1. (a) Notification. Notification, via the Arkansas Development Finance Authority’s website at www.arkansas.gov/adfa, will be sent to all developers and affordable housing professionals advising them of the:

   1. (1) Availability of volume cap; and
   2. (2) Process for submission of applications.
2. (b) Submission of application. The applicant, developer, or its representative shall submit a completed 2009 Multi-Family Housing Application, including all required documentation and exhibits, with the application fee to the authority.

3. (c) Review of application.

   1. (1) Applications are reviewed by the authority’s multi-family housing staff for completeness and compliance with all requirements of this part and Low-Income Housing Tax Credit Program Qualified Allocation Plan, 15 CAR pt. 85.
   2. (2) Pursuant to Section 42(m)(1)(D) of the Internal Revenue Code, the application will be evaluated for compliance with the threshold requirements set forth in Section VI.B. of the QAP and the additional requirements for a complete application set forth in Section VI.C. of the QAP.

   3. (3)

      1. (A) The authority’s multi-family housing staff will conduct a review of the applicant’s previous performance related to the authority and other programs.
      2. (B) The applicant’s performance under the bond program to close previous bond transactions within the program requirements will be reviewed and could impact the funding decision.
      3. (C) In addition, unsatisfactory performance, as determined by the Board Housing Review Committee on previous developments, or delinquencies in payments will result in disqualification of an application by the authority’s Board Housing Review Committee.
   4. (4) All information submitted to the authority along with authority staff findings and notes may be shared with any issuing entity to assist the issuing entity with funding decisions.

4. (d) Covenant to execute certificate of bond proceeds expenditure.

   1. (1) With its application, the applicant must covenant that the borrower/user of the bond proceeds will execute and submit to the authority a certificate that designates the manner in which the proceeds of the bonds were applied to expenditures, by the earlier of:

      1. (A) Within six (6) months after the date on which the development is to be placed in service; or
      2. (B) At the time of submission of the development’s cost certification for the issuance of Internal Revenue Service Form 8609.

   2. (2)

      1. (A) Further, at bond issuance/closing, the borrower/user will execute a separate document/letter declaring the above covenant.
      2. (B) Such document/letter will be included with all other bond closing documentation.
5. (e) Extensions of the closing date. The bond closing must take place prior to the expiration of the reservation period, as extended, as provided for in 15 CAR § 73-105.

6. (f) Credit enhancement of private placement (Arkansas Development Finance Authority issues only).

   1. (1)

      1. (A) All multi-family transactions must be either credit enhanced or placed with a bank, registered investment company, insurance company, or "accredited investors", as defined in Rule 501 of Regulation D of the United States Securities and Exchange Commission, (“qualified investors”) who are willing to sign investor letters stating their qualifications to analyze and gauge risk relating to their investment in such issues.
      2. (B) The minimum rating requirement for credit enhancement to be eligible for multi-family bond issues would be “A” or better by Moody’s Investors Service or “A” or better by S&P Global Ratings at the time of closing.
   2. (2) Bonds issued and placed with accredited investors, as defined above, would be issued in initial minimum denominations of one hundred thousand dollars ($100,000) or any integral multiples of five thousand dollars ($5,000) in excess thereof.

7. (g) Formal presentation before Board Housing Review Committee.

   1. (1) All applicants will be required to make a formal presentation before the authority’s Board Housing Review Committee.
   2. (2) Applicants will be notified by the authority’s staff of the schedule for making the formal presentation.

   3. (3) The presentation shall include, but is not limited to, discussion of the following:

      1. (A) Demonstrated demand for affordable housing in the proposed project locale;
      2. (B) Project location;
      3. (C) Project size;
      4. (D) Unit types and bedroom mix;
      5. (E) Projected market and low-income unit mix;
      6. (F) Tenants to be served;
      7. (G) Proposed financing structure;
      8. (H) Readiness to close bond transaction within sixty (60) days;
      9. (I) Zoning and site plan approval status;
      10. (J) Background and experience of developer and development team;
      11. (K) Community support;
      12. (L) Energy efficiency/maintenance standards;
      13. (M) Detailed synopsis of rehabilitation work, if applicable;
      14. (N) Monitoring procedures; and
      15. (O) Serving special needs, e.g., elderly housing, housing for persons with physical disabilities, or housing for large families.

8. (h) Decision of Board Housing Review Committee.

   1. (1) The Board Housing Review Committee will make its recommendation of selected applications to the Board of Directors of the Arkansas Development Finance Authority.
   2. (2) The Board of Directors of the Arkansas Development Finance Authority will approve selected applications at a regular Board of Directors of the Arkansas Development Finance Authority meeting.

9. (i) Changes to the original application.

   1. (1) Any change to the original application must be submitted to the authority in writing at least thirty (30) days prior to the desired effective date of the change.
   2. (2) All changes must be reviewed and approved by the authority’s multi-family housing staff or the Board of Directors of the Arkansas Development Finance Authority.
   3. (3) Any change to the original application made without approval from the authority will be null and void.

10. (j) Reservation of volume cap by Arkansas Development Finance Authority.

    1. (1) All reservations of volume cap made by the authority will be made for the purpose of providing bond financing for a specific development on a specific site.
    2. (2) Any change in the development site, the applicant entity, the ownership entity, or the size, nature, or other characteristics of the development may, in the authority’s sole discretion, invalidate the reservation.
    3. (3) The applicant is obligated to report any changes to the authority.
    4. (4) Should the highest elected official withdraw the letter of support for the development at any time prior to the bond closing, the authority will invalidate the reservation for volume cap.
    5. (5) Revocation of the letter of support at any time after the bond closing will not affect the reservation for volume cap.

Codification Notes: Section 42(m)(1)(D) of the Internal Revenue Code is codified at 26 U.S.C. § 42(m)(1)(D).