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Presentation, discussion, and possible action regarding release of HOME-American Rescue Plan Non-Congregate Shelter Development Invitation to Apply
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RECOMMENDED ACTION
recommendation
WHEREAS, the Texas Department of Housing and Community Affairs (“TDHCA” or “the Department”) programmed $3,324,229 of the HOME-ARP funding into nonprofit capacity building and operating (NCO) costs to support organizations in successfully carrying out HOME-ARP non-congregate shelter (NCS) development, and programmed $56,511,887 in NCS development;
WHEREAS, in the summer of 2023, the Department submitted the HOME-ARP Allocation Plan First Amendment to the U.S. Department of Housing and Urban Development (HUD) for approval, which stated that the NCO and NCS funds would be targeted in Texas areas with high rates of unsheltered homelessness and high costs of living, and that NCS funds would only be available to organizations that received NCO;
WHEREAS, the Department received no comment from HUD within the review period signifying the first amendment is considered accepted; and
WHEREAS, on July 27, 2023, the Department’s Governing Board approved a conditional award to organizations that met the required criteria for NCO and subject to conditions outlined in the First Amendment, and reserved $56,511,887 for NCS development(s) conditioned on the completion of the NCO Invitation to Apply and the conditions of the First Amendment;
NOW, therefore, it is hereby
RESOLVED, that the Executive Director is authorized to amend to add funds to the 2024 HOME-ARP Non-Congregate Shelter Invitation to Apply without further Board approval from any remaining amounts in the other HOME-ARP activities or HOME-ARP administrative funds; and
FURTHER RESOLVED, that the Executive Director and his designees be and each of them hereby are authorized, empowered, and directed, for and on behalf of the Department, to release a 2024 HOME-ARP Non-Congregate Shelter Invitation to Apply in the amount of approximately $56,511,887, and to make any technical corrections or perform such other acts as may be necessary to effectuate the foregoing.
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BACKGROUND
TDHCA was allocated $132,969,147 of funds from HUD under Section 3205 of the American Rescue Plan Act. HUD issued waivers and new activities from HOME annual funds into HOME-American Rescue Plan (HOME-ARP), in the Community Planning and Development Notice 21-10 and Appendix (HUD 21-10). Per HUD CPD Notice 21-10, a non-congregate shelter (NCS) is one or more buildings that provide private units or rooms as temporary shelter to individuals and families and does not require occupants to sign a lease or occupancy agreement. NCS must have, at minimum, units with a bathroom sink, toilet, bath and/or shower; smoke detector; carbon monoxide detector; and either unit kitchens/kitchenettes or a communal space with communal kitchens.
The TDHCA HOME-ARP Allocation Plan First Amendment changed the method of distribution so that non-congregate shelter (NCS) development funds will only be awarded to recipients of the nonprofit capacity building and operating funds (NCO). The NCO funds were targeted in areas that met criteria demonstrating need for at least a medium-scale (50 units) NCS.
In July 2023, the Department conditionally awarded The Other Ones Foundation (TOOF) NCO funds. After submission and review of the application, TOOF was awarded $3,224,229 with a Contract that began in April 2024, for a two-year period. The Department reserves the right to award additional NCO funds according to the HOME-ARP First Amendment.
The 2024 HOME-ARP NCS Invitation to Apply will release $56,511,887 for NCS acquisition, construction, reconstruction or rehabilitation of a medium to large scale HOME-ARP NCS. Occupants of the NCS would have to meet the definition of a HOME-ARP qualified population, which includes persons experiencing homelessness and other vulnerable populations.
For the 2024 HOME-ARP NCS Invitation to Apply, the minimum request is $5,000,000. The maximum request is up to $50,000,000, and 100% of the HOME-ARP eligible costs. The loan structure provides interest as low as 0% and deferred forgivable or deferred interest and principal, for no less than 10 years and no more than 15 years, but not shorter than the Federal Restricted Use period. The Federal Restricted Use period for the NCS will be 15 years for new construction and 10 years for rehabilitation.
NCS is based on rental development rules, with many waivers and alternative requirements to account for the differences in NCS development. For example, there would be no pro forma for NCS since there is no rental income. Alternatively, NCS will need to show availability of operating funds. HOME-ARP funds are ineligible to be used for shelter operating per HUD CPD Notice 21-10. Therefore, the Applicant must submit a plan for securing additional private, local, state, or federal funding sufficient for any operating gap associated with the NCS developed under the Invitation to Apply.
Attachment A is the NCS Invitation to Apply, which includes the waivers from existing rules for rental development. Once approved, HOME-ARP staff will send the Invitation to Apply directly to awardees of NCO funds. Applications will be accepted starting July 15, 2024, through December 31, 2024, or as extended by the Executive Director.