation fund. 6 Staffing to administer statewide trust funds varies from 1 to 22 staff persons. Administration budgets among the 37 funds vary from only a few thousand dollars to nearly $1.5 million annually. 6 Ibid. Selected Trust Fund Profiles Six state-administered affordable housing trust funds were examined for this brief. Ohio The Ohio Housing Trust Fund (OHTF) was established by the General Assembly following the voter-approved Constitutional Amendment for Housing in 1990, and initially received $2.5 million annually in unclaimed funds from the Ohio Department of Commerce. Over 10 years, For further information: http://www.commerce. state.az.us/ housing/ahtf1.shtml http://www.ihda.org/cd . htm http://www.mhfa.state. mn.us/ http://www.mhdc.com/ programs/ mhtf.html http://crd.neded.org/ho using/nahtf/ http://www.odod.state. oh.us/cdd/htf/ default.htm appropriations for the fund have totaled $126.5 million (from interest on the state's budget stabilization and general revenue funds, and interest on the balance in the housing trust fund itself), including $50.5 million in the current biennium. Since 1993, there have been several failed attempts to increase the real estate transaction Recordation Fee to generate a dedicated revenue stream for the OHTF. I/ ~t U14P Fannie Mae Foundation Issue Brief: Affordable Housing Trust Funds Ohio Housing Trust Fund dollars may be used for a full range of housing activities that serve primarily low-income families and individuals, including predevelopment costs, rental assistance, housing counseling, home-buyer assistance, handicapped accessibility modification, rehabilitation, home repair, and new construction. Since 1991, more than 83,200 families have received assistance through programs of the, trust fund. More than 3,000 new housing units (homes and apartments) have been constructed, another 1,500 rental units have been rehabilitated, and more than 6,800 homes have been repaired or rehabilitated using OHTF funding. Fund managers estimate that every dollar the OHTF provides leverages an additional five dollars in private investments and federal resources. The Ohio Department of Development administers the trust fund, advised by a 14- member committee representing various sectors of the housing and lending industry and local governments.' 8 Illinois To support its Affordable Housing Trust Fund, the State of Illinois increased its real estate transfer tax from $.50 to 7 Ohio Housing Trust Fund. 2001. [http://www. odod.state. oh.us/cdd/htf/default.htm] 8 Brooks, op. cit. $1.00 per $1,000 on the sale price of real property. Half of the revenue collected is deposited into the Affordable Housing Trust Fund, generating approximately $20 to $22 million per year. The majority of funds are allocated to very low income households (up to 50 percent of area median income). The types of projects eligible for consideration include the acquisition and/or rehabilitation of existing housing, new construction, the adaptive reuse of nonresidential buildings, and special-needs housing for the mentally ill, developmentally disabled, physically handi- capped, or single-parent families. Between 1989 and 1999, approximately $119 million was generated from the real estate transfer tax to fund low- and very low income housing, and the trust fund provided support for 13,505 housing units. For every dollar the trust fund provides, it estimates more than $5.50 is leveraged from other sources. The Illinois Housing Development Authority and the Affordable Housing Advisory Commission administer the trust fund and review applications for funding. To ensure an equitable geographic distribution, trust fund resources are allocated around the state (to the Chicago metropolitan region, other metropolitan regions, and non- 4 metropolitan regions) according to a formula based on U.S. Census data.9, io Minnesota The Minnesota Housing Trust Fund is financed by the interest earned on real estate brokers' pooled interest-bearing trust accounts, which consist of earnest money deposits for real estate purchases. Interest accruing on revenue bond application fees, forfeited fees, and fees not returned have provided additional revenues. To supplement the fund, the legislature has also appropriated general funds; the total size of the Minnesota Housing Trust Fund is currently about $2 million per year. (In comparison, funding requests totaled nearly $39 million in 1998.) The Housing Trust Fund provides zero-interest, deferred loans for the development, construction, acquisition, preservation, and rehabilitation of affordable housing for renters and homeowners. At least 75 percent of rental units must serve participants at or below 30 percent of area median income. All ownership units must serve households at or below 50 percent of the median. Since its inception, the fund has awarded $12.7 million to more than 200 projects. More than 4,500 housing units 9 Illinois Housing Development Authority, 2001. [http://www.ihda.org/cd.htm] ° Brooks, op. cit. 0 Fannie Mae Foundation Issue Brief: Affordable Housing Trust Funds have been constructed, providing affordable housing for an estimated 7,600 Minnesota residents. The Minnesota Housing Finance Agency (MHFA) administers the fund. An eight- member advisory task force consisting of realtors, lenders, nonprofit developers, low- income people, housing advocates, and builders assists the MHFA. The task force attempts to target funding to projects that: are creative or innovative and could serve as models for other projects; will provide long-term affordable housing; have strong local support; and contribute to a statewide distribution of funds. 11, 12 household incomes no greater than 25 percent of the area median. At least 30 percent of funds must be allocated to nonprofit organizations. Other criteria used to select proposals for funding include: geographical distribution, demonstrated need, the ability to leverage funds, the reason- ableness of the development's costs and rents, and readiness of the applicant to proceed. Programs that received funding in 1999 included emergency aid, home repair, operating support, rental assistance, homeless shelter and tran- sitional housing construction and rehabilitation, and multifamily housing projects. Missouri The Missouri Housing Trust Fund collects revenue from a recording fee on all real estate documents. Annual funding levels have averaged about four million dollars in recent years. The trust fund provides support for a variety of activities, including rental housing production, housing and related services for the homeless, and rental subsidies. All assisted families and individuals must have household incomes at or below 50 percent of the area median income; at least half of those assisted must have 11 Minnesota Housing Finance Agency, 2001. [http://www.mhfa.state.mn.us] 2 Brooks, op. cit. The Missouri Housing Development Commission (MHDC) administers this fund. The MHDC publishes a Notice of Fund Availability at least once a year and eligible inter- ested parties submit appli- cations in response to it. 13, 14 Nebraska In 1997, the Nebraska legislature approved a real estate transfer tax increase, from $1.50 to $1.75 per $1,000 value, and redirected one dollar of the tax from the general fund to the Nebraska Affordable Housing Trust Fund (NAHTF) 13 Missouri Housing Development Commission, 2001. [http://www.mhdc.com/programs/ mhtf.html] 14 Brooks, op. cit. until 2003. In addition, certain fees paid for the registration of securities sold in the state are devoted to the fund. Together, over six years, the state expects these sources to generate $24 million for the trust fund. The Nebraska fund has three main areas of focus: rehabilitation of existing housing; development of new single- or multifamily units; and technical assistance, design, and financial services to nonprofit housing development organizations. Operating cost assistance for nonprofit organizations may be provided, up to 50 percent of total cost and not to exceed $25,000. In 1998, assistance from the NAHTF, when leveraged with private investment, resulted in the development of a total of 714 units. The Nebraska Department of Economic Development (DED) administers the NAHTF. The DED allocates the monies with the assistance of an interagency review committee that has representatives from the state departments of Health, Economic Development, Education, Social Services, and Public Institutions. Revenue to support the fund is collected by the counties and remitted to the Department of Revenue, which distributes it to the DED.15,16 15 Nebraska Affordable Housing Trust Fund, 2001. [http://crd.neded.org/ housing/nahtf/] 16 Brooks, op. cit. Fannie Mae Foundation Issue Brief: Affordable Housing Trust Funds Arizona Since 1998, the Arizona Housing Trust Fund has received a percentage from the state's unclaimed property fund. The trust fund receives 55 percent of unclaimed deposits and interest on unexpended funds. The fund expects to receive approximately $6 million annually from this source. The Arizona Affordable Housing Trust Fund provides grants and loans to cities, towns, counties, local housing authorities, tribal housing organizations, and nonprofit organizations. Eligible projects include new construction, acquisition, and/or rehab- ilitation of housing to be used for homeownership, rental, transitional, or emergency shelter. Ongoing assistance programs such as rehabilitation of housing occupied by low- income homeowners, rental subsidies, and operating costs for emergency or special-needs housing are also eligible for funding. Set-asides are available to provide funding for planning and predevelopment activities and home-buyer assistance programs. Funded projects must serve households with incomes at or below 80 percent of the area median income and maintain affordability for at least 5 to 15 years. The fund is required to set aside funds (at least 20 percent of its total allocation) for rural projects, and to target assistance to households with children. The Arizona Department of Commerce's Office of Housing and Infrastructure Development (HID) administers the fund, assisted by five other housing assistance programs. Within the HID structure, the fund has four full-time staff members: a housing program manager, a housing trust fund manager, a housing compliance officer, and a housing trust fund contract specialist. HID also has a Housing Commission that functions in an advisory capacity. 17 Conclusion One obvious factor in determining the maximum production levels of affordable housing for low-income households is the availability of ready capital for acquisition, construction, rehabilitation, and related services. 18 In response, three-quarters of the states choose to commit government resources to the affordable housing funds. 17 Arizona Department of Commerce, 2001. [http://www.commerce. state. az. us/housing/ahtfl.shtmll 18 Several other key factors that warrant attention include: organi- zations' capacity and commitment to efficiently produce low-cost housing units; a policy environment that encourages or discourages such development; and market forces. Affordable Housing Trust Fund M~~YAiDIISIN6 ABOUT S tv Ji ^ t s~': a f',' 3 t' 2 • t.., " ter. Affordable Housing Trust Fund The Massachusetts Affordable Housing Trust Fund (AHTF) provides resources to create or preserve affordable housing throughout the state for households whose incomes are not more than 110% of median income. Funds are available for rental, home ownership and mixed-use projects as well as housing for the disabled and homeless, but may be applied only to the affordable units. AHTF funds are used primarily to support private housing projects that provide for the acquisition, construction or preservation of affordable housing. MassHousing and the Department of Housing and Community Development (DHCD) jointly administer AHTF. In addition to the direct assistance provided, the AHTF has funds for other purposes: ■ A total of $2.5 million to fund pre-development activities, administered by the Community Economic Development Assistance Corporation (CEDAC) ■ Up to $5 million annually to support public housing modernization, administered by DHCD ■ The AHTF receives money for and administers the Department of Mental Health Danvers State Hospital Housing Fund, which assists in the development of permanent housing for DMH clients in the DMH North East Area. Who it's for Eligible applicants include governmental subdivisions, community development corporations, local housing authorities, community action agencies, community- based or neighborhood-based non-profit housing organizations, other non-profit organizations, for-profit entities, and private employers. To be eligible, applicants must be current on all existing mortgage obligations with the Commonwealth or any of its subdivisions. Borrowers receiving AHTF money must be single-purpose entities except for projects sponsored by public housing authorities, in which case the sponsoring authority may be the borrower. Program Details AHTF funds may be used flexibly to ensure a project's financial feasibility. A wide range of financial assistance is available from the AHTF for projects that meet en puriucj 5 c ..`d1't,,. is oily 's € Everywhere ± ] j Page I of 2 b PRESS Rat k}sl ■ Comprehensive PerrnitMOB ■ Single-Family and Condominium Developers ■ Rental HoEksirkg Developers ■ Green BUiiding/Green Communitie:~ ■ Documents for Developers Affordable Housing Trust Fund FY 2007 Annual Report Massachusetts Affordable Housing Trust Fund Guidelines Gs One-Stop Application Affordable Housing Trust Fund Advisory Committee Members Massachusetts Sustainable Development Principles https://www.masshousing.com/portal/server.pt?mode=2&uuID=%7BAEC3205D-953D-424... 2/6/2012 L Affordable Housing Trust Fund the funding criteria. Types of assistance include ■ Deferred payment loans ■ Low- or no-interest amortizing loans ■ Downpayment and closing cost assistance for first-time home buyers ■ Credit enhancements and mortgage insurance guarantees ■ Matching funds for municipalities that sponsor affordable housing projects ■ Matching funds for employer-based housing Funding threshold criteria include ■ Consistency with the Commonwealth's Sustainable Development Principles ■ Minimum term of affordability of 30 years ■ Affordability of all AHTF units to households earning no more than 110% of area median income ■ Financial feasibility. Preference shall be given to projects that are most likely to commence development in a timely manner upon approval of funding. Funding preferences include rojectsldeuelopnients that ■ Produce new affordable housing units ■ Provide new affordability ■ Create units affordable to households with a range of incomes, particularly units for households with incomes below 80% of area median income ■ Include affordable units for families ■ Include affordable units for the disabled and the homeless ■ Propose the longest term of affordability ■ Are sponsored by non-profit organizations ■ Use private funding sources and non-state funding sources to leverage the least amount of AHTF funds AHTF will make every effort to be responsive to the level of demand being generated by eligible applicants and to ensure a broad geographic spread of resources throughout the state. Legal MassDocs loan documents are used by Commonwealth subordinate funding programs for affordable rental projects, including the Affordable Housing Trust Fund. home I contacts I privacy terms & conditions I site security I log in I site map I accessibility Equal Housing Lender Page 2 of 2 D11 https : //www.masshousing. comlportallserver.pt?mode=2&uuID=%7BAEC3205D-953 D-424... 2/6/2012 Massachusetts Affordable Housing Trust Fund Guidelines (Effective January 1, 2006 and in Effect Until a Revised Set of Guidelines is Issued) --Revised March, 2007-- Issued By the Department of Housing and Community Development Pursuant to Chapter 121D of the Massachusetts General Laws Prospective applicants for funding are urged to contact MassHousing at 617-854-1381 for information about the Affordable Housing Trust Fund's policies and procedures prior to making an application. 9 TABLE OF CONTENTS Page Section 1-Administrative Structure 1 Section 2- Eligible Applicants 2 Section 3- Eligible Activities 2 Section 4- Types of Assistance 3 Section 5- Funding Thresholds/Preferences 4 Section 6- Allocation of Funds and Timetable 6 Section 7- Maximum Award Amount 6 Section 8- Application Procedures 6 Section 9- Review by MassHousing 8 Section 10 -Approval Process 8 Section 11 Affordability Restrictions 9 Section 12 -Preservation of Federally Assisted Housing 9 Section 13 -Waivers 9 Attachment A-Guidelines for the Use of the Department of Mental Health Danvers State Hospital Housing Fund 10 Attachment B-Guidelines for Project Consistency with the Commonwealth's Sustainable Development Principles (Effective January 1, 2006) 13 0 The Massachusetts Affordable Housing Trust Fund (AHTF) was created with the enactment of Section 227 of Chapter 159 of the Acts of 2000, now known as Chapter 121D of the Massachusetts General Laws (the Statute). The AHTF is designed to provide resources to create or preserve affordable housing throughout the state for households whose incomes are not more than 110% of median income, as determined by the U.S. Department of Housing and Urban Development (HUD). The AHTF was funded at $20,000,000 per year for three years (State Fiscal Years 2001 - 2003) from the state's General Fund. Funding for FY 2003 was later reduced to $12.5 million. In June of 2003, the Legislature adopted language in outside Section 631 A of Chapter 26 of the Acts of 2003 to provide for the capitalization of the AHTF via bond authorizations. The budget language authorized bond issues totaling $70,000,000 to capitalize the fund over a five-year period (FY 2004 - FY 2008). In addition to the purposes set forth in MGL c. 121D, the bond authorization specified that up to 2% of the authorization may be used for DHCD administrative costs directly attributable to the administration of the AHTF. In June of 2004, the Legislature adopted language in outside Section 412 of Chapter 149 of the Acts of 2004 to provide an additional $2,000,000 in general revenue funds for the AHTF. Those additional funds will be restricted to projects utilizing 9% Low Income Housing Tax Credits. In 2005, an additional $100 million was re-authorized for the Affordable Housing Trust Fund. In addition to the AHTF legislated funding, the Affordable Housing Trust Fund is the recipient of funding for and the administrator of the Department of Mental Health Danvers State Hospital Housing Fund to be used to assist in the development of housing for clients of DMH who reside in communities in the DMH North East Area, since patients of the former Danvers State Hospital were predominantly from these communities. For further information about this funding, please see Attachment AGuidelines for the Use of the Department of Mental Health Danvers State Hospital Housing Fund. Section 1- Administrative Structure The Affordable Housing Trust Fund is sited within the state's Department of Housing and Community Development (DHCD) and will be managed by the Massachusetts Housing Finance Agency (MassHousing) with guidance and assistance from a 15-member Advisory Committee comprised of local officials, housing advocates, lenders and developers. Department of Housina and Communitv Development DHCD is the state's primary policy maker for affordable housing strategies and the conduit for public resources. Under the AHTF, DHCD shall provide general oversight of the AHTF, monitor progress, develop policies and guidelines dealing with its operation, coordinate the involvement of the Advisory Committee, consult with MassHousing with respect to the underwriting process, participate with MassHousing on a Selection Committee to determine which projects to fund and secure final approval from the Director of DHCD for projects selected. Massachusetts Housins Finance Aaencv MassHousing functions as the state's affordable housing bank. Its role in relation to the AHTF is to provide day-to-day management of the AHTF, underwrite applications for 6 financing in accordance with the AHTF Guidelines in consultation with DHCD, participate with DHCD on a Selection Committee to determine which projects to fund, oversee the distribution and expenditure of funds for approved projects, invest and administer program funds, and provide regular reports to both DHCD and the Advisory Committee on the utilization of funds and the projects funded. MassHousing will carry out these duties under contract to DHCD. • The Advisorv Committee The Advisory Committee is established by the Statute and directed to make policy recommendations to DHCD and MassHousing regarding the AHTF's program and funding activities. The committee will be convened by DHCD on a regular basis to discuss these issues and to provide advice and guidance regarding the fund and its operations. Section 2- Eligible Analicants The Affordable Housing Trust Fund has been structured to ensure that many different types of organizations are eligible to receive financing. Eligible applicants include governmental subdivisions, community development corporations, local housing authorities, community action agencies, community-based or neighborhood-based non-profit housing organizations, other non- profit organizations, for-profit entities, and private employers. In order to be considered eligible for financing, applicants must be current on all existing mortgage obligations with the Commonwealth or any subdivision thereof. In addition, borrowers receiving Affordable Housing Trust Fund money must be single purpose entities except for projects sponsored by public housing authorities in which case the sponsoring authority may be the borrower. Section 3 - Eligible Activities The purpose of the Affordable Housing Trust Fund is to support the creation or preservation of housing that is affordable to people with incomes that do not exceed 110% of the area median income, as defined by HUD. AHTF funds will be focused on those activities that create, preserve or acquire housing throughout the state for the benefit of those households. AHTF funds may also be used for permanent or transitional housing for homeless families and individuals, and for the modernization, rehabilitation and repair of public housing. A housing development to be financed by the AHTF which receives subsidy, financing, tax credits or other assistance under a state or federal housing program, may contain market rate units insofar as permissible under those programs and/or to the extent that they are necessary to support the creation of and/or on-going sustainability for the affordable housing units in the development. However, AHTF funds may not be used to support market rate units. ~S Section 4 - Tvnes of Assistance Funds from the Affordable Housing Trust Fund may be used to support the acquisition, development or preservation of affordable housing units. These funds may be used flexibly to ensure the financial feasibility of the projects. A wide range of financial assistance is available from the AHTF. The following list is meant to be illustrative, but not exhaustive, of possible types of assistance provided through the AHTF. ❑ Deferred payment loans. ❑ Low or no interest amortizing loans. ❑ Down payment and closing cost assistance for first-time homebuyers. ❑ Credit enhancements and mortgage insurance guarantees. ❑ Matching funds for municipalities that sponsor affordable housing projects. ❑ Matching funds for employer-based housing. ❑ At this time, there is a limited amount of general revenue funding available to the AHTF. Applicants should assume that AHTF funds awarded will be bond funds. Therefore, the Trust Fund amount must be deducted from basis on tax credit deals. For further information regarding this requirement, please contact your attorney and/or financial consultant. ❑ Predevelopment funding from the Community Economic Development Assistance Corporation (CEDAC)Pursuant to the AHTF statute, CEDAC administers assistance from the AHTF to be used to provide predevelopment financial assistance to non-profit organizations for projects that meet the thresholds/preferences outlined in these Guidelines. In accordance with the Statute, CEDAC will provide this assistance under the terms of a contract entered,into with MassHousing. A total allocation of $2.5 million is available for this purpose. Recipients of these funds from CEDAC need not be an AHTF borrower. In addition to the AHTF predevelopment funds, CEDAC provides a variety of planning and development assistance to support the activities of, nonprofit organizations throughout the state that are related to the development, operation and preservation of affordable housing. Applicants should contact CEDAC directly for assistance. The CEDAC telephone number is 617-727-5944. ❑ Section 8 Project Based Vouchers-DHCD will make available up to 100 Section 8 project- based vouchers (PBV) from its own portfolio, subject to available funding from HUD, to be used in conjunction with projects that create new units for families funded by the Affordable Housing Trust. ❑ On October 13, 2005, HUD promulgated the final PBV rule at 24 CFR Part 983. The rule requires substantial modification to the program's policies and procedures. The Section 8 PBV Administrative Plan and the PHA Plan consistent with the HUD requirements are 9 posted on DHCD's website at www.M:ass.Gov/.DHC.D/. Click on Divisions, Housing and Rental Assistance, and Bureau of Federal Rental Assistance. Interested sponsors should call Mary-Anne Morrison at DHCD at 617/573-1208 for further information. Section 5 - Funding Thresholds/Preferences The AHTF is an essential resource for addressing the need for affordable housing. In selecting projects for funding, preference will be given to those projects that will create new housing units and that do so in a manner consistent with the Commonwealth's Principles for Sustainable Development (see Attachment A). In order to ensure that these limited resources are utilized in the most effective manner possible consistent with these principles, funding thresholds and preferences have been established to guide the decision-making process. THRESHOLDS The following threshold criteria must be met by all projects to be considered for AHTF financing. • Consistencv with Sustainable Development Principles: Developments for which applications are submitted to the AHTF after January 1, 2006 must be consistent with the Guidelines for Project Consistency with the Commonwealth's Sustainable Development Principles (see Attachment B) • Term of Affordabilitv: The minimum term of affordability for projects receiving AHTF funding is 30 years. • Targeted Affordabilitv: All AHTF units in the project must be affordable to households at or below 110% of Area Median Income. • Financial Feasibilitv: Each project submitted for consideration for funding by the AHTF shall be evaluated with respect to financial feasibility. Projects with a gap in the funding will not be selected for an award. Readiness to Proceed: Each project submitted for consideration for funding by the AHTF shall be evaluated with respect to its "readiness to proceed" based on the status of site control, zoning, financing commitments, status of construction drawings, selection of the general contractor, permitting and other commonly used indicators. Funding preference shall be given to those projects that are most likely to be able to commence development in a timely manner upon approval of funding. 0 PREFERENCES Developments that produce "new" affordable housing units. For the purposes of these Guidelines, "new" affordable housing units shall include housing units constructed where none had existed previously, abandoned or fire-damaged residential units to be returned to residential use, and non-residential or non-residentially-zoned property converted to residential use. Developments that provide new affordability. For the purpose of these Guidelines, "new affordability" refers to existing housing where a new level of affordability is provided that does not currently exist. This could occur in rental or ownership housing where the number of affordable units is increased; where a portion of existing units will be made affordable to households at income levels substantially lower than the units currently served; or where the term of affordability on the units will be extended for a period beyond thirty (30) years. • Developments that create units affordable to households with a range of incomes, with a special emphasis on units for households with incomes below 80% of the Area Median Income. • Developments that include affordable units for families. Developments that include affordable units for the disabled and the homeless. There will be an annual funding reservation of up to $3,000,000 which may be used to fund projects for the homeless or for individuals and families with incomes between 0% and 30% of Area Median Income as defined by HUD. These funds also may be used to support the creation of Single Person Occupancy residences. Several exceptions to the general funding guidelines may apply to these projects: 1. In addition to the production of new units, these specifically allocated funds may be used for acquisition and rehabilitation of existing units. 2. The $50,000 per unit limit may be exceeded for these projects. • Projects that propose the longest term of affordability. • Projects that are sponsored by non-profit organizations. • Projects that use private funding sources and non-state funding sources to leverage the least amount of AHTF funds. • AHTF will make every effort to be responsive to the level of demand being generated by eligible applicants and to ensure a broad geographic spread of resources throughout the state. Section 6- Allocation of Funds and Timetable AHTF funds will be allocated in a manner consistent with the threshold and preference criteria above. In addition, up to $3 million will be made available for discretionary funds. These funds may be allocated from the AHTF to finance worthwhile projects that do not fit the funding preferences noted in Section 5 of these Guidelines, or that reflect a particularly innovative approach to providing affordable housing. Section 7 - Maximum Award Amount Many worthwhile affordable housing projects have significant funding gaps. Because of the limitation on funds available to the Affordable Housing Trust Fund and a desire to fund as many projects throughout the state as possible, a limit of the lesser of $1,000,000 per project or $50,000 per assisted unit has been established for allocation of AHTF funding. A limit of $2,000,000 of AHTF funding per project has been established for projects funded with discretionary funds. The level and type of assistance provided by the AHTF to a specific project must be the minimum amount necessary to achieve the desired degree of affordability. Section 8 - Application Procedures The Affordable Housing Trust will work with MassHousing, DHCD, MHP and CEDAC--the four major affordable housing agencies in the state (the "Affordable Housing Agencies")--to provide an optimal allocation of public funds to worthy affordable housing projects. Projects that are seeking only Affordable Housing Trust Fund funding may apply directly to the AHTF at the address below at any time. Projects that are seeking a combination of DHCD, MHP and/or MassHousing funding or financing should submit an application to the Affordable Housing Agency in accordance with the respective deadlines, as applicable. The Affordable Housing Agency will underwrite the project, confirm that the project is financially feasible, make a determination of whether the project is ready to proceed, confirm that the project has a financing gap that requires AHFT funding and then refer the application to the AHTF, c/o MassHousing. AHTF funds may be substituted for funding by an Affordable Housing Agency funding at the discretion of the Affordable Housing Agency and the AHTF. In order to streamline the application process, the following procedures shall be observed: 1. APPLICATIONS FOR TRUST FUNDING ONLY: Applicants who wish to be considered solely for funding by the AHTF may apply directly to the AHTF at the address below. Completed One Stop Applications for proposals that are requesting consideration only by the Affordable Housing Trust Fund may be submitted at any time during the year to AHTF, c/o MassHousing for consideration by the AHTF based on the criteria 0 Affordable Housing Trust - Cambridge Massachusetts Page 1 of 4 The cambridgeiv?mgov Department of 6-t4AM-RIDG-ECOMMU-NITYDEVELOPMENT Cambridge Affordable Housing Trust . About the Cambridge Affordable Housing Trust . Funding Sources . How Does the Trust Define Affordable . Affordable Housing Trust Report . Affordable Housing Trust Members . Trust Meeting Dates, Agendas, and Minutes . For More Information r Affordable Housing Trust Report About the Affordable Housing Trust The Cambridge Affordable Housing Trust was established in 1988 in response to escalating housing prices and a severe shortage of affordable housing for many low- and moderate-income residents. With the mission of creating and preserving affordable housing opportunities, the Trust has continued to be active in responding to the increasing need for affordable housing in the years since the end of rent control in the mid-1990s. The Trust's nine members include experts in housing policy, real estate finance, development, planning, and design. The Trust provides funding to assist non-profit housing organizations and the Cambridge Housing Authority in creating new affordable housing, preserving the affordability of existing housing, and rehabilitating multi-family housing. The Trust also offers financial assistance to first-time homebuyers and provides housing policy advice to City staff. The Trust has a long- standing commitment to supporting high quality housing that is well integrated into the community and that will remain affordable for future generations. Some of the criteria the Trust uses when reviewing proposals for new programs, policies, and housing developments include: . Creation and preservation of long-term affordability; . Emphasis on the creation of housing for families; . Creation of both rental and homeownership housing to serve a mix of incomes; . Design quality and use of energy-efficient materials; . Use of Trust funds to leverage funding commitments from other public and private financing sources. Through its affordable housing acquisition and development, affordable housing preservation, first-time homebuyer assistance, and rehabilitation programs, the Affordable Housing Trust has helped thousands of families and individuals remain in the Cambridge community. Since its inception, the Trust has financed the creation and preservation of more than 1,900 affordable rental and homeownership units in Cambridge. Return to Top Funding Sources The Cambridge Affordable Housing Trust receives significant financial support through the http://www2.cambridgema.gov/cdd/hsg/caht/hsg_caht.html 2/6/2012 Affordable Housing Trust - Cambridge Massachusetts Page 2 of 4 Community Preservation Act (CPA). Adopted by the Cambridge City Council and Cambridge voters in 2001, the CPA is a financing tool for Massachusetts communities to expand the supply of affordable housing, protect historic sites, and preserve open space. Under the CPA, local funds that are dedicated to these uses are eligible for matching funds from the state. The Incentive Zoning Ordinance, adopted in 1988, generates funding for the Cambridge Affordable Housing Trust by requiring developers of certain non-residential projects to mitigate the impact of their development through a contribution to the Affordable Housing Trust. In 2000, Harvard University launched the Harvard University 20/20/2000 Initiative, under which the University committed $20 million of low-interest financing to support affordable housing in both Cambridge and Boston. Administering a $6,000,000 revolving loan fund, the Cambridge Affordable Housing Trust is one of three housing lenders selected by Harvard to manage these funds. In addition to these sources, private contributions (often anonymous) are also made to assist in the Trust's efforts to support affordable housing in Cambridge. Return to Top How Does the Trust Define Affordable Affordable means that the tenant or homebuyer pays no more than 30% of their income for housing costs. Most affordable housing is limited to households earning no more than 80% of the area median income. Affordable rental and ownership units developed through the City of Cambridge programs remain affordable through long-term deed restrictions. For rental units, these restrictions limit income-eligibility and how much rent can be charged for each unit. For homeownership units, the restrictions limit the resale price of the unit and require that upon resale units be sold to income-eligible households. Return to Top Affordable Housing Trust Report This file is in PDF format and requires use of the free Adobe Acrobat viewer. . 2006 Affordable Housing Trust Report (2.3 M13) To obtain a free copy of the Affordable Housing Trust Report, please contact Michelle Moran at mmoran@cambridgema.gov or 617/349-4622 Return to Top Affordable Housing Trust Members Members of the Affordable Housing Trust are appointed by the City Manager and include the City Manager as an ex officio member. Current members include the following: . Beverly Bates . Peter Daly . Florrie Darwin . Michael Haran . Robert W. Healy . Gwendolyn Noyes . Susan Schlesinger . James Stockard, Jr. . William Tibbs Return to Top 21 http://www2.cambridgema.gov/cdd/hsg/eaht/hsg_eaht.html 2/6/2012 Affordable Housing Trust - Cambridge Massachusetts Page 3 of 4 Trust Meeting Dates, Agendas, and Minutes The Cambridge Affordable Housing Trust meets regularly, usually on the fourth Thursday of the month. Trust meetings are open to the public and non-members are welcome to attend. These files are in PDF format and require use of the free Adobe Acrobat viewer. Date Agenda Minutes (February 5, 2009 I) Agenda I I Minutes (March 5, 2009 II Agenda I Minutes May 28, 2009 I Agenda I Minutes June 24, 2009 ( Agenda I Minutes July 22, 2009 Agenda I Minutes September 24, 2009 I Agenda I I Minutes December 3, 2009 I Agenda I I Minutes January 28, 2010 I Agenda ( Minutes February 25, 2010 I Agenda Minutes April 28, 2010 Agenda ( Minutes May 27, 2010 II Agenda I Minutes July 14, 2010 II Agenda I Minutes September 23, 2010 I Agenda I Minutes October 28, 2010 I) Agenda ( Minutes December 9, 2010 I Agenda I Minutes January 27, 2011 I Agenda Minutes (March 24, 2011 II Agenda ( Minutes (April 28, 2011 I Agenda I Minutes May 26 , 2011 I Agenda ( Minutes July 27, 2011 I Agenda I Minutes September 14, 2011 I Agenda I Minutes September 27, 2011 II Agenda I Minutes October 27, 2011 ( Agenda I Minutes December 15, 2011 I Agenda ( Minutes January 26, 2012 II Agenda February 23, 2012 March 22, 2012 http://www2.cambridgema.gov/cdd/hsg/caht/hsg_caht.html 2/6/2012 Affordable Housing Trust - Cambridge Massachusetts April 26, 2012 May 24, 2012 June 28, 2012 ~ Cambridge Affordable Housing Trust meetings are also listed on the citywide Calendar of Events. Return to Top For More Information Page 4 of 4 For more information about affordable housing opportunities in Cambridge, please call the Housing Information Line at 617/349-4622 or send an email to Michelle Moran at mmoran@cambridgema.gov. The Community Development Department TTY line is 617/349- 4621. Return to Top Return to Housing Division Return to Community Development Department Home LV'111 http://www2.cambridgema.gov/cdd/hsg/caht/hsg_caht.html 2/6/2012 Affordable Housing Trust Fund Published on City of Somerville Website (httD://www.somervillema.aov) Home > Printer-friendly > Printer-friendly Affordable Housing.Trust Fund Affordable Housing Trust Fund Page 1 of 2 The Somerville Affordable Housing Trust Fund (SAHTF) was created in 1989, by a city ordinance, and its first programs began in 1991. Its purpose is to preserve and create affordable rental and homeownership units in Somerville and carry out programs to directly assist homeowners and renters. All of its activities must benefit low to moderate- income households (with incomes at or below 110% of area median income). The Trust was initially capitalized by a $400,000 allocation of municipal funds and federal program income. In addition, all linkage fees from commercial development in Somerville go to the Trust, as do payments made in lieu of units pursuant to the city's Inclusionary Zoning Ordinance. It also receives revenues from the repayment of Trust-funded loans to affordable housing developers, first time homebuyers and renters receiving security deposit, arrearage or other loans. To date, it has received $1.5 million in resources. Trustees are appointed to a 3-year term. Current Trustees: Ex Officio Mayor (Dana LeWinter- Staff Contact: designee) Kelly Donato, 617-625-6600 ext. 2560. SHA Executive Director: (Beth Howe- designee) Board of Alderman President (Rebekah Gewirtz - designee) Aaaointed Trustees Somerville Resident Mary Cassesso 9~ http://www.somervillema.gov/print/departments/affordable-housing-trust-fund 2/6/2012 Affordable Housing Trust Fund Somerville Resident Eleanor Rances Nonprofit - Community Action Agency of Kimberly Smith- Somerville Cofield Nonprofit - Somerville Community Danny LeBlanc Corporation Housing/Real Estate Specialist Andrea Shapiro Banking/Finance Representative - Donna Haynes Central Bank Current Officers: Managing Trustee: Mary Cassesso Asst Managing Trustee Andrea Shapiro Page 2 of 2 Treasurer Vacant Clerk Daniel LeBlanc Secretary Kelly Donato © 2004 - 2012 City of Somerville Home I About Somerville Calendar What's New I Emr)lovment Ormortunities I Search Contact Us Disclaimer Source URL: htto://www.somervillema.aov/deDartments/affordable-housina-trust-fund Links: [1] http://www.somervillema.gov/javascript: toggle_departmental_info(); 61 http://www.somervillema.gov/print/departments/affordable-housing-trust-fund 2/6/2012 City of Salem, MA - Affordable Housing Trust Fund Salem City Hall Affordable Housing Trust Fund Contact: Address: Phone: Fax: Meetina Aaendas Additional Links: Salem Affordable Housina Trust Ordinance Annual Renorts Members Name Kimberley Driscoll Aaron Allen Kathleen Burke Chad A. Colarusso Lucy Corchado Mary T. Dennesen Mary R. Lauby Andrew Meegan Leonette M. Strout Page 1 of 1 93 Washington Street, Salem, MA 01970 ph: 978-745-9595 Naomi Francisco, Acting Housing Coordinator 120 Washington Street, 3rd Floor Salem, MA 01970 978-745-9595 x5685 978-740-0404 Declaration of Trust Senate Bill S-2152 Rules & Reaulations Title Mayor Vice Chair Treasurer Salem's Five-Year Consolidate Plan and Action Plans identified the creation and preservation of affordable housing as the highest community development priority for the City. In 2003, the City entered into a Memorandum of Understanding with a housing developer which resulted in a monetary contribution in 2005 designated for affordable housing activities. The Salem City Council established the Affordable Housing Trust Fund (AHTF) in October of 2006 to use these funds to provide for the creation and preservation of affordable housing in the City of Salem for the benefit of low- and moderate-income households. To that end, the AHTF leverages other public and private money for affordable housing projects and serves as an advisory group to the Salem City Council, Planning Board, and Zoning Board. The city ordinance establishing the Affordable Housing Trust Fund states that the Board of Trustees shall be composed of twelve members, including the Mayor and two members of the City Council. The members of the Board possess a wide breath and depth of housing and community development knowledge. The Board is made up of Salem residents with a wide range of expertise from affordable housing policy & planning to real estate, law, and women's advocacy. Long-Term Goals The following long-term goals guide the actions of the Trust: • Produce affordable housing units through rehabilitation of existing units and new construction. • Preserve existing affordable housing • Advocate and build support for affordable housing projects • Recommend policy changes that promote affordable housing strategies and support affordable housing initiatives 9 Meeting Minutes http://www.salem.com/Pages/SalemMA BComm/affordablehousing?textPage=1 2/6/2012 Salem Affordable HousinLy Trust Rules and Regulations Outline A. Purpose B. Definitions C. Housing Trust Fund Established D. Board of Trustees E. Eligible Activities F. Conditions G. Amendments to Rules and Regulations A. Purpose: The purpose of the Rules and Regulations is to establish methods for operations, conduct of meetings, role of Trustees, election of officers, eligible use of Trust Funds and funding approval process for the Salem Affordable Housing Trust Fund. The Rules and Regulations are intended to be supplementary and, where in conflict, subordinate to the City Ordinance establishing the Trust Fund and the Declaration of Trust. B. Definitions: AFFORDABLE HOUSING: Decent, safe, sanitary, and appropriate housing that Low- and Moderate-Income Households can own or rent without having to devote more than approximately 30 percent of their gross income for monthly Housing Expenses. BOARD OF TRUSTEES: The Board established pursuant to MGL Ch 44 Section 55 C as adopted on October 31, 2006 by City Council and the Mayor, as set forth below in the Declaration of Trust. ELIGIBLE ACTIVITIES: The housing activities for which the Housing Trust Fund may provide financial support are set forth below in Section E. EXTREMELY-LOW INCOME: Households that have incomes that do not exceed 30 percent of the median income for the Boston PSMA area, as established and defined in the annual schedule published by the U.S. Department of Housing and Urban Development, and adjusted for household size, or such higher income limit as may be established for a local, county, state, or federal housing program. SALEM AFFORDABLE HOUSING TRUST FUND "Housing Trust Fund": The funding source as established by MGL Ch 44 Section 55 C, with the central purpose of providing for the preservation and creation of affordable housing in the City of Salem for the benefit of low and moderate-income households. 1 of 4 (i~l LOW-INCOME HOUSEHOLDS: Households that have incomes that do not exceed 50 percent of the median income for the Boston PSMA area, as established and defined in the annual schedule published by the U.S. Department of Housing and Urban Development, and adjusted for household size, or such higher income limit as may be established for a local, county, state, or federal housing program. MODERATE-INCOME HOUSEHOLDS: Households that have incomes that do not exceed 80 percent of the median income for the Boston PSMA area, as established and defined in the annual schedule published by the U.S. Department of Housing and Urban Development, and adjusted for household size, or such higher income limit as may be established for a local, county, state, or federal housing program. TRUST ESTATE: Assets held by the Trust. C. Housine Trust Fund Established: 1. The Housing Trust Fund was officially established by City Ordinance Chapter 2, Article IV Boards, Commissions, Committees and Authorities, Division 14, Affordable Housing Trust Funds Board of Trustees on October 31, 2006. 2. The Board of Trustees shall be responsible for implementing the Housing Trust Fund as set forth in the Declaration of Trust. D. Board of Trustees: 1. The Board of Trustees and the Mayor signed a Declaration of Trust and recorded said Trust at the Essex South Registry of Deeds on , 2007 at Book Page . 2. The Board of Trustees shall manage, make recommendations, and from time to time reevaluate (a) the goals for the Housing Trust Fund; (b) the Housing Trust Fund's operating budget and projected expenditures and revenue; (c) the Housing Trust Fund's funding and award policies and priorities; (d) the Housing Trust Fund's program requirements; (e) the Housing Trust Fund's procedures for disbursing Fund resources; (f) the review of applications for Housing Trust Fund awards; (g) the granting of awards; (h) the monitoring of Eligible Activities funded by the Housing Trust Fund; and (i) the evaluation of Housing Trust Fund activities. 3. Officers. The Officers shall be elected at the annual meeting of the Trust, and shall hold office for one year or until their successors are elected and qualified. Should any office become vacant, the Trust shall elect a successor at the next meeting, and such election shall be for the unexpired term of said office. Officers shall include: 1. Chair. The Chair shall preside at all meetings of the Trust. Except as otherwise authorized by resolution of the Trust, the Chair shall sign all contracts, deeds, and other instruments made by the Trust. At each meeting the Chair shall submit such 2 of 4 recommendations and information as he/she may consider proper concerning the business affairs and policies of the Trust. 2. Vice-Chair. The Vice-Chair shall perform the duties of the Chair in the absence or incapacity of the Chair, and in case of a vacancy in the office of Chair. 3. Treasurer. The Treasurer shall authorize the City Treasurer to receive and disburse such moneys under the direction of the Trust except as otherwise authorized by resolution of the Trust. The Trust may from time to time qualify, change or cancel any such designation. Any member elected to the office of Treasurer shall serve without compensation other than payment of necessary expenses. 4. Special Meetins. The Chair may, when he/she deems it expedient, and shall, upon written request of three members of the Trust, call a special meeting of the Trust for the purpose of transacting any business designated in the call. The notice of special meeting will be issued no less than five days in advance 'of the meeting and may be mailed to each member or sent via email. 5. Annual Meeting. Annual meetings of the Trust shall be held in conjunction with the regular meeting of the Trust in June of each year. 6. Order of Business. At the regular meeting of the Trust, the following shall be the order of business: 1. Role Call 2. Reading and approval of the minutes of the previous regular meeting and any intervening special meetings 3. Committee Reports 4. Unfinished business 5. New Business 6. Adjournment 7. Meeting Minutes. The Chair or his or her designee shall record minutes at each meeting. Minutes shall be sent to each Trustee with the notice and agenda of the next meeting. Minutes shall be accepted or edited by Trust vote at next meeting, and shall be filed with the Trust records. 8. Committees. Standing or temporary committees may be authorized from time to time by majority vote of the Trust. 9. Rebortin2. At the Annual meeting of the Trust, or other annual date determined by the members, the Chair shall report on the activities of the Trust during the previous year. The Report shall include, at minimum, programmatic and financial activities and an audit of such activities. 3 of 4 l% E. EliEible Activities: The following housing-related activities are the types of activities for which resources may be received or expensed for the Housing Trust Fund (all of the following activities must benefit an Extremely Low-, Low- or Moderate-Income household(s)): i. Housing production, including, without limitation, new construction, rehabilitation, and adaptive re-use; ii. Acquisition, including, without limitation, vacant land, single-family homes, multi-unit buildings, and other existing structures that may be used in whole or part for residential use; iii. Home ownership assistance; iv. Preservation of existing housing; v. Housing-related support services, including home ownership education and financial counseling; vi. Capacity grants for not-for-profit organizations that are actively engaged in addressing the Affordable Housing needs of Extremely Low-, Low- and Moderate-Income Households; and vii. Any other activity that the Board of Trustees determines would address the City's Affordable Housing needs. F. Conditions: The Board of Trustees may impose conditions, restrictions, requirements, or similar instruments, termed "Conditions" to any Housing Trust Fund award. G. Amendments to Rules and Regulations: The Trust may amend these Rules and Regulations by majority vote at any meeting of the Trustees. All written rules, regulations, procedures and amendments shall be filed in the Office of the City Clerk. 4of4 9