Operating Assistance Grants Program(OAG)

Purpose

The Operating Assistance Grants Program consists of two types of grants -- production and capacity building.

Production Grants

The purpose of awarding production grants is to support the capacity of active nonprofit housing developers to facilitate the production and rehabilitation of limited income housing.

Eligible recipients include nonprofit organizations engaged in the production of affordable housing. For the purposes of these policies, a nonprofit organization is a corporation, foundation, or other legal entity, no part of the net earnings of which inures to the benefit of any private shareholder or individual holding any interest in such entity.

Capacity Building Grants

The purpose of awarding capacity building grants is to develop the capacity of inexperienced nonprofit organizations to undertake the development of affordable housing and to assist existing nonprofit organizations to undertake new types of affordable housing activities.

Eligible recipients include inexperienced nonprofit organizations or existing nonprofit organizations that are undertaking new types of affordable housing activities.

Amount of Funds

At the beginning of each fiscal year, up to one percent (1%) of the total aggregate amount of budgeted moneys in the Rental Housing Programs Fund, Homeownership Programs Fund and Special Loan Programs Fund will be made available to eligible nonprofit organizations. Additional funds appropriated from any other source may also be included.

Allocation of Funds

Approximately half of the funds from each Program will be awarded as grants for the production of qualified housing in those activities. The remaining funds will be awarded as capacity building grants.

Eligibility Criteria

Production Grants

Active nonprofit housing producers will be eligible for production grants based on the following criteria:

1. Evidence of one of the following:
   1. Financing Source(s). Commitment letters, reservation letters or other evidence satisfactory to the Department made during calendar year 2010 for a loan or grant to finance the acquisition, construction, or rehabilitation of:
      1. Rental housing which is eligible for financing through the Department’s rental housing programs.
      2. A group home which is eligible for financing through the Department’s Group Home Financing Program, or
      3. Single-family for-sale housing or an advanced reservation of mortgage funds for income eligible households to purchase housing developed by a nonprofit organization, which are eligible activities through the Department’s homeownership programs.
   2. Nonprofit organization's assistance to individuals in applying for a loan to finance a home which is eligible for financing through the Department’s homeownership programs or to individuals applying for a loan through the Department’s Lead Hazard Reduction Grant and Loan Program. Evidence must include a copy of the deed of trust, settlement sheet or other loan document that provides the name of the borrower, the address of the property and the closing date (Note: assistance must have been provided to individuals in calendar year 2010). Homeownership programs include the production of affordable homeownership units and/or assisting an individual to obtain a loan under the homeownership programs.
2. Certification that project serves families with incomes at or below 60% of area median income as established by HUD. Mixed income projects will receive funds based on the proportion of low-income units to the total number of units.
3. Evidence that the nonprofit has owned, developed or sponsored at least one affordable housing project which has been in operation for a minimum of one-year prior to requesting operating assistance; or has provided assistance to individuals making applications for loans to purchase, construct or rehabilitate affordable housing. A local government approved by the Department may certify that the nonprofit organization's efforts were responsible for the origination of the applications will satisfy this requirement.

Capacity Building Grants

Newly-formed or inexperienced nonprofit organizations and nonprofits that are undertaking new housing activities that request capacity building grants must:

1. Identify and give a description of matching funds and resources. The matching contribution amount is as follows:
   for grants with a term of more than 1 year, the contribution shall equal $1 to every $3 of grant funds in the first year, $1 for every $1 of grant funds in the second year, and $2 for every $1 of grant funds in the third year.
2. Provide staff resumes reflecting the experience required to produce the type of housing being planned, and
3. Submit a Plan of Development Goals covering a minimum of five years, which clearly sets forth the objectives of the organization, its affordable housing production goals and a timetable for implementation.

Maximum Awards

Production Grants

Grants are awarded on a first-come, first-serve basis.

1. For qualified rental housing projects, the grant amount is one percent of the loan or grant amount evidenced by a reservation or commitment of funds for the development or pre-development costs associated with a housing project, up to a maximum of $13,000.
2. For qualified group home projects, the grant is $750 for each project. Grants awarded for this purpose to a single nonprofit organization in one fiscal year may not exceed $1,500.
3. For qualified homeownership programs, the grant is $100 for each unit of housing identified by a nonprofit organization in a reservation or commitment of funds in its grant application. The grant may not be less than $1,000 or more than $5,000.
4. For nonprofit organizations that assist individuals in making applications for loans under the other special loan programs or the Lead Hazard Reduction Grant and Loan Program, the grant is $150 for each individual application submitted to the Department. The total amount of funds awarded for this purpose to a single nonprofit organization in one fiscal year may not exceed $5,000.

Capacity Building Grants

A maximum grant of $65,000 for up to three years, with $30,000 disbursed in the first year, $20,000 in the second and $15,000 in the third.

Disbursement of Funds

Production grants will be disbursed in a lump sum by the end of the fiscal year. Capacity Building grants will be disbursed quarterly to pay for eligible costs anticipated to be incurred as well as costs actually incurred by the nonprofit in the previous quarter upon approval.

General Conditions

1. The allocations between types of grants are expected to remain relatively constant. If sufficient qualified applicants are not available in any given year to use the capacity building grant allocation, the funds allocated to capacity building may be used to provide production grants to qualified nonprofit housing producers.
2. Nonprofit organizations will be required to submit a request for production or capacity building grants on a form to be provided by the Department.
3. Along with its request for operating assistance, the nonprofit must provide evidence of good standing within the State.
4. A committee appointed by the Department will evaluate applications and make recommendations for awards to the Secretary.
5. The Department will use its best efforts to promote geographic distribution.
6. The Department will use its best efforts to select from each of the three program areas.
7. For production grants, funds may be used for any purpose for which grantee is legally authorized to expend funds.
8. Projects are eligible for production grants one-time only.
9. For Homeownership assistance, assistance must have been provided in the previous calendar year.
10. For both production and capacity building grants, applicants must: have the legal capacity to enter into a grant agreement; satisfy all legal requirements to operate in the State; and, not have defaulted on a prior loan from the Department nor be currently debarred or suspended from any of the Departments programs.
11. For production grants, applicants may not have previously received a production grant and failed to complete the project in a timely manner.
12. For capacity building grants, applicants may not have received a prior capacity building grant and may not have participated within the 2 years before the application in any projects or activities financed by the housing programs for which it is applying to develop capacity.

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