Rental Housing Works (RHW)
Purpose of Rental Housing Works (RHW)
The purpose of RHW is to create jobs and strengthen the Maryland economy by providing
gap financing for the creation and preservation of affordable rental housing financed
through DHCD’s Multifamily Bond Program and Low Income Housing Tax Credit Program.
RHW is funded at $17.5 million for FY 2013.
RHW is subordinate gap financing to be used solely for projects financed using DHCD’s
Multifamily Bond Program (MBP) and 4% Low Income Housing Tax Credits (Tax Credits).
Therefore, projects requesting RHW funding must meet the requirements for both MBP
and Tax Credits, including those described in the Maryland Qualified Allocation
Plan (QAP) and Multifamily Rental Financing Program Guide (Guide).
The RHW appropriation is being made through DHCD’s existing Rental Housing programs
and, except as otherwise noted in this document, RHW funding is subject to the laws
(statutes, regulations and Program Guide), applicable to the:
- Rental Housing Production Program (RHPP), for general occupancy projects; or
- Elderly Rental Housing Program (ERHP), for age-restricted projects.
RHW funding requests will be evaluated and processed in conjunction with the project’s
MBP and Tax Credit application. For RHW projects also requesting other DHCD sources
of funding, such as Partnership Rental Housing Program (PRHP), Be Smart, Maryland
Housing Rehabilitation Program (MHRP) funds, the projects must also meet the criteria
for these additional funding sources.
RHW funding is governed by the laws applicable to DHCD’s Rental Housing programs,
including the requirement for a local contribution, with the following changes:
- Applicants for RHW funding do not need to compete in a DHCD Competition for LIHTCs
and Rental Housing Funds.
- RHW must be used in conjunction with DHCD’s tax-exempt bonds and 4% LIHTCs and RHW
applications should be submitted in conjunction with a MBP application.
- In addition to meeting DHCD’s MBP, LIHTCs, and RHF requirements, RHW applicants
must satisfy the following additional threshold criteria:
- Required zoning for use and density of development must be in place at the time
of application and properly documented. A letter from the local zoning office would
be proper documentation. An approved PUD resolution or a local jurisdiction’s equivalent
to a PUD resolution satisfies this requirement. Development or site plan approval
is not required at application. Conditional use or special exception approval also
is not required at threshold and is up to the developer to obtain before closing.
- The award of any competitive public and private sources of funding necessary for
the project’s financial feasibility must have been made; and
- The project’s projected FTE must be documented using the
FTE Job Calculator .
- The Board of Public Works must approve all RHW funding awards because the source
of the RHW funding is general obligation bonds.
Requests for RHW Funding
Beginning May 14, 2012, RHW Applications will be accepted on an
ongoing basis in conjunction with an application for the DHCD Multifamily Bond Program
(MBP) and 4% federal Low Income Housing Tax Credits (LIHTCs). For MBP applications
on file with DHCD prior to May 14, 2012, a request for RHW funding must be made
by completing the RHW application and submitting this application to DHCD on or
after May 14, 2012.
The RHW Application
Form may be downloaded from the DHCD website at: http://www.mdhousing.org/website/programs/RHW/documents/RHW_application.docx
- RHW applicants must submit and sign the RHW Application Form and provide the required
- DHCD will track applications based on date of receipt and will notify applicant
of the date received.
- RHW applications will be reviewed in conjunction with MBP applications.
- For projects already in process for MBP, DHCD will complete the threshold review
for RHW funding within 30 days of receipt of the RHW application.
- If the project does not meet the RHW threshold criteria, the RHW application shall
be rejected and removed from processing, and the Applicant notified in writing.
- The rejection notice shall state the reason the application has been rejected.
- The Applicant may address the threshold issues and submit a new application, which
will receive a new date of receipt.
- Projects that pass threshold will be scored using the Evaluation Criteria in the
Guide and must score at least 185 points, as required for MBP.
- Kick-off meetings will be scheduled for MBP/RHW projects after scoring is complete.
- At the kick-off meeting, a timeline and critical path schedule will be distributed.
- Projects will proceed in accordance with the agreed-upon schedule.
- Projects will be funded on a “first-ready, first served” basis.
Applicants should be aware that failure to meet processing timeframes and requirements
for the Multifamily Bond Program and other necessary sources of funding for the
project will affect the project’s ability to receive RHW funding.
Limitations on RHW Funding Amounts
Subject to an overall maximum loan amount per project of $2.0 million for new
construction and $1.5 million for acquisition/rehabilitation projects, RHW funding
amounts will be limited to the greater of $12,000/unit or $20,000/FTE.
FTE per project will be determined using DHCD’s Resource Allocation Model (RAM).
The FTE Job Calculator
to determine FTE is available at: http://www.mdhousing.org/website/programs/RHW/documents/RHW_calculator.xls
The total units in a project, including market rate units in mixed income projects,
will be used to determine funding levels using the per unit limit.
40 year term; 2% interest rate with DHCD agreeing to share 25% of cash flow with
DHCD will agree to share 50% of the cash flow for Multifamily Bond Projects with
RHW provided the following 3 conditions are met:
- More than 25% of the developer fee is deferred;
- The borrower agrees to equity sharing at the earlier of the sale or refinancing
of the RHW financed project. The equity share provided to DHCD will be the percentage
of net equity equal to the percentage of RHW funding to the total development costs
as calculated in the final cost certification. The equity share will be subject
to an overall cap based on tax considerations.
- There is no additional DHCD amortizing or cash flow debt on the property. DHCD grants
and deferred loans, including PRHP, CDBG and MAHT funds, will not preclude a project
from qualifying for a 50/50 cash flow split.
For More Information, Contact:
- Rental Housing Works
- Multifamily Housing Program
- Community Development Administration
- Maryland Department of Housing and Community Development
- 100 Community Place
- Crownsville, MD 21032-2023