RFP 2019-04 - HOME and CHDO Affordable Housing Project Request for Proposal
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CITY OF ROSEMEAD
REQUEST FOR PROPOSAL NO. 2019-04
FOR HOME INVESTMENT PARTNERSHIPS PROGRAM (HOME)
COMMUNITY HOUSING DEVELOPMENT ORGANIZATION (CHDO)
AFFORDABLE HOUSING PROJECTS
SUBMITTALS:
Six (6) bound copies and one (1) electronic PDF file on flash drive or CD of the proposal in sealed
envelope(s) must be received by the City of Rosemead’s City Clerk’s Office by
no later than Thursday, February 28, 2019 at 3:00 p.m.
CONTACT PERSON:
Ben Kim, Community Development Director
City of Rosemead
8838 E. Valley Boulevard
Rosemead, California 91770
(626) 569-2169
bkim@cityofrosemead.org
PROPOSALS RECEIVED AFTER THE TIME AND DATE STATED ABOVE SHALL NOT BE CONSIDERED.
FACSIMILE AND E-MAIL PROPOSAL WILL NOT BE ACCEPTED.
INQUIRIES: Direct questions for clarification on Request for Proposal documents
to Ben Kim, Community Development Director at (626) 569-2169 or
bkim@cityofrosemead.org
MODIFICATIONS: Any modification of this Request for Proposal will be provided to
consultants who request notification of any modifications.
ISSUANCE DATE: January 31, 2019
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The City of Rosemead seeks low-income housing project proposals from qualified
Community Housing Development Organizations to construct, acquire, preserve and/or
rehabilitate affordable housing. Preference will be given to projects that:
• Provide a priority for affordable for-sale housing units to Rosemead Veterans and
their families;
• Result in affordable housing for Rosemead senior and families;
• Result in homeownership for first-time homebuyers;
• Incorporate the City of Rosemead’s Consolidated Plan and Housing Element
objectives; and
• Projects that can complete property acquisition within a 6-month timeframe with
project completion within 18-months from date of award for homebuyer projects.
Approximately $898,000 in HOME Entitlement Funds (Substantial Amendment to the Annual
Action Plan currently under HUD review) are available under this Request for Proposals
(RFPs), subject to City Council approval. Additional funds may also be available for property
rehabilitation costs for qualified projects.
Eligible applicants are nonprofit corporations who have been certified as a Community
Housing Development Organization (CHDO) within the past twelve months or can either
meet the criteria of the federal HOME regulations for a CHDO in response to this RFP and
have paid staff whose experience qualifies them to undertake CHDO set-aside activities.
CHDO certification applications will be accepted along with this RFP. See the CHDO
Checklist (Appendix A) for a full description of the HOME CHDO criteria and required
documentation.
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TABLE OF CONTENTS
Page No.
Introduction 4
Background 4
Purpose 5
Funds Available 5
Award of Funds 5
Minimum Requirements 5
Eligible Activities 6
General Project Requirements 8
Two Stage Contracting Process 9
Disbursement of Funds 10
Written Inquiries 10
Proposal Submittal 10
Proposal Content 11
Evaluation Criteria & Selection Procedures 13
Guidelines & General Conditions 14
Forms 20
Questionnaire
Project Summary
Housing Priorities
Project Preparation
References
Estimated Project Costs and Financing
Certification
Noncollusion Affidavit
Conflict of Interest Disclaimer
Acknowledgment of Insurance Requirements
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Appendices 33
Appendix A: CHDO Checklist
Appendix B: Insurance
Appendix C: Income Limits
Appendix D: HOME Maximum Per Unit Subsidy Limits
Appendix E: Rent Limitations
Appendix F: Underwriting and Subsidy Layering Review Guidelines
Appendix G: Application Checklist
Appendix H: Evaluation Criteria
INTRODUCTION
The City of Rosemead Community Development Department administers the federally
funded HOME Investment Partnerships Program (HOME) and Community Development
Block Grant (CDBG) for increasing, improving, and preserving low-income housing in the
City of Rosemead.
This document outlines the requirements, selection process and the information necessary
to submit a proposal for this service. The successful proposer will be required to comply with
Equal Employment Opportunity and all applicable federal, state, and local laws and
requirements.
BACKGROUND
The City of Rosemead is a suburb located in the San Gabriel Valley, 10 miles east of
downtown Los Angeles. It is bounded on the north by the cities of Temple City and San
Gabriel, on the west by Monterey Park, Alhambra, and the unincorporated Los Angeles
County community of South San Gabriel, on the south by Montebello, plus by El Monte and
South El Monte on the east. The City is 5.5 square miles (2,344-acres) in size.
Rosemead is a working-class suburb with a diverse population base. According to the 2010
Census, the City had a population of 53,764. The estimated makeup of the City was 4.7%
White, 0.3% African American, 60.3% Asian, 33% Hispanic/Latino (of any race), and 0.7%
Non-Hispanic Other. As a substantially built-out city, Rosemead only added 259 residents
to its population during the last decade (2000-2010).
Rosemead operates under the Council/Manager form of government. The City Council is
elected at large to four years, overlapping terms. The Mayor is elected by a majority vote of
the City Council and rotates each year. The City Manager is appointed by, and serves at the
pleasure of, the City Council.
The Housing Division serves under direction of the Community Development Director. The
Community Development Department combines the functions of Housing, Building & Safety,
Economic Development, Planning, Business License, and Code Enforcement Divisions.
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PURPOSE
The City of Rosemead’s Community Development Department is announcing the availability
of funds provided to the City of Rosemead under the HOME program administered by the
United States Department of Housing and Urban Development (HUD). The funds are
available to eligible non-profit applicants for the purpose of preserving, improving, or
developing affordable housing in the City of Rosemead.
FUNDS AVAILABLE
Approximately $898,000 (Substantial Amendment to Annual Action Plan currently under
HUD review) are available from a combination of HOME entitlement funds and HOME
Community Housing Development Organization (CHDO) set-aside funds for affordable
housing project(s).
AWARD OF FUNDS
All applications will first be subject to preliminary screening by the City for completeness and
minimum requirements. A selection committee will review those responses deemed
complete. Preliminary selection will be made based on the extent to which the proposal
meets the evaluation criteria. The proposal selected and recommended for final award will
be subject to approval by the Rosemead City Council. Applicants will be notified when the
final award has been made. A contract between the City and the funded applicant must be
executed prior to any disbursement of funds.
If no applications meet the selection criteria, the City reserves the right to fund none of the
applications under this RFP, reopen the period for submission of proposals, or informally
solicit proposals.
MINIMUM REQUIREMENTS
In order for a project/proposal to receive consideration, it must meet the following minimum
requirements:
1. The purpose of the proposal is to use HOME funds to finance a CHDO eligible project
which, upon completion, will be occupied by HOME income-eligible households.
2. The housing may be affordable rental or home ownership.
3. The applicant must be a qualified CHDO, as stated above.
4. The proposal is submitted by the deadline.
5. The project to be financed with HOME funds is located in the City of Rosemead.
6. The applicant must have sufficient resources to meet minimum leveraging
requirements.
7. The project will minimize displacement of any households or other entities.
8. The proposal is signed and complete.
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ELIGIBLE ACTIVITIES
In order to be considered for funding, all proposed projects must be considered eligible under
the requirements of the current HOME Final Rule, including provisions pertaining to CHDO
specific affordable housing activities. The CHDO’s role in the project must meet one of the
following definitions:
• CHDO Owner: CHDO must hold title to or have a long-term lease in a given
housing property. The CHDO hires a developer to oversee construction or
rehabilitation. The CHDO must own the housing during development and for the
affordability period following completion.
• CHDO Developer: CHDO must own and develop a property. To be the developer,
the CHDO must be in sole charge of all aspects of the development process,
including obtaining zoning, securing non-HOME financing, selecting architects,
engineers and general contractors, overseeing the progress of the work and
determining reasonable costs. For rental housing, the CHDO must own the
housing during development and for the affordability period following completion.
For homeownership, the CHDO acquires and owns the property during
construction and sells the property to a qualified homebuyer.
• CHDO Sponsor: If the rental housing is owned or developed by a subsidiary of a
CHDO, is a limited partnership of which the CHDO or its subsidiary is the sole
general partner, or is a limited liability company of which the CHDO or its
subsidiary is the sole managing member, then the CHDO is considered a sponsor.
Eligible Activity CHDO
Owner
CHDO
Developer
CHDO
Sponsor
Acquisition/Rehabilitation of rental housing X X X
New construction of rental housing X X X
Acquisition/rehabilitation of homebuyer X
properties
New construction of homebuyer properties X
Direct financial assistance (i.e. down payment
and closing costs) to purchasers of HOME
assisted homebuyer housing owned by a CHDO
with HOME funds.
X
The housing to be constructed or rehabilitated must be permanent housing. HOME funding
may be used for the following types of projects:
• Acquisition
• New construction
• Reconstruction
• Rehabilitation of non-luxury housing with suitable amenities
• Conversion
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• Mixed-use (retail or office/residential)
Conversion of an existing structure to affordable housing is considered rehabilitation, unless
the conversion entails adding one or more units beyond the existing walls, in which case,
the project is new construction under HOME federal regulations.
Acquisition of vacant land or demolition must be undertaken only with respect to a particular
housing project intended to provide affordable housing, and for which funds for construction
have been committed.
Mixed use development is the use of a building or set of buildings for more than one purpose.
Instead of single use development that can only serve one purpose, mixed use development
can combine retail, office, and residential uses on one property. The HOME portion of the
development costs may only be used for the residential portion of the development.
1. Income requirements: The beneficiaries of the housing must have household incomes
less than 80% of AMI adjusted for family size (See Appendix C, Income Limits). For rental
projects with five or more units, 20 percent of the units must be occupied by very low
income households.
2. Minimum per-unit subsidy: The minimum amount of HOME funds that must be
invested in a project involving rental housing or homeownership is $1,000 times the
number of HOME-assisted units in the project.
3. Maximum per-unit subsidy: The amount of HOME funds that the City may invest on a
per-unit basis in affordable housing may not exceed the per-unit dollar limits as set forth
in the HOME Maximum Per Unit Subsidy Limits as determined by HUD. See Appendix
D.
4. Homeowner purchase price limit: Where HOME funds are used to finance
homeownership units, the after rehabilitation value of the home cannot exceed the
current Homeownership Limit.
5. Rent limitations: The HOME assisted units in a rental housing project must be occupied
only by households that are income eligible per HUD guidelines and must have rents that
do not exceed those outlined in Appendix E, Rent Limitations.
6. Period of Affordability. HOME regulations require that assisted units remain affordable
at a minimum from five years to twenty years, depending on the type of activity as well
as the amount of HOME subsidy. The affordability period will be determined upon review
of the project.
7. Eligible Costs
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a. Development hard costs. The actual cost of constructing or rehabilitating all housing
types, including mixed use and mixed income developments, ownership or rental
housing.
b. Acquisition costs. Costs of acquiring improved or unimproved real property,
including acquisition for homeownership.
c. Related soft costs. Other reasonable and necessary costs incurred by the owner
and associated with the financing or development (or both) of new construction,
rehabilitation, or acquisition of housing assisted with HOME funds, i.e., architectural,
engineering, City permits and entitlements, financing, developer and legal fees, as
well as working capital and closing costs.
d. Relocation costs. Costs of relocation payment and other relocation assistance.
e. Tenant-based rental assistance (TBRA) is not an eligible cost under this RFP.
f. Homeownership counseling is not an eligible cost under this RFP.
GENERAL PROJECT REQUIREMENTS
The RFP is a two stage process. This initial RFP is for the selection of a qualified CHDO and
general project proposal (such as rental housing or affordable family homebuyer project).
Applicants are encouraged to identify specific sites and resources for the RFP, but this is
not required at this stage. If selected, the CHDO will have six months to return to the City
with a specific site and detailed budget and pro-forma, as well as other materials necessary
for the City to determine the project’s feasibility and perform a subsidy layering review and
underwriting analysis.
Stage 1: Requirements for the RFP
1. Targeted Beneficiaries: The HOME Program is designed to assist housing projects that
serve affordable income households. See Housing Priorities form for preference
categories.
2. Applications are for affordable housing projects located in the City of Rosemead. The
proposal must indicate whether the applicant will be carrying out a homebuyer or rental
project, any targeting to special needs or income levels, and whether the project is new
construction or acquisition/rehabilitation. The proposal does not need to include a
specific site, if not known. However, applicants should provide an example project which
is based upon currently available properties and realistic estimates of cost and
resources.
3. Preliminary site plans and schematics for new construction, engineering reports for
rehabilitation, preliminary market justification, and appraisals are not required at this
stage, but if available, may be submitted with the proposal.
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Stage 2: Prior to approval of a specific property:
1. All financing commitments will be verified.
2. City staff will perform an inspection and long range capital needs assessment.
3. A subsidy layering and underwriting review will be completed. (See Appendix F.)
4. An environmental review must be completed.
5. Rehabilitation or new construction projects may be subject to the wage and hour
requirements of the Davis-Bacon Act/State Prevailing Wage, as well as the accessibility
requirements under 24 CFR Part 8, which implements Section 504 of the Rehabilitation
Act for 1973.
6. Projects that involve relocation must meet the requirements of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970 and local and State law.
7. Acquisition and/or renovation of existing housing are also subject to lead based paint
(LBP) testing. Depending on age of structure(s), scope of work, and type of work, LBP
testing can vary in extent and need as mandated by HUD.
8. Until funds are completely disbursed, the successful applicant will be required to provide
an annual audit of its financial statements and auditor’s opinion and management letter,
if issued. Audits must be conducted by an independent licensed certified public
accountant. An A-133 audit is required by Federal regulations if total federal dollars
expended by the applicant in any fiscal year of the organization exceeds $750,000.
9. An updated CHDO Certification must be completed prior to commitment of funds to a
specific project.
Funding awards may take the form of grants and/or deferred loans, which may be
subordinate to other financing. The type of assistance provided by the City will be determined
after a thorough review of the proposed project.
TWO STAGE CONTRACTING PROCESS
Upon award under the RFP, the City will enter into a HOME Implementation Agreement with
a CHDO. The agreement will specify the type of project, beneficiaries, affordability
requirements, timeline, and funds available. Upon execution of this agreement, the CHDO
will be authorized to seek a potential project.
Once a project (specific site) is identified by the CHDO, the CHDO will submit a proposal,
which includes the budget for the project and sources of funds, marketing plan, construction
or rehabilitation plans, etc. If approved, the City will enter into an Acquisition and
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Rehabilitation Agreement. This agreement authorizes the CHDO to enter into escrow subject
to final funding approval from the City.
DISBURSEMENT OF FUNDS
Funds will be disbursed only at the time all conditions of the award have been met by the
applicant. Disbursement of funds under this RFP is subject to: execution of a contract
between the applicant and the City of Rosemead, a deed of trust, note, restrictive covenant,
and/or any other appropriate additional legal documentation as required; local program
requirements; environmental review; underwriting; and subsidy layering review.
Execution of the HOME Implementation Agreement may take up to three (3) months after
the date of award for all conditions of the award to be met. Where the applicant has failed to
meet the conditions of the award within the allotted time or any extension, the award may
be revoked and the funds allocated may be de-obligated and reprogrammed to other projects
by the City Council. The funds must be expended in full accordance with the contract and
other agreements.
WRITTEN INQUIRIES
Written inquiries must be emailed to bkim@cityofrosemead.org. No telephone inquiries will
be accepted. Any inquiries should clearly state the question and provide any additional
information deemed relevant to the inquiry. Applicants are encouraged to contact the
Planning Division regarding zoning and other development standards. However, contact with
any other City Staff regarding this RFP is not allowed.
PROPOSAL SUBMITTAL
Qualified respondents should review the specifications and submit six (6) bound original and
one (1) electronic PDF file of its proposal in a sealed envelope addressed to:
City of Rosemead, City Clerk’s Office
8838 E. Valley Blvd.
Rosemead, CA 91770
The outside of the envelope clearly marked: “Proposal for HOME CHDO Affordable Housing
Project, RFP No. 2019-04.” Proposals shall be received no later than 3:00 P.M. on
Thursday, February 28, 2019.
Unauthorized conditions, limitations, or provisions attached to a proposal will render it
informal and may cause its rejection. The completed proposal shall be without
interlineations, alterations or erasures. Alternative proposals will not be considered unless
requested. No oral, telegraphic or telephonic proposals or modifications will be considered.
The proposal may be withdrawn upon request by the proposer without prejudice at any time,
provided that the request is in writing, that it has been executed by the proposer or duly
authorized representative, and that it is filed with the City.
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Proposal documents shall be deemed to include by reference each and every one of the
following:
Request for Proposals (RFP)
Addenda to RFP
Proposal
Supplements to Proposal
Proposals shall be submitted in accordance with the form prescribed by the City of
Rosemead. Failure to respond in this manner may render the proposal non-responsive.
PROPOSAL CONTENT
Applicants must complete all forms provided in the Forms section of the RFP in typewritten
narrative. All attachments must be typewritten on 8-1/2 x 11- inch white paper. Please refer
to the instructions below and the Forms section. Appendix G contains an Application
Checklist for your use. Below is a description of the required proposal components and
content:
1. Questionnaire
Each application is to include the “Questionnaire” form. Applicant’s executive director or
designee authorized to legally bind your organization must sign the Questionnaire. NOTE:
An unsigned Questionnaire will result in the rejection of the application.
2. CHDO Certification Documents
Unless your organization has been certified as a City of Rosemead Community Housing
Development Organization (CHDO) within the past twelve months, submit the
documentation listed in Appendix A. Eligible applicants must be non-profit organizations
meeting the CHDO criteria and documentation requirements provided in Exhibit A.
3. Project Summary
Complete the “Project Summary” form.
4. Housing Priorities (Maximum 25 Points)
Complete the “Housing Priorities” form and attach a one-page narrative describing the
population, community and number to be served by the proposed project, including the type
of affordable housing that will result from this project. If your project will serve a targeted
population or special needs population or provide services, describe the special needs
population to be served and/or the services that will be provided. Label the one page
narrative “Housing Priorities Narrative” and place your narrative after the Housing Priorities
form.
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5. Project Preparation (Maximum 25 Points)
Complete the “Project Preparation” form and attach a narrative on no more than two (2)
typewritten pages. The narrative should respond to each request for information in the order
presented below. Clearly label your narrative as “Project Preparation Narrative” and place
your narrative after the Project Preparation form and attachments.
• For what purposes are you requesting this funding?
• Outcome to be achieved (include description of all units, both HOME and non-
HOME).
• If a homebuyer project, how many homes are expected to be completed?
• If a rental project, briefly describe the management plan for the project.
• Present a clear and reasonable work plan, including an estimated project timeline,
preferably lease-up within eighteen (18) months or resale within eight (8) months from
date of acquisition, that identifies estimated start date, milestones to be accomplished
within the funding period and how long the project will take to complete including
estimated completion date.
• Describe any unique or innovative elements to the proposed project.
• Will the project meet Energy Star standards, green building, LEED certification?
• Meet accessibility standards as applicable, in accordance with Section 504 of the
Rehabilitation Act, the Americans with Disabilities Act, and the Fair Housing Act?
• How will the housing be made affordable to low income households?
• Gives priority to Rosemead Veterans and their families?
• Has a unit mix that will provide affordable housing for families?
• Provides on-site services?
• Provides a preference to people who live or work in Rosemead?
• Has a location that is convenient to transportation, services, and shopping?
• Eligibility criteria of other sources of funding that will be committed or expect to be
obtained for this project?
If the proposal is a collaborative submission with other nonprofit organizations, explain how
the project will be jointly conducted, identify the lead agency, identify roles and
responsibilities of each participating party, and describe how the proposed project and
beneficiaries will benefit from the collaboration. Include a letter of agreement between the
collaborating organizations.
6. Management Capacity & Experience in Real Estate (Maximum 25 Points)
Provide a narrative on no more than two (2) typewritten pages. The narrative should list and
respond to each request for information in the order presented below. Please clearly label
your narrative as “Management Capacity and Experience in Real Estate” and place your
narrative after the “Project Preparation Narrative.” Also, complete the “References” form
provided in the Forms section. Your narrative should:
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a. Provide evidence of a successful track record of adequate organizational experience
in owning and managing real estate. Please also describe paid staff that
will be dedicated to this project and what role they will play, as well as their experience
with that role.
b. Provide detail of how your organization’s experience relates to the proposed housing
project.
c. Describe a recent successful project and your experience working with HOME CHDO
funds.
7. Capacity for Project Financing and Leveraging (Maximum 25 Points)
This section of the proposal should show evidence of the ability to leverage non-City of
Rosemead cash for project costs. At minimum, a project should include at least 12.5% equity
contribution. Projects with a larger equity commitment and firm funding commitments will be
awarded more points.
Evidence of leveraged funds may include cash, past grant history, firm commitments or
demonstrated capacity to leverage funds. Resources may include grants, loans, donations
of cash, goods, supplies, and services, etc.
a. Complete “Estimated Project Costs and Financing” form.
b. Provide a current organization-wide budget. Please clearly label this attachment as
“Organization Budget” and place behind the “Project Preparation Narrative”.
c. Provide three (3) most recent annual audited financial statements and auditor’s
opinion and management letter, if issued. Audits must be conducted by an
independent licensed certified public accountant. If an audit(s) is not available, please
explain why.
EVALUATION CRITERIA AND SELECTION PROCEDURES
A materially incomplete or non-responsible proposal will be rejected. A proposal evaluation
committee comprised of City staff will review each proposal based upon the Evaluation
Criteria provided in Appendix I. Applicant references will be contacted for those proposals
receiving the most points. The top proposal(s) earning the most points may be invited to
participate in an interview with City staff to review qualifications and project proposal prior to
selection. The award of the contract could be as much as three months after the RFP
submission deadline. Final selection will be contingent upon City Council approval.
Special Note: If the selected organization fails to perform in accordance with HUD’s
regulations, City of Rosemead’s funding deadlines, and per the organization’s proposal, the
organization will be removed at the discretion of the Community Development Department
and the next organization in line will be contacted.
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GUIDELINES & GENERAL CONDITIONS
Proposals may be withdrawn at any time. Revised proposals may be resubmitted up until
the Submittal Date.
The selected organization will be responsible for complying with all conditions of this RFP,
addenda, and all subsequent formal agreements. All responses provided should be as
detailed as possible to provide the proposal evaluators with enough information to make a
fair assessment of the organization’s proposed project and qualifications.
The selected organization will be required to enter into a HOME Program Implementation
Agreement and site specific agreements, including Deeds and Restrictive Covenants.
The City may reject all proposals and reissue this request. The City is neither obligated to
award a contract following proposal evaluation, nor to pay any costs incurred by participants
in the selection process. The City may change or modify any of the criteria and information
set forth herein without notice.
Taxes
No mention shall be made of Sales Tax or Use Tax, as all proposal prices submitted will be
considered as including such tax, if applicable.
References
All reference information called for in the RFP must be submitted with the proposal.
Issuing Officer
The RFP is issued by the Community Development Department of the City of Rosemead.
If you have any questions concerning this RFP, please email your questions to
bkim@cityofrosemead.org. Contact with any other City staff or representative regarding
this RFP, except as noted herein, is not allowed.
Receipt of Proposal
Proposals shall be time stamped when received and will be accepted up to and no later than
the time indicated in the RFP. All proposals received after the time stated above will not be
considered and will be returned to the proposer. The proposer assumes the risk of any delay
in the mail or the handling of the mail by employees of the City. Whether sent by mail or by
means of personal delivery, proposers assume responsibility for having proposal deposited
on time at the place specified.
Proposal Signature
The name of the organization shall be provided and signed by its executive director or duly
authorized officer.
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Pre-Contractual Expenses
The City of Rosemead shall not, in any event, be liable for any pre-contractual expense
incurred by proposer in the preparation of its proposal. Pre-contractual expenses are defined
as expenses incurred by proposer in:
1. Preparing its proposal in response to this RFP
2. Submitting its proposal to the City of Rosemead
3. Negotiating with the City of Rosemead on any matter related to its proposal
4. Any other expenses incurred by Proposer prior to date of award
Interpretation of Proposal Documents
Should a proposer find discrepancies in, or omissions from the specifications, or should
proposer be in doubt as to their meaning, proposer shall notify the City immediately. Should
it be found necessary, a written addendum will be posted on the City’s website. Addenda
issued during the proposal period shall form a part of the contract and shall be included with
the proposal.
Addenda
Any City of Rosemead changes to the requirements will be made by written addendum to
this RFP. Any written addenda issued pertaining to this RFP shall be incorporated into the
terms and conditions of any resulting Agreement. The City of Rosemead will not be bound
to any modifications or deviations from the requirements set forth in this RFP as the result
of oral instructions. Proposers shall acknowledge receipt of addenda in their proposals.
Failure to acknowledge receipt of all addenda may cause a proposal to be deemed
nonresponsive.
Proposers shall acknowledge receipt of addenda (if any) on cover letter in their proposals.
Failure to acknowledge receipt of all addenda may cause a proposal to be deemed
nonresponsive.
Joint Offers
Where two or more Proposers desire to submit a single proposal in response to this RFP,
they shall do so on a prime-sub-consultant basis rather than as a joint venture. The City of
Rosemead intends to contract with a single firm and not with multiple firms doing business
as a joint venture.
Compliance with Laws
The proposer shall comply with all applicable laws, ordinances, and codes of the State of
California, U.S. Department of Housing and Urban Development (HUD), and the City of
Rosemead, all regulations and rules relating to affirmative action, and shall commit no
trespass on any public or private property in performing any of the work embraced by this
contract.
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Responsibility for Compliance with Legal Requirements
Successful proposers shall be in full compliance with all applicable Federal, State and local
regulations, standards, and ordinances, regardless of whether or not they are referred to by
the City.
Supplements to RFP
If the evaluation of any proposal indicates minor noncompliance or variance with the RFP,
the City may, but need not, make written request to the proposer for a supplement to the
submitted proposal. Such request will attempt to identify the noncompliance or variance,
and will establish a date by which the supplement to the RFP shall be submitted. If so
requested, the proposer may submit a supplement to the RFP responsive to such request,
within the time period established, which the City will evaluate in conjunction with the RFP.
Any supplement to the RFP will be deemed to be an integral part of the proposer’s submittal.
Evaluation
Upon receipt of proposals, the City will evaluate all proposals to determine whether
proposals are acceptable based on the criteria established in the RFP.
Validity Period
The submitted RFP shall be considered valid for a period of 180 days after the due date and
shall contain a statement to that effect signed by the executive director authorized to bind
organization for this period.
Public Record
After the award of the contract has been made by the City Council or appropriate staff, all
findings and information considered in determining which proposal best meets the needs of
the City and will be most advantageous with respect to price, conformity to the specifications
and other factors will be made available for public inspection.
Time of Delivery
Time of delivery is a part of the consideration and must be stated in definite terms. Proposals
are subject to acceptance any time within 180 days after opening unless otherwise
stipulated.
Interest of Member of the City
No member of the governing body of the City of Rosemead, and no other officer or employee
of the City who exercises any functions or responsibilities in connection with carrying out this
project to which this proposal pertains, shall have any personal interest, direct or indirect, in
this contract.
Interest of Proposer
The successful proposer covenants that it presently has no interest and shall not acquire
any interest, direct or indirect, in the City or any other interest which would conflict in any
manner or degree with the performance of this contract, and no person having any such
interest shall be employed.
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Penalty for Collusion
If at any time it shall be found that the person, firm or corporation to whom a contract has
been awarded has, in presenting any proposal, colluded with any other party or parties, then
the contract so aware shall be null and void. The contractor and the contractor’s bonding
company shall be liable to the City for all loss or damage that the City may suffer thereby.
The City may advertise for a new contract for said services.
Project Organization
The successful proposer must provide a project manager to act as a liaison with the City,
who will coordinate written reports and see the project through to satisfactory conclusion.
Execution of Contract
The proposer to whom award is made shall execute a written contract with the City on the
form of the agreement provided, and shall secure all insurance and bonds required by the
City within ten (10) days from the date of the award. Failure or refusal to enter into a contract,
or to conform to any of the stipulated requirements in connection therewith, shall be just
cause for the annulment of the award. Award shall then be made to the next proposer as
determined by the City and that firm shall fulfill every stipulation as if it were the party to
whom the first award was made.
Findings Confidential
Until such time that the City Council awards the contract, all reports, information, data, etc.,
prepared or assembled by the proposer under this proposal are confidential and the
proposer agrees that such proposal shall not be made available to any individual or
organization without the prior written approval of the City.
Changes
The City may require changes in the scope of the services to be performed by the proposer
hereunder. All such changes, which are mutually agreed upon by and among all the parties,
shall be incorporated in written amendments to this contract. All such amendments shall
state any increase or decrease in the amount of the compensation due the proposer for the
change in scope.
Additions/Deletions of Service
The City reserves the right to add and/or delete services to this contract. Should a service
requirement be deleted, payment to the contractor will be reduced proportionally to the
amount of service reduce in accordance with the proposal price. Should additional services
be required from this contract, prices for such additions will be negotiated between the
contractor and the City.
Incorporation of Proposal into the Contract
The contents of this proposal and the selected firm’s response are to be incorporated, in
total, into the contract.
Amendments
All amendments to this contract must be in writing and signed by both parties.
18
Contract Compliance Monitoring
The City shall monitor the organization’s compliance with, and performance under, the terms
and conditions of the contract. The organization shall make available for the inspection
and/or copying by the City all records and accounts relating to the work performed or the
service provided under this contract.
Contractor’s Responsibility
The contractor shall be responsible for any damages whatsoever to City Property as
applicable when such property is the responsibility of or in the custody of the organization,
his/her employees or subcontractors.
Disputes
In the event a dispute arises concerning any matter under the contract, the party wishing
resolution of the dispute shall submit a request in writing to the City Manager. The City
Manager shall consider the request and respond within ten (10) days giving his or her
findings and the reasons for the findings. Any party dissatisfied with the findings of the City
Manager may appeal to the City Council in any objection. The City Council shall consider
any matter appealed at a hearing within thirty (30) days. The decision of the City Council
shall be final upon matters of fact unless clearly erroneous or procured by fraud.
Rejection of Proposals
The City reserves the right to reject any, or any part of a proposal, to waive any informality
in the proposal and to select the services, which shall be deemed in the best interest of the
City.
It shall be emphasized that award of contract will be based upon responsiveness to the
proposal specifications.
Proposers Interested in More than One Proposal
More than one proposal from an individual, firm, partnership, corporation or association
under the same or different names will not be considered. Reasonable grounds for believing
that any proposer is interested in more than one proposal for the work contemplated will
cause the rejection of all proposals in which such proposer is interested. If there is reason
for believing that collusion exists among more than one proposer, all proposals will be
rejected, and none of the participants in such collusion will be considered in future proposals.
A person, firm or corporation who has submitted a sub-proposal or who has quoted prices
on materials to a proposer is not thereby disqualified from submitting a proposal or quoting
prices to other proposers.
Permits, Regulations, and Ordinances
The successful proposer shall give all notices necessary in connection with the performance
of the contract, shall secure and pay for all necessary licenses and permits to do the work
and shall comply with all laws, ordinances, rules and regulations, bearing on the conduct of
19
the work. Any work performed that does not conform to said laws, ordinances, rules and
regulations shall be changed to conform thereto by the contractor at his sole expense.
Equal Opportunity/Section 3
This program/project is federally funded in whole or in part by the HOME Investment
Partnerships Program and all requirements of the Title 24 of the Code of Federal Regulations
apply including Section 3, Part 135. The purpose of Section 3 is to ensure that employment
and other economic opportunities generated by HUD assistance or HUD assisted projects
covered by Section 3, shall, to the greatest extent feasible, be directed to low- and very low-
income persons, particularly persons who are recipients of government assistance for
housing, and to business concerns which provide economic opportunities to low- and very
low-income persons.
20
FORMS
21
QUESTIONNAIRE
1. Organization’s Name
2. Organization’s Address
3. Total Funding Requested: $
4. Name of President/Executive Director
5. Telephone Number Fax Number
6. Email Address___________________________________________________
7. Name and Title of Project Manager
8. Telephone Number Fax Number
9. Email Address___________________________________________________
10. Identify if the application is being submitted jointly with other nonprofit community
based organizations:
Yes (List other organization(s) by name):___________________________
No
11. Has your organization ever been suspended or debarred or is otherwise excluded
from or ineligible for participation in Federal programs under Executive Order 12549,
“Debarment and Suspension.”
_____ Yes _____ No
I CERTIFY THAT TO THE BEST OF MY KNOWLEDGE, information contained in this
proposal is accurate. By signing this application, the undersigned offers and agrees, if the
proposal is accepted, to furnish the items or services, subject to final negotiation by the City
of Rosemead, and subsequent contract award.
______________________________________________________________________
Signature of Executive Director (or authorized designee) Date
______________________________________________________________________
Print Name Title
22
PROJECT SUMMARY
Project Name: __________________________________________________________
Project type (please mark all that apply):
Rental Project - Estimated number of units: ___________
Homeownership Project - Estimated number of homes: __________
Unit type (please check all that apply):
Multi-family building(s)
Mixed-use commercial/residential
Condominium/Townhome
Single family detached
Funding Requested:
Acquisition $_______________
Construction $_______________
Rehabilitation $_______________
Soft Costs $_______________
Relocation Costs $_______________
Total funding requested $_______________
Anticipated location (provide a specific address, if known, or neighborhood boundaries):
______________________________________________________________________
Brief Project Description:
23
HOUSING PRIORITIES
Indicate the target population to be served and which objectives the project is designed to
meet. If you answer “yes” to any of the objectives, please provide brief description. All
households must be low income households (at or below 80% AMI).
Objective
Number
Objective Description Yes/No
1 Give priority to Rosemead Veterans and
their families.
Yes No
2 Provide affordable housing for Rosemead
families.
Yes No
If yes,
# of 2-br. Projected units = ______
# of 3-br. Projected units = ______
# of 4-br. Projected units = ______
3. Provide homeownership opportunities.
Yes No
If yes,
# of homebuyers assisted: _____
4. Project serves special needs population,
such as chronically homeless, victims of
domestic violence, persons with
disabilities, and/or youth aging out of
foster care.
Yes No
If yes, identify population type:
______________________________
& number of units: ___________
Attach a one-page narrative describing the population, community and number to be
served by the proposed project, including the type of affordable housing that will
result from this project. If your project will serve a special needs population or
provide services, describe the special needs population to be served and/or the
services that will be provided.
24
PROJECT PREPARATION
Number of years organization in operation:________ Date of incorporation: ___________
Number of years organization in housing development: __________
Total number of units produced: __________
Rehabilitated: __________
Owned: __________
Managed: __________
Constructed: __________
Estimate percentage of above total housing units produced that served very low and low
income persons:
30% of median and below __________
50% of median and below __________
80% of median and below __________
Over 80% of median __________
Number of employees/volunteers in organization: _________
Full-time employees _________
Part-time employees _________
Volunteers _________
Number of employees/volunteers to work on project: _________
Full-time employees _________
Part-time employees _________
Volunteers _________
Type of Proposed Project (Check one):
Rental
Homeownership
Project preserves and/or rehabilitates existing affordable units (Check one):
Yes
No
Please check Yes or No, as appropriate, for the proposed project and provide attachments
as indicated in the sequence below. Clearly label requested attachments as directed below
and place these attachments behind this worksheet.
1. Do you have a site(s) identified? If yes, provide location site map(s) for the project(s).
Label as Attachment 5a.
Yes
No
25
2. If the site is identified, do you anticipate the property requiring a rezoning/special use
permit for your proposed project?
Yes
No
3. Has total project financing been identified for this project?
Yes
No
4. Is project ready for implementation, assuming HOME funding under this RFP?
Yes
No
5. If no site has been identified, please indicate how potential properties will be
identified? What will be the property characteristics (bedroom size), neighborhood,
and price point?
Identify the age of the housing units to be preserved and/or rehabilitated: _________
Identify the condition of the housing units to be preserved and/or rehabilitated (Check one):
No rehabilitation needed;
Minor rehabilitation required (estimated rehabilitation costs are below $25,000 per
unit); or
Substantial rehabilitation required (estimated rehabilitation costs $25,000 or more per
unit.
If the proposed project is acquisition/rehabilitation for resale to a first-time homebuyer, how
will you ensure that the after rehabilitation value of the property does not exceed the
Homeownership Value Limits set by HUD?
Do you have schematics and a preliminary site plan for the project?
Yes
No
Do you have detailed cost estimates for rehabilitation work? If yes, submit one copy and
identify source of estimates. Clearly label.
Yes
No
Has an appraisal been completed for the property?
Yes
No
26
If yes, what is the appraised value of the property? $__________________
What is the assessed value of the property? $__________________
27
REFERENCES
Provide the contact information of three (3) current or former clients who have contracted
with your organization for similar projects.
Reference #1
Name of Agency
Name of Contact Person
Telephone Number
Email
Date of Agreement
Brief Description of Project:
Reference #2
Name of Agency
Name of Contact Person
Telephone Number
Email
Date of Agreement
Brief Description of Project:
Reference #3
Name of Agency
Name of Contact Person
Telephone Number
Email
Date of Agreement
28
Brief Description of Project:
29
ESTIMATED PROJECT COSTS AND FINANCING
Estimated Project Costs Per Unit Total
Acquisition:
Site preparation/demolition:
New construction:
Rehabilitation:
Other (financing, insurance,
legal fees):
Total Estimated Project Cost:
Project Financing Amount Committed
Proposed HOME Funds $
Equity source (describe each source): $ Yes No
Equity source: $ Yes No
Equity source: $ Yes No
1st Trust: $ Yes No
2nd Trust: $ Yes No
Total Project Financing: $
30
TOTAL HOME as % of Total Project Financing: _______% Complete for Rental
Projects only:
PROPOSED RENT SCHEDULE
No. of
Bedrooms
Income served a
percent of AMI
(30%, 50%, 80%,
market)
Number of units
by bedrooms/
income served
Rent Utilities
Complete for Proposed Homeownership Projects Only:
Number
of units
Square
Footage
No. of
Bedrooms/
Baths
Structure Type1 Acquisition &
construction
cost/unit
Sales
Price/unit
Targeted purchasers:
# of Purchasers: __________ Income as % of AMI: _________%
# of Purchasers: __________ Income as % of AMI: _________%
1 Single family detached, townhouse, or condominium
31
# of Purchasers: __________ Income as % of AMI: _________%
Does your proposed project include sweat equity requirements?
What is the minimum down payment the homebuyer will be required to make? ______%
How would the sales price be determined?
What other funds will be used for gap financing and/or down payment assistance?
Homebuyers must receive housing counseling. Please indicate who will provide housing
counseling and the qualifications of the provider.
32
CERTIFICATION
The undersigned has carefully examined RFP documents pertinent to the referenced
services, and further, being familiar with all other conditions affecting this proposal, hereby
agrees to furnish all labor, materials, etc., required to complete said services outlined in the
specifications and other documents.
Furthermore, the undersigned considers this response to the RFP valid for a period of 180
days after the due date.
______________________________________________________
Agency Name
______________________________________________________
Printed Name
Title
______________________________________________________
Authorized Signature
Date
______________________________________________________
Mailing Address
______________________________________________________
City State Zip Code
______________________________________________________
Telephone Number
______________________________________________________
Fax Number
33
NONCOLLUSION AFFIDAVIT
Proposer declares that the only persons or parties interested in this proposal as principals
are those named herein; that no officer, agent, or employee of the City is personally
interested, directly or indirectly, in this proposal; that this proposal is made without
connection to any other individual, firm, or corporation making a proposal of the same work
and that this proposal is in all respects fair and without collusion or fraud.
Note: This questionnaire constitutes a part of the proposal and signature on the signature
portion of this proposal shall constitute signature of this questionnaire.
In case of discrepancy between words and figures, the words shall prevail.
The names of all persons, firms, and corporations interested in the foregoing proposal as
principals as follows:
Pursuant to the requirements of Business and Professions Code Section 7028.15, the
representations made in this bid are made under penalty of perjury.
The undersigned are prepared to satisfy the City Council of the City of Rosemead of their
ability, financially or otherwise, to perform the contract for the proposed work and
improvements in accordance with specifications set forth.
____________________________________
Company Name
____________________________________
Print Name
____________________________________
Title
____________________________________
Signature
Dated_______________________, 20_____
34
CONFLICT OF INTEREST DISCLAIMER
The undersigned, ____________________________________________, declares that
(Print or Type Name)
______________________________________does have/does not have (cross one out)
(Name of Firm)
interest, ownership or receives or anticipates receiving remuneration of any type from the
manufacturer(s), supplier(s), or distributor(s) which may be recommended on the project, as
listed below.
Firm Product Remuneration
_____________________________________
Signature of President, Secretary, Partner,
Owner or Representative
______________________________________
Date
35
ACKNOWLEDGMENT OF INSURANCE REQUIREMENTS
AND CERTIFICATION OF ABILITY TO PROVIDE
COVERAGES SPECIFIED
I, _____________________________________, the ________________________
(President; Secretary; Owner or Representative)
of ________________________________________________________, certify that the
(Company Name or Corporation, or Owner)
Insurance Requirements set forth in Appendix B have been read and understood that our
insurance company(ies) __________________________
_____________________________________________________________________
(Name(s) of insurance company(ies)
is/are able to provide the coverages specified.
_____________________________________
Signature of President, Secretary, Partner,
Owner or Representative
_____________________________________
Date
36
APPENDICES
37
APPENDIX A
CHDO Checklist
The information contained in this checklist refers to the definition of Community Housing
Development Organization (CHDO) in the HOME Rule, Subpart A §92.2. This checklist is a
tool utilized by the City of Rosemead to track the required certification documentation that
must be submitted for CHDO certification. In order to receive consideration under the RFP,
your organization must provide the following documentation with your application packet.
I. LEGAL STATUS
A. The nonprofit organization is organized (and remains in good standing) with state and local laws, as
evidenced by:
_____A Charter, or
_____Articles of Incorporation
B. No part of the organizations net earnings shall inure to the benefit of any member, founder, contributor
or individual, as evidenced by:
_____ Articles of Incorporation
_____By Laws
C. A tax exemption ruling from the Internal Revenue Service (IRS) under section 501(c)(3) or 501(c)(4)
of the Internal Revenue Service Code of 1986:
_____Copy of IRS Letter or 501( c)(3) Certificate
OR
If classified as a subordinate of a central organization non-profit under Section 905 of the Internal
Revenue Code, as evidenced by:
______A group exemption letter from the IRS that includes the CHDO.
D. Has among its purposes, the provision of decent housing that is affordable to low and moderate income
people, as evidenced by a statement in the organizations:
_____ Charter,
_____ Articles of
Incorporation, _____ By Laws,
OR _____ Resolutions.
E. Has a clearly defined geographic service area:
_____ Written description, OR
_____ Map
II. CAPACITY
A. Conforms to the financial accountability standards of Attachment F of OMB Circular A-110, ”Standards
for Financial Management Systems”, as evidenced by:
38
_____ A notarized statement by the president or chief financial officer of the organization; OR _____
A certification from a Certified Public Accountant.
B. Has a demonstrated capacity for carrying out activities assisted with HOME funds, as evidenced by:
_____ Resumes and/or statements that describe experience of Key Staff members who have completed
projects similar to those to be assisted with HOME funds.
C. Has a history of serving the community2 in the construction of low income housing funded with HOME
funds, as evidenced by:
_____ Statement that documents at least one-year of experience in serving the community in either
housing, social services or economic development. Please attach substantiating documentation
that will confirm involvement in local activities (such as copies of minutes of local meetings,
announcements of activities, flyers, brochures, newspaper articles, recognition letters, awards,
etc.).
_____ For newly created organizations formed or sponsored by a non-profit agency such as local church,
service or community organization, provide a statement that documents that the parent
organization has had at least one-year of experience in serving the community they plan to serve.
III. ORGANIZATIONAL STRUCTURE
A. BOARD REPRESENTATION:
The CHDO must maintain at least one-third of its governing board’s membership for residents of
low income neighborhoods, other low income community residents, or elected representatives of low
income neighborhood organizations, as evidenced by the organization’s:
_____ By Laws,
_____ Charter, or
_____ Articles of Incorporation.
B. Provides a formal process for low-income program beneficiaries to advise the organization all of its
decision making. The process must allow constituents to advise the organization regarding design,
location, development and management of affordable housing projects, as evidenced by:
_____ By Laws
_____ Board Resolution, if not included in By Laws
_____ Copy of written operating procedures approved by the governing board.
IV. RELATIONSHIP WITH FOR-PROFIT ENTITIES
A. If the CHDO is sponsored or created by a for-profit entity, the for-profit entity may not appoint more
than one-third of the membership of the CHDO’s governing board. The board members appointed by
the for-profit entity may not, in turn, appoint the remaining two- thirds of the board members, as
evidenced by the CHDO’s:
_____ By Laws,
_____ Charter, OR
_____ Articles of Incorporation.
B. The CHDO is not controlled, nor receives directions from individuals, or entities seeking profit from
the organization, as evidenced by:
2 Community is broadly defined as Southern California region.
39
_____ A self-certifying statement.
_____ By Laws
C. A Community Housing Development Organization (CHDO) may be sponsored or created by a for-
profit, however:
1. The for-profit entity’s primary purpose does not include the development or management of
housing, as evidenced by:
_____ The for-profit organization’s by laws and;
2. The CHDO is free to contract for goods and services from vendor(s) of its own choosing, as
evidenced by the CHDO’s:
_____ By Laws,
_____ Charter, OR
_____ Articles of Incorporation.
40
APPENDIX B
INSURANCE
A. CHDO shall furnish or cause to be furnished to City evidence of:
1. Property insurance insuring the Program Property against all risks of loss,
excluding earthquake and flood, in an amount not less than one hundred
percent (100%) of the full insurable value of the Program Property;
B. CHDO shall at all times during the term of this Agreement carry, maintain, and keep
in full force and effect, with an insurance company admitted to do business in
California, rated “A” or better in the most recent A.M. Best Insurance Rating Guide,
and approved by City, a policy or policies of:
1. Broad-form commercial general liability insurance with minimum combined
single limits of One Million Dollars ($1,000,000) against any injury, death, loss
or damage as a result of wrongful or negligent acts by CHDO, its officers,
employees, agents, and independent contractors in performance of services
under this Agreement;
2. Automobile liability insurance, with minimum combined single limits
coverage of One Million Dollars ($1,000,000); and
3. Workers’ compensation insurance and employer’s liability insurance with a
minimum limit of One Million Dollars ($1,000,000) or the amount required by
law, whichever is greater.
C. Insurance policies required by the Agreement shall contain the following provisions:
1. Each insurance policy required hereunder shall be endorsed and state that the
coverage shall not be suspended, voided, canceled by the insurer or either party
to this Agreement, or reduced in coverage or in limits except after thirty (30)
calendar days’ prior written notice by certified mail, return receipt requested,
has been given to City.
2. City, its elected and appointed officials, officers, employees, attorneys, and
designated volunteers shall be covered as additional insurers as respects:
liability arising out of activities CHDO performs; products and completed
operations of CDHO: premises owned, occupied or used by CHDO. The
coverage shall contain no special limitations on the scope of protection
afforded to CITY, and its elected and appointed officials, officers, employees,
attorneys and designated volunteers.
3. Except for the workers’ compensation policy, coverage provided hereunder by
CDHO shall be primary insurance and not contributing with any insurance
maintained by City, and the policies shall contain such an endorsement. The
41
insurance policy or the certificate of insurance shall contain a waiver of
subrogation for the benefit of City.
4. CHDO's insurance shall apply separately to each insured against whom claim
is made or suit is brought, except with respect to the limits of the insurer’s
liability.
5. Any failure to comply with the reporting or other provisions of the policies,
including breaches of warranties, shall not affect coverage provided to City,
and its respective elected and appointed officials, officers, employees,
attorneys or designated volunteers.
D. All insurance coverages shall be confirmed by execution of endorsements required
under the Agreement. CDHO shall file certificates of insurance and the endorsements
with City on or before the date of commencement of services pursuant to this
Agreement, and thereafter maintain current endorsements on file with City. The
endorsements are subject to City’s approval. Certificates of insurance and
endorsements for Property Damage Coverage shall be provided to City prior to the
close of escrow for the purchase of the Program Property. The certificates and
endorsements are to be signed by a person authorized by that insurer to bind coverage
on its behalf. City may inspect complete, certified copies of all required insurance
policies at any time.
E. Any deductibles or self-insured retentions must be declared to and approved by City.
At City’s option, either the insurer shall reduce or eliminate such deductibles or self
insured retentions as respects City or its respective elected or appointed officers,
officials, employees and volunteers or CHDO shall procure a bond guaranteeing
payment of losses and related investigations, claim administration, defense expenses
and claims.
F. The procurement of the insurance policy or policies required under the Agreement
shall not be construed to limit CHDO’s liability under the Agreement or to fulfill the
indemnification provisions and requirements of the Agreement.
42
APPENDIX C
Income Limits
(2018 Adjusted HOME Income Limits)
Family Size 30% AMI 50% AMI 80% AMI
1 $20,350 $33,950 $54,250
2 $23,250 $38,800 $62,000
3 $26,150 $43,650 $69,750
4 $29,050 $48,450 $77,500
5 $31,400 $52,350 $83,700
6 $33,700 $56,250 $89,900
7 $36,050 $60,100 $96,100
8 $38,350 $64,000 $102,300
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APPENDIX D
HOME Maximum Per Unit Subsidy Limits
Effective November 7, 2017
Bedrooms HOME Maximum Subsidy
0 $144,050
1 $165,134
2 $200,801
3 $259,774
4+ $285,149
44
APPENDIX E
2018 HOME Program Rents
Bedroom Size Low HOME Rent High HOME Rent
0 $848 $1,067
1 $909 $1,163
2 $1,091 $1,397
3 $1,260 $1,605
4 $1,406 $1,771
5 $1,551 $1,936
6 $1,695 $2,101
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APPENDIX F
HOME Underwriting & Subsidy Layering Review Guidelines
A review of developer capacity and project feasibility will be conducted prior to approval of
the project. The City will follow CPD Notice 15-11 when conducting a subsidy
Layering/underwriting review. One of the purposes of the review is to ensure that the City is
not investing more HOME funds than is necessary and that the City is making a sound
investment over the long term.
I. APPLICATION:
For all HOME funded HOME-assisted rental and homebuyer projects, the developer must
first complete and application for funding. In the application for HOME funds, the developer
must list all sources of government assistance that may possibly be used for the project. In
addition, the developer must list the amount of each funding source and the use of the funds.
A detailed development and operating budget is also required.
II. UNDERWRITING ANALYSIS:
Once the application and all budget forms are received, the City will perform a subsidy
layering review. The underwriting analysis will consist of the following:
1. Identifying the types of funding involved (source, uses, amounts, type, maximum per
unit subsidy, and what firm commitments are in place). Funds cannot be committed
until all necessary financing is secured;
2. Reviewing financial capacity and experience of developer;
3. Determining if the project is feasible;
4. Reviewing costs to determine if they are reasonable, HOME eligible, necessary, and
will result in units meeting property standards;
5. Reviewing the reasonableness of the rate of return for developer (profit
reasonableness, developer fee);
6. Identifying the long term needs of the project and/or tenants (see homebuyer
projects);
7. Assessing market conditions of neighborhood where project will be located and
market demand for the proposed units;
8. Determining if there is any unreasonable risk of loss of funds and/or affordability; and
46
9. Review timeline to ensure that all HOME deadlines can be met: acquisition of
standard housing will occur within six months of the purchase agreement date, and
construction or demolition of the property can be expected to start within 12 months
of the agreement date. Project must also be completed within four years of the date
funds are committed.
A. Proforma Analysis
The developer must submit a proforma analysis showing the income and expenses
and reserve levels projected for the project over the term of the affordability period.
The City will review the projected rents (compliance with HOME rent limits),
assumptions on long-term income and expenses through the affordability period, and
adequate reserves for replacement. The rate of increase for income should be no
higher than 2% per year. May be less for special needs projects. Vacancy can be as
low as 2% in a tight market, but should be as much as 6% for projects serving special
needs and the chronically homeless. Operating expenses would include payment on
loans, utilities, gardening, maintenance, vacancy factor, property management fees,
taxes (if applicable), marketing, support services, and reserves for long-range capital
needs. Operating expenses should increase 4-4.5% each year.
The pro-forma should provide a reserve account for operating and replacement.
Replacement reserves should be sufficient and timely to address the long-term
capital needs identified in the City’s assessment.
Homebuyer projects
For homebuyer projects, the following review affordability analysis will be conducted
as a part of the affordability analysis:
1. Determine if subsidy level is adequate but not excessive given the income
eligibility requirements of the target population;
2. Ensure that homebuyer guidelines require proof of sufficient savings to meet the
down payment, cash reserves, and closing costs (if applicable);
3. Determine if homebuyer guidelines require that the housing costs (PITI) and total
debt fall within acceptable ratios; and
4. Review if HOME funds are being loaned to the homebuyer and determine if loan
to value ratio is adequate.
B. Return on Investment
In reviewing the proposal, the City must determine that the developer’s return on
investment is reasonable given the size, type, risk and complexity of the project. Also,
the City will consider the amount of equity investment the developer is committing to
the project.
47
Developer Fee
Generally, the developer fee may not exceed 15% for LIHTC or 10% for projects of
20 units or more (rehabilitation or new construction). For projects less than 20 units,
the developer fee may be as high 6% depending upon the complexity and the timeline
for the project. The more complex and lengthy that the project is the more developer
fee.
Project Income
Generally, southern California real estate appreciated at an average rate of 7.4
percent per year from 1985 - 2004. If the developer has invested no equity into the
project, they have taken on a very low level of risk unless they will also continue own
and manage the project after completion. If the project is expected to earn income
after deducting debt service, then the City’s loan will be amortized.
Conversely, if the developer has invested equity into the property, the developer
should expect a reasonable return on the equity invested. An analysis will be
conducted to determine the interest rate and repayment terms, while preserving the
affordability and long-term viability.
To determine the rate of return on the developer’s equity investment for a low risk
project, the annual cash flow will be divided by the equity invested. The resulting
percentage generally should not exceed the current 30 year Treasury yield curve rate.
However, in some cases more profit may be allowed in order to incentivize the
creation of deeply affordable housing or in recognition of other risk factors, so care
will be taken to consider what profit the developer could reasonably expect without
the HOME funds and limitations. Because each project is different, profit
reasonableness will be determined on a case-by-case basis.
C. Market Assessment
The City’s assessment of current market demand in the neighborhood where the
project is located will address pricing and absorption. Demand for all housing units
being developed, not just those designated as HOME-assisted, must be assessed.
The study will review whether the project can expect to receive the anticipated rent
or sales price in the location and with the amenities proposed, and if the rental or sale
of the project can occur in a timely manner.
The scope of the market analysis will depend largely on the scope of the proposed
project. Typically, the City will request that the applicant provide market data to
support the demand for the units at the proposed rent/sales price. For special needs
projects, current waiting list data provided by the developer may be considered
sufficient.
Securing reliable, independent, and timely data just for the City of Rosemead may be
difficult. When local data is not available, the City will accept regional data for Los
Angeles County. Unless the market is currently experiencing a decline, data may be
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4 to 6 years old. More current data or factors will be required during a market
downturn.
Generally, the City’s market analysis will include the following:
• Evaluation of general demographic, economic, and housing conditions in the
community.
• Delineate the market area by identifying the geographic area from which the
majority of a project’s tenants or buyers are likely to come.
• Qualify the pool of eligible tenants or buyers in terms of household size, age,
income, tenure (homeowner or renter), and other relevant factors. Not all residents
of the market area are potential or likely tenants or buyers of any given project.
• Analyze the competition by evaluating other housing opportunities with an
emphasis on other affordable rental developments or sales opportunities in the
market area, including those financed through either the HOME program or other
federal programs.
• Assess the market for the planned units and determine if there is sufficient
demand to sell the HOME assisted housing either nine months of construction
completion or to rent the HOME assisted housing within 18 months of project
completion.
• Evaluate the effective demand and the capture rate, usually expressed as a
percentage (the project’s units divided by the applicant pool). The capture rate is
the percentage of likely eligible and interested households living nearby who will
need to rent units in the proposed project in order to fully occupy it. The lower this
rate, the more likely a project is to succeed.
• Estimate the absorption period. Plan how many units can be successfully leased
or sold each month and how long it will take to achieve initial occupancy/sale of
the HOME units and stabilized occupancy for the project as a whole.
If other funders require an independent market study, the City will accept the
independent market study if the study meets the requirements outlined in the City’s
underwriting standards. The City will review any such studies and determine the
project’s likelihood of success.
D. Developer Capacity Assessment
The City will assess if the developer experience and financial capacity is acceptable
based on the size, scope, and complexity of the project.
Experience
The City will review the following information to assess developer capacity:
A list of past projects completed by the developer that are of similar nature to
the one proposed; and
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List of key staff and each person’s role in the project and their prior experience
and/or qualifications.
If the developer is lacking appropriate experience or staffing, the City may request
that the developer partner with another experienced developer to provide the
necessary capacity to the project.
Financial Capacity
The City will review the following information to determine if the developer has the
financial capacity to complete the proposed project:
Adequate financial management systems and practices through review of
developer’s net worth, financial statements, and audits; and
Sufficient financial resources to carry the project to completion or through initial
lease-up through a review of pre-development funding, cash on hand, and
liquidity of assets.
The cash needs of the project should not exceed the developer’s net or liquid assets.
E. Project Feasibility Review
In order to adequately underwrite a project, the City will assess a sources and uses
statement and an operating pro-forma (or sales and revenue plan for homebuyer
development projects).
Sources and Uses Statement
In the HOME Funding Application, the applicant must complete a sources and uses
statement. Based upon the sources of funding identified, the City will request the
following:
Firm commitment letters with all terms and conditions for all mortgages, grants,
bridge loans and investment tax credits;
If the applicant is a partnership or limited liability corporation, a copy of the
partnership agreement or operating agreements, which will indicate the cash
contributions by the partner(s) or members(s); and
If equity is committed by the developer or owner(s), evidence of available
equity funds.
Assessment of HOME Subsidy Amount
The City must ensure that the amount of HOME assistance is reasonable and
necessary. While evaluating sources, the City will determine the following:
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• Are total funding sources adequate and timely in their availability to cover
development costs at phases of the development – acquisition,
construction/rehabilitation, and permanent loan? All necessary financing must
be available to cover reasonable costs of development. The availability of
resources should match the project’s timeline and allow the City determine
when and for which items it will disburse HOME funds. The City will review the
commitment and availability of permanent funding sources, the repayment
terms of which need to be incorporated in the long term operating projections.
• Are other funding sources compatible with HOME, or do they contain different
requirements that affect the structure of the project, including unit mix, and are
these differences accommodated in the project plan? In the City’s review of
written commitments for other funding sources, the City will determine whether
there are provisions that: (1) conflict with HOME requirements; or (2) are not
reflected in the project plan. The availability of resources should match the
project’s timeline and allow the City to anticipate when and for which items it
will disburse HOME funds.
• Are the funding sources firmly committed? The City will review all firm written
commitments and amounts to ensure that the amount is necessary to complete
the project. Documentation of firm financing can include award letters, offer
letters, final term sheets, or other commitments which are conditioned upon
the receipt of HOME funds. The documents may not include automatic self-
expiring clauses or highly conditioned language. The commitment must have
all substantial terms tied to the proposed project.
In the case of LIHTC, the project must have received a reservation from the
Housing Credit Allocator and be able to provide a good faith offer of equity
investment from an investor prior to the issuance of a HOME commitment.
Uses
Uses are the project costs that are budgeted to be paid during development. The City
will review all costs to determine the gap between uses and other sources. The gap
should not be less than the amount of HOME funds to be provided.
In the HOME Funding Application, the applicant must provide a summary of estimated
project costs and attach a detailed development budget. For a less complex project,
the summary along with supporting documentation may be provided in lieu of a
detailed development budget.
The types of documents needed for the review may include:
Purchase Agreement;
Estimated Closing Statement;
Appraisal;
Construction cost estimate or preliminary bid(s);
Contracts or quotes for professional services;
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Agreements governing the various reserves which are capitalized at closing to
verify that the reserves cannot be withdrawn later as fees or distributions; and
For LIHTC, documentation on the syndication costs (legal, accounting, tax
opinion, etc.) from the organization/individual who will syndicate and sell the
offering to ensure that the project can support the fees necessary to
syndicate/fund the project.
The City must ensure that the costs are necessary and reasonable. While evaluating
uses, the City will determine the following:
• Are all of the proposed costs of development “necessary and reasonable” in
compliance with OMB cost principles contained in 2 CFR part 200? Costs are
considered necessary if they are required to implement the project in full
compliance with all program standards. For costs to be reasonable, the City
will evaluate appraisal information and bids/quotes. If the project involves
rehabilitation, the City will also prepare a cost estimate.
• Are the proposed costs sufficient to achieve all program requirements,
including property standards, to provide quality housing for at least the
affordability period? An essential part of this analysis is the project pro-forma
and estimated reserves. For projects involving rehabilitation, the City will
conduct a capital needs assessment to determine the useful life of major
systems, such as roof, heating, electrical, and plumbing.
• Are the costs proposed to be paid with HOME funds eligible under the HOME
rule at 24 CFR part 92.206?
III. SUBSIDY LAYERING
The analysis to determine the amount of investment needed to make a project feasible is
sometimes referred to as “gap analysis”, as it is used to determine the gap between
approved costs and availability financing or other subsidies.
The City will review the sources of funds, terms and equity invested. If the total amount
HOME assistance and other sources exceeds the amount the City determines is necessary
to make the project feasible and viable for the affordability period, the City may reduce the
amount of HOME assistance, increase number of HOME assisted units or lower the target
income levels and rents, and/or impose loan terms. The application for HOME funding will
be denied if the developer fails to make adjustments required by the City.
IV. RESULTS
Based on the underwriting analysis and subsidy layering review, the City will determine if the
HOME funds requested are necessary or reduce the HOME funding or deny the application
for HOME funds.
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The City will issue a written evaluation of the project application, which will be documented
in the project file.
V. REVISIONS
The Subsidy Layering/Underwriting review is performed prior to the beginning of the project.
However, after the project commences, conditions may change. For example, the initial
budget for relocation or rehabilitation may need to be adjusted to take into account
unexpected costs. Not all changes jeopardize the project, because the City verifies sufficient
developer equity and ensures that the budget has contingency funds before the project
starts. However, if the total project budget changes more than 5% or a funding source is lost
or added, a limited review will be conducted by the City to determine if the project remains
feasible and that the HOME subsidy amount is still appropriate.
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APPENDIX G
Application Checklist
1. Application Cover Sheet
Questionnaire Form
2. CHDO Certification
Documents listed in Appendix A
3. Project Summary
Project Summary form
4. Housing Priorities
Housing Priorities form
1-page Narrative
5. Project Preparation
Project Preparation form
2-page Narrative
Letter of agreement for collaboration (if applicable)
6. Management Capacity & Experience in Real Estate
2-page Narrative
References Form
7. Capacity for Project Financing and Leveraging
Estimated Project Costs and Financing form
Organization Budget
Three most recent annual audited financial statements
8. Other Forms
Certification
Noncollusion Affidavit
Conflict of Interest Disclaimer
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Acknowledgment of Insurance Requirements and
Certification of Ability to Provide Coverages Specified
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APPENDIX H
Evaluation Criteria
1. Housing Priorities (Maximum 25 points)
Proposal indicates which housing priorities listed in the RFP that the applicant’s project is designed to meet.
All HOME beneficiaries must be low income households (at or below 80% AMI).
Maximum 10 Points Maximum 15 Points Maximum 20 Points Maximum 25 Points
Proposal clearly
describes the population
to be served and
explains how their needs
will be served through
this project.
AND
All of the households to
be served by the project
will be low income (80%
or below AMI)
Proposal clearly
describes the population
to be served and
explains how their needs
will be served through
this project.
AND
All of the households to
be served by the project
will be low income (80%
or below AMI)
AND
More than 51% of the
population to be served
by the project is from one
of these categories:
Rosemead Veteran or
families.
Proposal clearly
describes the population
to be served and
explains how their needs
will be served through
this project.
AND
All of the households to
be served by the project
will low income (80% or
below AMI)
AND
More than 75% of the
population to be served
by the project is from two
of these categories:
Rosemead Veteran or
families.
AND
Project provides for
homeownership
opportunities.
Proposal clearly
describes the population
to be served and
explains how their needs
will be served through
this project.
AND
All of the households to
be served by the project
will be low income (80%
or below AMI)
AND
100% of the population
to be served by the
project is from two of
these categories:
Rosemead Veteran or
families.
AND
Project provides for
homeownership
opportunities.
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2. Project Preparation (Maximum 25 points)
Proposal provides evidence that the applicant has identified (or will identify) possible sites and will likely
complete acquisition within 6 months of award and full lease-up within 12 months of acquisition or sale within
6 months of acquisition.
Maximum 10 Points Maximum 15 Points Maximum 20 Points Maximum 25 Points
Proposal identifies
possible areas or sites
and indicates that
acquisition can be
completed within 6
months of award date.
Proposal identifies
possible areas or sites
and indicates that
acquisition can be
completed within 6
months of award date.
AND
Applicant has identified a
possible project site
(address).
Applicant has identified a
possible project site
(address).
AND
Applicant has a
preliminary plan for
acquisition (and rehab, if
applicable).
AND
Primary project financing
has been identified.
Applicant has identified a
project site and has a
purchase agreement or
ownership.
AND
Applicant has a
preliminary plan for
rehab, if applicable.
AND
All forms of non-HOME
financing have been
identified. Applicant’s
first lender has provided
a pre-approval letter
demonstrating that
applicant can likely
secure additional project
financing and/or
applicant already has
other funding
commitments.
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3. Management Capacity and Real Estate Experience (Maximum 25 Points)
Proposal demonstrates organizational capacity and paid staff to successfully complete project activities and
its objective(s) and presents how the project will be accomplished within a specified period.
Maximum 10 Points Maximum 15 Points Maximum 20 Points Maximum 25 Points
Proposal presents
demonstrated successful
track record as evidence
of adequate
organizational
experience in owning
and managing real
estate or developing new
housing and paid staff
that will be dedicated to
this project.
AND
Provides three
references for projects
similar to the one
proposed.
Proposal presents
demonstrated successful
track record as evidence
of adequate
organizational
experience in owning
and managing real
estate or developing new
housing and paid staff
that will be dedicated to
this project.
AND
Provides three
references for projects
similar to the one
proposed.
AND
Description of staff
involved and their
expertise as it pertains to
project activities.
AND
Proposal presents a
clear and reasonable
acquisition/rehab and
marketing or rental
management plan.
Includes a realistic
timeline proving for
resale to home buyers
within 12 months of
award date or for lease
up and full occupancy
within 22 months of
award date.
Proposal presents
demonstrated successful
track record as evidence
of adequate
organizational
experience in owning
and managing real
estate or developing new
housing and paid staff
that will be dedicated to
this project.
AND
Description of staff
involved and their
expertise as it pertains to
project activities.
AND
Proposal presents a
clear and reasonable
acquisition/rehab and
marketing or rental
management plan.
Includes a realistic
timeline providing for
resale to homebuyers
within 10 months of
award date or for lease
up and full occupancy
within 20 months of
award date
AND
Includes prospective
source of eligible tenants
or buyers.
Proposal presents
demonstrated successful
track record as evidence
of adequate
organizational
experience in owning
and managing real
estate or developing new
housing and paid staff
that will be dedicated to
this project.
AND
Description of staff
involved and their
expertise as it pertains to
project activities.
AND
Proposal presents a
clear and reasonable
acquisition/rehab and
marketing or rental
management plan.
Includes a realistic
timeline providing for
resale to homebuyers
within 8 months of award
date or for lease up and
full occupancy within 18
months of award date
AND
Includes a successful
leasing/resale process in
place that is adequately
described.
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4. Capacity for Project Financing and Leveraging (Maximum 25 points)
Maximum 10 points Maximum 15 points Maximum 20 points Maximum 25 points
Estimated project costs
and financing are clearly
described and within the
parameters of the RFP.
Financing plans are
feasible.
AND
Applicant shows
evidence of the ability to
leverage at least 12.5%
of total for estimated
project costs from non-
City funds.
Estimated project costs
and financing are clearly
described and within the
parameters of the RFP.
Documentation identifies
proposed project
financing.
Financing plans are
feasible.
AND
Applicant shows
evidence of the ability to
leverage at least 30% of
total for estimated project
costs from non-City
funds. This may include
soft commitments of
demonstrated capacity of
leverage funds.
Estimated project costs
and financing are clearly
described.
Documentation identifies
proposed project
financing.
Financing plans are
feasible and show a
positive cash flow.
AND
Applicant shows
evidence of the ability to
leverage a significant
amount of non-City funds
at least 40% of total for
estimated project costs
from all sources. This
may include past grants
or firm commitment of
funds for project
submitted under this
RFP.
Estimated project costs
and financing are clearly
described.
Documentation identifies
proposed project
financing.
Financing plans are
feasible and show a
positive cash flow.
AND
Applicant shows
evidence of the ability to
leverage a significant
amount of non-City funds
at least 50% of total for
estimated project costs
from all sources. This
may include past grants
or firm commitment of
funds for project
submitted under this
RFP.
Financing, other than
City funds, has been
committed or secured.
Applicant demonstrates
evidence of additional
commitments of non-City
financial and other
material resources that
are available to or
attainable by the
applicant and that will
significantly support the
project.