HCR Supportive Housing Opportunity Program Term Sheet

1 November 2020

Supportive Housing Opportunity Program

SUPPORTIVE HOUSING OPPORTUNITY PROGRAM (SHOP): SHOP provides gap financing for the

creation of affordable supportive housing with on-site supportive services. The use of SHOP funding is

limited to projects utilizing 9% Low Income Housing Tax Credits (LIHTCs) and projects financed with HFA

bonds. Additionally, the use of SHOP funding is limited to projects with a service and operating award.

Supportive housing projects seeking to include units above 60% AMI (or above 80% AMI if income

averaging is utilized) and up to 130% AMI (Middle Income Units) are eligible to apply for Middle Income

Housing Program funds subject to the limits specified below, as applicable, and based on demonstrated

need for gap financing by HCR underwriting standards.

Applicants can access Section 8 Housing Choice Project Based Vouchers (from HCR and local

administrators) to fund non-Empire State Supportive Housing Initiative (ESSHI) units in an ESSHI project.

In New York City, applicants can access Section 8 Housing Choice Project Based Vouchers for rental

subsidies for both ESSHI and non-ESSHI units. The ESSHI service and operating award will be reduced to

account for services only on ESSHI units.

Priority is given to projects in accordance with the information set forth herein. Actual award amounts

must be recommended by HCR staff, and approved by HFA Credit Committee, HTFC and/or HFA Boards,

as applicable. HCR reserves the right to substitute SHOP funds with Homes for Working Families funds

for projects financed with HFA bonds. Applicants are strongly encouraged to apply for only the funding

necessary for the financial feasibility of the project and to leverage funding from non-HCR sources. HCR

reserves the right to allocate funding to ensure that the broad range of statewide housing needs are

met.

Eligible Uses

New construction of, the adaptive reuse of non-residential property to, or the

rehabilitation of unregulated residential property to create integrated affordable

supportive housing with supportive services offered to the tenants. Applicants

are encouraged to maximize the number of supportive housing units in their

developments taking the neighborhood context into consideration. The total

number of new supportive housing units must constitute at least 30% percent

(25% for projects with OPWDD units) of the total units in the project. For projects

involving the relocation of existing supportive units funded by state rental and

operating subsidies, the existing supportive housing units will be considered as

“new” supportive housing units for the purposes of calculating the total number

of supportive units in the proposed project.

Eligible costs are for site acquisition, hard costs, and related soft costs.

For projects applying through the HCR Multifamily Finance 9% RFP, permanent

financing only. For projects applying for financing with HFA bonds, both

construction and permanent financing available.

Area Median

Income

Restrictions

At least 50% of the units in the project must be affordable to households earning

no more than 60% AMI, or if income averaging is utilized, no more than 80%

AMI.

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For projects seeking funding under the Middle Income Housing Program (MIHP),

at least 10% but no more than 30% of the units in the project must be for

households with incomes over 60% AMI (above 80% AMI if LIHTC income

averaging is utilized) and up to 130% AMI. HCR will allow a reduced rent burden

to encourage middle- and moderate- income households to reside in

economically distressed neighborhoods, such as a Qualified Census Tract (QCT)

or a project which is a component of a downtown revitalization effort. In such

cases, HCR will allow up to a 20% rent advantage for middle-income tenants. For

example, if the rent of a MIHP unit is set at an 80% AMI affordability level, it may

be rented to households up to 100% AMI. Projects outside of a QCT or which are

not a component of a downtown revitalization effort must be able to achieve

rents that are affordable to households with incomes of at least 80% AMI in

order to access MIHP funding.

Per Unit

Maximum Award

Projects with less than 50% supportive housing or leveraging funds from HPD,

HHAP, or other City or State agencies for supportive housing units will not be

eligible for maximum subsidy amounts. The maximum subsidy amounts are

expected only for projects unable to secure leveraged resources and/or for

projects where prevailing wages are required. All projects will be evaluated on a

case by case basis.

For projects financed with HCR 9% LIHTCs

New York City, Westchester, Nassau, and Suffolk Counties: Up to $150,000 per

supportive housing unit and up to $110,000 per other housing unit up to 60%*

AMI in integrated supportive housing projects. Projects leveraging funds from

the City of New York are eligible for up to $100,000 per unit.

Rest of State: Up to $85,000 per supportive housing unit and up to $60,000 per

other housing unit up to 60%* AMI in integrated supportive housing projects.

For projects financed with HFA bonds

New York City: Up to $200,000 per unit for all residential units in projects where

at least 50% of the units are designated as permanent supportive housing.

Projects leveraging funds from the City of New York are eligible for up to

$100,000 per unit.

Westchester, Nassau and Suffolk Counties: Up to $200,000 per supportive

housing unit and up to $160,000 per additional income restricted unit up to

60%* AMI in integrated supportive housing projects.

Rest of State: Up to $150,000 per supportive housing unit and up to $95,000 per

additional income restricted unit up to 60%* AMI in integrated supportive

housing projects.

For MIHP financed units, up to $140,000 in MIHP per unit in New York City,

Westchester, Nassau & Suffolk counties, and up to $95,000 in MIHP per unit in

all other counties.

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3 November 2020

*If income averaging is utilized, up to 80% AMI.

Interest Rate and

Loan Terms

0.5% interest-only paid during construction and permanent. Minimum of 30

year term, maximum of 50 years.

Supportive

Services and

Operating

Funding

All projects must have a service and operating award or plan. Projects applying

through the Multifamily Finance 9% RFP must meet the specific requirements of

supportive housing as set forth in the 9% LIHTC Qualified Allocation Plan.

HCR anticipates that the operating funding from the services and operating

source will at least cover real estate maintenance and operating expenses for the

supportive housing units. Applicants should underwrite rents for supportive

housing units at an amount affordable to households earning at least 50% AMI.

Priorities

Projects with ESSHI awards and projects which are comprised of at least 50%

supportive housing units will have priority.

Target

Populations

The eligible target populations to be served under this program are families,

individuals and/or young adults who are both homeless and who are identified

as having an unmet housing need as determined by the CoC or local planning

entity or through other supplemental local, state and federal data, and have one

or more disabling conditions or other life challenges, including:

• Serious mental illness (SMI);

• Substance use disorder;

• Individuals diagnosed with HIV;

• Victims/Survivors of domestic violence;

• Military service with disabilities (including veterans with other than

honorable discharge);

• Chronic homelessness (including families, and individuals experiencing

street homelessness or long-term shelter stays);

• Youth / young adults who left foster care within the prior five years and

who were in foster care at or over age 16;

• Homeless young adults between 18 and 25 years old;

• Adults, youth or young adults reentering the community from

incarceration or juvenile justice placement, particularly those with

disabling conditions;

• Frail elderly/disabled seniors, as defined in the ESSHI RFP;

• Individuals with Intellectual/Development Disabilities (I/DD).

In accordance with the most recent ESSHI RFP, projects of 15 or more ESSHI

qualifying individuals, with 30 or more units in total serving applicable

populations, will be required to set aside 25 percent of designated ESSHI units

for high-cost, high-need Medicaid users. The applicable populations are SMI,

substance use disorder, individuals disagnosed with HIV/AIDS, chronic

homelessnes, homeless frail elderly/seniors, individuals with developmental

disabilities. The ESSHI RFP located at https://omh.ny.gov/omhweb/rfp

contains a

glossary for population definitions.

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4 November 2020

Definition of Homeless: In order to be considered homeless for the purposes of

this program, an individual must meet one of the following criteria:

(1) an un-domiciled person (whether alone or as a member of a family) who

is unable to secure permanent and stable housing without special

assistance. This includes those who are inappropriately housed in an

institutional facility and can safely live in the community and those

young adults, survivors of domestic violence, and individuals with I/DD

who are at risk of homelessness,

(2) a youth or young adult who left foster care within the prior five years

and who was in foster care at or over age 16, and who is without

permanent and stable housing,

(3) an adult or young adult reentering the community from incarceration or

juvenile justice placement, who was released or discharged, and who is

without permanent and stable housing, or

(4) a young adult between the ages of 18 and 25 years of age without a

permanent residence.

Eligible

Applicants

Not-for-profit corporations or charitable organizations, or a wholly owned

subsidiary of such corporations or organizations, or private for-profit developers.

80% of SHOP funding through FY 2020 will be prioritized for developments

controlled by not-for-profit organizations. The following arrangements are

acceptable demonstrations of not-for-profit control:

• 100% Not-for-profit Development: Projects where the

sponsor(s)/developer(s) are not-for-profits. The project will be

developed and owned by a not-for-profit or a partnership of not-for-

profits during construction and after conversion to permanent financing.

• Turnkey Development: Projects where a not-for-profit partner is in a fee

development structure with a for-profit partner where the ownership of

the project is turned over to the not-for-profit provider after

construction completion.

• Joint Ventures with Majority Not-for-profit Control: Partnerships

between not-for-profit and for-profit entities where the majority

ownership is by the not-for-profit (at least 51% ownership by the not-

for-profit of the controlling entity of the property owner). Such

partnerships ensure that not-for-profit has day-to-day and long-term

management control over the properties.

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Regulatory

Agreement

Requirements

Minimum 40 year regulatory agreement, maximum of 50 years.

Age-Restricted

Housing

Requirements

Developers seeking funding for a housing development that intends to restrict

tenancy based on age (e.g., “senior housing” projects or supportive units serving

“frail elderly”), shall provide HCR with proof it has obtained an exemption from

the New York State Division of Human Rights (“DHR”) in accordance with N.Y.

Exec. Law § 296-2a(e). Verification that DHR has granted this waiver may be a

condition precedent to the construction loan closing.

To apply for an exemption pursuant to N.Y. Exec. Law § 296-2a(e), submit a

written request to the Commissioner of DHR, located at One Fordham Plaza, 4th

floor, Bronx, New York, 10458, describing, among other things, general

information about the project (including the address and number of units,

income and age restrictions, and any time sensitivities that may warrant

expedited review), the anticipated sources of government funding, the market

need for housing that is restricted by age, and the applicant’s intent to market

the development in accordance with its HCR-approved Affirmative Fair Housing

Marketing Plan.

HCR retains the right to revise this term sheet from time to time and to waive any requirement contained

therein, subject to the applicable statutes and program regulations. HCR also retains the right to not

award any or all of its funds under this program. All proposals must comply with all applicable federal,

state and local laws.