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<br />7 <br /> <br />A closing fee of the greater of $3,500 or 1% of the loan amount will be payable to the Agency <br />prior to closing. At its discretion, the Agency may seek reimbursement from the applicant for <br />costs in excess of the required closing fee, including extraordinary legal fees. <br /> <br />To ensure GROW Funds can remain available to support eligible projects, reservations will <br />expire 12 months after the date of Board approval unless the applicant demonstrates significant <br />progress toward securing funding commitments and land use approvals. Developers may <br />request an extension to accommodate extenuating circumstances; the Agency reserves the <br />right to consider each request on a case-by-case basis. GROW Fund reservations will <br />automatically expire if the primary financing source proposed in the application is not awarded <br />within the timeframe proposed in the application. <br /> <br />G. Feasibility Analysis <br /> <br />In order to ensure that limited resources are utilized in the most effective manner, funding <br />applications will be reviewed by Agency staff, analyzing the following items: <br /> <br />1. Reasonableness of costs <br />a. Per-unit construction and developments costs: Applicants must demonstrate the <br />project is cost-reasonable and in line with per-unit costs of comparable <br />developments. The Agency will utilize predictive cost modeling and take into <br />consideration special construction techniques or features that support the needs of <br />targeted demographics. <br />b. Developer fee: Maximum developer fee allowable for rental projects shall be 15% of <br />project costs before developer fee for the first 50 units and 8% per unit thereafter for <br />units 51+. For owner-occupied projects, developer fee may not exceed 10% of <br />project costs before developer fee. The Agency reserves the right to waive developer <br />fee limits and/or approve changes to the fee proposed in the developer’s initial <br />application. <br />c. Consultant fees and financing costs <br />d. Reasonableness of Maintenance and Operating costs <br />e. Level of Operating and Replacement reserves <br /> <br />2. Debt coverage ratio <br /> <br />3. Cash flow analysis: Cash flow after required debt service and deferred developer fee <br />payments shall be evaluated for reasonableness relative to effective gross expense. <br />Cash flow analysis shall exclude required reserve deposits and fees for supportive <br />services; asset management, partnership, and/or investor fees shall be included. <br /> <br />4. Market analysis and demonstration of need for affordable housing: Developer’s market <br />study for new construction or acquisition-rehabilitation projects must demonstrate <br />reasonable demand and anticipated absorption rate for housing product proposed. <br />Agency staff may require revisions to the market study to reflect current local market <br />conditions, comparable properties, reasonable market demand areas, etc. <br /> <br />5. Development Team Capacity <br />a. Developer experience <br />b. Ownership experience <br />c. Property management experience, if applicable <br />d. Supportive services provider experience, if applicable