The HOME Program and Multifamily Rehabilitation

Transcription

1 The HOME Program and Slide 1 Speakers Kevin Roddy, ICF International Joe Riddle, Arkansas Development Finance Authority Jonathan Stanley, Minnesota Housing Slide 2 Agenda Brief overview of HOME multi family rehabilitation rules Partners and roles in construction Applying construction standards Construction costs Construction management Q&A Slide 3 1

2 Slide 4 HOME Requirements Eligible Projects Eligible projects Rental Rehabilitation, Conversion and Reconstruction Eligible costs Hard costs, soft costs, project delivery costs, administrative costs Type of HOME units Must be permanent housing No facilities Slide 5 HOME Requirements Funding Approaches to funding projects Loans, grants, loan guarantees, construction loans, permanent financing Minimum investment $1,000 per unit Maximum investment Ceiling is based on 221(d)(3) limit Max is based on cost allocation HOME Requirements Property Quality Property quality All units must be standard Standards vary for acquisition, rehabilitation, new construction Construction standards differ from on going occupancy standards Slide 6 2

3 HOME Requirements Eligible Properties No requirements on structure type or style of property Eligible types of housing include: Transitional and permanent housing SROs and group homes ECHO units Slide 7 Slide 8 HOME Requirements Ineligible Properties Property previously assisted with HOME funds during its affordability period Funds used alone or in combination with HUD funded public housing program funds e.g., Development, CIAP or CGP to acquire, rehabilitate, or construct public housing units Facilities nursing homes or shelters Other Federal Requirements Equal Opportunity Federal Labor Regulations Davis/Bacon Minority/Woman Owned Business Enterprise Section 3 Uniform Relocation Act Lead Safe Housing Rule/EPA RRP Section 504 Accessibility Slide 9 3

4 Partners & Their Roles Developer/Owner HUD Other government grantees Lenders Consultants Contractors Slide 10 Contractor Lender Subcontractors Owner Consultants Construction Manager Architect/Engineer HUD State & Local Government Slide 11 Partners & Their Roles HFA staff: Director Program Manager Construction Manager or Rehabilitation Specialist Code Inspectors Slide 12 4

5 HFA Roles Construction Roles including: Contract Administrator Lender/Approver Developer Construction Review Authority Slide 13 How Codes and Standards Apply Collectively codes and standards: Guide rehabilitation and construction Provide for safe living environments Ensure quality work Ensure the program conforms to Federal regulations Slide 14 Types of Codes and Standards There are a number of different codes and standards that may apply to your construction program, including: Housing Standards/Housing Code Building Codes Rehabilitation Standards Slide 15 5

6 Housing Standards Set conditions for health and safety Serve as basis of inspection of existing properties Are the minimum standard for habitation HUD Section 8 HQS Model residential property standards Locally developed housing standards Slide 16 Building Codes Designed for specific trades and systems Structure, plumbing, electric, HVAC, fire & safety Model developed by International Code Council Adopted locally with modifications Slide 17 HOME Construction Quality Requirements Applicable state/local code, ordinances and zoning If no state/local code applies, one of the national model codes Slide 18 6

7 Rehabilitation Standards Set standards for rehabilitation work Define quality and workmanship Specify when and which building codes apply Developed locally Input from program and local building officials staff Required by HOME Program Slide 19 Rehabilitation Standards Proposed HOME Rule change: Establish standard for all rehabilitation activities Written standards for methods and materials Created from uniform inspection of property Minimum standard UPCS Property over 26 units Capital Needs Assessment required Major systems 15 year useful life Slide 20 Rehabilitation Standards Proposed HOME Rule change: Disaster Mitigation Other improvements modest amenities Inspection Procedures adopt written standards Acquisition inspection within 30 days prior to commitment Frequency Payment schedule Slide 21 7

8 Energy Efficiency Standards Incorporate proper air sealing on walls, floors, ceilings, doors, windows, and electrical outlets Minimum standards for ventilation, attic insulation, and crawlspace treatment Standards for replacement windows and doors ENERGY STAR appliances Slide 22 Balancing Quality and Cost Codes and standards affect long term viability of the housing stock HFA should adopt: Policies that guide the type and quality construction desired Standards that reflect and implement that policy Slide 23 Slide 24 Balancing Quality and Cost Reflect a balance in: Housing Standards Methods and Materials Specifications Weigh up front and back end costs: Long term maintenance Durability Installation Efficiency 8

9 Why do inspections? Determine feasibility Identify site/structure issues and requirements Develop scope and plans Identify environmental requirements Document contractor performance Verify payment due Slide 25 Types of Inspections Initial Site Inspections Work in Progress Inspections Final Inspections Monitoring Inspections Slide 26 Slide 27 Key Concepts in Cost Estimating Cost reasonableness Appropriate charge according to market Independent cost estimate Hard costs Labor, materials, overhead Soft costs Financing, design, management, etc. 9

10 Types of Cost Estimates Preliminary or square foot Trade or Scope of Work(aka assembly or component) Quantity Take offs Quantity Take-off Slide 28 Information Sources: Hard Costs Jobs with similar components Databases of local costs Professional cost estimators Cost estimate manuals Computer estimating systems Slide 29 Information Sources: Soft Costs Percentage of hard costs Percentage dictated by local markets Sources include: Banks Title Companies Local government officials Slide 30 10

11 Federal Procurement Requirements Requirements depend upon program design and person responsible Developer large projects Property owner rehabilitation Program staff rehabilitation Slide 31 Federal Procurement Requirements Rules for grantee in 24 CFR Rules for subrecipients in 24 CFR No Federal requirements for developers or owners Local requirements may apply Slide 32 Procurement Procedures Capital Projects require formal competitive bidding Prepare bid documents Publish invitation for bids in local paper Sealed bids, public bid opening Select lowest responsible bidder 100% bond payment and performance No conflict of interest Slide 33 11

12 Slide 34 Levels of HFA Involvement Intensive Involvement Involved in day to day operations Requires capable staff Moderate Involvement Still hands on involvement Delegates more tasks Minimal Involvement May contract with third party for oversight Start of Construction Environmental review and Release of Funds (ROF) must be complete Relocation notices must be sent Starting on right track helps project succeed Pre construction meeting is essential Written notice to proceed Slide 35 Change Orders Addresses unforeseen items Also sign of problems Poor work write up or estimates May signal irregularities Required even if no cost implication Slide

13 Change Orders Check for: Its effect on cost, timeframe, appropriateness and completeness Excessive change orders are a red flag Slide Slide 38 Construction Payments: Issues Detailed payment processing procedures and documentation are essential. Whose money? HFA or owner Disagreements and misunderstandings Owner or developer typically negotiates with contractor How long does payment take? Critical to agree with contractors at start Final Inspection and Close Out Final inspection for substantial work completion Prepare punch list of unfinished items Final code inspection Certificate of occupancy Final payment when all complete Slide 39 13

14 Close out Documents Cost certifications Warranties and guarantees As built drawings Owner s manuals Release of liens Slide 40 Common Construction Problems Excessive change orders + cost overruns Delays Poor quality Theft Work outside of specifications Slide 41 14