HomeMy WebLinkAbout2020-03-12 HRA Regular Meeting PacketAgenda
Edina Housing and Redevelopment Authority
City of Edina, Minnesota
Council Chambers
Thursday, March 12, 2020
7:30 AM
I.Call to Order
II.Pledge of Allegiance
III.Roll Call
IV.Approval of Meeting Agenda
V.Community Comment
During "Community Comment," the Edina Housing and Redevelopment
Authority (HRA) will invite residents to share new issues or concerns that
haven't been considered in the past 30 days by the HRA or which aren't
slated for future consideration. Individuals must limit their comments to
three minutes. The Chair may limit the number of speakers on the same
issue in the interest of time and topic. Generally speaking, items that are
elsewhere on today's agenda may not be addressed during Community
Comment. Individuals should not expect the Chair or Commissioners to
respond to their comments today. Instead the Commissioners might refer the
matter to sta. for consideration at a future meeting.
VI.Adoption of Consent Agenda
All agenda items listed on the consent agenda are considered routine and
will be enacted by one motion. There will be no separate discussion of such
items unless requested to be removed from the Consent Agenda by a
Commissioner of the HRA. In such cases the item will be removed from the
Consent Agenda and considered immediately following the adoption of the
Consent Agenda. (Favorable rollcall vote of majority of Commissioners
present to approve.)
A.Minutes: Draft Minutes of the Regular Meeting February 13, 2020
VII.Reports/Recommendations: (Favorable vote of majority of Commissioners
present to approve except where noted)
A.2020 A.ordable Housing Program Policy Guide
B.Presentation on Max7eld Housing Study
VIII.Correspondence
A.Correspondence
IX.HRA Commissioners' Comments
X.Executive Director's Comments
XI.Adjournment
The Edina Housing and Redevelopment Authority wants all participants to be
comfortable being part of the public process. If you need assistance in the way of
hearing ampli7cation, an interpreter, large-print documents or something else,
please call 952-927-8861 72 hours in advance of the meeting.
Date: March 12, 2020 Agenda Item #: VI.A.
To:Chair & Commissioners of the Edina HRA Item Type:
Minutes
From:Jennifer Garske, Executive Assistant
Item Activity:
Subject:Minutes: Draft Minutes of the Regular Meeting
February 13, 2020
Edina Housing and Redevelopment
Authority
Established 1974
CITY OF EDINA
HOUSING & REDEVELOPMENT
AUTHORITY
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
Approve the regular meeting minutes of Feb. 13, 2020.
INTRODUCTION:
See attached meeting minutes of Feb. 13, 2020.
ATTACHMENTS:
Description
Minutes: HRA, Feb. 13, 2020
Page 1
MINUTES
OF THE REGULAR MEETING
OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY
FEBRUARY 13, 2020
7:30 A.M.
I. CALL TO ORDER
Chair Hovland called the HRA meeting to order at 7:30 a.m.
II. ROLL CALL
Answering rollcall were Commissioners Anderson, Brindle and Chair Hovland.
Absent: Commissioners Fischer and Staunton.
III. PLEDGE OF ALLEGIANCE
IV. APPROVAL OF MEETING AGENDA – AS PRESENTED
Motion made by Commissioner Anderson, seconded by Commissioner Brindle approving the
meeting agenda as presented.
Ayes: Anderson, Brindle and Hovland
Motion carried.
V. COMMUNITY COMMENT
No one appeared.
VI. APPROVAL OF CONSENT AGENDA – AS PRESENTED
Motion made by Commissioner Brindle, seconded by Commissioner Anderson approving the
consent agenda as presented.
VI.A. Minutes of the Regular Meeting of January 16, 2020
Ayes: Anderson, Brindle and Hovland
Motion carried.
VII. REPORTS/RECOMMENDATIONS
VII.A. APPROVING LOAN AGREEMENT WITH EDINA HOUSING FOUNDATION FOR THE
PURCHASE OF 4040 W. 70TH STREET - APPROVED
Affordable Housing Manager Hawkinson explained that on December 12, 2019 the Housing & Redevelopment
Authority reviewed and approved a Term Sheet that identified the basic business points supporting the use of
public funds for the acquisition by the Edina Housing Foundation (the “EHF”) of 4040 W. 70th St. (the “Site”)
from American Collectors Association. The purpose of this acquisition was to provide the EHF with the
opportunity to secure a developer for the construction of age-restricted, affordable housing estimated at 118
units. The Term Sheet was intended to serve as the general framework of a Loan Agreement to be executed
between the EHF and Edina HRA. City Council held a Public Hearing December 17 regarding modifying the
Southeast Edina Redevelopment Project Area and TIF Plan that would allow Southdale 2 TIF Pooled funds to be
used for this acquisition. She outlined the proposed Loan Documents between the HRA and EHF and highlighted
business terms outlined in the Term Sheet that included a $3,650,000 loan secured by a non-recourse mortgage,
zero percent interest for two years with two one-year extensions. As allowed in the Purchase Agreement, the
seller had opted to extend the closing date until June 1, 2020, therefore the Maturity Dale of the Loan Documents
was June 1, 2022. Ms. Hawkinson said the Foundation would actively seek a developer through a competitive
Request for Proposal process; review the proposals for developer experience, capacity and quality of work; and
conduct interviews, and noted the Greater Southdale District Plan supported the development of affordable age-
restricted housing. She shared next steps that included EHF solicitation for development proposals this spring
with selection by fall and Planning Commission and City Council in 2021.
The Commission inquired about the meaning of a non-recourse loan. Alex Sellke, Dorsey & Whitney LLP,
explained if there was a loan default the HRA remedy would be to take the property back as lenders rights were
in the property instead of repayment.
Minutes/HRA/February 13, 2020
2
Ms. Hawkinson added the Foundation did not have assets to pay back in cash if in default and this protected
them from being sued as individuals or as the Foundation.
The Commission confirmed insurance was in place that insulated Board members in that instance then clarified
the TIF district limit of 40 years referred to the affordability of the project and not the term.
Motion made by Commissioner Anderson, seconded by Commissioner Brindle to approve the
Loan Agreement, Promissory Note and Mortgage (“Loan Documents”) between HRA and Edina
Foundation documents for $3.65 million.
The Commission confirmed the maturity date was two years then commented how when first brought forward
there were concerns about the City conducting development but noted this action would create a much-needed
housing type with age-restricted housing and hoped a non-profit developer with experience in this housing type
would be identified as this location would be good for senior housing. Ms. Hawkinson clarified the maturity also
included two one-year extensions.
Ayes: Anderson, Brindle, and Hovland
Motion carried.
VII.B. AUTHORIZATION OF ACQUISITION OF 425 JEFFERSON AVENUE SOUTH, EDINA -
AUTHORIZED
Executive Director Neal explained City staff had been working with the owners of 425 Jefferson Ave. S. to abate
property maintenance nuisance conditions and the property had caused disruption and discontent in the
neighborhood for the past two years. City staff approached the owners with a tentative proposal to purchase
the real estate and abandoned personal property and they expressed interest in the tentative proposal. He stated
staff would like the HRA’s authorization before moving forward with any tentative proposal. He said staff propose
would use funds from the City’s Affordable Housing Trust Fund for acquisition and use the rehabilitated property
as part of the affordable housing initiative and would present a firm plan for how the property would be used
when a final purchase agreement was presented to the HRA later this spring for an affordable single-family home.
The Commission spoke about interest in this property and impacts on the immediate neighborhood and if the
property had been inspected. Mr. Neal said staff had inspected the property and noted since the photos were
taken a house fire had occurred which complicated the property further. He said he hoped the property could
be rehabbed and disposed for management by an affordable housing organization.
The Commission said precedent was set when situations like this arose and was pleased we could take advantage
when present to benefit all involved. They thanked the neighborhood for bringing this property to the City’s
attention and said they liked the flexibility when public health and safety concerns needed to be addressed. They
referred to another property 58th and Wooddale and how this would go better working with the Housing
Foundation and develop a land trust as a great solution for all involved.
Motion made by Commissioner Anderson, seconded by Commissioner Brindle to authorize
Executive Director to negotiate a tentative purchase agreement for 425 Jefferson Avenue South.
Ayes: Anderson, Brindle, and Hovland
Motion carried.
VIII. CORRESPONDENCE – RECEIVED
IX. HRA COMMISSIONERS’ COMMENTS - RECEIVED
X. EXECUTIVE DIRECTOR’S COMMENTS
XI. ADJOURNMENT
Chair Hovland adjourned the HRA meeting at 7:55 a.m.
Respectfully submitted,
___________________________________________
Scott Neal, Executive Director
Date: March 12, 2020 Agenda Item #: VII.A.
To:Chair & Commissioners of the Edina HRA Item Type:
Report / Recommendation
From:Stephanie Hawkinson, Affordable Housing
Development Manager Item Activity:
Subject:2020 Affordable Housing Program Policy Guide Action
Edina Housing and Redevelopment
Authority
Established 1974
CITY OF EDINA
HOUSING & REDEVELOPMENT
AUTHORITY
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
Approve proposed changes to the Affordable Housing Program P olicy Guide.
INTRODUCTION:
The Affordable Housing P rogram Policy Guide (“Guide”) was updated in response to P roperty Managers’
questions and feedback received from site visits over the past year. T he updated 2020 Guide is attached for
review and approval.
The Guide is intended to assist owners and managers of new multifamily housing development that include
affordable units.
In collaboration with Affordable Housing Connections, Staff recommends the proposed changes.
ATTACHMENTS:
Description
Staff Report
2020 Affordable Housing Program Guide - Clean
2020 Affordable housing Program Guide - Redlined
Questions and Answers Regarding Policy Implementation
Development Summaries
March 12, 2020
Chair and Commissioners of the Edina HRA
Stephanie Hawkinson, Affordable Housing Development Manager
2020 Affordable Housing Program Policy Guide
Information / Background:
The Affordable Housing Program Policy Guide (“Guide”) was updated in response to Property Managers’
questions and feedback received from site visits over the past year. The updated 2020 Guide is attached for
review and approval.
On December 13, 2018 the HRA approved the first Guide and directed staff to make changes to tailor the
language to fit the City’s New Multifamily Affordable Housing (“Policy”). These changes were made and the
policy was reviewed and approved by the Edina Housing Foundation. Since March 2019 the Guide has been
attached to the Development Agreements for Market Rate Housing Developments that include affordable
units per the Policy.
In the ensuing year the City’s third party compliance consultant, Affordable Housing Connections (AHC),
has been meeting with property managers and reviewing tenant files for the affordable units to confirm they
are complying with the Policy. Based on questions and concerns that arose, the Guide has been revised in
order to add clarity. It is important to note that most of the buildings that currently include affordable units
were approved prior to the Policy being updated in March 2019 and prior to the approval of the Guide.
Therefore, the affordability requirements are based on the Resolutions and Loan Agreements that were
adopted for each individual development, which may not include all the requirements in the current Policy
or Guide. To assist with these discrepancies, AHC created summary sheets for each development, which
are attached to this report.
The primary changes to the Guide were made to align it better with the Policy. Previously the language was
adopted from HUD’s HOME guidelines or Section 42 regulations, which in some cases was overly rigid and
onerous, and did not apply to affordable units in market rate developments. Other changes were
grammatical or made to add clarity. Of note are the following updates:
STAFF REPORT Page 2
• Definition of Student Household – Some HUD programs do not allow for student households. The
Guide allows renting to students if certain conditions are met.
• Utility Allowance – Affordable rent levels must be adjusted if the tenant is paying utilities so that
rent plus utilities is at or below the maximum rent. Each year Metro HRA publishes a Utility
Allowance Table, which is used to adjust the rent. However, this table uses values derived from
multiple buildings, some of which are old and not energy efficient. If an owner can demonstrate that
utility billing in their new building will be less than what is on the published table, an adjustment may
be allowed.
• Income Verification - AHP has provided assistance to Property Managers on how to income verify
tenants. This was the most prevalent area of concern. The Guide attempts to provide additional
information.
A sample of property manager questions in addition to development summaries are attached to this report.
March 2020 Page 1 of 31
Affordable Housing Program
Policy Guide
March 2020
March 2020 Page 2 of 31
Table of Contents
Introduction to the Affordable Multi-Family Housing Program
(AHP) ..............................................................................................4
Chapter 1 – Overview of Affordable Housing Program Policy ...........5
1.01 Period of Affordability (POA) ................................................................................................................. 5
1.02 Affordable Dwelling Units (ADUs) ........................................................................................................ 5
Affordability Standards – Rental Projects ........................................................................................................... 5
Affordability Standards – For Sale Projects ......................................................................................................... 6
1.03 Student Households ............................................................................................................................... 6
1.04 New Multi-Family Affordable Housing Program (AHP) Rent Limits ..................................................... 6
1.05 Rental Assistance .................................................................................................................................. 7
1.06 Allowable Fees and Charges .................................................................................................................. 7
1.07 Fixed or Floating Affordable Dwelling Units .......................................................................................... 8
1.08 Rent Increases ....................................................................................................................................... 8
1.09 Utility Allowances ................................................................................................................................. 8
1.10 Record Retention ................................................................................................................................ 10
1.11 Leases .................................................................................................................................................. 10
1.12 Income Certification ............................................................................................................................ 11
1.13 Increases in Income ............................................................................................................................ 11
1.14 Property Standards ............................................................................................................................. 11
1.15 Affirmative Fair Housing Marketing Plan ........................................................................................... 12
1.16 Fair Lease and Grievance Procedures .................................................................................................. 12
Chapter 2 – Maintaining the Unit Mix ............................................ 12
2.01 Fixed Affordable Dwelling Units .......................................................................................................... 13
2.02 Floating Affordable Dwelling Units .................................................................................................... 13
Chapter 3 – General Occupancy Guidelines .................................... 15
3.01 Qualification of Applicants ................................................................................................................. 15
3.02 Eligibility Determination ..................................................................................................................... 16
3.03 Change in Household Composition ...................................................................................................... 16
3.04 Minimum Lease Requirements ............................................................................................................ 17
3.05 House Rules ......................................................................................................................................... 17
3.06 Number of Persons Per Unit ............................................................................................................... 17
3.07 Tenant Selection Plan ......................................................................................................................... 18
March 2020 Page 3 of 31
3.08 Government Data Practices Act Disclosure Statement Form ............................................................. 18
3.09 Income Verification ............................................................................................................................. 19
3.10 Gross Annual Household Income ........................................................................................................ 19
3.11 Factors that Affect Household Size ..................................................................................................... 20
3.12 General Income Verification Requirements ......................................................................................... 21
3.13 Corrections to Documents ................................................................................................................... 24
3.14 Effective Term of Verifications ............................................................................................................ 24
3.15 Over Income Households ..................................................................................................................... 24
3.16 Annual Recertification ........................................................................................................................ 24
3.17 Tenant Files ......................................................................................................................................... 25 Chapter 4 – Reporting Requirements ............................................. 27
4.01 Annual Owner/Agent Certifications .................................................................................................... 27
4.02 Compliance Reports ............................................................................................................................. 27
4.03 Utility Allowance Source Document ................................................................................................... 27 Chapter 5 – Compliance Inspections .............................................. 28
5.01 Physical Inspections ............................................................................................................................ 28
5.02 Review of Tenant Files and Property Records ..................................................................................... 28 Chapter 6 – Correction and Consequences of Non-Compliance ...... 29
6.01 Notice to Owner/Agent ....................................................................................................................... 29
6.02 Correction Period ................................................................................................................................ 29
6.03 Owner’s/Agent’s Response .................................................................................................................. 29 Chapter 7 – Requests for Action .................................................... 31
7.01 Sale or Transfer ................................................................................................................................... 31
March 2020 Page 4 of 31
Introduction to the Affordable Multi-Family Housing Program (AHP)
Properties developed using financing from the City of Edina, or because of our policy for New
Multi-Family Affordable Housing, are subject to specific rules designed to ensure that
affordability pledges made by owners and developers remain available to very low and low
income tenants (30% to 60% of Area Median Income) throughout the required Period of
Affordability (the POA). This Guide is designed to assist owners and their agents with planning
and maintaining compliance with the local requirements associated with these rental
properties that include affordable units. This guide does not pertain to the Market Rate units.
It is the responsibility of City of Edina Housing and Redevelopment Authority (hereafter the
“HRA”) to monitor the continuing compliance of affordable units in accordance with local policy
and governing agreements throughout the POA. The following procedures apply to all rental
properties that received funds or a Planned Unit Development (PUD) under the local policy on
New Multi-Family Affordable Housing (AHP). Any violation of the AHP requirements could
constitute a covenant default of the governing agreement(s) and imposition of all local
government rights and remedies.
While successful operation of an affordable property is management intensive, the
owner/agent is responsible for ensuring that the governing agreement requirements are
properly administered. Thorough understanding of requirements and compliance monitoring
procedures requires training of owners/agents. The owner/agent should ensure that it knows
and understands the requirements of the affordable housing policy and the compliance
requirements since failure to comply may have very serious consequences. The HRA
recommends that owners, management agents and site managers (collectively referred to as
“owner/agent” throughout this document) receive compliance training before certifying or
leasing any affordable units. At a minimum, training should cover key compliance terms,
determination of rents, household eligibility, file documentation, procedures for maintaining
the required unit mix and reporting. Record retention and property condition standards are
also key to maintaining compliance. Attending educational opportunities as offered is strongly
recommended to keep up with any procedural changes to the AHP.
Should the AHP assisted property also receive an allocation of Section 42 tax credits (Low
Income Housing Tax Credits or LIHTC), and the property is found to be compliant with the tax
credit program, then the HRA will consider the property compliant with the AHP.
Owners/Agents of AHP assisted properties must annually certify to the HRA that the property
is compliant with the Low Income Housing Tax Credit program.
The HRA’s determination to monitor the project for compliance with requirements of the AHP
does not make it liable for an owner’s/agent's noncompliance. This Guide will be made
available to the owner/agent at project financial closing and will be posted on the City’s
website. The HRA, in its sole discretion, may delegate its compliance reporting and monitoring
responsibilities to a third-party. AHP assisted properties will have a compliance review at initial
lease up and every third (3rd) year thereafter. However, the HRA reserves the right to conduct a
March 2020 Page 5 of 31
compliance review annually. During the compliance review, the HRA or third-party monitoring
agent, will ensure compliance against City Agreements by inspecting records of residential
student status, income and asset documentation, and rent record for each resident household
for all project’s AHP assisted units. The first review for new projects will occur no later than the
end of the second year of the period of affordability.
Chapter 1 – Overview of Affordable Housing Program Policy
The following is an overview the Affordable Housing Policy. It is not intended to be detailed or
comprehensive. The requirements of the AHP apply to market rate residential developments
that receive a PUD approval from the City of Edina and/or financial assistance from the HRA.
This includes new developments and mixed-used developments that create twenty (20) or
more multi-family dwelling units and/or any change in use of all or part of an existing building
from a non-residential use to a residential use that includes at least twenty (20) dwelling units.
1.01 Period of Affordability (POA)
Affordable units created under the Affordable Housing Policy (AHP) are rent and income
controlled for a minimum of 20 years with a maximum established by the funding source and
reflected in the binding agreement. This term is referred to as the Period of Affordability or
POA.
Owners/agents should refer to the property’s governing agreements, at project commitment,
to determine the specific terms and conditions that govern the property, as the affordability
period was increased from 15 years to 20 years in March 2019.
Project Commitment is a schedule of commitments within the project’s Financing Agreement(s)
between the parties hereto, such as the authorizing Resolution, Development Agreement
and/or Loan Documents, dated as of the Execution Date and their related agreements.
1.02 Affordable Dwelling Units (ADUs)
At least ten percent (10%) to twenty percent (20%) of the total number of dwelling units in a
development receiving a PUD and/or assisted with local funds under the AHP will be designated
as Affordable Dwelling Units (ADUs). The percentage applied is based on the affordability
standard of the development.
Affordability Standards – Rental Projects
If an AHP property also is assisted with Low Income Housing Tax Credits (LIHTC), the AHP
Affordability Standard is based on the LIHTC election (Income Averaging, 20/50 or 40/60 set
aside).
If an AHP property is NOT assisted with LIHTC, then the HRA together with the owner will
determine which affordability standard applies. The legal document executed with the HRA
determines the standard.
March 2020 Page 6 of 31
10% at 50%
At least ten percent (10%) of total units developed shall be occupied by households at or below
fifty percent (50%) of the MTSP (Multifamily Tax Subsidy Income Limits, i.e. tax credit income
limits).
20% at 60%
At least twenty percent (20%) of total units developed shall be occupied by households at or
below sixty percent (60%) of the MTSP.
Affordability Standards – For Sale Projects
At least ten percent (10%) of total units developed shall be affordable for households as
follows:
1-2 person household $100,000
3+ person household $115,000
Adjusted annually by Minnesota Housing as posted on their website.
1.03 Student Households
AHP adopted the Section 8 Housing Choice Voucher program restrictions on student
participation found at 24 CFR 5.612 and excludes any individual that:
1. Is enrolled in a higher education institution;
AND
2. Is under the age of 24; and
3. Is not a veteran of the US Military; and
4. Is not married*; and
5. Does not have a dependent child(ren); and
6. Is not a person with disabilities; and
7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not
eligible on the basis of income
* Effective August 1, 2013 same-sex marriages are recognized as marriages for student
eligibility purposes.
1.04 New Multi-Family Affordable Housing Program (AHP) Rent Limits
Every ADU is subject to maximum allowable rents based on bedroom size for the area in which
the property is located. These maximum rents are referred to as the AHP rents. These limits
represent the maximum that owners/agents can charge for rent, including an allowance for
March 2020 Page 7 of 31
tenant paid utilities, and other non-optional charges (i.e. parking, required renter’s insurance,
etc.). AHP will utilize the U.S. Department of Housing and Urban Development annually
published median income amounts for all Minnesota counties. Minnesota Housing uses these
amounts to calculate the maximum allowable rents and tenant income. Minnesota Housing
publishes the LIHTC income and rent limits on its website and notifies owners/agents of the
updated limits as they become available. According to AHP, the date a Certificate of Occupancy
is issued to a building will determine which rent and income limits to use. Minnesota Housing
provides different tables (Table A, B, C, etc.) of income and rent limits based on your Certificate
of Occupancy dates and updates these tables annually. To avoid noncompliance, be sure you
are using the correct limits table.
In the event AHP rent limits decrease for an area, or utility allowances increase, an
owner/agent may be required to reduce the rent charged but will not be required to lower
rents below those in effect at the time when the Development Agreement was signed by the
City.
1.05 Rental Assistance
Tenant Based Section 8 Housing Choice Vouchers. Tenants with Section 8 vouchers, or similar
state or federal tenant based rental assistance (TBRA) subsidies tied to a tenant and not a unit,
may be charged rent that exceeds the applicable AHP rent for the unit to an extent allowed by
HUD, Metro HRA, and/or the most restrictive funding source. ADUs layered with tenant or
project based rental assistance qualify households using the Very Low-Income limits (<50%) and
the household pays no more than 30% of its monthly adjusted income for rent; ADU rent
therefore remains affordable.
Tenants receiving rental assistance, including Section 8 subsidy, must not be refused tenancy in
an ADU based solely on the fact that they receive rental assistance. For eligibility purposes, the
tenant selection plan must indicate that household income does not need to equal at least two
times the unit rent (or any variation thereof) as long as the published Payment Standard
subsidy can cover the project’s intended rent. The HRA annually publishes Payment Standards
(a rent limit for using a Section 8 Housing Choice Voucher. Payment standards are set by each
housing authority. They differ for bedroom size and property location).
1.06 Allowable Fees and Charges
Fees considered reasonable and customary may be charged, such as application fee, if such fees
are customary for rental housing in the neighborhood. Fees for parking or services such as bus
transportation or meals can only be charged if the services are voluntary and are not a
condition of occupancy. An eligible tenant cannot be charged a fee for the owner or manager’s
work involved in completing the additional forms or documentation required for the AHP, such
as the Resident Income Certification.
Down payment fees/rent deposit for the ADU should not exceed one month’s rent.
March 2020 Page 8 of 31
1.07 Fixed or Floating Affordable Dwelling Units
ADUs may be “fixed” or “floating” and are designated on a property-by-property basis. The
enforcement agreement must contain fixed or floating unit designations.
Fixed Units – The ADUs are identified by unit number and never change. Development
Agreements may outline a specific quantity of bedroom sizes and square footage, including
minimum floor space, when considering the placement of ADUs within the project. Units in
properties where all units are ADUs automatically are considered fixed.
If units throughout a project are not comparable (as defined by the HRA) or are in several
scattered sites, the ADU unit designation must be fixed.
Floating Units – The ADUs may change over time as long as the total number of ADUs and
specific quantity of bedroom sizes or ADU total square footage in the property remains
compliant with the original Development Agreement. If a property’s enforcement agreement
does not specify floating units, then the units that were initially designated as ADUs at project
completion will be used to determine comparable floating units.
See Chapter 2, Maintaining the Unit Mix, for more information.
1.08 Rent Increases
If ADU rents remain below the maximum allowed, an owner/agent may impose a rent increase
as allowed by the enforcement agreement no earlier than one year from the date the project
was completed (date the building Certificate of Occupancy was issued) and no more frequently
than once a year thereafter. If an owner/agent wishes to increase rents, the request must be
within reasonable limits to cover increases in expenses such as real estate taxes or operating
expenses. At no time can proposed rent increases exceed the current MTSP (LIHTC rents) rent
limits for that development.
If the owner/agent increases rents as provided above, tenants must be given a written notice
60 days in advance or in accordance with lease provisions before implementation.
1.09 Utility Allowances
The AHP requires that an allowance for tenant paid utilities be considered as a housing cost to
the tenant and be factored in when determining rent for an ADU. The HRA approved the use of
Metro HRA’s Utility Allowance Schedule (effective 2/1/18 and amended annually) as the
document to use to determine an ADU’s utility allowance. Utility allowance schedules are
usually updated annually. It is the owner’s/agent’s responsibility to obtain an updated utility
allowance and retain it in the property records. Changes in utility allowances must be
implemented within 90 days of the publication effective date. If an increase in the utility
allowance causes the ADU rent to exceed the applicable AHP rent limit, the unit rent must be
adjusted (lowered) to bring the gross rent of the unit into compliance with the AHP rent limits.
However, at no time will the ADU rent be adjusted to an amount lower than the ADU rent in
place at project commitment.
March 2020 Page 9 of 31
An alternative estimate for utility payments may be used, as allowed by Section 42 and
approved by the City. Utility allowance methodology change requests and all supporting
documentation must be emailed to the Affordable Housing Development Manager at the City
for approval. Requests for a change in the property's established utility allowance
methodology, to one of the approved utility allowance methodologies should reflect savings
from energy efficiency improvements in a manner that is fair to tenants, financially feasible for
owners and reduces long-term public subsidy expenditures.
General Submission Requirements
Each request for a change in utility allowance methodology must include:
1. Cover letter with the current utility allowance and proposed utility methodology
2. A current utility allowance schedule (i.e. local Metro HRA Utility chart) completed with
tenant paid utilities
3. Copy of 90-day Notice to the resident including new Utility Allowance and Tenant Rent
4. Utility Allowance Certification, signed and dated
5. Supporting documentation as required (estimate from a properly licensed engineer for
example)
Allowable Utility Allowance Methodologies
The property owner may request to use one or more of the following utility allowance
methodologies that meets the AHP requirements. If the project has multiple funding sources,
the rents must comply with the program gross rent limits for each program. If the project also
has Section 8 Project Based Assistance, the PBA administrator determines the UA schedule for
the unit.
PHA Utility Method: The local PHA utility allowance for the voucher program. This is the typical
current method of establishing Utility Allowances used by most Section 42 LIHTC projects.
Owners may request consideration of a different utility allowance methodology from the
following alternatives:
1. HUD Utility Schedule Model (HUSM): An estimate calculated via HUD’s online Utility
Schedule Model, using recent utility rates. The HUSM enables users to calculate utility
schedules using a project specific methodology by entering the property housing type,
and utility rate information (tariffs) for the property location. This model is based on
climate and survey information from the U. S. Energy Information Administration of the
Department of Energy and it incorporates energy efficiency and Energy Star data. The
HUSM (web based and Excel format) and use instructions can be accessed on the HUD
Exchange website User at: https://www.hudexchange.info/trainings/courses/hud-
utility-schedule-model-calculating-utilityallowances-for-home-webinar1/
2. Utility Company Estimate (UCE): An estimate from a local utility company providing the
estimated cost of utilities for a unit of similar size and construction for the project or
from the geographic area where the project is located.
3. Energy Consumption or Engineered Model (ECM): An estimate from a properly licensed
engineer, or qualified professional, using an energy consumption model that takes into
March 2020 Page 10 of 31
account the unit size, building orientation, design and materials, mechanical systems,
appliances and characteristics of the building location. If the ECM report is completed by
a qualified professional that is not a properly licensed engineer, the request must
include additional information to support the qualifications and experience of the
qualified professional in providing energy consumption utility allowance reports. The
engineer or qualified professional must be licensed in Minnesota.
If the property is regulated by HUD, or another form of project-based subsidy, the program-
approved utility allowance may be used.
1.10 Record Retention
Owners/agents must retain each household’s initial application forms including household
income and asset documentation and lease and leasing agreements/addenda for three (3)
years after the tenant’s move out effective date.
Owners/agents must maintain applicant and tenant information in a way to ensure
confidentiality. Any applicant or tenant affected by negligent disclosure or improper use of
information may bring a civil action for damages against the owner/agent and seek other relief,
as appropriate. Owners/agents must dispose of records in a manner that will prevent any
unauthorized access to personal information, e.g., burn, pulverize, shred, etc.
1.11 Leases
Each lease must include the legal name(s) of the parties to the agreement and all other
occupants, a description of the unit to be rented (address), the term of the lease, the rental
amount, the use of the premises, and the rights and obligations of each party. The lease shall
also inform the tenant that fraudulent statements and information are grounds for eviction and
that the tenant could become subject to penalties available under federal law.
Initial leases for ADUs must be for 12 months unless another term is agreed to mutually by
owner/agent and tenant. If tenant agrees to a shorter term, that agreement must be in writing
and kept in the tenant’s file. At no time can a lease term be for less than 30 days.
ADU leases must contain language that the owner/agent reserves the right to adjust tenant
rents in accordance with the AHP rent limits and/or in the event a tenant’s income increases
above the income limits of the AHP.
The lease also must contain a provision that the owner/agent retains the right to recertify the
tenant’s income and household composition on an annual basis. The tenant’s failure to
cooperate with the annual recertification constitutes a violation of the lease.
If the lease used for the ADU unit does not contain any of the required provisions and/or
contains any prohibited provisions, an AHP Lease Addendum must be signed by the tenant and
March 2020 Page 11 of 31
kept in the tenant’s file. If a new lease is executed, a new AHP Lease Addendum also must be
executed. Prohibited lease terms are defined in the AHP Lease Addendum (see Appendix B).
Owner/Agent may not evict or terminate resident (including refusal to renew a lease) without
good cause. Good cause is (a) serious or repeated violation(s) of the material terms and
conditions of the Resident Lease. Use of the AHP Lease Addendum including the AHP Lease
Rider outlining provisions on evictions and terminations is mandatory.
During the final year of the POA, new leases for the Affordable Units must be for a term of no
less than six months, and such newly leased Affordable Units will be subject to all the
Affordable Housing Requirements until the expiration of such new leases.
An AHP Lease Addendum is not required when the HUD model lease for subsidized housing is
used.
1.12 Income Certification
The owner/agent must verify and certify tenant income eligibility and student status at move in
and recertify at least annually thereafter. At initial move in, or when first being determined
eligible for an ADU and in every 3rd year of the affordability period (not tenancy), household
composition, income and income from assets must be verified via third-party verification or
other forms of supporting documentation and kept in the tenant’s file. In other years, tenants
must, at a minimum, self-certify to their anticipated income (including income from assets),
family size, and composition.
As part of the monitoring process, tenant files will be reviewed at initial occupancy of the
project and every 3rd year thereafter.
1.13 Increases in Income
The owner/agent must ensure that any household whose anticipated gross income exceeds
140% of the maximum income limit at recertification pays not less than the market or similar
rent as the other non-ADUs in the development. A minimum notice of 60 days is required for
increases to tenant rent. The unit must be marketed to eligible tenants when vacated. If the
units are floating, the rent is increased, and the next available unit must be rented at affordable
rates to an income eligible tenant. Conversely, the tenant whose income increase to above
140% of AMI could be relocated to a Market Rate unit if the affordable units are fixed.
For units assisted with both AHP funds and Low Income Housing Tax Credits (LIHTC), a tenant is
not considered over income until income exceeds the applicable 140% LIHTC limit. When a
tenant’s income exceeds the 140% LIHTC limit, the tenant’s rent is adjusted to the LIHTC rent
limit if the project is 100% LIHTC or, if the project is mixed income, to the market rent for
similar non-ADUs in the property.
1.14 Property Standards
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The owner/agent must keep all units in compliance with local codes and other applicable state
and local building codes to ensure the units are decent, safe, and sanitary at all times.
1.15 Affirmative Fair Housing Marketing Plan
Owners/agents must adhere to Equal Opportunity, Affirmative Marketing, and Fair Housing
practices in all marketing efforts, eligibility determinations and other transactions. The Equal
Housing Opportunity logo or statement must be used in all advertising of vacant units (We do
business in accordance with the Federal Fair Housing Law. It is illegal to discriminate against
any person because of race, color, religion, sex, handicap, familial status, or national origin).
In addition to the federal protections mentioned above, the Minnesota Human Rights Act
makes it illegal to discriminate against any person with respect to housing and real property,
because of race, color, creed, religion, national origin, sex, marital status, disability, status with
regard to public assistance, sexual orientation or familial status.
A file must be maintained with all marketing efforts related to the property including
newspaper ads, social service contacts, photos of signs posted, etc. Records will be reviewed
during on site monitoring to ensure that all efforts follow federal requirements and are being
adequately documented.
1.16 Fair Lease and Grievance Procedures
Fair lease and grievance procedures should be objective. They should clearly state:
• To whom a tenant should direct a complaint;
• Who will investigate and/or respond to the complaint; and
• By when the tenant should expect to receive a response. Chapter 2 – Maintaining the
Unit Mix
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Chapter 2 – Maintaining the Unit Mix
2.01 Fixed Affordable Dwelling Units
Properties with units that are not comparable in terms of size, amenities and features must
have fixed ADUs. Fixed ADUs means specific units are designated as the ADUs for the duration
of the affordability period. Owner/Agent must maintain these specific units as the ADUs.
Maintaining the required number of ADUs, is called complying with the unit mix requirements.
At no time will non-ADUs be subject to AHP rent and income requirements when the ADUs are
fixed.
When an owner/agent recertifies a tenant’s income, the tenant’s income may have increased.
A tenant is considered “over income” in the AHP when:
• The tenant occupies an ADU and the tenant income increases to 140% of the current
income limit for that family size; or
• For ADUs that are also LIHTC units, a tenant is considered “over income” when its
income goes over 140% of the qualifying tax credit election (Average Income, 50% or
60%) for that unit.
When a tenant is over income, the unit that the tenant occupies is considered temporarily out
of compliance with the AHP’s occupancy and unit mix requirements. Temporary
noncompliance due to an increase in an existing tenant’s income is permissible if the
owner/agent takes specific steps to restore the correct unit mix in the property as soon as
possible. When the tenant’s income exceeds the AHP’s income limit (140%), the unit rent also
must be adjusted.
The owner/agent cannot terminate the lease immediately if the tenant’s income has increased
above the AHP income limit. Instead, the owner/agent may extend /renew the lease for up to
six months. If the tenant remains over income at the time of the next recertification, a 60-day
notice to vacate may be issued to the tenant. If the tenant is determined to be under the AHP
income limit at the time of recertification, the unit is considered back in compliance.
2.02 Floating Affordable Dwelling Units
Properties with units that are comparable in terms of size, amenities and features can have
floating ADUs. Properties with floating ADUs must maintain the required number of ADUs
throughout the POA; however, the initial ADUs do not have to remain as ADUs throughout the
POA.
When ADUs float, the specific units that carry the ADU designation may change, or float, among
assisted and non-assisted units during the POA. If/when an initial ADU goes out of compliance
due to a tenant’s income going over the AHP (or LIHTC) income limit, a non-ADU can replace
the out of compliance ADU if the tenant income and unit rent of the non-ADU meet the ADU
requirements. In other words, the ADU designation “floats” to another unit.
March 2020 Page 14 of 31
For example, if a property has an over-income tenant in an ADU, when the next non-ADU
comparable unit becomes available, it will be designated as an ADU and rented to an income
eligible tenant. The unit occupied by the over income tenant is redesignated as a market rate
unit.
Maintaining the required number of comparable ADUs is called complying with the unit mix
requirements.
When recertifying a tenant’s income, an owner/agent may find that the tenant’s income has
increased. A tenant is considered “over income” when:
• The tenant occupies an ADU and the tenant income increases over the current AHP
income limit (140% AMI) for that family size; or
• In ADUs that are also LIHTC units, a tenant is considered “over income” when its income
increases to 140% or more of the qualifying tax credit election (50% or 60%) for that
unit.
When a tenant is over income, the unit that the tenant occupies is considered temporarily out
of compliance with the AHP’s unit mix requirements. Temporary noncompliance due to an
increase in an existing tenant’s income is permissible if the owner/agent takes specific steps to
restore the required unit mix in the property. The rents of the over income tenants can be
adjusted.
When redesignating units in a property with floating ADUs, owner/agent can choose to
substitute a unit that is equal or “greater” than the original ADU, but generally they cannot
substitute one that is “lesser”. A lesser unit can be substituted only when doing so preserves
the original unit mix. A greater unit is one that might be considered preferable because of
larger size or additional bedrooms. The goal is to maintain the same number and type of ADUs
as were designated originally. Therefore, if an owner/agent makes a substitution that is
“greater,” it later can substitute an available unit that is “lesser” to restore the original unit mix.
Once a comparable non-ADU unit is designated as the new ADU, the unit with the over income
tenant is redesignated as a non-ADU or market rate unit. At this point, the owner/agent may
adjust the tenant’s rent without regard to the AHP rent requirements (although requirements
from other funding sources still may apply). Rent increases are subject to the terms of the
lease.
Note, a tenant in a floating ADU whose income exceeds AHP income limit is not required to pay
more than the market rent for a comparable, unassisted unit in the property.
The owner/agent cannot terminate the lease based on the tenant’s increase in income.
March 2020 Page 15 of 31
Chapter 3 – General Occupancy Guidelines
3.01 Qualification of Applicants
Applicants for ADUs shall be advised early in their initial visit to the property that there are
maximum income limits that apply to these units. They also will be made aware that the
anticipated income of all persons expecting to occupy the unit must be verified and included on
a Resident Income Certification form prior to occupancy, and that tenant income and student
status will be reviewed annually.
If an individual is enrolled as a student at an institution of higher education, is under the age of
24, is not a veteran, is not married, is not a person with disabilities, and does not have a
dependent child, in order to be eligible for a ADU, the student must be individually income
eligible and the student’s parents (the parents individually or jointly) must be income eligible
unless the student can demonstrate his or her independence from parents.
AHP has adopted the section 8 Housing Choice Voucher program restrictions on student
participation found at 24 CFR 5.612, which exclude any student that:
1. Is enrolled in a higher education institution.
2. Is under the age of 24.
3. Is not a veteran of the US Military.
4. Is not married**.
5. Does not have a dependent child(ren).
6. Is not a person with disabilities.
7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible on
the basis of income.
**Effective August 23, 2013, same-sex marriages are recognized as marriages for student
eligibility purposes.
To determine a student’s independence from his or her parents, the owner should consider all of
the following:
1. The individual must be of legal contract age under state law; and
2. The individual must have established a household separate from parents or legal guardians for at
least one year prior to application for occupancy, or the individual must meet the U.S. Department
of Education’s definition of an independent student; and
3. The individual must not be claimed as a dependent by parents or legal guardians pursuant to IRS
regulations; and
4. The individual must obtain a certification of the amount of financial assistance that will be
provided by parents, signed by the individual/s providing the support. This certification is required
even if no assistance will be provided.
March 2020 Page 16 of 31
To document a student’s independence from parents:
1. Review and verify previous address information to determine evidence of a separate household,
or verify the student meets the U.S. Department of Education’s definition of “independent
student”; and
2. Review prior year income tax returns to verify if a parent or guardian has claimed the student as
a dependent (except if the student meets the Department of Education’s definition of “independent
student”); and
3. Verify income provided by a parent by requiring a written certification from the individual
providing the support. Certification is also required if the parent/s is providing no support to the
student. Financial assistance that is provided by persons not living in the unit is part of annual
income.
Verification of student eligibility must be maintained in the tenant file along with the income
certification.
3.02 Eligibility Determination
A fully completed Household Questionnaire is critical to an accurate determination of eligibility.
The information furnished on the application should be used as a tool to determine all sources
of anticipated income and assets.
After the tenant completes the Household Questionnaire, the owner/agent must have all
income verified by obtaining source documentation (award letters, offers of employment, W-
2’s, check stubs (not paycheck), bank statements, investment records, etc.) or by a third-party
(public agency, employer, financial institution). If total cash value of assets is less than $50,000,
assets can be self-certified using the Under $50,000 Certification. Assets exceeding $50,000
must be third-party verified. The application, income and asset verifications, and lease are to
be executed prior to move in. All occupants in an ADU must be certified and have a valid lease
on file. All household members age 18 and over must sign all required documents.
3.03 Change in Household Composition
If a tenant in an ADU (no LIHTC) wishes to have an additional person move into the unit within
the first 6 months of occupancy, the following steps must be taken:
1. The prospective tenant must complete a Household Questionnaire and allow time for
verification of income and assets as required of the initial tenant; and
2. The prospective tenant's income must be added to the current tenant's certification and
a determination made as to whether the new household is still within the AHP income
guidelines. If the new household income exceeds the guidelines, then once proper
notice is given, the tenant must pay the market rate. If the ADU is floating, the ADU
designation must be floated to another eligible unit. The new rent of the now over
income household cannot exceed market rent for a comparable unassisted unit.
The tenant file shall also be documented when any household member vacates the unit.
March 2020 Page 17 of 31
3.04 Minimum Lease Requirements
Initial tenant leases, including a signed and dated AHP lease addendum (if applicable), must be
on file and must specify a term of at least 12 months. Subsequent leases may have a shorter
term, with written mutual agreement. Leases must not contain any of the prohibited lease
terms. Any non-renewal or termination of leases must be in accordance with the lease and/or
AHP lease addendum.
Owners/agents must comply with the lease requirements found in Section 601 of the Violence
Against Women Reauthorization Act (VAWA) of 2013. HRA highly encourages owners/agents to
use the VAWA Lease Addendum, form HUD-91067 or its successor VAWA Lease Addendum
form. In general, owner/agent may not construe an incident of actual or threatened domestic
violence, dating violence, sexual assault, or stalking as a serious or repeated violation of a lease
term by the victim, or threatened victim, as good cause for terminating tenancy. However, in
accordance with VAWA 2013, owner/agent may bifurcate a lease to terminate the tenancy of
an individual who is a tenant or lawful occupant and engages in criminal activity directly
relating to domestic violence, dating violence, sexual assault, or stalking against another lawful
occupant living in the unit or other affiliated individual as defined in the VAWA 2013.
Owner/Agent should include a copy of HUD-5382 form with each tenancy termination or
eviction notice to allow an individual to certify that he or she is a victim of domestic violence,
dating violence, sexual assault or stalking. The form is to be completed and submitted to
owner/agent within 14 business days or an agreed upon extension date for the individual to
receive protection under the VAWA.
3.05 House Rules
Developing a set of house rules is a good practice. The decision about whether to develop
house rules for a property rests solely with the owner/agent. If house rules are listed in the
lease as an attachment, then they must be attached to the lease. By identifying allowable and
prohibited activities in housing units and common areas, the owner/agent provides a structure
for treating tenants equitably and for making sure tenants treat each other with
consideration. House rules also are beneficial in keeping properties safe and clean and making
them more appealing and livable for the tenants. They also are extremely beneficial if it
becomes necessary to evict a tenant for inappropriate behavior. For more information on
House Rules, refer to Chapter 6-9 of the HUD 4350.3 REV 1, Change 4 Handbook.
3.06 Number of Persons Per Unit
There is no federal regulation governing the number of persons allowed to occupy a unit based
on size; however, at initial occupancy ADUs will have a minimum requirement of at least one
person per bedroom. It is important, though, to be consistent when accepting or rejecting
applications. It is required that the owner/agent determine the minimum and maximum
number of people that will be allowed to occupy each size unit and put that formula in writing
as part of the Tenant Selection Plan and submit the Plan to the HRA or designated agent for
approval. The owner/agent may refer to the HUD Handbook 4350.3 REV 1, Change 4, Chapter
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3-23, regarding occupancy standards. By following the standards described, owners/agents can
ensure that applicants and tenants are housed in appropriately sized units in a fair and
consistent manner.
3.07 Tenant Selection Plan
Owner/Agent must develop a formal written policy that clearly states the procedures and
criteria the owner/agent will consistently apply in drawing applicants from the waiting list,
screening for suitability for tenancy, and implementing income targeting requirements. The
Tenant Selection Plan must state if there is an elderly restriction (“seniors only” building).
In accordance with the VAWA of 2013, the selection criteria cannot deny admission on the basis
that the applicant has been a victim of domestic violence, dating violence, sexual assault or
stalking. Owner/Agent should provide to each applicant/tenant HUD form 5382or its successor
form to allow the applicant/tenant to provide information regarding his or her status as a victim
of domestic violence, dating violence or stalking.
Owners/agents may refer to the HUD Handbook 4350.3 REV 1, Change 4, Chapter 4, when
developing a tenant selection plan. HRA will review the Tenant Selection Plan as part of its
monitoring process.
3.08 Government Data Practices Act Disclosure Statement Form
In working with applicants and tenants, the owner/agent warrants compliance with applicable
data privacy laws and regulations including the Minnesota Government Data Practices Act,
which sets policies on the information that can be obtained, stored and/or released in
connection with public programs. To comply with this law, the AHP Government Data Practices
Act Statement form must be kept in each tenant's permanent file. Note that this is not a
release authorization for verification of income and assets and must not be used as such. Each
adult household member’s name must be printed clearly at the top in the box provided. An
unsigned and/or undated form is not valid and will be noted as insufficient at time of file
inspection.
1. The form is to be signed one time and is valid as long as the resident lives at the
property and participates in the program(s) identified in item #2 on page 1 of the form.
If a resident moves from one unit to another, the original signed and dated form should
be moved to the file for the new unit. A copy should be kept in the move out file for the
old unit.
2. A valid form must include all relevant attachments. Some properties or units within a
property may require 2 or more attachments for multiple programs.
3. Only one form is needed per unit as long as the head of household, spouse, co-head,
and all household members over the age of 18 have signed and dated the form.
4. If an adult is added to the household or a minor reaches age 18, they must be added to,
sign, and date the original form. It is not necessary to complete a new form.
5. A copy of the form should be made available to the applicant/tenant. It is acceptable to
give them an unsigned copy.
6. For new residents, the form should be completed at the time of initial application.
March 2020 Page 19 of 31
A Government Data Practices Act Disclosure form that can be used for all ADUs is available on
the HRA website.
3.09 Income Verification
At initial occupancy, owner/agent must determine whether prospective tenant(s) of ADUs
qualify as low income households. Income eligibility is based on anticipated income as defined
at 24 CFR 5.609 (Section 8). When collecting income verification documentation, owner/agent
must consider any likely changes in income. Owner/Agent must follow appropriate steps in
determining whether households are eligible prior to admittance.
Minnesota Housing provides sample verifications and other forms to assist owners/agents in
qualifying eligible tenants. The release of information (at top of form) must be completed and
signed by the person who is the subject of the verification prior to sending the form to an
employer or other income source. Completed and returned verifications are used to calculate
and document income.
An Income and Asset Calculation Worksheet form also is available and can be used to assist in
showing the individual calculations of income and asset income. This is highly recommended
and will assist an inspector during a file review. This form should be dated and signed by the
owner/agent.
3.10 Gross Annual Household Income
Gross annual income for households living in ADUs shall be determined in a manner consistent
with Section 8 of the U.S. Housing Act of 1937.
Note that the information below only provides a summary. Owners and managers must use
current circumstances to project income, unless verification forms or other verifiable
documentation indicate that an imminent change will occur. For guidance in this section and in
determination of tenant income, the HUD Handbook 4350.3, Occupancy Requirements of
Subsidized Multifamily Housing Programs, is used and is recommended as a reference guide.
The HUD Handbook 4350.3 and HUD notices can be obtained by visiting HUD’s website:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handboo
ks/h sgh/4350.3.
The determination of annual income must include all types of income in the amount
anticipated to be received by the tenant in the 12 months following certification/
recertification. Owner/Agent should use current circumstances to project income, unless
verification forms or other verifiable documentation indicate that a change will occur
(increase/decrease in rate of pay and/or hours). However, if the owner/agent is unable to
determine annual income using current information because the family reports little to no
income, or because income fluctuates, the owner/agent may average past actual income
received or earned within the last 12 months before the certification date to calculate annual
income.
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3.11 Factors that Affect Household Size
When determining family size for occupancy, the owner/agent must include the following
individuals who currently are not living in the unit:
• Children temporarily absent due to placement in a foster home;
• Children in joint custody arrangements who are present in the household 50% or more
of the time;
• Children who are away at school but who live with the family during school recesses;
• Unborn children of pregnant women. When a pregnant woman is an applicant, the
unborn child is included in the size of the household and is included for purposes of
determining the maximum allowable income. The rental application should ask the
following question: “Will there be any changes in household composition within the
next 12-month period?” If an applicant answers that a child is expected (birth, foster or
adoption), the owner/agent should explain to the applicant this is an additional
household member and use the corresponding income limit, and self-certification of
additional member should be used as documentation within the initial certification.
• Children who are in the process of being adopted;
• Temporarily absent family members who still are considered family members. For
example, the owner/agent may consider a family member who is working in another
state on assignment to be temporarily absent. Persons on active military duty are
considered temporarily absent (except if the person is not the head, co-head or spouse
or has no dependents living in the unit). If the person on active military duty is the
head, co-head, or spouse, or if the spouse or dependents of the person on active
military duty resides in the unit, that person’s income must be counted in full;
• Family members in the hospital or rehabilitation facility for periods of limited or fixed
duration. These persons are temporarily absent as defined above.
Persons permanently confined to a hospital or nursing home are not considered household
members.
When determining family size for establishing income eligibility, the owner/agent must include
all persons living in the unit except the following:
• Live-in aides
• Children of live-in aides
o A live-in aide/attendant is a person who resides with one or more elderly persons,
near-elderly persons, or persons with disabilities, and who:
Is determined to be essential to the care and well-being of the person(s);
Is not obligated for the support of the person(s); and
Would not be living in the unit except to provide the necessary
supportive services.
While a relative may be a live-in aide/attendant, s/he must meet the above requirements,
especially the last. The live-in aide qualifies for occupancy only if the individual needing
supportive services requires the aide’s services and remains a tenant. The live-in aide may not
March 2020 Page 21 of 31
qualify for continued occupancy as a remaining family member. The owner/agent must obtain
verification from the person’s physician, psychiatrist or other medical practitioner or health
care provider that the live-in aide is needed to provide the necessary supportive services
essential to the care and well-being of the person and should not add the attendant to the
lease. The owner/agent may not require applicants or tenants to provide access to confidential
medical records or to submit to a physical examination.
Some households may include other persons who are considered family members for the
purposes of determining household size and income eligibility, including:
• Foster adults
• Foster children
Please see Appendix A for more detail on whose income is counted, what is counted as income
and what is not, and how to account for income generated by assets.
3.12 General Income Verification Requirements
All income and asset sources must be disclosed on the eligibility application and verified. A
properly completed application must be used as the basis for determining what verifications
will be necessary. The application, along with all supporting documentation and the Resident
Income Certification, will be reviewed by HRA staff or its agent during a tenant file review.
The following describes the types of third-party verification in order of acceptability:
1. Third-party verification from source (written):
a. An original or authentic document generated by a third-party source that is
dated within six months from the date of receipt by the owner/agent.
Documents may be in possession of the tenant (or applicant), and commonly are
referred to as tenant provided documents. These documents are considered
third-party verification because they originated from a third-party source.
Examples of tenant provided documentation that may be used include, but are
not limited to: pay stubs, payroll summary report, employer notice/letter of
hire/termination, SSA benefit letter, bank statements, child support payment
stubs, welfare benefit letters and/or printouts, and unemployment monetary
benefit notices.
Owner/Agent must consider the following when using tenant provided
documentation:
i. Is the document current? Documentation of public assistance may be
inaccurate if it is not recent and does not show any changes in the
family’s benefits or work and training activities.
ii. Is the documentation complete? Owner/Agent may accept pay stubs to
document employment income only if the applicant or tenant provides
the most recent two months of consecutive pay stubs to illustrate
variations in hours worked. Actual paychecks or copies of paychecks
March 2020 Page 22 of 31
should never be used to document income because deductions are not
shown on the paycheck.
iii. Is the document an unaltered original? The greatest shortcoming of
tenant provided documents as a verification source is their susceptibility
to undetectable change through the use of high quality copying
equipment. Documents with original signatures are the most reliable.
Photocopied documents generally cannot be assumed to be reliable.
2. Written documentation sent directly to the third-party source by mail or electronically
by fax, email or internet.
Verification forms must contain a release authorization signed by the applicant/tenant.
Do not use a blanket release authorization as this entitles the owner/agent to obtain
information to which it is not entitled or needed for eligibility determination. The Data
Practices Act Disclosure Statement is not a verification release. Applicants should be
asked to sign two copies of each verification form. The second copy may be used if the
first request has not been returned in a timely manner.
Income verification requests must be sent directly to and from the source. They are
never given to the tenant to obtain signatures. If the returned verifications do not
contain complete information, owner/agent must follow up with the source to obtain
complete information. Typical examples include failure to indicate interest rates, dates
of anticipated raises, amounts of anticipated raises, etc. All pertinent information must
be documented in the file and must also include the name, phone number and title of
the contact, the name of the person accepting the information, and the date.
The single form AHP Eligibility Verification may be used to document income and asset
eligibility in lieu of separate verification(s) for each separate income or asset source, if
the sole source of income is Housing Support. The AHP Eligibility Verification confirms
receipt of Housing Support (formally known as GRH) since it identifies that the applicant
is in fact qualified for income-based Medical Assistance (MA) through Minnesota’s
Department of Human Services. (Housing Support recipients must have MA prior to
obtaining housing grant funding). MA eligibility documents AHP eligibility because the
Federal Poverty Guidelines (FPG) are significantly less than the LIHTC income limits.
NCCP.org (NCCP.org/tools/converter/) defines poverty as a family income less than 100
percent of the federal poverty threshold, as determined by the U.S. Census Bureau; Low
Income is defined as family income less than 200 percent of the poverty threshold.
3. Third-party verification from source (verbal).
When clarifying information over the telephone, it is important to be certain that the
person on the telephone is the party he or she claims to be. Generally, it is best to
telephone the verification source rather than to accept verification from a source calling
the property management office. Verbal verification must be documented in the file.
When verifying information by phone, the owner/agent must record and include in the
tenant’s file the following information:
March 2020 Page 23 of 31
a. Third-party’s name, position, and contact information;
b. Information reported by the third-party;
c. Name of the person who conducted the telephone interview; and
d. Date and time of the telephone call.
4. Self Certification
An owner/agent may accept a tenant’s notarized statement or signed affidavit regarding
the veracity of information submitted only if the information cannot be verified by
another acceptable verification method. In these instances, the owner/agent must
document the file why third-party verification was not available. The owner/agent may
witness the tenant signature(s) in lieu of a notarized statement or affidavit.
The following describes use of electronic information when used as third-party
verification.
Electronic Verification. The owner/agent may obtain accurate third-party written
verification by facsimile, email, or Internet, if adequate effort is made to ensure that the
sender is a valid third-party source.
a. Facsimile. Information sent by fax is most reliable if the owner/agent and the
verification source agree to use this method in advance during a telephone
conversation. The fax should include the company name and fax number of the
verification source.
b. Email. Similar to faxed information, information verified by email is more
reliable when preceded by a telephone conversation and/or when the email
address includes the name of an appropriate individual and firm.
c. Internet. Information verified on the Internet is considered third-party
verification if the owner/agent is able to view web-based information from a
reputable source on the computer screen. Use of a printout from the Internet
may also be adequate verification in many instances.
Steps used to obtain written verification as described in 1, 2 and 3 above must be documented
to show just cause for using other types of verification. The owner/agent must include the
following documents in the tenant file:
1. A written note explaining why third-party verification is not possible, signed and
dated by the applicant/resident.
2. A copy of the date-stamped original request that was sent to the third-party.
3. Written notes or documentation indicating follow up efforts to reach the third-party
to obtain verification.
4. A written note indicating the request has been outstanding without a response from
the third-party.
Note: If a tenant is employed by a business owned by the tenant's family or is employed by the
property owner/agent or the management company, a copy of a recent pay stub verifying year-
to- date earnings also is required.
March 2020 Page 24 of 31
Upon receipt of all verifications, owner/agent must determine if the resident is qualified for
participation in the AHP. All verifications should be reviewed, and calculations made as
necessary.
3.13 Corrections to Documents
Sometimes it is necessary to make corrections or changes to documents. A document that has
been altered with correction fluid or "white out" will not be accepted by HRA. When a change
is needed on a document, the person making the correction must draw a line through the
incorrect information, write or type the correct wording or number, and have all parties initial
and date the change.
3.14 Effective Term of Verifications
Verifications of any kind are valid for 6 months prior to an ADU tenant’s move in date or
recertification date.
3.15 Over Income Households
When determining eligibility to occupy an ADU, the household's gross income must always be
considered. However, if a tenant goes over the income guidelines of 140% of household
income at recertification, the owner/agent must raise the over income tenant’s rent to reflect
Fair Market Rent, or relocate tenant to a Market Rate Unit, as soon as the lease permits in
accordance with the terms of the lease (see Chapter 2). The AHP does not require interim rent
adjustments.
3.16 Annual Recertification
All households occupying an ADU must be recertified at least annually from the date of
occupancy. Annual recertifications must be effective on or before the occupancy anniversary
date of the previous certification. Owner/Agent may align recertification dates with other
program certifications or so that all units in the property are recertified at one time during the
year. However, if a period of twelve (12) months passes without a recertification being
completed for any ADU, the unit is considered out of compliance. Owner/Management may
request an annual schedule whereby all tenants are recertified during the same month
however before making changes to schedule, an email request must be made, and approved by
the City first. The requirement to recertify is included in an ADU lease or addendum, tenant
refusal to comply can be considered a violation of the lease and is grounds for termination.
Income must be third-party verified in every 3rd year of the affordability period, not tenancy.
Example: Every Third Year Full Certification
Property ABC received Certificate of Occupancy on 11/1/2019
Period of Affordability (POA) for Property ABC will be a total of 15 years starting on
11/1/2019 and ending on 11/1/2034
March 2020 Page 25 of 31
Amanda Johnson Moved onto Property ABC on 12/1/2019
In 2019 (POA Year One): Management verifies income using SSA Benefits Award Letter, a copy
of Amanda’s current PERA Benefit Letter (Pension Public Employees Retirement Association
of Minnesota) and Under $50,000 Asset Verification to determine eligibility at Move In. All
items must be third-party verified using source documents.
In 2020 (POA Year Two): Amanda Johnson needs to complete her Annual Recertification but in
POA Year Two for Property ABC, only a self-certification of income and asset, signed by all adult
household members is needed. Use of the AHP Self-Certification of Income & Asset form can be
used instead of third-party verifications during this non-3rd year. Note: Move In certifications
for eligibility must always third-party verify using source documents.
In 2021 (POA Year Three): Amanda Johnson needs to complete her Annual Recertification but
in POA Year Three for Property ABC, only a self-certification of income and asset, signed by all
adult household members is needed. Use of the AHP Self-Certification of Income & Asset form
can be used instead of third-party verifications during this non-3rd year. Note: Move In
certifications for eligibility must always third-party verify using source documents.
In 2022 (Year Four): The Annual Recertification requirement for this POA year at Property ABC
states all income and assets reported by a household must be third-party verified using source
documents. The AHP Self-Certification of Income & Asset is not eligible for use for any ADU at
Property ABC.
3.17 Tenant Files
Owner/Agent must maintain a tenant file for each ADU. All permanent documents must be
kept together so they are accessible at each compliance review (income certification and
supporting documentation, lease/AHP addendum, etc.). Annual recertification information,
including the tenant questionnaires, release forms, verifications, and annual inspection reports
must be grouped together by year, with the most recent year on top for review.
The tenant files must contain the following:
• HRA Government Data Practices Act Statement
• Household Questionnaire
• Acceptable verifications of income and assets
• Verification of student eligibility if applicable
• Resident Income Certification (Initial Certification and Annual Recertifications)
• Signed lease agreement and AHP addendum (if needed)
• Lead based paint acknowledgements (rental rehabilitation only; built pre-1978)
All move out files should also contain the following:
• Written 30-day (or greater) notice to vacate (if not available – document in file)
March 2020 Page 26 of 31
• Security deposit refund (check number and date) or letter of intent to withhold security
deposit within 14 days of move out
Tenant records, including income verifications and development rents must be retained for the
most recent three year period after the tenant moves out.
March 2020 Page 27 of 31
Chapter 4 – Reporting Requirements
The owner/agent must maintain a report of all tenants residing in each ADU at the time of
application through the end of the affordability period and must submit annual reports to HRA
in a form and manner requested by HRA.
Annual compliance reports are due to HRA by March 1 or as otherwise specified by HRA, of
each year during the affordability period. If the due date falls on a weekend or a holiday,
reports are due the following business day. Reports and other required documents must be
submitted as directed by HRA on an annual basis.
4.01 Annual Owner/Agent Certifications
Complete the Owner/Agent Certification to certify compliance with AHP requirements for the
preceding calendar year. Owner/Agent Certifications must be printed, signed and dated by the
authorized Owner/Agent Representative, then scanned and submitted as directed by HRA.
4.02 Compliance Reports
HRA or designated agents will monitor AHP compliance by reviewing annual Owner/Agent
Certifications and analyzing compliance information submitted by the owner/agent. Failure to
submit the Owner/Agent Certification and/or update the report on all units and their related
activity by the due date will constitute noncompliance with the AHP and the related loan
documents.
4.03 Utility Allowance Source Document
Owners/Agents must submit the utility allowance source documents applicable to the reporting
period. Multiple utility allowance source documents may apply to one reporting period.
March 2020 Page 28 of 31
Chapter 5 – Compliance Inspections
Compliance inspections (file reviews) will be conducted every 3 years. Inspections may be
conducted more frequently if HRA determines it to be necessary based on concerns raised
during a previous review or other information.
The compliance inspection includes, but is not limited to, an inspection of at least 20%, but up
to 50%, of the ADU tenant files (with a minimum of four (4) units).
HRA will contact the owner/agent in advance to schedule the tenant file review. The property
inspection and tenant file review may be conducted at the same time or may be conducted
separately by different HRA staff.
5.01 Physical Inspections
This program does not mandate inspections. Rental Licensing requires inspections every three
years.
5.02 Review of Tenant Files and Property Records
During the tenant file review, HRA staff will review Resident Income Certifications, third-party
verifications or other forms of income documentation, leases, lead based paint disclosure
forms, and other management information for selected units.
HRA staff will also review the following property information:
• Utility Allowances and supporting documentation
• Current written tenant selection plan, occupancy policy and/or house rules if changes
were made since the last review
• Current lease and lease addenda/agreement(s)
• Affirmative Fair Housing Marketing Plan/Marketing Plans
• Advertising
• Equal Housing Opportunity posters, logos
• Correspondence
• Tenant ledgers for all units inspected
March 2020 Page 29 of 31
Chapter 6 – Correction and Consequences of Non-Compliance
If HRA does not receive the required certifications and/or compliance reports when due, or
discovers by audit, inspection, or review, or in some other manner, that the property is not in
compliance with the requirements of the AHP, or with the property’s loan documents, including
the enforcement agreement, the HRA will notify the owner/agent as soon as possible.
6.01 Notice to Owner/Agent
HRA or its designated agent will provide prompt written notice to the owner/agent of an AHP
property if HRA does not receive the annual Owner/Agent Certification and income and
occupancy report by the required due date. HRA or its designated agent also will notify the
owner/agent if it does not receive or is not permitted to inspect the Resident Income
Certifications, supporting documentation, and rent records, or discovers by inspection, review,
or in some other manner, that the property is not in compliance with the requirements of the
AHP or with the property’s loan documents, including the enforcement agreement.
6.02 Correction Period
The correction period of 30-days will be set forth in a Notice of Noncompliance to the owner
and its agent. HRA may extend the correction period if HRA determines there is good cause for
granting the extension. Requests for an extension must be in writing from the owner/agent,
must be received by HRA no later than the last day of the correction period identified on the
Notice of Noncompliance, and must include an explanation of the efforts to correct the
noncompliance and the reason the extension is needed.
6.03 Owner’s/Agent’s Response
HRA will review the owner’s/agent’s response and supporting documentation, if any, to
determine whether the noncompliance has been clarified, corrected or remains out of
compliance.
Clarified noncompliance is, for example, where income eligibility was not properly documented
and the inspector cannot make a reasonable determination that the unit is in compliance but
the owner/agent conducts a retroactive (re)certification which completely and clearly
documents the sources of income and assets that were in place at the time the certification
should have been effective, and applies income and rent limits that were in effect on that date.
If documentation is complete and supports that the tenant was eligible as of the effective date,
the file is considered clarified.
Corrected noncompliance is when a violation is observed and there is a period of time during
which the unit is out of compliance but the unit is brought back into compliance. For example,
a late certification or re-certification is out of compliance on the certification due date, and
back in compliance as of the date the last household member signs a retroactive Income
Certification.
March 2020 Page 30 of 31
Uncorrected noncompliance is a violation that is not corrected or clarified by the end of the
correction period.
Failure to correct all noncompliance could result in extension of the end of the POA, loss of Tax
Increment Financing, or LURC tax treatment or other legal remedies. Persistent noncompliance
also may impact the owner’s/agent’s eligibility for financing from the HRA under any or all its
programs.
March 2020 Page 31 of 31
Chapter 7 – Requests for Action
7.01 Sale or Transfer
Any property owner must provide prior written notice to the HRA before sale or transfer of the
property. The notice will provide that the new owner/agent acknowledges that the terms and
conditions of the Affordable Housing Program as set forth in the governing documents
recorded against the property remain in place.
Attachments:
•Current Rent Income Table
•AFHMP Template – Pages 1-5 without HUD
Signature
•AHC Checklist
•AHC Forms
05/03/2019Minnesota Housing Finance Agency Income Limits And Maximum Rents
TAX_CREDIT_INCOME_LIMIT.RDF
Date Run:
Table L: Projects Placed in Service on or after 4/24/2019 Page 14 of 44
04/24/2019
04/24/2019
Hennepin
Houston
20%
30%
40%
50%
60%
70%
80%
20%
30%
40%
50%
60%
70%
80%
14,000
21,000
28,000
35,000
42,000
49,000
56,000
11,020
16,530
22,040
27,550
33,060
38,570
44,080
16,000
24,000
32,000
40,000
48,000
56,000
64,000
12,580
18,870
25,160
31,450
37,740
44,030
50,320
18,000
27,000
36,000
45,000
54,000
63,000
72,000
14,160
21,240
28,320
35,400
42,480
49,560
56,640
20,000
30,000
40,000
50,000
60,000
70,000
80,000
15,720
23,580
31,440
39,300
47,160
55,020
62,880
21,600
32,400
43,200
54,000
64,800
75,600
86,400
16,980
25,470
33,960
42,450
50,940
59,430
67,920
23,200
34,800
46,400
58,000
69,600
81,200
92,800
18,240
27,360
36,480
45,600
54,720
63,840
72,960
24,800
37,200
49,600
62,000
74,400
86,800
99,200
19,500
29,250
39,000
48,750
58,500
68,250
78,000
26,400
39,600
52,800
66,000
79,200
92,400
105,600
20,760
31,140
41,520
51,900
62,280
72,660
83,040
20%
30%
40%
50%
60%
70%
80%
20%
30%
40%
50%
60%
70%
80%
350
525
700
875
1,050
1,225
1,400
275
413
551
688
826
964
1,102
375
562
750
937
1,125
1,312
1,500
295
442
590
737
885
1,032
1,180
450
675
900
1,125
1,350
1,575
1,800
354
531
708
885
1,062
1,239
1,416
520
780
1,040
1,300
1,560
1,820
2,080
408
613
817
1,021
1,226
1,430
1,635
580
870
1,160
1,450
1,740
2,030
2,320
456
684
912
1,140
1,368
1,596
1,824
640
960
1,280
1,600
1,920
2,240
2,560
503
754
1,006
1,258
1,509
1,761
2,013
700
1,050
1,400
1,750
2,100
2,450
2,800
550
825
1,100
1,375
1,650
1,925
2,200
County:
County:
Effective Date:
Effective Date:
1
1
2
2
3
3
4
4
5
5
6
6
7
7
8
8
0
0
1
1
2
2
3
3
4
4
5
5
6
6
---------- Income Limits By Household Size ----------
---------- Income Limits By Household Size ----------
---- Maximum Gross Rents By Bedroom Size(Post 1989) ----
---- Maximum Gross Rents By Bedroom Size(Post 1989) ----
Note to all applicants/respondents: This form was developed with Nuance, the official HUD software for the creation of HUD forms.
HUD has made available instructions for downloading a free installation of a Nuance reader that allows the user to fill-in and save this
form in Nuance. Please see http://portal.hud.gov/hudportal/documents/huddoc?id=nuancereaderinstall.pdf for the instructions. Using
Nuance software is the only means of completing this form.
Affirmative Fair Housing
Marketing Plan (AFHMP) -
Multifamily Housing
U.S. DepartmentofHousing
andUrban Development
OfficeofFairHousingandEqualOpportunity
OMB Approval No. 25290013
(exp.12/31/2016)
Previous editions are obsolete Page 1 of 8 Form HUD-935.2A (12/2011)
1a.Project Name &Address (including City,County,State &Zip Code)1b.Project Contract Number 1c.No.of Units
1d. Census Tract
1e.Housing/Expanded Housing Market Area
1f. Managing Agent Name, Address (including City, County, State & Zip Code), Telephone Number & Email Address
1g. Application/Owner/Developer Name, Address (including City, County, State & Zip Code), Telephone Number & Email Address
1h. Entity Responsible for Marketing (check all that apply)
Owner Agent Other (specify)
Position, Name (if known), Address ( including City, County, State & Zip Code), Telephone Number & Email Address
1i. To whom should approval and other correspondence concerning this AFHMP be sent? Indicate Name, Address (including City,
State & Zip Code), Telephone Number & E-Mail Address.
2a. Affirmative Fair Housing Marketing Plan
Plan Type Date of the First Approved AFHMP:
Reason(s) for current update:
2b. HUD-Approved Occupancy of the Project (check all that apply)
Elderly Family Mixed (Elderly/Disabled) Disabled
2c. Date of Initial Occupancy 2d. Advertising Start Date
Advertising must begin at least 90 days prior to initial or renewed occupancy for new
construction and substantial rehabilitation projects.
Date advertising began or will begin
For existing projects, select below the reason advertising will be used:
To fill existing unit vacancies
To place applicants on a waiting list (which currently has individuals)
To reopen a closed waiting list (which currently has individuals)
Previous editions are obsolete Page 2 of 8 Form HUD-935.2A (12/2011)
3a.Demographics of ProjectandHousing Market AreaCompleteandsubmitWorksheet1.
3b.Targeted Marketing Activity
Based on your completed Worksheet 1,indicate which demographic group(s)in the housing market area is/are least likely to apply for the
housing without special outreach efforts.(check all that apply)
White AmericanIndianorAlaska Native Asian Black or African American
Native Hawaiian or Other Pacific Islander Hispanicor Latino Persons with Disabilities
Families withChildren Other ethnic group,religion,etc.(specify)
4a.Residency Preference
Is the owner requesting a residency preference?If yes,complete questions 1 through 5.
If no,proceed to Block 4b.
(1)Type
(2)Is the residency preference area:
The same as the AFHMP housing/expanded housing market area as identified in Block 1e?
The same as the residency preference area of the local PHA in whose jurisdiction the project is located?
(3)What is the geographic area for the residency preference?
(4)What is the reason for having a residency preference?
(5)How do you plan to periodically evaluate your residency preference to ensure that it is in accordance with the non-discrimination
and equal opportunity requirements in 24 CFR 5.105(a)?
Complete and submit Worksheet 2 when requesting a residency preference (see also 24 CFR 5.655(c)(1))for residency
preference requirements.The requirements in 24 CFR 5.655(c)(1)will be used by HUD as guidelines for evaluating
residency preferences consistent with the applicable HUD program requirements.See also HUD Occupancy
Handbook (4350.3)Chapter 4,Section 4.6 for additional guidance on preferences.
4b.Proposed Marketing Activities: Community Contacts
CompleteandsubmitWorksheet3 to describeyour use of community
contacts to market the project to those least likely to apply.
4c.Proposed Marketing Activities: Methods of Advertising
Complete and submit Worksheet 4 to describe your
proposed methods of advertising that will be used to
market to those least likely to apply. Attach copies of
advertisements, radio and television scripts, Internet
advertisements, websites, and brochures, etc.
Previous editions are obsolete Page 3 of 8 Form HUD-935.2A(12/2011)
5a.Fair Housing Poster
The Fair Housing Poster must be prominently displayed in all offices in which sale or rental activity takes place (24 CFR 200.620(e)).
Check below all locations where the Poster will be displayed.
Rental Office Real Estate Office Model Unit Other (specify)
5b.Affirmative Fair Housing Marketing Plan
The AFHMP must be available for public inspection at the sales or rental office (24 CFR 200.625).Check below all locations
where the AFHMP will be made available.
Rental Office RealEstate Office Model Unit Other (specify)
5c.Project Site Sign
Project Site Signs,if any,must display in a conspicuous position the HUD approved Equal Housing Opportunity logo,slogan,or statement
(24 CFR 200.620(f)).Check below all locations where the Project Site Sign will be displayed. Please submit photos of Project signs.
RentalOffice Real Estate Office Model Unit Entrance toProject Other (specify)
The size of the Project Site Sign will be x
The Equal Housing Opportunity logo or slogan or statement will be x
6.Evaluation of Marketing Activities
Explain the evaluation process you will use to determine whether your marketing activities have been successful in attracting
individuals least likely to apply,how often you will make this determination,and how you will make decisions about future marketing
based on the evaluation process.
Previous editions are obsolete Page 4 of 8 Form HUD-935.2A (12/2011)
7a.Marketing Staff
What staff positions are/will be responsible for affirmative marketing?
7b.Staff Training and Assessment:AFHMP
(1)Has staff been trained on the AFHMP?
(2)Has staff been instructed in writing and orally on nondiscrimination and fair housing policies as required by
24 CFR 200.620(c)?
(3)If yes,who provides instruction on the AFHMP and Fair Housing Act, and how frequently?
(4)Do you periodically assess staff skills on the use of the AFHMP and the application of the Fair Housing
Act?
(5)If yes,how and how often?
7c.Tenant Selection Training/Staff
(1)Has staff been trained on tenant selection in accordance with the project’s occupancy policy,including any residency preferences?
(2)What staff positions are/will be responsible for tenant selection?
7d.Staff Instruction/Training:
Describe AFHM/Fair Housing Act staff training,already provided or to be provided,to whom it was/will be provided,content of training,
and the dates of past and anticipated training.Please include copies of any AFHM/Fair Housing staff training materials.
Previous editions are obsolete Page 5 of 8 Form HUD-935.2A (12/2011)
8. Additional Considerations: Is there anything else you would like to tell us about your AFHMP to help ensure that
your program is marketed to those least likely to apply for housing in your project?Please attach additional sheets,as
needed.
9. Review and Update
By signing this form,the applicant/respondent agrees to implement its AFHMP, and to review and update its AFHMP
in accordance with the instructions to item 9 of this form in order to ensure continued compliance with HUD’s Affirmative Fair
Housing Marketing Regulations (see 24 CFR Part 200,Subpart M).I hereby certify that all the information stated herein,
as well as any information provided in the accompaniment herewith,is true and accurate.Warning:HUD will prosecute
false claims and statements.Conviction may result in criminal and/or civil penalties.(See 18 U.S.C.1001,1010,1012;
31 U.S.C.3729,3802).
Signature of person submitting this Plan &Date of Submission (mm/dd/yyyy)
Name (type or print)
Title &Name of Company
For HUD-Office of Housing Use Only
Reviewing Official:
For HUD-Office of Fair Housing and Equal Opportunity Use Only
Approval Disapproval
Signature & Date (mm/dd/yyyy) Signature & Date (mm/dd/yyyy)
Name(typeor
print)
Title
Name(typeorprint)
Title
Head of Household
Demographic Information
Head of Household Demographics 1 of 1 AHP 02/2020
Instructions: This form is to be completed by the head of household only after occupancy has been
approved. Your approval for occupancy will not be affected if you choose not to respond. The owner
will submit this information to The City of Edina for assessment of households being served by its
financing programs. Your cooperation is much appreciated.
Housing Information (this section to be completed by owner/agent)
Property Name
Minnesota Housing D#
Building Address
Unit #
Head of Household Information
Name
Date of birth
(month/day/year) / /
Ethnicity
Hispanic or Latino
Not Hispanic or Latino
I choose not to respond
Gender
Female
Male
I choose not to respond
Race
(check all that apply)
American Indian/Alaska Native
Asian
Black/African American
Native Hawaiian/
Other Pacific Islander
White
I choose not to respond
Number of household
members
Adults (including head of household)
Children under age 18 residing in unit
Is any household member
mobility impaired requiring
features of an accessible
unit?
Yes
No
I choose not to respond
Is any household member a
person with a disability
other than mobility
impairment?
Yes
No
I choose not to respond
Main source of household
income (check only one)
Salary/wages
Self-employment
Social Security
Retirement /pension/annuity
Alimony/child support
Interest/dividends/rental income
Unemployment/disability
Public assistance
No income
Previous editions are obsolete form HUD-928.1 (6/2011)
U. S. Department of Housing and Urban Development
EQUAL HOUSING OPPORTUNITY
We Do Business in Accordance With the Federal Fair Housing Law
(The Fair Housing Amendments Act of 1988)
It is illegal to Discriminate Against Any Person Because of Race, Color, Religion, Sex,Handicap, Familial Status, or National Origin
In the sale or rental of housing or
residential lots
In advertising the sale or rental of housing
In the financing of housing
In the provision of real estate
brokerage services
In the appraisal of housing
Blockbusting is also illegal
Anyone who feels he or she has beendiscriminated against may file a complaint ofhousing discrimination: 1-800-669-9777 (Toll Free) 1-800-927-9275 (TTY)
www.hud.gov/fairhousing
U.S. Department of Housing and
Urban Development
Assistant Secretary for Fair Housing and
Equal Opportunity
Washington, D.C. 20410
AHP 02/2020
Attachment
Affordable Housing Program (AHP)
Part A (Required to determine eligibility)
1. Information regarding the household composition including the name(s) and age(s) of all members in the
household.
2. Student status.
3. The amount and source of all earned and unearned income of all household members.
4. The type, value and income derived from all household assets.
5. The type, value and income derived from all household assets disposed of for less than fair market value
within the past 2 years.
6. Current and/or previous housing history (for program eligibility, if applicable).
Part B
1. Race
2. Ethnicity
3. Gender of head of household
4. Receipt of Public Assistance and Type of Assistance (MFIP, Section 8, GRH, etc.)
5. Homeless Household
6. Disabled Status
7. Household Type (single, elderly, disabled, etc.)
AHP 02/2020
Verification of Eligibility – Affordable Housing Program
TO: (Name and Address of Housing Support Division) FROM: (Name & Address of Owner/Management Agent)
RE:________________________________ Email: ________________________________
Applicant/Tenant Full Name
Contact: _______________at ( )___________
___________________
Unit Number (Optional) Thank you for your prompt response. All information is confidential.
PERMISSION FOR RELEASE OF INFORMATION
Release: I hereby authorize the release of requested information. Information obtained under this consent is limited to information
that is no older than 12 months. There are circumstances which would require the owner to verify information that is up to 5 years
old, which would be authorized by me on a separate consent with explanation, attached to a copy of this consent.
Signature of Applicant/Tenant Date
MN-DHS Housing Supports and Services Division, please fill in all blanks.
Does the above Applicant/Tenant receive benefits under one of these two income-based
Housing Programs outlined below?
If Yes, what type of benefit program does s/he participate in?
and/or
Effective date of benefits:
Additional remarks:
Housing Support and Services Provider:
Print Your Name: Title:
Signature: Date:
Telephone #: Fax #: Email:
THIS SECTION TO BE COMPLETED BY HOUSING SUPPORT & SERVICES DIVISION
Yes
No
Housing Support Minnesota Supplemental Aid (MSA Housing Assistance)
AHP 02/2020
Government Data Practices Act
Disclosure Statement
Print name(s) of Household Members signing this form:
The City of (“City”) that provided the funding for the development of the property listed
below is asking for this private information that relates to your application to occupy, or continue to
occupy, a unit in the following property (“Property”).
Property Name:
Some of the information you are being asked to provide may be considered private or confidential under
the Minnesota Government Data Practices Act (MGDPA), Minnesota Statutes Chapter 13. Section
13.04(2) of this law requires that you be notified of the matters included in this Disclosure Statement
before you are asked to provide that information. The owner/agent of the Property may also ask you to
supply information that relates to your application. The owner’s/agent’s request for information is not
governed by the Minnesota Government Data Practices Act.
1. The City of Edina, Minnesota for the Affordable Housing Program (AHP) is asking for information
necessary for the administration and management of a local program to provide housing for low
income families. Some of the information may be used to establish your eligibility to initially
occupy, or to continue to occupy, a unit in the Property. Other information may be used to assist
the City in the evaluation and management of some of the programs it operates.
2. As part of your application, you are asked to supply the information contained in the following
attachment.
Attachment 1 – Inclusionary Housing Program
The Attachment has two parts: Part A and Part B
3. The information asked for under Part A of the attachment may be used by the City and/or
owner/agent to establish your eligibility to participate in the Inclusionary Housing Program or
occupy an affordable dwelling unit in the Property. If you refuse to supply any portion of the
information asked for under Part A, you may not qualify for initial or continued occupancy of a unit
in the Property.
4. The information asked for under Part B will help the City in the evaluation and management of
some of the programs it operates and your supplying of this information will be helpful to the City.
AHP 02/2020
Failure to provide any of the information asked for under Part B will NOT affect whether or not you
qualify for initial or continued occupancy of a unit in the Property.
5. The owner/agent may also ask for information to determine whether or not it will rent a unit in the
Property to you. If you supply, or refuse to supply, any information requested by the owner/agent,
it will NOT affect a decision by the City, but could affect the owner’s/agent’s decision to rent a unit
to you. The determination by the owner/agent is separate from the City’s determination and the
City does not participate, in any way, in the owner’s/agent’s decision.
6. All of the information that you supply will be accessible to staff of the City (and its agents) and
may be made available to staff of the Office of the Minnesota Attorney General, the United States
Department of Housing and Urban Development (HUD), the United States Internal Revenue
Service (IRS) and other persons and/or governmental entities who may have statutory authority to
review the information, investigate specific conduct, and/or take appropriate legal action including
but not limited to law enforcement agencies, courts and other regulatory agencies. The information
may also be provided by the City to the owner’s management agents of the Property.
7. This Disclosure Statement remains in effect for as long as you occupy a unit in the Property and are
a participant in the program(s) identified above.
I was (We were) supplied with a copy of and have read this Government Data Practices Act Disclosure
Statement and the Attachment identified above.
Head of Household, Spouse, Co-Head and all household members age 18 or older must sign and date:
Applicant/Tenant signature Date
Applicant/Tenant signature Date
Applicant/Tenant signature Date
Applicant/Tenant signature Date
Applicant/Tenant signature Date
AHP 02/2020
AFFORDABLE HOUSING PROGRAM (AHP) LEASE ADDENDUM
Resident Name:
Address:
Lease Date:
The Property in which you are leasing received funding from the Affordable Housing Program. This program is
designed to provide housing to low income individuals and families.
This addendum will be in effect for the duration of your occupancy.
By signing this Agreement, you and all adult household members acknowledge that you have read, understand
and agree to the following provisions:
1. Affordable Housing Program. The Unit must comply with the Affordable Housing Program. Resident's rights
under the Lease are subject to Program requirements.
2. Unit Occupancy. Only the residents named on the Lease are permitted to occupy the unit.
3. Income Certification. Resident has executed an Income Certification Form prior to moving into the Unit, and
Resident shall complete and execute further Income Certification Forms at Management's request not less than
annually hereafter. Upon Management’s request, Resident shall certify Resident’s household income and/or
assets to Management or any governmental or quasi-governmental agency in a manner satisfactory to
Management.
4. Recertified Income. Resident acknowledges that the annual recertification of Resident's household income
must meet the limitations imposed by the Program. (Resident’s initials) ________
5. Information Supplied. Resident certifies that the information supplied by Resident to determine Resident's
qualifications to rent the Unit, including Resident's Application and Income Certification, is accurate, complete,
and true in all respects. Submission of inaccurate, incomplete, or false information at any time is a breach of
lease for which Resident can be evicted.
6. Increased Income. If, upon annual recertification, Resident's household income exceeds 140% of the applicable
Program limit, Management may meet with Resident to review the status of the household’s qualification under
the Program. If the household no longer qualifies, Management may terminate Resident’s lease.
7. Certain Changes. Resident shall notify Management immediately in writing if Resident's household size
changes, anyone in Resident’s household becomes a full-time student, or Resident begins to receive HUD
assistance. Management may immediately terminate this Lease if Resident’s student status disqualifies the Unit
under the Program. Management may adjust Resident's rent and/or utility allowance if Resident begins to
receive HUD assistance. (Resident’s initials) _________
8. Student Eligibility. AHP adopted the Section 8 Housing Choice Voucher program restrictions on student
participation found at 24 CFR 5.612 and excludes any individual that:
AHP 02/2020
1. Is enrolled in a higher education institution;
AND
2. Is under the age of 24; and
3. Is not a veteran of the US Military; and
4. Is not married*; and
5. Does not have a dependent child(ren); and
6. Is not a person with disabilities; and
7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible on the
basis of income
* Effective August 1, 2013 same-sex marriages are recognized as marriages for student eligibility
purposes.
ALL RESIDENTS MUST IMMEDIATELY REPORT TO MANAGEMENT ANY CHANGE IN STUDENT STATUS. (Resident’s
initials) __________
9. Cooperation with Management. Resident shall cooperate with Management so that Management complies with
the Program. Resident will timely respond to Management requests related to Program documents,
verifications, and certifications. This includes but is not limited to timely attending meetings, signing
verifications, and providing requested information. Resident agrees to sign a new lease upon the completion of
annual certifications, if requested or required by Management.
10. Termination/Non-Renewal. Management may terminate or refuse to renew the Lease or file an eviction action
for the following reasons:
Serious or repeated violation of the Lease. This includes but is not limited to Resident’s violation of this
Agreement. (Resident’s initials) _______
Violation of applicable federal, state, or local law. (Resident’s initials) _______
Refusal/Failure to complete paperwork required by the Program. (Resident’s initials) _______
Other good cause, including if Resident’s continued occupancy of the Unit violates Program requirements.
(Resident’s initials) _______
I have read and agree to the provisions above and understand that failure to comply with these provisions
constitutes material non-compliance with this lease and establishes good cause for termination, nonrenewal of
the lease, or eviction action.
________________________________________________ __________________________
Resident’s Signature Date
________________________________________________ __________________________
Resident’s Signature Date
________________________________________________ __________________________
Management’s Signature Date
AHP 02/2020
AHP Rental Application
Applicant Information
Name:
Date of birth: SSN: Phone:
Current address:
City: State: ZIP Code:
Own Rent (Please circle) Monthly payment or rent: How long?
Previous address:
City: State: ZIP Code:
Owned Rented (Please circle) Monthly payment or rent: How long?
Co-applicant Information
Name:
Date of birth: SSN: Phone:
Current address:
City: State: ZIP Code:
Own Rent (Please circle) Monthly payment or rent: How long?
Previous address:
City: State: ZIP Code:
Owned Rented (Please circle) Monthly payment or rent: How long?
Income and Asset
Total Monthly Income (Include all family gross income): $
Income Sources (check all that apply)
Wages/Self-Employment
SSI/SSA
Pension/Annuity
Child Support
Investment/Interest
Income
Workers Compensation
TANF/Public Assistance
Other________________
Value of Family Assets (Assets include all bank accounts, investment accounts,
and real estate): $
Emergency Contact
Name of a person not residing with you:
Address:
City: State: ZIP Code: Phone:
References
Name: Address: Phone:
I authorize the verification of the information provided on this form as to my credit and source/s of income.
Signature of applicant: Date:
Signature of co-applicant: Date:
AHP 02/2020
RESIDENT INCOME CERTIFICATION
For use by eligible Affordable Housing Program (AHP) properties only
Property Name: ____________________________ Effective Date: _________________
Household Composition:
Anticipated Gross Household Income (Annual Amounts):
Household Member
Name
Wages/Salaries/Self-
Employment Benefits/Pensions TANF/Public
Assistance Other Income
Annual Gross Income: $ $ $ $
Total Annual
Gross Income: $
Household Asset and Asset Income:
Household Member
Name Asset Description Current Cash
Value of Asset
Actual Income
from Assets
Total Cash Value:
Total Income
from Assets:
$ (A)$
Enter Total Cash
Value if over $50,000 $______________ Passbook Rate:
X .06% = (B)$_____________ Imputed Income
Enter the greater of the Total Income from Assets (A) OR Imputed
Income (B): This will be the Total Income from Assets: $________________
Total Annual Income
Annual Income (total of all actual income and income from assets): $________________
Head of Household Name Leased Address Total Number
of Occupants
AHP 02/2020
Rent Amounts:
Leased Rent Amount: $________________
Monthly Utility Allowance: $________________
Gross Monthly Rent: (Leased Rent
+ Utility Allowance) $________________
Student Status:
Are any household
members, a student at
an institution of higher
education?
Yes
No
If Yes, enter # as shown on the student form
AHP Student Self-Certification
1. FT Student
2. Disabled
3. At least 24 years of age
4. Veteran of United States Military
5. Married
6. Dependent
7. Living Independently from Parents
8. Graduate or Professional Student
9. Orphan or Ward of the Court
10. Vulnerable Youth
11. Independent via unusual circumstances
#_________________
After all verifications of income and/or assets have been received and calculated, each household member age 18 or older
must sign and date the Resident Income Certification. For move-in, it is recommended that the Resident Income
Certification be signed no earlier than 5 days prior to the effective date of the certification.
I/we hereby affirm that the foregoing information is true and complete to the best of my/our knowledge and authorize the
Landlord to make inquires to verify the statements herein. I/we further understand that any intentional misrepresentation
in this self-certification might result in a default in the rental agreement and/or eviction of the household. If any of the
aforementioned changes, I/we agree to notify the Landlord immediately.
All household members age 18 or older must sign and date below:
Signature: ______________________________________________ Date: _________________________________
Signature: ______________________________________________ Date: _________________________________
Signature: ______________________________________________ Date: _________________________________
Signature and Date of Owner/Representative:
Signature: ______________________________________________ Date: _________________________________
Affordable Housing Program (AHP)
RESIDENT NOTIFICATION LETTER
As a resident of (name of property), a property funded by the CITY OF
EDINA, MINNESOTA, a Minnesota statutory city, and the HOUSING AND REDEVELOPMENT AUTHORITY OF THE
CITY OF EDINA, MINNESOTA, you have certain rights stated in your lease and the attached Lease Rider. Your
landlord must follow city and state rules for the Affordable Housing Program. One of the important protections
provided by federal law is that you cannot be evicted from your home or have your tenancy terminated without
good reason or “good cause.”
Your landlord may not evict you or terminate your tenancy (including refusing to renew your lease) without good
cause. Good cause is (a) serious or repeated violation(s) of the material terms and conditions of your lease. The
landlord must state, in writing, the good cause in any eviction, lease non-renewal or termination of tenancy
notice. If you did not do what your landlord claims in the notice, or if you think it was not serious enough for
your lease to be terminated or not renewed, you can ask the landlord if there is an appeal process. If there is no
appeal process, you may request that the termination be retracted and discuss your reasons why. If you receive a
notice of eviction, you have a right to contest the eviction in court by explaining to the judge why you disagree
with the reasons for terminating your lease. Visit www.lawhelpmn.org to see if you qualify for free or low-cost
legal assistance.
In addition, your landlord may not increase the amount of rent stated on your lease more than once annually.
The attached Lease Rider should already be signed by your landlord. You and all members of your household age
18 or older must also sign the Lease Rider in order to make it part of your lease.
The Lease Rider needs to be signed each time you sign a new lease. If at any time additional adult household
members enter the unit or a child who lives in that unit turns 18, they should add their signature to the existing
Lease Rider with the current date.
Your landlord also has a legal obligation to comply with the statutory requirements found in Section 601 of the
Violence Against Women Reauthorization Act of 2013 (VAWA).
Under VAWA, you may not be denied admission, denied assistance, terminated from participation, or evicted on
the basis that you are or have been a victim of domestic violence, dating violence, sexual assault or stalking, if you
otherwise qualify for admission, assistance, participation or occupancy.
You should have received the following when you were approved for occupancy or at some time during your
occupancy:
•HUD Form 5380 – Notice of Occupancy Rights under the Violence Against Women Act; and
•HUD Form 5382 – Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, and
Alternate Documentation.
The landlord must also include these documents with any notice of eviction, lease non-renewal or termination of
tenancy. You may also have signed a VAWA Lease Addendum.
If you have any questions concerning this matter, please contact your resident manager,
, or your landlord at (phone and email).
Sincerely ,
Property Representative Name (print and sign) Date
AHP 02/2020
Affordable Housing Program LEASE RIDER
(attach to resident lease)
Property Name:
Building/Unit #:
Head of Household Name:
The Lease dated is hereby amended by adding the following provisions:
1. Owner/Landlord may not evict or terminate the tenancy (including refusing to renew this Lease)
except for good cause. Good cause means (a) serious or repeated violation(s) of the material
terms and conditions of the Lease. Any eviction, lease non-renewal or termination of tenancy
notice must be in writing and must state the specific violation(s). The notice must comply with all
requirements of Minnesota law and other applicable programs.
2. Owner/Landlord may not increase the lease rent more than once annually, regardless of the term
of the Lease.
To the extent that any terms contained in the Lease or any other agreement between the owner and the
tenant contradict the terms of this Lease Rider, the provisions of this Lease Rider shall control.
By signing below, I indicate my consent to this Lease Rider:
Property Representative Name (print) (signature) Date
*************************************************************************************
By signing below, I indicate my consent to this Lease Rider. I/we have been given a copy of this Lease
Rider.
Resident Name (print) (signature) Date
Resident Name (print) (signature) Date
Resident Name (print) (signature) Date
Resident Name (print) (signature) Date
AHP 02/2020
AHP 02/2020
Self-Certification of Household Annual Income
For use by eligible Affordable Housing Program (only to be used in-between the 3rd year requirement of a full certification)
Property Name: __________________ Unit Number: ______________ Recertification Date: _____________
1. Enter all household member’s names, relationship to the head of household and student status below:
Last Name First Name Relationship to Head of
Household
Has This Person Been a
Student During the Past
Year and/or Will This Person
Be a Student in the
Upcoming Year?
2. Enter all household members’ gross annual income (income before taxes). Types of income include but are not
limited employment wages, military pay, public assistance, Social Security/SSI benefits, Pension, VA benefits, child
support, regular gifts, unemployment, and some types of financial aid.
Household Member’s Name Source of Income Gross Annual Income
Total Gross Annual Income from Column: $
AHP 02/2020
3. Types of income from assets include but are not limited to interest and dividends earned from checking accounts,
savings accounts, retirement accounts, certificates of deposit, money market, 401Ks and real estate.
Total Cash Value:
(total of Current Cash Value of Asset Colum)
Total Actual Income from Assets:
(total of Actual Income from Assets Column)
$ $
Total Annual Income
ANNUAL (GROSS) INCOME (TOTAL OF ALL HOUSEHOLD MEMBERS): $_______________________
I/we hereby affirm that the foregoing information is true and complete to the best of my/our knowledge and authorize the
Owner/Manager to make inquires to verify the statements herein. I/we further understand that any intentional
misrepresentation in this self-certification might result in a default in the rental agreement and/or eviction of the
household. If any of the aforementioned changes, I/we agree to notify the Owner/Manager immediately.
All household members age 18 or older must sign and date below:
Signature: ______________________________________________ Date: _________________________________
Signature: ______________________________________________ Date: _________________________________
Signature: ______________________________________________ Date: _________________________________
Signature: ______________________________________________ Date: _________________________________
Household Member’s Name Type of Asset & Source Current Cash Value of Asset Actual Income From Assets
11/2019
Property Address: ____________________ Affordable Housing Program (AHP)
STUDENT STATUS SELF-CERTIFICATION
FIRST NAME:
TO BE COMPLETED BY APPLICANT / RESIDENT:
A.Are you student at an institution of higher education?_____ Yes _____ No
“Institution of higher education” includes post-secondary vocational institutions, “proprietary institutions of
higher education” which prepare students for “gainful employment in a recognized occupation,” and
accredited post-secondary colleges and universities. If you are not sure, please mark “yes” and we will
verify the status of your institution.
If you have answered no, please skip the following questions in (B) and sign below in (C).
B.If you answered yes, please complete the following questions and sign below in (C):
Yes No
1. Are you a full-time student?_____ ____
2. Are you disabled?_____ ____
If yes, were you receiving Section 8 assistance as of November 30, 2005? _____ ____
3. Are you at least 24 years of age? _____ ____
If no, please list birth date:________________
4. Are you a veteran of the United States military?_____ ____
5. Are you married?_____ ____
6. Do you have a dependent other than a spouse (e.g. dependent child) _____ ____
7. Will you be living with your parents?_____ ____
If no:
a. Are your parents receiving or eligible to receive Section 8?_____ ____
b. Are you claimed as a dependent on your parent’s tax return? _____ ____
c. Have you maintained a household separate from your parents or
guardians for at least 1 year?_____ ____
8. Are you a graduate or professional student?_____ ____
9. Were you an orphan or a ward of the court through the age of 18?_____ ____
10. Are you classified as a Vulnerable Youth?_____ ____
11. Are you a student for whom a financial aid administrator makes a
documented determination of independence by reason of other
unusual circumstances?_____ ____
C.
________________________________ __________________________________
Signature Print Name
________________________________
Date
LAST NAME:
AHP 02/2020
UNDER $50,000 ASSET CERTIFICATION
for use with HRA's Affordable Housing Program Only
For households whose combined net assets do not exceed $50,000.
Complete only one form per household; include assets of children.
Household Name: Unit No.
Development Name: City:
Complete all that apply for 1 through 4:
1.My/our assets include (enter n/a in (A) if you do not own the respective asset):
(A)
Cash
Value*
(B)
Int.
Rate
(A*B)
Annual
Income Source
(A)
Cash
Value*
(B)
Int.
Rate
(A*B)
Annual
Income Source
$ $ Savings Account(s) $ $ Checking Account(s)
$ $
Include online accounts such
as GoFundMe, Fundly, etc.
Cash on Hand $ $
Cash cards used to
receive government
benefits or other income
$ $ Certificates of Deposit $ $ Money market funds
$ $ Stocks $ $ Bonds
$ $ IRA Account(s) $ $ 401K Account(s)
$ $ Keogh Account(s) $ $ Trust Funds
$ $ Equity in real estate $ $ Land Contracts
$ $ Lump Sum Receipts $ $ Capital investments
$ $ Life Insurance Policies (excluding Term)
$ $ Other Retirement/Pension Funds not named above:
$ $ Personal property held as an investment** :
$ $ Other (list):
PLEASE NOTE: Certain funds (e.g., Retirement, Pension, Trust) may or may not be (fully) accessible to you. Include only those amounts which are.
*Cash value is defined as market value minus the cost of converting the asset to cash, such as broker's fees, settlement costs, outstanding loans, early withdrawal
penalties, etc.
**Personal property held as an investment may include, but is not limited to, gem or coin collections, art, antique cars, etc. Do not include necessary personal
property such as, but not necessarily limited to, household furniture, daily-use autos, clothing, assets of an active business, or special equipment for use by the
disabled.
2.Within the past two (2) years, I/we have sold or given away assets (including cash, real estate, etc.) for more than $1,000 below
fair market value (FMV). Those amounts equal a total of: $ (enter the difference between FMV and
the amount you received).
3.I/we have not sold or given away assets (including cash, real estate, etc.) for less than fair market value during the past two (2)
years.
4.I/we do not have any assets at this time (do not check this box if you have entered any numbers in section 1, above).
The net family assets (as defined in 24 CFR 813.102) above do not exceed $50,000 and the annual income from the net family assets is
$ (enter the total of all (A*B) Annual Income in section 1 above). This amount is included in total gross annual income.
Under penalty of perjury, I/we certify that the information presented in this certification is true and accurate to the best of my/our
knowledge. The undersigned further understand(s) that providing false representations herein constitutes an act of fraud. False,
misleading or incomplete information may result in the termination of a lease agreement.
Applicant/Tenant
Under $50,000 Asset Certification
Date Applicant/Tenant Date
March 2020 Page 1 of 29
Affordable Housing Program
Policy Guide
March 2020
March 2020 Page 2 of 29
Table of Contents
Introduction to the Affordable Multi-Family Housing Program
(AHP) ..............................................................................................4
Chapter 1 – Overview of Affordable Housing Program Policy ...........5
1.01 Period of Affordability (POA) ................................................................................................................. 5
1.02 Affordable Dwelling Units (ADUs) ........................................................................................................ 5
Affordability Standards – Rental Projects ........................................................................................................... 5
Affordability Standards – For Sale Projects ......................................................................................................... 6
1.03 Student Households ............................................................................................................................... 6
1.04 New Multi-Family Affordable Housing Program (AHP) Rent Limits ..................................................... 7
1.05 Rental Assistance .................................................................................................................................. 7
1.06 Allowable Fees and Charges .................................................................................................................. 7
1.07 Fixed or Floating Affordable Dwelling Units .......................................................................................... 8
1.08 Rent Increases ....................................................................................................................................... 8
1.09 Utility Allowances ................................................................................................................................. 8
1.10 Record Retention ................................................................................................................................ 10
1.11 Leases .................................................................................................................................................. 10
1.12 Income Certification ............................................................................................................................ 11
1.13 Increases in Income ............................................................................................................................ 11
1.14 Property Standards ............................................................................................................................. 12
1.15 Affirmative Fair Housing Marketing Plan ........................................................................................... 12
1.16 Fair Lease and Grievance Procedures .................................................................................................. 12
Chapter 2 – Maintaining the Unit Mix ............................................ 12
2.01 Fixed Affordable Dwelling Units .......................................................................................................... 12
2.02 Floating Affordable Dwelling Units .................................................................................................... 13
Chapter 3 – General Occupancy Guidelines .................................... 14
3.01 Qualification of Applicants ................................................................................................................. 14
3.02 Eligibility Determination ..................................................................................................................... 16
3.03 Change in Household Composition ...................................................................................................... 16
3.04 Minimum Lease Requirements ............................................................................................................ 16
3.05 House Rules ......................................................................................................................................... 17
3.06 Number of Persons Per Unit ............................................................................................................... 17
3.07 Tenant Selection Plan ......................................................................................................................... 17
March 2020 Page 3 of 29
3.08 Government Data Practices Act Disclosure Statement Form ............................................................. 18
3.09 Income Verification ............................................................................................................................. 18
3.10 Gross Annual Household Income ........................................................................................................ 19
3.11 Factors that Affect Household Size ..................................................................................................... 19
3.12 General Income Verification Requirements ......................................................................................... 21
3.13 Corrections to Documents ................................................................................................................... 23
3.14 Effective Term of Verifications ............................................................................................................ 24
3.15 Over Income Households ..................................................................................................................... 24
3.16 Annual Recertification ........................................................................................................................ 24
3.17 Tenant Files ......................................................................................................................................... 25 Chapter 4 – Reporting Requirements ............................................. 26
4.01 Annual Owner/Agent Certifications .................................................................................................... 26
4.02 Compliance Reports ............................................................................................................................. 26
4.03 Utility Allowance Source Document ................................................................................................... 26 Chapter 5 – Compliance Inspections .............................................. 27
5.01 Physical Inspections ............................................................................................................................ 27
5.02 Review of Tenant Files and Property Records ..................................................................................... 27 Chapter 6 – Correction and Consequences of Non-Compliance ...... 27
6.01 Notice to Owner/Agent ....................................................................................................................... 27
6.02 Correction Period ................................................................................................................................ 28
6.03 Owner’s/Agent’s Response .................................................................................................................. 28 Chapter 7 – Requests for Action .................................................... 29
7.01 Sale or Transfer ................................................................................................................................... 29
March 2020 Page 4 of 29
Introduction to the Affordable Multi-Family Housing Program (AHP)
Properties developed using financing from the City of Edina, or because of our policy for New
Multi-Family Affordable Housing, are subject to specific rules designed to ensure that
affordability pledges made by owners and developers remain available to very low and low
income tenants (30% to 60% of Area Median Income) throughout the required Period of
Affordability (the POA). This Guide is designed to assist owners and their agents with planning
and maintaining compliance with the local requirements associated with these rental
properties that include affordable units. This guide does not pertain to the Market Rate units.
It is the responsibility of City of Edina Housing and Redevelopment Authority (hereafter the
“HRA”) to monitor the continuing compliance of affordable units in accordance with local policy
and governing agreements throughout the POA. The following procedures apply to all rental
properties that received funds or a Planned Unit Development (PUD) under the local policy on
New Multi-Family Affordable Housing (AHP). Any violation of the AHP requirements could
constitute a covenant default of the governing agreement(s) and imposition of all local
government rights and remedies.
While successful operation of an affordable property is management intensive, the
owner/agent is responsible for ensuring that the governing agreement requirements are
properly administered. Thorough understanding of requirements and compliance monitoring
procedures requires training of owners/agents. The owner/agent should ensure that it knows
and understands the requirements of the affordable housing policy and the compliance
requirements since failure to comply may have very serious consequences. The HRA
recommends that owners, management agents and site managers (collectively referred to as
“owner/agent” throughout this document) receive compliance training before certifying or
leasing any affordable units. At a minimum, training should cover key compliance terms,
determination of rents, household eligibility, file documentation, procedures for maintaining
the required unit mix and reporting. Record retention and property condition standards are
also key to maintaining compliance. Attending educational opportunities as offered is strongly
recommended to keep up with any procedural changes to the AHP.
Should the AHP assisted property also receive an allocation of Section 42 tax credits (Low
Income Housing Tax Credits or LIHTC), and the property is found to be compliant with the tax
credit program, then the HRA will consider the property compliant with the AHP.
Owners/Agents of AHP assisted properties must annually certify to the HRA that the property
is compliant with the Low Income Housing Tax Credit program.
The HRA’s determination to monitor the project for compliance with requirements of the AHP
does not make it liable for an owner’s/agent's noncompliance. This Guide will be made
available to the owner/agent at project financial closing and will be posted on the City’s
website. The HRA, in its sole discretion, may delegate its compliance reporting and monitoring
responsibilities to a third-party. AHP assisted properties will have a compliance review at initial
lease up and every third (3rd) year thereafter. However, the HRA reserves the right to conduct a
March 2020 Page 5 of 29
compliance review annually. During the compliance review, the HRA or third-party monitoring
agent, will ensure compliance against City Agreements by inspecting records of residential
student status, income and asset documentation, and rent record for each resident household
for all project’s AHP assisted units. The first review for new projects will occur no later than the
end of the second year of the period of affordability.
Chapter 1 – Overview of Affordable Housing Program Policy
The following is an overview the Affordable Housing Policy. It is not intended to be detailed or
comprehensive. The requirements of the AHP apply to market rate residential developments
that receive a PUD approval from the City of Edina and/or financial assistance from the HRA.
This includes new developments and mixed-used developments that create twenty (20) or
more multi-family dwelling units and/or any change in use of all or part of an existing building
from a non-residential use to a residential use that includes at least twenty (20) dwelling units.
1.01 Period of Affordability (POA)
Affordable units created under the Affordable Housing Policy (AHP) are rent and income
controlled for a minimum of 20 years with a maximum established by the funding source and
reflected in the binding agreement. This term is referred to as the Period of Affordability or
POA.
Owners/agents should refer to the property’s governing agreements, at project commitment,
to determine the specific terms and conditions that govern the property, as the affordability
period was increased from 15 years to 20 years in March 2019.
Project Commitment is a schedule of commitments within the project’s Financing
Agreement(s) between the parties hereto, such as the authorizing Resolution, Development Agreement and/or Loan Documents, dated as of the Execution Date and their related agreements.
1.02 Affordable Dwelling Units (ADUs)
At least ten percent (10%) to twenty percent (20%) of the total number of dwelling units in a
development receiving a PUD and/or assisted with local funds under the AHP will be designated
as Affordable Dwelling Units (ADUs). The percentage applied is based on the affordability
standard of the development.
Affordability Standards – Rental Projects
PLEASE NOTE: For developments financed with Low Income Housing Tax Credits, this
Program Guide defers to the rules and regulations provided in the Land Use Restrictive
Agreement (LURA) or related document. If the LURA expires during the Period of
Affordability, the development must comply with this Program Guide.
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If an AHP property also is assisted with Low Income Housing Tax Credits (LIHTC), the AHP
Affordability Standard is based on the LIHTC election (Income Averaging, 20/50 or 40/60 set
aside).
If an AHP property is NOT assisted with LIHTC, then the HRA together with the owner will
determine which affordability standard applies. The legal document executed with the HRA
determines the standard.
10% at 50%
At least ten percent (10%) of total units developed shall be occupied by households at or below
fifty percent (50%) of the MTSP (Multifamily Tax Subsidy Income Limits, i.e. tax credit income
limits).
20% at 60%
At least twenty percent (20%) of total units developed shall be occupied by households at or
below sixty percent (60%) of the MTSP.
Affordability Standards – For Sale Projects
At least ten percent (10%) of total units developed shall be affordable for households as
follows:
1-2 person household $100,000
3+ person household $115,000
Adjusted annually by Minnesota Housing as posted on their website.
1.03 Student Households
AHP adopted the Section 8 Housing Choice Voucher program restrictions on student
participation found at 24 CFR 5.612 and excludes any individual that:
1. Is enrolled in a higher education institution;
AND
2. Is under the age of 24; and
3. Is not a veteran of the US Military; and
4. Is not married*; and
5. Does not have a dependent child(ren); and
6. Is not a person with disabilities; and
7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not
eligible on the basis of income
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* Effective August 1, 2013 same-sex marriages are recognized as marriages for student
eligibility purposes.
1.04 New Multi-Family Affordable Housing Program (AHP) Rent Limits
Every ADU is subject to maximum allowable rents based on bedroom size for the area in which
the property is located. These maximum rents are referred to as the AHP rents. These limits
represent the maximum that owners/agents can charge for rent, including an allowance for
tenant paid utilities, and other non-optional charges (i.e. parking, required renter’s insurance,
etc.). AHP will utilize the U.S. Department of Housing and Urban Development annually
published median income amounts for all Minnesota counties. Minnesota Housing uses these
amounts to calculate the maximum allowable rents and tenant income. Minnesota Housing
publishes the LIHTC income and rent limits on its website and notifies owners/agents of the
updated limits as they become available. According to AHP, the date a Certificate of Occupancy
is issued to a building will determine which rent and income limits to use. Minnesota Housing
provides different tables (Table A, B, C, etc.) of income and rent limits based on your Certificate
of Occupancy dates and updates these tables annually. To avoid noncompliance, be sure you
are using the correct limits table.
In the event AHP rent limits decrease for an area, or utility allowances increase, an
owner/agent may be required to reduce the rent charged but will not be required to lower
rents below those in effect at the time when the Development Agreement was signed by the
City.
1.05 Rental Assistance
Tenant Based Section 8 Housing Choice Vouchers. Tenants with Section 8 vouchers, or similar
state or federal tenant based rental assistance (TBRA) subsidies tied to a tenant and not a unit,
may be charged rent that exceeds the applicable AHP rent for the unit to an extent allowed by
HUD, Metro HRA, and/or the most restrictive funding source. ADUs layered with tenant or
project based rental assistance qualify households using the Very Low-Income limits (<50%) and
the household pays no more than 30% of its monthly adjusted income for rent; ADU rent
therefore remains affordable.
Tenants receiving rental assistance, including Section 8 subsidy, must not be refused tenancy in
an ADU based solely on the fact that they receive rental assistance. For eligibility purposes, the
tenant selection plan must indicate that household income does not need to equal at least two
times the unit rent (or any variation thereof) as long as the published Payment Standard
subsidy can cover the project’s intended rent. The HRA annually publishes Payment Standards
(a rent limit for using a Section 8 Housing Choice Voucher. Payment standards are set by each
housing authority. They differ for bedroom size and property location).
1.06 Allowable Fees and Charges
Fees considered reasonable and customary may be charged, such as application fee, if such fees
are customary for rental housing in the neighborhood. Fees for parking or services such as bus
transportation or meals can only be charged if the services are voluntary and are not a
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condition of occupancy. An eligible tenant cannot be charged a fee for the owner or manager’s
work involved in completing the additional forms or documentation required for the AHP, such
as the Resident Income Certification.
Down payment fees/rent deposit for the ADU should not exceed one month’s rent.
1.07 Fixed or Floating Affordable Dwelling Units
ADUs may be “fixed” or “floating” and are designated on a property-by-property basis. The
enforcement agreement must contain fixed or floating unit designations.
Fixed Units – The ADUs are identified by unit number and never change. Development
Agreements may outline a specific quantity of bedroom sizes and square footage, including
minimum floor space, when considering the placement of ADUs within the project. Units in
properties where all units are ADUs automatically are considered fixed.
If units throughout a project are not comparable (as defined by the HRA) or are in several
scattered sites, the ADU unit designation must be fixed.
Floating Units – The ADUs may change over time as long as the total number of ADUs and
specific quantity of bedroom sizes or ADU total square footage in the property remains
compliant with the original Development Agreement. If a property’s enforcement agreement
does not specify floating units, then the units that were initially designated as ADUs at project
completion will be used to determine comparable floating units.
See Chapter 2, Maintaining the Unit Mix, for more information.
1.08 Rent Increases
If ADU rents remain below the maximum allowed, an owner/agent may impose a rent increase
as allowed by the enforcement agreement no earlier than one year from the date the project
was completed (date the building Certificate of Occupancy was issued) and no more frequently
than once a year thereafter. If an owner/agent wishes to increase rents, the request must be
within reasonable limits to cover increases in expenses such as real estate taxes or operating
expenses. At no time can proposed rent increases exceed the current MTSP (LIHTC rents) rent
limits for that development.
If the owner/agent increases rents as provided above, tenants must be given a written notice
60 days in advance or in accordance with lease provisions before implementation.
1.09 Utility Allowances
The AHP requires that an allowance for tenant paid utilities be considered as a housing cost to
the tenant and be factored in when determining rent for an ADU. The HRA approved the use of
Metro HRA’s Utility Allowance Schedule (effective 2/1/18 and amended annually) as the
document to use to determine an ADU’s utility allowance. Utility allowance schedules are
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usually updated annually. It is the owner’s/agent’s responsibility to obtain an updated utility
allowance and retain it in the property records. Changes in utility allowances must be
implemented within 90 days of the publication effective date. If an increase in the utility
allowance causes the ADU rent to exceed the applicable AHP rent limit, the unit rent must be
adjusted (lowered) to bring the gross rent of the unit into compliance with the AHP rent limits.
However, at no time will the ADU rent be adjusted to an amount lower than the ADU rent in
place at project commitment.
An alternative estimate for utility payments may be used, as allowed by Section 42 and
approved by the City. Utility allowance methodology change requests and all supporting
documentation must be emailed to the Affordable Housing Development Manager at the City
for approval. Requests for a change in the property's established utility allowance
methodology, to one of the approved utility allowance methodologies should reflect savings
from energy efficiency improvements in a manner that is fair to tenants, financially feasible for
owners and reduces long-term public subsidy expenditures.
General Submission Requirements
Each request for a change in utility allowance methodology must include:
1. Cover letter with the current utility allowance and proposed utility methodology
2. A current utility allowance schedule (i.e. local Metro HRA Utility chart) completed with
tenant paid utilities
3. Copy of 90-day Notice to the resident including new Utility Allowance and Tenant Rent
4. Utility Allowance Certification, signed and dated
5. Supporting documentation as required (estimate from a properly licensed engineer for
example)
Allowable Utility Allowance Methodologies
The property owner may request to use one or more of the following utility allowance
methodologies that meets the AHP requirements. If the project has multiple funding sources,
the rents must comply with the program gross rent limits for each program. If the project also
has Section 8 Project Based Assistance, the PBA administrator determines the UA schedule for
the unit.
PHA Utility Method: The local PHA utility allowance for the voucher program. This is the typical
current method of establishing Utility Allowances used by most Section 42 LIHTC projects.
Owners may request consideration of a different utility allowance methodology from the
following alternatives:
1. HUD Utility Schedule Model (HUSM): An estimate calculated via HUD’s online Utility
Schedule Model, using recent utility rates. The HUSM enables users to calculate utility
schedules using a project specific methodology by entering the property housing type,
and utility rate information (tariffs) for the property location. This model is based on
climate and survey information from the U. S. Energy Information Administration of the
Department of Energy and it incorporates energy efficiency and Energy Star data. The
HUSM (web based and Excel format) and use instructions can be accessed on the HUD
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Exchange website User at: https://www.hudexchange.info/trainings/courses/hud-
utility-schedule-model-calculating-utilityallowances-for-home-webinar1/
2. Utility Company Estimate (UCE): An estimate from a local utility company providing the
estimated cost of utilities for a unit of similar size and construction for the project or
from the geographic area where the project is located.
3. Energy Consumption or Engineered Model (ECM): An estimate from a properly licensed
engineer, or qualified professional, using an energy consumption model that takes into
account the unit size, building orientation, design and materials, mechanical systems,
appliances and characteristics of the building location. If the ECM report is completed by
a qualified professional that is not a properly licensed engineer, the request must
include additional information to support the qualifications and experience of the
qualified professional in providing energy consumption utility allowance reports. The
engineer or qualified professional must be licensed in Minnesota.
If the property is regulated by HUD, or another form of project-based subsidy, the program-
approved utility allowance may be used.
1.10 Record Retention
Owners/agents must retain each household’s initial application forms including household
income and asset documentation and lease and leasing agreements/addenda for three (3)
years after the tenant’s move out effective date.
Owners/agents must maintain applicant and tenant information in a way to ensure
confidentiality. Any applicant or tenant affected by negligent disclosure or improper use of
information may bring a civil action for damages against the owner/agent and seek other relief,
as appropriate. Owners/agents must dispose of records in a manner that will prevent any
unauthorized access to personal information, e.g., burn, pulverize, shred, etc.
1.11 Leases
Each lease must include the legal name(s) of the parties to the agreement and all other
occupants, a description of the unit to be rented (address), the term of the lease, the rental
amount, the use of the premises, and the rights and obligations of each party. The lease shall
also inform the tenant that fraudulent statements and information are grounds for eviction and
that the tenant could become subject to penalties available under federal law.
Initial leases for ADUs must be for 12 months unless another term is agreed to mutually by
owner/agent and tenant. If tenant agrees to a shorter term, that agreement must be in writing
and kept in the tenant’s file. At no time can a lease term be for less than 30 days.
ADU leases must contain language that the owner/agent reserves the right to adjust tenant
rents in accordance with the AHP rent limits and/or in the event a tenant’s income increases
above the income limits of the AHP.
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The lease also must contain a provision that the owner/agent retains the right to recertify the
tenant’s income and household composition on an annual basis. The tenant’s failure to
cooperate with the annual recertification constitutes a violation of the lease.
If the lease used for the ADU unit does not contain any of the required provisions and/or
contains any prohibited provisions, an AHP Lease Addendum must be signed by the tenant and
kept in the tenant’s file. If a new lease is executed, a new AHP Lease Addendum also must be
executed. Prohibited lease terms are defined in the AHP Lease Addendum (see Appendix B).
Owner/Agent may not evict or terminate resident (including refusal to renew a lease) without
good cause. Good cause is (a) serious or repeated violation(s) of the material terms and
conditions of the Resident Lease. Use of the AHP Lease Addendum including the AHP Lease
Rider outlining provisions on evictions and terminations is mandatory.
During the final year of the POA, new leases for the Affordable Units must be for a term of no
less than six months, and such newly leased Affordable Units will be subject to all the
Affordable Housing Requirements until the expiration of such new leases.
An AHP Lease Addendum is not required when the HUD model lease for subsidized housing is
used.
1.12 Income Certification
The owner/agent must verify and certify tenant income eligibility and student status at move in
and recertify at least annually thereafter. At initial move in, or when first being determined
eligible for an ADU and in every 3rd year of the affordability period (not tenancy), household
composition, income and income from assets must be verified via third-party verification or
other forms of supporting documentation and kept in the tenant’s file. In other years, tenants
must, at a minimum, self-certify to their anticipated income (including income from assets),
family size, and composition.
As part of the monitoring process, tenant files will be reviewed at initial occupancy of the
project and every 3rd year thereafter.
1.13 Increases in Income
The owner/agent must ensure that any household whose anticipated gross income exceeds
140% of the maximum income limit at recertification pays not less than the market or similar
rent as the other non-ADUs in the development. A minimum notice of 60 days is required for
increases to tenant rent. The unit must be marketed to eligible tenants when vacated. If the
units are floating, the rent is increased, and the next available unit must be rented at affordable
rates to an income eligible tenant. Conversely, the tenant whose income increase to above
140% of AMI could be relocated to a Market Rate unit if the affordable units are fixed.
For units assisted with both AHP funds and Low Income Housing Tax Credits (LIHTC), a tenant is
not considered over income until income exceeds the applicable 140% LIHTC limit. When a
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tenant’s income exceeds the 140% LIHTC limit, the tenant’s rent is adjusted to the LIHTC rent
limit if the project is 100% LIHTC or, if the project is mixed income, to the market rent for
similar non-ADUs in the property.
1.14 Property Standards
The owner/agent must keep all units in compliance with local codes and other applicable state
and local building codes to ensure the units are decent, safe, and sanitary at all times.
1.15 Affirmative Fair Housing Marketing Plan
Owners/agents must adhere to Equal Opportunity, Affirmative Marketing, and Fair Housing
practices in all marketing efforts, eligibility determinations and other transactions. The Equal
Housing Opportunity logo or statement must be used in all advertising of vacant units (We do
business in accordance with the Federal Fair Housing Law. It is illegal to discriminate against
any person because of race, color, religion, sex, handicap, familial status, or national origin).
In addition to the federal protections mentioned above, the Minnesota Human Rights Act
makes it illegal to discriminate against any person with respect to housing and real property,
because of race, color, creed, religion, national origin, sex, marital status, disability, status with
regard to public assistance, sexual orientation or familial status.
A file must be maintained with all marketing efforts related to the property including
newspaper ads, social service contacts, photos of signs posted, etc. Records will be reviewed
during on site monitoring to ensure that all efforts follow federal requirements and are being
adequately documented.
1.16 Fair Lease and Grievance Procedures
Fair lease and grievance procedures should be objective. They should clearly state:
• To whom a tenant should direct a complaint;
• Who will investigate and/or respond to the complaint; and
By when the tenant should expect to receive a response. Chapter 2 –
Maintaining the Unit Mix
2.01 Fixed Affordable Dwelling Units
Properties with units that are not comparable in terms of size, amenities and features must
have fixed ADUs. Fixed ADUs means specific units are designated as the ADUs for the duration
of the affordability period. Owner/Agent must maintain these specific units as the ADUs.
Maintaining the required number of ADUs, is called complying with the unit mix requirements.
At no time will non-ADUs be subject to AHP rent and income requirements when the ADUs are
fixed.
When an owner/agent recertifies a tenant’s income, the tenant’s income may have increased.
A tenant is considered “over income” in the AHP when:
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• The tenant occupies an ADU and the tenant income increases to 140% of the current
income limit for that family size; or
• For ADUs that are also LIHTC units, a tenant is considered “over income” when its
income goes over 140% of the qualifying tax credit election (Average Income, 50% or
60%) for that unit.
When a tenant is over income, the unit that the tenant occupies is considered temporarily out
of compliance with the AHP’s occupancy and unit mix requirements. Temporary
noncompliance due to an increase in an existing tenant’s income is permissible if the
owner/agent takes specific steps to restore the correct unit mix in the property as soon as
possible. When the tenant’s income exceeds the AHP’s income limit (140%), the unit rent also
must be adjusted.
The owner/agent cannot terminate the lease immediately if the tenant’s income has increased
above the AHP income limit. Instead, the owner/agent may extend /renew the lease for up to
six months. If the tenant remains over income at the time of the next recertification, a 60-day
notice to vacate may be issued to the tenant. If the tenant is determined to be under the AHP
income limit at the time of recertification, the unit is considered back in compliance.
2.02 Floating Affordable Dwelling Units
Properties with units that are comparable in terms of size, amenities and features can have
floating ADUs. Properties with floating ADUs must maintain the required number of ADUs
throughout the POA; however, the initial ADUs do not have to remain as ADUs throughout the
POA.
When ADUs float, the specific units that carry the ADU designation may change, or float, among
assisted and non-assisted units during the POA. If/when an initial ADU goes out of compliance
due to a tenant’s income going over the AHP (or LIHTC) income limit, a non-ADU can replace
the out of compliance ADU if the tenant income and unit rent of the non-ADU meet the ADU
requirements. In other words, the ADU designation “floats” to another unit.
For example, if a property has an over-income tenant in an ADU, when the next non-ADU
comparable unit becomes available, it will be designated as an ADU and rented to an income
eligible tenant. The unit occupied by the over income tenant is redesignated as a market rate
unit.
Maintaining the required number of comparable ADUs is called complying with the unit mix
requirements.
When recertifying a tenant’s income, an owner/agent may find that the tenant’s income has
increased. A tenant is considered “over income” when:
• The tenant occupies an ADU and the tenant income increases over the current AHP
income limit (140% AMI) for that family size; or
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• In ADUs that are also LIHTC units, a tenant is considered “over income” when its income
increases to 140% or more of the qualifying tax credit election (50% or 60%) for that
unit.
When a tenant is over income, the unit that the tenant occupies is considered temporarily out
of compliance with the AHP’s unit mix requirements. Temporary noncompliance due to an
increase in an existing tenant’s income is permissible if the owner/agent takes specific steps to
restore the required unit mix in the property. The rents of the over income tenants can be
adjusted.
When redesignating units in a property with floating ADUs, owner/agent can choose to
substitute a unit that is equal or “greater” than the original ADU, but generally they cannot
substitute one that is “lesser”. A lesser unit can be substituted only when doing so preserves
the original unit mix. A greater unit is one that might be considered preferable because of
larger size or additional bedrooms. The goal is to maintain the same number and type of ADUs
as were designated originally. Therefore, if an owner/agent makes a substitution that is
“greater,” it later can substitute an available unit that is “lesser” to restore the original unit mix.
Once a comparable non-ADU unit is designated as the new ADU, the unit with the over income
tenant is redesignated as a non-ADU or market rate unit. At this point, the owner/agent may
adjust the tenant’s rent without regard to the AHP rent requirements (although requirements
from other funding sources still may apply). Rent increases are subject to the terms of the
lease.
Note, a tenant in a floating ADU whose income exceeds AHP income limit is not required to pay
more than the market rent for a comparable, unassisted unit in the property.
The owner/agent cannot terminate the lease based on the tenant’s increase in income.
Chapter 3 – General Occupancy Guidelines
3.01 Qualification of Applicants
Applicants for ADUs shall be advised early in their initial visit to the property that there are
maximum income limits that apply to these units. They also will be made aware that the
anticipated income of all persons expecting to occupy the unit must be verified and included on
a Resident Income Certification form prior to occupancy, and that tenant income and student
status will be reviewed annually.
If an individual is enrolled as a student at an institution of higher education, is under the age of
24, is not a veteran, is not married, is not a person with disabilities, and does not have a
dependent child, in order to be eligible for a ADU, the student must be individually income
March 2020 Page 15 of 29
eligible and the student’s parents (the parents individually or jointly) must be income eligible
unless the student can demonstrate his or her independence from parents.
AHP has adopted the section 8 Housing Choice Voucher program restrictions on student
participation found at 24 CFR 5.612, which exclude any student that:
1. Is enrolled in a higher education institution.
2. Is under the age of 24.
3. Is not a veteran of the US Military.
4. Is not married**.
5. Does not have a dependent child(ren).
6. Is not a person with disabilities.
7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible on
the basis of income.
**Effective August 23, 2013, same-sex marriages are recognized as marriages for student
eligibility purposes.
To determine a student’s independence from his or her parents, the owner should consider all of
the following:
1. The individual must be of legal contract age under state law; and
2. The individual must have established a household separate from parents or legal guardians for at
least one year prior to application for occupancy, or the individual must meet the U.S. Department
of Education’s definition of an independent student; and
3. The individual must not be claimed as a dependent by parents or legal guardians pursuant to IRS
regulations; and
4. The individual must obtain a certification of the amount of financial assistance that will be
provided by parents, signed by the individual/s providing the support. This certification is required
even if no assistance will be provided.
To document a student’s independence from parents:
1. Review and verify previous address information to determine evidence of a separate household,
or verify the student meets the U.S. Department of Education’s definition of “independent
student”; and
2. Review prior year income tax returns to verify if a parent or guardian has claimed the student as
a dependent (except if the student meets the Department of Education’s definition of “independent
student”); and
3. Verify income provided by a parent by requiring a written certification from the individual
providing the support. Certification is also required if the parent/s is providing no support to the
student. Financial assistance that is provided by persons not living in the unit is part of annual
income.
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Verification of student eligibility must be maintained in the tenant file along with the income
certification.
3.02 Eligibility Determination
A fully completed Household Questionnaire is critical to an accurate determination of eligibility.
The information furnished on the application should be used as a tool to determine all sources
of anticipated income and assets.
After the tenant completes the Household Questionnaire, the owner/agent must have all
income verified by obtaining source documentation (award letters, offers of employment, W-
2’s, check stubs (not paycheck), bank statements, investment records, etc.) or by a third-party
(public agency, employer, financial institution). If total cash value of assets is less than $50,000,
assets can be self-certified using the Under $50,000 Certification. Assets exceeding $50,000
must be third-party verified. The application, income and asset verifications, and lease are to
be executed prior to move in. All occupants in an ADU must be certified and have a valid lease
on file. All household members age 18 and over must sign all required documents.
3.03 Change in Household Composition
If a tenant in an ADU (no LIHTC) wishes to have an additional person move into the unit within
the first 6 months of occupancy, the following steps must be taken:
1. The prospective tenant must complete a Household Questionnaire and allow time for
verification of income and assets as required of the initial tenant; and
2. The prospective tenant's income must be added to the current tenant's certification and
a determination made as to whether the new household is still within the AHP income
guidelines. If the new household income exceeds the guidelines, then once proper
notice is given, the tenant must pay the market rate. If the ADU is floating, the ADU
designation must be floated to another eligible unit. The new rent of the now over
income household cannot exceed market rent for a comparable unassisted unit.
The tenant file shall also be documented when any household member vacates the unit.
3.04 Minimum Lease Requirements
Initial tenant leases, including a signed and dated AHP lease addendum (if applicable), must be
on file and must specify a term of at least 12 months. Subsequent leases may have a shorter
term, with written mutual agreement. Leases must not contain any of the prohibited lease
terms. Any non-renewal or termination of leases must be in accordance with the lease and/or
AHP lease addendum.
Owners/agents must comply with the lease requirements found in Section 601 of the Violence
Against Women Reauthorization Act (VAWA) of 2013. HRA highly encourages owners/agents to
use the VAWA Lease Addendum, form HUD-91067 or its successor VAWA Lease Addendum
March 2020 Page 17 of 29
form. In general, owner/agent may not construe an incident of actual or threatened domestic
violence, dating violence, sexual assault, or stalking as a serious or repeated violation of a lease
term by the victim, or threatened victim, as good cause for terminating tenancy. However, in
accordance with VAWA 2013, owner/agent may bifurcate a lease to terminate the tenancy of
an individual who is a tenant or lawful occupant and engages in criminal activity directly
relating to domestic violence, dating violence, sexual assault, or stalking against another lawful
occupant living in the unit or other affiliated individual as defined in the VAWA 2013.
Owner/Agent should include a copy of HUD-5382 form with each tenancy termination or
eviction notice to allow an individual to certify that he or she is a victim of domestic violence,
dating violence, sexual assault or stalking. The form is to be completed and submitted to
owner/agent within 14 business days or an agreed upon extension date for the individual to
receive protection under the VAWA.
3.05 House Rules
Developing a set of house rules is a good practice. The decision about whether to develop
house rules for a property rests solely with the owner/agent. If house rules are listed in the
lease as an attachment, then they must be attached to the lease. By identifying allowable and
prohibited activities in housing units and common areas, the owner/agent provides a structure
for treating tenants equitably and for making sure tenants treat each other with
consideration. House rules also are beneficial in keeping properties safe and clean and making
them more appealing and livable for the tenants. They also are extremely beneficial if it
becomes necessary to evict a tenant for inappropriate behavior. For more information on
House Rules, refer to Chapter 6-9 of the HUD 4350.3 REV 1, Change 4 Handbook.
3.06 Number of Persons Per Unit
There is no federal regulation governing the number of persons allowed to occupy a unit based
on size; however, at initial occupancy ADUs will have a minimum requirement of at least one
person per bedroom. It is important, though, to be consistent when accepting or rejecting
applications. It is required that the owner/agent determine the minimum and maximum
number of people that will be allowed to occupy each size unit and put that formula in writing
as part of the Tenant Selection Plan and submit the Plan to the HRA or designated agent for
approval. The owner/agent may refer to the HUD Handbook 4350.3 REV 1, Change 4, Chapter
3-23, regarding occupancy standards. By following the standards described, owners/agents can
ensure that applicants and tenants are housed in appropriately sized units in a fair and
consistent manner.
3.07 Tenant Selection Plan
Owner/Agent must develop a formal written policy that clearly states the procedures and
criteria the owner/agent will consistently apply in drawing applicants from the waiting list,
March 2020 Page 18 of 29
screening for suitability for tenancy, and implementing income targeting requirements. The
Tenant Selection Plan must state if there is an elderly restriction (“seniors only” building).
In accordance with the VAWA of 2013, the selection criteria cannot deny admission on the basis
that the applicant has been a victim of domestic violence, dating violence, sexual assault or
stalking. Owner/Agent should provide to each applicant/tenant HUD form 5382or its successor
form to allow the applicant/tenant to provide information regarding his or her status as a victim
of domestic violence, dating violence or stalking.
Owners/agents may refer to the HUD Handbook 4350.3 REV 1, Change 4, Chapter 4, when
developing a tenant selection plan. HRA will review the Tenant Selection Plan as part of its
monitoring process.
3.08 Government Data Practices Act Disclosure Statement Form
In working with applicants and tenants, the owner/agent warrants compliance with applicable
data privacy laws and regulations including the Minnesota Government Data Practices Act,
which sets policies on the information that can be obtained, stored and/or released in
connection with public programs. To comply with this law, the AHP Government Data Practices
Act Statement form must be kept in each tenant's permanent file. Note that this is not a
release authorization for verification of income and assets and must not be used as such. Each
adult household member’s name must be printed clearly at the top in the box provided. An
unsigned and/or undated form is not valid and will be noted as insufficient at time of file
inspection.
1. The form is to be signed one time and is valid as long as the resident lives at the
property and participates in the program(s) identified in item #2 on page 1 of the form.
If a resident moves from one unit to another, the original signed and dated form should
be moved to the file for the new unit. A copy should be kept in the move out file for the
old unit.
2. A valid form must include all relevant attachments. Some properties or units within a
property may require 2 or more attachments for multiple programs.
3. Only one form is needed per unit as long as the head of household, spouse, co-head,
and all household members over the age of 18 have signed and dated the form.
4. If an adult is added to the household or a minor reaches age 18, they must be added to,
sign, and date the original form. It is not necessary to complete a new form.
5. A copy of the form should be made available to the applicant/tenant. It is acceptable to
give them an unsigned copy.
6. For new residents, the form should be completed at the time of initial application.
A Government Data Practices Act Disclosure form that can be used for all ADUs is available on
the HRA website.
3.09 Income Verification
At initial occupancy, owner/agent must determine whether prospective tenant(s) of ADUs
qualify as low income households. Income eligibility is based on anticipated income as defined
March 2020 Page 19 of 29
at 24 CFR 5.609 (Section 8). When collecting income verification documentation, owner/agent
must consider any likely changes in income. Owner/Agent must follow appropriate steps in
determining whether households are eligible prior to admittance.
Minnesota Housing provides sample verifications and other forms to assist owners/agents in
qualifying eligible tenants. The release of information (at top of form) must be completed and
signed by the person who is the subject of the verification prior to sending the form to an
employer or other income source. Completed and returned verifications are used to calculate
and document income.
An Income and Asset Calculation Worksheet form also is available and can be used to assist in
showing the individual calculations of income and asset income. This is highly recommended
and will assist an inspector during a file review. This form should be dated and signed by the
owner/agent.
3.10 Gross Annual Household Income
Gross annual income for households living in ADUs shall be determined in a manner consistent
with Section 8 of the U.S. Housing Act of 1937.
Note that the information below only provides a summary. Owners and managers must use
current circumstances to project income, unless verification forms or other verifiable
documentation indicate that an imminent change will occur. For guidance in this section and in
determination of tenant income, the HUD Handbook 4350.3, Occupancy Requirements of
Subsidized Multifamily Housing Programs, is used and is recommended as a reference guide.
The HUD Handbook 4350.3 and HUD notices can be obtained by visiting HUD’s website:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handboo
ks/h sgh/4350.3.
The determination of annual income must include all types of income in the amount
anticipated to be received by the tenant in the 12 months following certification/
recertification. Owner/Agent should use current circumstances to project income, unless
verification forms or other verifiable documentation indicate that a change will occur
(increase/decrease in rate of pay and/or hours). However, if the owner/agent is unable to
determine annual income using current information because the family reports little to no
income, or because income fluctuates, the owner/agent may average past actual income
received or earned within the last 12 months before the certification date to calculate annual
income.
3.11 Factors that Affect Household Size
When determining family size for occupancy, the owner/agent must include the following
individuals who currently are not living in the unit:
• Children temporarily absent due to placement in a foster home;
• Children in joint custody arrangements who are present in the household 50% or more
of the time;
March 2020 Page 20 of 29
• Children who are away at school but who live with the family during school recesses;
• Unborn children of pregnant women. When a pregnant woman is an applicant, the
unborn child is included in the size of the household and is included for purposes of
determining the maximum allowable income. The rental application should ask the
following question: “Will there be any changes in household composition within the
next 12-month period?” If an applicant answers that a child is expected (birth, foster or
adoption), the owner/agent should explain to the applicant this is an additional
household member and use the corresponding income limit, and self-certification of
additional member should be used as documentation within the initial certification.
• Children who are in the process of being adopted;
• Temporarily absent family members who still are considered family members. For
example, the owner/agent may consider a family member who is working in another
state on assignment to be temporarily absent. Persons on active military duty are
considered temporarily absent (except if the person is not the head, co-head or spouse
or has no dependents living in the unit). If the person on active military duty is the
head, co-head, or spouse, or if the spouse or dependents of the person on active
military duty resides in the unit, that person’s income must be counted in full;
• Family members in the hospital or rehabilitation facility for periods of limited or fixed
duration. These persons are temporarily absent as defined above.
Persons permanently confined to a hospital or nursing home are not considered household
members.
When determining family size for establishing income eligibility, the owner/agent must include
all persons living in the unit except the following:
• Live-in aides
• Children of live-in aides
o A live-in aide/attendant is a person who resides with one or more elderly persons,
near-elderly persons, or persons with disabilities, and who:
Is determined to be essential to the care and well-being of the person(s);
Is not obligated for the support of the person(s); and
Would not be living in the unit except to provide the necessary
supportive services.
While a relative may be a live-in aide/attendant, s/he must meet the above requirements,
especially the last. The live-in aide qualifies for occupancy only if the individual needing
supportive services requires the aide’s services and remains a tenant. The live-in aide may not
qualify for continued occupancy as a remaining family member. The owner/agent must obtain
verification from the person’s physician, psychiatrist or other medical practitioner or health
care provider that the live-in aide is needed to provide the necessary supportive services
essential to the care and well-being of the person and should not add the attendant to the
lease. The owner/agent may not require applicants or tenants to provide access to confidential
medical records or to submit to a physical examination.
March 2020 Page 21 of 29
Some households may include other persons who are considered family members for the
purposes of determining household size and income eligibility, including:
• Foster adults
• Foster children
Please see Appendix A for more detail on whose income is counted, what is counted as income
and what is not, and how to account for income generated by assets.
3.12 General Income Verification Requirements
All income and asset sources must be disclosed on the eligibility application and verified. A
properly completed application must be used as the basis for determining what verifications
will be necessary. The application, along with all supporting documentation and the Resident
Income Certification, will be reviewed by HRA staff or its agent during a tenant file review.
The following describes the types of third-party verification in order of acceptability:
1. Third-party verification from source (written):
a. An original or authentic document generated by a third-party source that is
dated within six months from the date of receipt by the owner/agent.
Documents may be in possession of the tenant (or applicant), and commonly are
referred to as tenant provided documents. These documents are considered
third-party verification because they originated from a third-party source.
Examples of tenant provided documentation that may be used include, but are
not limited to: pay stubs, payroll summary report, employer notice/letter of
hire/termination, SSA benefit letter, bank statements, child support payment
stubs, welfare benefit letters and/or printouts, and unemployment monetary
benefit notices.
Owner/Agent must consider the following when using tenant provided
documentation:
i. Is the document current? Documentation of public assistance may be
inaccurate if it is not recent and does not show any changes in the
family’s benefits or work and training activities.
ii. Is the documentation complete? Owner/Agent may accept pay stubs to
document employment income only if the applicant or tenant provides
the most recent two months of consecutive pay stubs to illustrate
variations in hours worked. Actual paychecks or copies of paychecks
should never be used to document income because deductions are not
shown on the paycheck.
iii. Is the document an unaltered original? The greatest shortcoming of
tenant provided documents as a verification source is their susceptibility
to undetectable change through the use of high quality copying
equipment. Documents with original signatures are the most reliable.
Photocopied documents generally cannot be assumed to be reliable.
March 2020 Page 22 of 29
2. Written documentation sent directly to the third-party source by mail or electronically
by fax, email or internet.
Verification forms must contain a release authorization signed by the applicant/tenant.
Do not use a blanket release authorization as this entitles the owner/agent to obtain
information to which it is not entitled or needed for eligibility determination. The Data
Practices Act Disclosure Statement is not a verification release. Applicants should be
asked to sign two copies of each verification form. The second copy may be used if the
first request has not been returned in a timely manner.
Income verification requests must be sent directly to and from the source. They are
never given to the tenant to obtain signatures. If the returned verifications do not
contain complete information, owner/agent must follow up with the source to obtain
complete information. Typical examples include failure to indicate interest rates, dates
of anticipated raises, amounts of anticipated raises, etc. All pertinent information must
be documented in the file and must also include the name, phone number and title of
the contact, the name of the person accepting the information, and the date.
The single form AHP Eligibility Verification may be used to document income and asset
eligibility in lieu of separate verification(s) for each separate income or asset source, if
the sole source of income is Housing Support. The AHP Eligibility Verification confirms
receipt of Housing Support (formally known as GRH) since it identifies that the applicant
is in fact qualified for income-based Medical Assistance (MA) through Minnesota’s
Department of Human Services. (Housing Support recipients must have MA prior to
obtaining housing grant funding). MA eligibility documents AHP eligibility because the
Federal Poverty Guidelines (FPG) are significantly less than the LIHTC income limits.
NCCP.org (NCCP.org/tools/converter/) defines poverty as a family income less than 100
percent of the federal poverty threshold, as determined by the U.S. Census Bureau; Low
Income is defined as family income less than 200 percent of the poverty threshold.
3. Third-party verification from source (verbal).
When clarifying information over the telephone, it is important to be certain that the
person on the telephone is the party he or she claims to be. Generally, it is best to
telephone the verification source rather than to accept verification from a source calling
the property management office. Verbal verification must be documented in the file.
When verifying information by phone, the owner/agent must record and include in the
tenant’s file the following information:
a. Third-party’s name, position, and contact information;
b. Information reported by the third-party;
c. Name of the person who conducted the telephone interview; and
d. Date and time of the telephone call.
4. Self Certification
An owner/agent may accept a tenant’s notarized statement or signed affidavit regarding
the veracity of information submitted only if the information cannot be verified by
March 2020 Page 23 of 29
another acceptable verification method. In these instances, the owner/agent must
document the file why third-party verification was not available. The owner/agent may
witness the tenant signature(s) in lieu of a notarized statement or affidavit.
The following describes use of electronic information when used as third-party
verification.
Electronic Verification. The owner/agent may obtain accurate third-party written
verification by facsimile, email, or Internet, if adequate effort is made to ensure that the
sender is a valid third-party source.
a. Facsimile. Information sent by fax is most reliable if the owner/agent and the
verification source agree to use this method in advance during a telephone
conversation. The fax should include the company name and fax number of the
verification source.
b. Email. Similar to faxed information, information verified by email is more
reliable when preceded by a telephone conversation and/or when the email
address includes the name of an appropriate individual and firm.
c. Internet. Information verified on the Internet is considered third-party
verification if the owner/agent is able to view web-based information from a
reputable source on the computer screen. Use of a printout from the Internet
may also be adequate verification in many instances.
Steps used to obtain written verification as described in 1, 2 and 3 above must be documented
to show just cause for using other types of verification. The owner/agent must include the
following documents in the tenant file:
1. A written note explaining why third-party verification is not possible, signed and
dated by the applicant/resident.
2. A copy of the date-stamped original request that was sent to the third-party.
3. Written notes or documentation indicating follow up efforts to reach the third-party
to obtain verification.
4. A written note indicating the request has been outstanding without a response from
the third-party.
Note: If a tenant is employed by a business owned by the tenant's family or is employed by the
property owner/agent or the management company, a copy of a recent pay stub verifying year-
to- date earnings also is required.
Upon receipt of all verifications, owner/agent must determine if the resident is qualified for
participation in the AHP. All verifications should be reviewed, and calculations made as
necessary.
3.13 Corrections to Documents
Sometimes it is necessary to make corrections or changes to documents. A document that has
been altered with correction fluid or "white out" will not be accepted by HRA. When a change
is needed on a document, the person making the correction must draw a line through the
March 2020 Page 24 of 29
incorrect information, write or type the correct wording or number, and have all parties initial
and date the change.
3.14 Effective Term of Verifications
Verifications of any kind are valid for 6 months prior to an ADU tenant’s move in date or
recertification date.
3.15 Over Income Households
When determining eligibility to occupy an ADU, the household's gross income must always be
considered. However, if a tenant goes over the income guidelines of 140% of household
income at recertification, the owner/agent must raise the over income tenant’s rent to reflect
Fair Market Rent, or relocate tenant to a Market Rate Unit, as soon as the lease permits in
accordance with the terms of the lease (see Chapter 2). The AHP does not require interim rent
adjustments.
3.16 Annual Recertification
All households occupying an ADU must be recertified at least annually from the date of
occupancy. Annual recertifications must be effective on or before the occupancy anniversary
date of the previous certification. Owner/Agent may align recertification dates with other
program certifications or so that all units in the property are recertified at one time during the
year. However, if a period of twelve (12) months passes without a recertification being
completed for any ADU, the unit is considered out of compliance. Owner/Management may
request an annual schedule whereby all tenants are recertified during the same month
however before making changes to schedule, an email request must be made, and approved by
the City first. The requirement to recertify is included in an ADU lease or addendum, tenant
refusal to comply can be considered a violation of the lease and is grounds for termination.
Income must be third-party verified in every 3rd year of the affordability period, not tenancy.
Example: Every Third Year Full Certification
Property ABC received Certificate of Occupancy on 11/1/2019
Period of Affordability (POA) for Property ABC will be a total of 15 years starting on
11/1/2019 and ending on 11/1/2034
Amanda Johnson Moved onto Property ABC on 12/1/2019
In 2019 (POA Year One): Management verifies income using SSA Benefits Award Letter, a copy
of Amanda’s current PERA Benefit Letter (Pension Public Employees Retirement Association
of Minnesota) and Under $50,000 Asset Verification to determine eligibility at Move In. All
items must be third-party verified using source documents.
March 2020 Page 25 of 29
In 2020 (POA Year Two): Amanda Johnson needs to complete her Annual Recertification but in
POA Year Two for Property ABC, only a self-certification of income and asset, signed by all adult
household members is needed. Use of the AHP Self-Certification of Income & Asset form can be
used instead of third-party verifications during this non-3rd year. Note: Move In certifications
for eligibility must always third-party verify using source documents.
In 2021 (POA Year Three): Amanda Johnson needs to complete her Annual Recertification but
in POA Year Three for Property ABC, only a self-certification of income and asset, signed by all
adult household members is needed. Use of the AHP Self-Certification of Income & Asset form
can be used instead of third-party verifications during this non-3rd year. Note: Move In
certifications for eligibility must always third-party verify using source documents.
In 2022 (Year Four): The Annual Recertification requirement for this POA year at Property ABC
states all income and assets reported by a household must be third-party verified using source
documents. The AHP Self-Certification of Income & Asset is not eligible for use for any ADU at
Property ABC.
3.17 Tenant Files
Owner/Agent must maintain a tenant file for each ADU. All permanent documents must be
kept together so they are accessible at each compliance review (income certification and
supporting documentation, lease/AHP addendum, etc.). Annual recertification information,
including the tenant questionnaires, release forms, verifications, and annual inspection reports
must be grouped together by year, with the most recent year on top for review.
The tenant files must contain the following:
• HRA Government Data Practices Act Statement
• Household Questionnaire
• Acceptable verifications of income and assets
• Verification of student eligibility if applicable
• Resident Income Certification (Initial Certification and Annual Recertifications)
• Signed lease agreement and AHP addendum (if needed)
• Lead based paint acknowledgements (rental rehabilitation only; built pre-1978)
All move out files should also contain the following:
• Written 30-day (or greater) notice to vacate (if not available – document in file)
• Security deposit refund (check number and date) or letter of intent to withhold security
deposit within 14 days of move out
Tenant records, including income verifications and development rents must be retained for the
most recent three year period after the tenant moves out.
March 2020 Page 26 of 29
Chapter 4 – Reporting Requirements
The owner/agent must maintain a report of all tenants residing in each ADU at the time of
application through the end of the affordability period and must submit annual reports to HRA
in a form and manner requested by HRA.
Annual compliance reports are due to HRA by March 1 or as otherwise specified by HRA, of
each year during the affordability period. If the due date falls on a weekend or a holiday,
reports are due the following business day. Reports and other required documents must be
submitted as directed by HRA on an annual basis.
4.01 Annual Owner/Agent Certifications
Complete the Owner/Agent Certification to certify compliance with AHP requirements for the
preceding calendar year. Owner/Agent Certifications must be printed, signed and dated by the
authorized Owner/Agent Representative, then scanned and submitted as directed by HRA.
4.02 Compliance Reports
HRA or designated agents will monitor AHP compliance by reviewing annual Owner/Agent
Certifications and analyzing compliance information submitted by the owner/agent. Failure to
submit the Owner/Agent Certification and/or update the report on all units and their related
activity by the due date will constitute noncompliance with the AHP and the related loan
documents.
4.03 Utility Allowance Source Document
Owners/Agents must submit the utility allowance source documents applicable to the reporting
period. Multiple utility allowance source documents may apply to one reporting period.
March 2020 Page 27 of 29
Chapter 5 – Compliance Inspections
Compliance inspections (file reviews) will be conducted every 3 years. Inspections may be
conducted more frequently if HRA determines it to be necessary based on concerns raised
during a previous review or other information.
The compliance inspection includes, but is not limited to, an inspection of at least 20%, but up
to 50%, of the ADU tenant files (with a minimum of four (4) units).
HRA will contact the owner/agent in advance to schedule the tenant file review. The property
inspection and tenant file review may be conducted at the same time or may be conducted
separately by different HRA staff.
5.01 Physical Inspections
This program does not mandate inspections. Rental Licensing requires inspections every three
years.
5.02 Review of Tenant Files and Property Records
During the tenant file review, HRA staff will review Resident Income Certifications, third-party
verifications or other forms of income documentation, leases, lead based paint disclosure
forms, and other management information for selected units.
HRA staff will also review the following property information:
• Utility Allowances and supporting documentation
• Current written tenant selection plan, occupancy policy and/or house rules if changes
were made since the last review
• Current lease and lease addenda/agreement(s)
• Affirmative Fair Housing Marketing Plan/Marketing Plans
• Advertising
• Equal Housing Opportunity posters, logos
• Correspondence
• Tenant ledgers for all units inspected
Chapter 6 – Correction and Consequences of Non-Compliance
If HRA does not receive the required certifications and/or compliance reports when due, or
discovers by audit, inspection, or review, or in some other manner, that the property is not in
compliance with the requirements of the AHP, or with the property’s loan documents, including
the enforcement agreement, the HRA will notify the owner/agent as soon as possible.
6.01 Notice to Owner/Agent
HRA or its designated agent will provide prompt written notice to the owner/agent of an AHP
property if HRA does not receive the annual Owner/Agent Certification and income and
March 2020 Page 28 of 29
occupancy report by the required due date. HRA or its designated agent also will notify the
owner/agent if it does not receive or is not permitted to inspect the Resident Income
Certifications, supporting documentation, and rent records, or discovers by inspection, review,
or in some other manner, that the property is not in compliance with the requirements of the
AHP or with the property’s loan documents, including the enforcement agreement.
6.02 Correction Period
The correction period of 30-days will be set forth in a Notice of Noncompliance to the owner
and its agent. HRA may extend the correction period if HRA determines there is good cause for
granting the extension. Requests for an extension must be in writing from the owner/agent,
must be received by HRA no later than the last day of the correction period identified on the
Notice of Noncompliance, and must include an explanation of the efforts to correct the
noncompliance and the reason the extension is needed.
6.03 Owner’s/Agent’s Response
HRA will review the owner’s/agent’s response and supporting documentation, if any, to
determine whether the noncompliance has been clarified, corrected or remains out of
compliance.
Clarified noncompliance is, for example, where income eligibility was not properly documented
and the inspector cannot make a reasonable determination that the unit is in compliance but
the owner/agent conducts a retroactive (re)certification which completely and clearly
documents the sources of income and assets that were in place at the time the certification
should have been effective, and applies income and rent limits that were in effect on that date.
If documentation is complete and supports that the tenant was eligible as of the effective date,
the file is considered clarified.
Corrected noncompliance is when a violation is observed and there is a period of time during
which the unit is out of compliance but the unit is brought back into compliance. For example,
a late certification or re-certification is out of compliance on the certification due date, and
back in compliance as of the date the last household member signs a retroactive Income
Certification.
Uncorrected noncompliance is a violation that is not corrected or clarified by the end of the
correction period.
Failure to correct all noncompliance could result in extension of the end of the POA, loss of Tax
Increment Financing, or LURC tax treatment or other legal remedies. Persistent noncompliance
also may impact the owner’s/agent’s eligibility for financing from the HRA under any or all its
programs.
March 2020 Page 29 of 29
Chapter 7 – Requests for Action
7.01 Sale or Transfer
Any property owner must provide prior written notice to the HRA before sale or transfer of the
property. The notice will provide that the new owner/agent acknowledges that the terms and
conditions of the Affordable Housing Program as set forth in the governing documents
recorded against the property remain in place.
Attachments:
•Current Rent Income Table
•AFHMP Template – Pages 1-5 without HUD
Signature
•AHC Checklist
•AHC Forms
Proposed changes
Affordable Housing Program
Clarifications and Manual Updates related to Site Visits
1. Period of Affordability
Q.) Because the property was unaware of Inclusionary Housing Programming at
Aurora, and the first IHP unit was moved onto the project in 2019 and CO was dated
12/21/2016 does the POA change?
A.) Yes. Aurora’s POA will start the first day of the month after the last IHP unit is
occupied by an eligible household. This establishment of dates will be set by the City
of Edina.
Manual Update: Edina has published a Program Guide for future projects and this guide
will clarify the start of the property’s period of Affordability. No updates to actual
Compliance Manual will take place because policy will not change as this was a unique
event. City of Edina will work with Aurora teams to start and set POA.
AHC: Will update the Project Spreadsheet to reflect Aurora’s POA has not yet been put
into place; Owner was unaware of AHP between the years of 2016-2018. In 2019, Aurora
began housing household’s eligible for AHP. Project Spreadsheet will be MASTER
template outlining unique monitoring features, such as this, therefore its importance is
extremely high.
Site Follow Up: Lease up units quickly and work with City of Edina to get POA started.
2. Receipt of Elderly Waiver and/or Housing Assistance Program
Q.) Can Manager accept proof of Elderly Waiver or any Housing Assistance Program
(GRH), as eligibility into Inclusionary Housing Program?
A.) Yes. Management can use either the Approval Letter into program (no more than
6 months old) or use of new form called AHP Eligibility Verification to verify eligibility
to AHP. No need to further investigate income or assets when this form is used.
Manual Update: Evidence of Elderly Waiver OR any Rental Assistance program such as
GRH that requires initial qualifications to be completed for receipt of program will be
accepted as eligibility of AHP.
Site Follow Up: – Management to either a.) collect Program Approval Letter for Elderly
Waiver or GRH Program dated within 6 months or b.) use AHP Eligibility Verification AS
OF move in date.
3. Application for Residency
Q.) Can we continue to use our own Application for Residency or should we use the
AHP Rental Application?
A.) Yes you can use your own version. There is no mandated rental application to
use however questions regarding who is applying to live in the unit, what income
and assets the applicant has and if the household member(s) are Full Time Students
must be determined for eligibility. Applications, no matter the version, should be in
the Resident’s File for the entire duration of the tenancy, plus needs to be retained
for 3 years after.
4. Annual Recertification Process
Q.) What is the plan for Annual Recertifications over the duration of the program and
the actual resident?
A.) Manager is to complete full verification of income and assets at Initial, self-
certification of income and assets on year two and full verification of income and
assets in POA year 3.
Manual Update: Additional language stating use of AHP Eligibility Verification is
acceptable for Initial Qualification and during 3rd year full certifications.
Site Follow Up: Management to request AHP households sign and understand the AHP
Lease Addendum. This should clarify the need to be in the office at least annually. AHC
to send POA example document as a tool for monitoring every 3rd year.
Example of Annual Recertification Process:
Property ABC received Certificate of Occupancy on 11/1/2019
Period of Affordability (POA) for Property ABC will be a total of 15 years starting on
11/1/2019 and ending on 11/1/2034
Amanda Johnson Moved onto Property ABC on 12/1/2019
In 2019 (POA Year One): Management verifies income using SSA Benefits Award Letter,
a copy of Amanda’s current PERA Benefit Letter (Pension Public Employees Retirement
Association of Minnesota) and Under $50,000 Asset Verification to determine eligibility
at Move In. All items must be third-party verified using source documents.
In 2020 (POA Year Two): Amanda Johnson needs to complete her Annual
Recertification but in POA Year Two for Property ABC, only a self-certification of income
and asset, signed by all adult household members is needed. Use of the AHP Self-
Certification of Income & Asset form can be used instead of third-party verifications
during this non-3rd year. Note: Move In certifications for eligibility must always third-
party verify using source documents.
In 2021 (POA Year Three): Amanda Johnson needs to complete her Annual
Recertification but in POA Year Three for Property ABC, only a self-certification of
income and asset, signed by all adult household members is needed. Use of the AHP
Self-Certification of Income & Asset form can be used instead of third-party verifications
during this non-3rd year. Note: Move In certifications for eligibility must always third-
party verify using source documents.
In 2022 (Year Four): The Annual Recertification requirement for this POA year at
Property ABC states all income and assets reported by a household must be third-party
verified using source documents. The AHP Self-Certification of Income & Asset is not
eligible for use for any ADU at Property ABC.
5. Affordable Housing Program (AHP) Lease Addendum
Q.) Can project use National Compliance forms as an alternative of the Affordable
Housing Program Lease Addendum; some verbiage is the same, but in different
order?
A.) Manager should use the Affordable Housing Program (AHP) Lease Addendum in
addition to the current addendums being used. The IHP Lease Agreement sheds
light on the program’s importance.
Manual Update: - None
Site Follow Up: - Resident should sign AHP Lease Addendum at Move In. Current
households should sign addendum certified “as of” the move in date. Newly updated
form is pending approval for use updating the student language.
6. Utility Allowance Updates:
Q.) When are the new allowances published and can we use our own consumption
numbers in the future?
A.) AHP uses the Metro HRA published numbers for allowance calculations. Metro
HRA tends to publish new updates in January however that isn’t the case every
year. Affordable Housing Connections shares the published allowances on their
website https://www.ahcinc.net/utilityallowances.html and you can also find the updates to
allowances and payment standards by using www.housinglink.org.
Acceptable Utility Allowance calculation methods can be found in the Affordable
Housing Program Guide on the City of Edina’s website
https://www.edinamn.gov/624/Affordable-Housing.
Manual Update: - Acceptable methodology has been added to the guide. Process for
submission to the City of Edina for approvals has been outlined.
Site Follow Up: - Ensure use of current Utility Allowance schedules.
7. Leasing Activities:
Q.) What lease terms are acceptable for my Affordable Housing Program units?
A.) Initial lease term must be no less 12 months. Leases thereafter can be for any
duration over 30 days. AHP has adopted MHFA’s recent clarification release
regarding one lease rent increase per calendar year. Owner/Management is not
restricted to a percentage when increasing rental rates, and no approval from the
City is necessary to do so as long as the amount offered is below the rental limits
(net rent) at the property.
Manual Update: - The City of Edina has added clarification on leasing activities and has
restricted rental increases to one time per calendar year.
Site Follow Up: - N/A
8. Insurance Premiums not included in Net Rent
Q.) Our initially qualifying households have mandatory fees for rental insurance
however we didn’t take this out of the gross rent when determining the leased
rental rates? How shall we proceed?
A.) Because Nolan Mains funds were committed to and agreements were made
before the official AHP Policy Guide was in place, this net rent oversight will be
disregarded. Notation of this unique circumstance will be noted on the Master
Project list with the City of Edina for future reference and understanding.
Manual Update: - None
Site Follow Up: - None
ARIA
3200 Southdale Circle, Edina MN 554
Project Summary
Management Agent Doran Management
Total Unit Count 184 Total
Total Affordable Housing Units 8 Units
Affordable Housing Compliance 15 Years after issuance of Certificate of Occupancy
Certificate of Occupancy Issue Date: 9/25/2019
Expiration of Compliance Provisions: 9/25/2034
Special Provisions General Occupancy
Student Status Independent Student - exclude any student that is
Restrictive Covenants – Income &
Rent Limits
Restrictive Covenants – Bedroom
Count & Unit Sizes
enrolled in a higher education institution, unless
that student is an “Independent Student” as defined
in the Higher Education Act or has parents who,
individually or jointly, are eligible on the basis of
income.
8 Units @ Median Family Income is equal or less
than 60% of area median gross income adjusted by
family size (AMI)
NA
Utilities Paid Tenant Paid
Owner Paid Notes Property Management not responding to compliance requests.
AURORA ON FRANCE
6500 France Avenue South, Edina, MN 55435
Project Summary
Management Agent: Ebenezer
Total Unit Count: 179 Units
Total Affordable Housing Units 10 Units
Affordable housing units shall be 10% (10 units) of the
assisted and independent units
Affordable Housing Compliance
Provisions:
15 Years after issuance of Certificate of Occupancy
Certificate of Occupancy Issue Date: 12/21/2016
Expiration of Compliance Provisions: 12/21/2031
Special Provisions: Senior Independent Living
Student Status:
Section 8/HOME Student Rule
Independent Student - exclude any student that is
enrolled in a higher education institution, unless that
student is an “Independent Student” as defined in the
Higher Education Act or has parents who, individually or
jointly, are eligible based on income.
Restrictive Covenants: Median Family Income is equal or less than
60% of area median gross income adjusted
by family size (AMI).
Income & Rent Limits:
Income @ 60%
Net Rent @ 60%
Income & Rent Tables:
Multifamily Rent & Income
Limits MTSP. Table
determination based on date of
COO Issuance (Similar to PISD)
Certification Requirements: Must re-examine and verify the income of each resident
household living in an ADU at least annually. Every 3rd
year verification required, based on property’s P.O.A. not
tenancy. Non-3rd year use of self-certification of
income/asset acceptable (see guide for full instruction).
Utility Allowances: Owner Pays All Not Applicable in Net Rent
AVIDOR ON FRANCE
5220 Eden Avenue, Edina, MN 55436
Project Summary
Management Agent: Allegro Management
Total Unit Count: 165 Units
Total Affordable Housing Units 17 Units
Affordable housing units shall be 10% (10 units) of the
rentable space
Affordable Housing Compliance
Provisions:
15 Years after issuance of Certificate of Occupancy
Certificate of Occupancy Issue Date: 05/24/2019
Expiration of Compliance Provisions: 05/24/2034
Special Provisions: Senior Independent Living
Student Status:
Section 8/HOME Student Rule
Independent Student - exclude any student that is
enrolled in a higher education institution, unless that
student is an “Independent Student” as defined in the
Higher Education Act or has parents who, individually or
jointly, are eligible based on income.
Restrictive Covenants: Median Family Income is equal or less than
50% of area median gross income adjusted
by family size (AMI).
Income & Rent Limits:
Income @ 50%
Net Rent @ 50%
Income & Rent Tables:
Multifamily Rent & Income
Limits MTSP. Table
determination based on date of
COO Issuance (Similar to PISD)
Certification Requirements: Must re-examine and verify the income of each resident
household living in an ADU at least annually. Every 3rd
year verification required, based on property’s P.O.A. not
tenancy. Non-3rd year use of self-certification of
income/asset acceptable (see guide for full instruction).
Utility Allowances: Owner Pays All Not Applicable in Net Rent
NOLAN MAINS OF EDINA
3945 Market Street, Edina MN 55424
Project Summary
Management Agent Saturday Property Management
Total Unit Count 100 Total
Total Affordable Housing Units 10 Units
Affordable Housing Compliance 15 Years after issuance of Certificate of Occupancy
Certificate of Occupancy Issue Date: 11/1/2019
Expiration of Compliance Provisions: 11/1/2034
Special Provisions General Occupancy
Student Status Independent Student - exclude any student that is
enrolled in a higher education institution, unless
that student is an “Independent Student” as defined
in the Higher Education Act or has parents who,
individually or jointly, are eligible based on income.
Restrictive Covenants – Income
& Rent Limits
5 Units @ Median Family Income is equal or less
than 60% of area median gross income adjusted by
family size (AMI)
5 Units @ Median Family Income is equal or less
than 50% of area median gross income adjusted by
family size (AMI)
Restrictive Covenants – Bedroom
Count & Unit Sizes
*2 Affordable units must be 2-bedroom & at least
1,000 sq ft. = at least two household members
*8 Affordable units must be 1-bedroom & at least
650 sq ft.
Certification Requirements: Must re-examine and verify the income of each
resident household living in an ADU at least
annually. Every 3rd year verification required,
based on property’s P.O.A. not tenancy. Non-3rd
year use of self-certification of income/asset
acceptable (see guide for full instruction).
TENANT PAID Utility Allowances: Cooking - Electric
Heating - Gas
Other Electric
THE LORIENT OF EDINA
4500 France Ave S., Edina, MN 55436
Project Summary
Management Agent: Greco Properties
Total Unit Count: 46 Total Units
Total ADU: 3 AHP Units
Affordable Housing
Compliance Provisions:
15 Years after issuance of Certificate of Occupancy
Certificate of Occupancy Issue Date: TBD
Expiration of Compliance Provisions: TBD
Special Provisions: Physical Disability
Student Status:
Section 8/HOME Student Rule
Independent Student - exclude any student that is
enrolled in a higher education institution, unless that
student is an “Independent Student” as defined in the
Higher Education Act or has parents who, individually
or jointly, are eligible based on income.
Restrictive Covenants: Median Family Income is equal or less than 50% of area
median gross income adjusted by family size (AMI)
Income & Rent Limits:
Income @ 50%
Net Rent @ 50%
Income & Rent Tables:
Multifamily Rent & Income
Limits MTSP*
*Table determination based on
date of COO Issuance (Similar to
PISD)
Certification Requirements: Must re-examine and verify the income of each resident
household living in an ADU at least annually. Every 3rd year
verification required, based on property’s P.O.A. not tenancy.
Non-3rd year use of self-certification of income/asset
acceptable (see guide for full instruction).
Utilities Paid: Owner Paid Utilities TBD
Tenant Paid Utilities TBD
Date: March 12, 2020 Agenda Item #: VII.B.
To:Chair & Commissioners of the Edina HRA Item Type:
Report / Recommendation
From:Stephanie Hawkinson, Affordable Housing
Development Manager Item Activity:
Subject:Presentation on Maxfield Housing Study Information
Edina Housing and Redevelopment
Authority
Established 1974
CITY OF EDINA
HOUSING & REDEVELOPMENT
AUTHORITY
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
No action required.
INTRODUCTION:
Mary Bujold, President of Maxfield Research and Consulting, LLC, will give a presentation on the Edina market
study.
Per the request of the HRA, Manager Neal entered into a contract with Maxfield Research and Consulting in
June 2019 to conduct a housing study. This study would examine and analyze growth trends, demographic
characteristics and economic factors, current housing market conditions (owned and rental formats) and would
determine the potential demand to support additional housing products in the City. It would also recommend
housing strategies designed to maintain and sustain the existing housing stock.
Maxfield Research would review the City’s current housing programs and housing initiatives and assess their
success with diversifying and broadening housing options in the community. Recommendations for new housing
development would focus on current gaps in the housing supply and potential strategies to fill needs in the short-
term to 2025 (five years) and the long-term to 2035 (ten years). Demographic projections will be provided to
2040 for overall population, households, age distribution, tenure by age of householder.
Staff expects the final report to be completed later this month.
ATTACHMENTS:
Description
Maxfield Presentation
Housing Market Study Summary and Key Findings
Presented to: Edina Housing and Redevelopment Authority
Presented by: Mary Bujold | Maxfield Research & Consulting, LLC
March 12, 2020
Maxfield Research & Consulting, LLC is a full-service
real estate advisory company providing strategic
value to our private and public sector clients’ real
estate activities.
Overview
35+ years experience
Diverse client base
Multi-Sector Capable
residential
commercial
public + private entities
Market driven strategies
Recommending highest &
best uses
Provide actionable plans
Maxfield Research & Consulting, LLC
OBJECTIVE Provide an analysis of housing needs for the City of Edina
APPROACH
Collect and analyze demographic, economic and housing market
data for Edina and adjacent communities to develop a framework
for meeting housing needs in the City
PROJECT
DELIVERABLES
•Short and long-term housing needs
•Recommendations guiding future housing development
•Comment on existing tools/policies to achieve goals
KEY DATES
•Data collection: 4th Quarter 2019
•Draft: January 2020
•Presentations: January 2020/March 2020
•Final Report: To be Delivered
Project Scope
12% Growth Rate in Edina from 2010-2020
Highest growth rate among senior population…
Young Baby Boomers (55 to 64 age
cohort) largest adult demographic in
Edina today (15%)
Seniors 65 to 74 largest growth over next
ten years (12.4%); 25 to 34 (11.7%)
Household size increased, now
decreasing:
2000: 2.26 |2010: 2.32
2020: 2.29 | 2030: 2.23
Living Alone largest group, but Married w/Child inc.
Median HH Income 39% higher than Hennepin Co.
Median Income (2019):
•$107,757 –Edina
•$77,509 –Hennepin County
•$79,195 –Twin Cities Metro Area
2020 Median income
•Non-seniors: $154,995
•Seniors: $71,096
Income disparity by tenure (2019)
•$129,679 (owner) vs. $59,886 (renter)Projected increase by 2025:
•10% to $118,770 (2% annually)
Employment
Roughly 45,000 jobs (covered employment)
Key Industry Sector Jobs:
•Education & Health Services: 24%
•Professional & Business Services: 11%
•Retail Trade: 10%
Edina a job importer
Avg. weekly/annual wage:
•$1,252 | $65,104 (Edina)
•$1,221 | $63,492 (Hennepin)
•$1,244 | $64,688 (Metro)
92% of jobs in Edina are from
commuters
26% of Edina residents
commute to Minneapolis
Residential Construction strong; MF leads the way
From 2010 through 2019, 2,646 new housing units
were constructed
•Avg. 265 total units/year
New Construction Activity
•Avg. 87 Single-family homes
•Avg. 3 Townhomes
•Avg. 174 Multifamily units
37 57
101 111 120 111 106 91 71 6776
0 0
234
113
482
97
433
288
51
0
100
200
300
400
500
600
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Units
Year
New Construction Residential Units: 2010 through 2019
Single-family Multifamily
Tear Downs Have Been Significant
Tear Downs/Avg Values
The number of tear downs rose
from 21 in 2009 to 115 in 2015
and have decreased modestly in
each year since then.
The average value of homes
before tear down has remained
relatively consistent as have the
values of the new homes. Nearly
all new homes rebuilt have
average values of more than
$1M.
Can we expect this trend to
continue? How is housing
affordability affected by this?
Low Rental Housing Vacancies
Overall
4,813 units | 57 properties
4% vacancy rate
Market Rate
4,654 units | 55 properties
4.0% vacancy rate
Avg. monthly rent $1,203
Avg. PSF rent: $1.31
Affordable/Subsidized
149 units | six properties
3% vacancy rate (excluding Nolan Mains)
5% Vacancy = Market Equilibrium
Hazelton
Onyx
Development Pipeline
1,257 rental units in process
962 market rate/395 affordable
43 MR/3 AFF under construction
784 MR/202 AFF approved
Rental Housing Cost Burden
Rental:
42% of Edina renters are cost burdened
•43% Metro Area/37% PMA Remainder
22% of Edina owners are cost burdened
•20% Metro Area/17% of PMA Remainder
Cost Burden: more than 30% of gross income allocated to housing
The highest
proportions of
cost burdened
HHs are age 65+
owners (34%) and
Renters (62%)
Senior Housing Inventory
Senior Inventory
2,311 units | 23 properties
5.8% Overall vacancy rate
Avidor
7500 York Cooperative
5% -7% Vacancy = Market Equilibrium
Home prices in Edina highest of its neighbors
Edina’s median home value much higher than surrounding cities
2019
$465,000 = Edina $275,000 = Bloomington
$399,000 = SW Mpls $350,000 = Eden Prairie
$345,000 = Minnetonka $300,000 = St. Louis Park
Low Inventory | Prices High
Active Listings (2019)
Listings: 258 active
Median price: $799K for Resales/$1.46M New
93% of listings are for SF
Avg. Price Per Sq. Ft.
SF: $209/PSF MF: $168/PSF
New: $301 SF/$686 MF
New Construction
Overall
$1.4M SF $700K MF
Teardowns: $1.3M+
New PSF cost: Edina
$300 SF $686 MF
Metro Area
$175 SF $187 MF
Pricing
Most new construction –owned
association-maintained properties
Not considered affordable compared to
Metro Area averages
Targets upper-bracket buyers
Days on market for SF homes priced above
$845,000 has increased over past 12 mos
to 155 days; TH/Condo up to 373 days
Naturally Occurring Affordable Housing (NOAH)
60% of existing rental units in Edina affordable at 80% AMI or less
22% of existing rental units in Edina affordable at 60% AMI or less
Naturally Occurring Affordable Housing (NOAH)
•The newest rental properties are
are affordable to households with
incomes at or above 80% AMI
•Affordability increases somewhat
with the age of the property as
those built expanding down to a
portion affordable at 60% AMI
•The highest proportion of units
with rents affordable to
households with incomes at or less
than 60% AMI were built prior to
1980 (1960s/1970s); however,
proportion still remains small
Demand Overview
Household growth & tenure
Turnover
Income-qualified households
Demand by product | Preferences
Demand Driver Examples
•Demographics
•Economy & Job Growth
•Consumer Choice | Preferences
•Turnover/Mobility
•Supply (i.e. Existing Hsg. Stock)
•Replacement need (i.e.
functionally /physically obsolete)
•Financing
Demand Assumptions/Methodology
Household growth adjusted for local factors (i.e. building permits, land
availability, areas zoned for higher density, etc.)
Demand Summary
Demand for 3,000 units to 2030 (for-sale and rental)
Note: Demand subtracts projects in the pipeline and senior supply
Demand for nearly 1,600 senior units by 2030
Note: Demand for senior hsg is cumulative
Single-Family Housing Recommendations
Single-Family Home
Single-Family Home
68 homes (rebuilds in 2019)
(Demand –47 homes) 2020-2025
Demand for new SF homes across all prices; however cannot build entry-level (land/labor costs, etc.)
Lot supply highly constrained (replacement occurs primarily through tear-downs)
Demand for smaller lot single-family, but even on small lots, prices are exceptionally high
40 Twinhome/Detached Villas
(Demand for 135 units) 2020-2025
Increasing demand for attached product
Again, even upper-middle market pricing is a significant challenge
Potential housing types:
Twin homes/duplex
Townhomes/row homes
Detached townhomes/villas
Condominiums making a comeback
Multifamily For-Sale Recommendations
Hawthorne Villa Homes
5120 France
Demand for 300 units (2020-2025)
•250 affordable
•50 subsidized
Demand for additional affordable
rentals
Recommend the following types:
Affordable rental –apartment-
style
Incorporate portion of low-income
Rental Housing Recommendations
71 France
Ponds of Edina
Senior Housing Recommendations
Demand for 1,600 units over the next ten years (across all service levels)
Recommend the following (five years):
Senior coop./Owner (80 to 120 units)
AFF AA Rental (150 units)
MR AA Rental (100 units)
Independent Lvg (80 units)
Assisted Living (40 units)
Memory Care (30 units)
Additional demand 2025-2030
Brookdale Edina
Yorkshire of Edina
•Growth picked-up last decade| HHs growing faster than population 2020+
•Growth in 25 to 44 cohorts; but 65+ population growing most rapidly
•Living alone 32% of HHs| Married w/o children (29%); Married w/children has risen
in Edina, atypical of other neighboring communities
•Strong HH incomes| Median renter income is 38% higher than Metro Area
•Low unemployment rate | Job inflow | Higher wages (Healthcare/Prof Services)
•Older multifamily rental stock | recent MR construction | 1,260 units in pipeline
•22% of market rate rental “affordable” at 50%-60% AMI |60%@80% AMI or less
•Senior housing performing well | New product will be needed in the future
•For-sale market higher than neighbors| unaffordable to most entry level
households | lack of supply
•Fully-developed character and high median income have fueled a dramatic rise in
Edina home prices
•How to produce affordable housing? Need a mix of tools
Summary
•New ownership housing in
Edina out of reach for most
households
•Lack of new affordable
rentals (GO and Sr)
•Tear-downs may decrease;
how to renovate older
housing and preserve its
affordability
•Encourage larger affordable
rental properties
•Consider targeting city
owned sites or those w/city
as all or a portion affordable
•Need a balance mix of tools
to create affordable
housing
•These may include:
–Land write downs
–Tax abatement or
deferrals
–Housing Trust Fund/Land
Trust
–Inclusionary Zoning
–Accessory Dwelling
–Land Use
Housing Needs/Policies
2020 Outlook & Trends
Economic Conditions Healthy, yet unknowns…
•Longest economic expansion in U.S. (126 months as of Dec. 2019)
•Consumer Confidence is strong | Stock market @ all-time high
•Full employment –MN @ 3.3% vs. Metro Area 3..% (Dec 2019)
•Labor shortages: lack of workers, not jobs (constraining growth)
•Job openings in MN @ all-time high (esp. skilled labor)
•Wages finally increasing at a rate above inflation in some industries
•Inflation estimated @ 1.8% in 2019 & 2.0% in 2020
•2019 GDP: 3rdQ 2.1% | 2020 est. 1.7%
•Housing: lack of supply/inventory is holding back economy
•Peak of cycle…downturn in 2021 or 2022???
•Tariffs, trade war, global weakness…unknowns???
For-Sale Housing Market
•Home prices continue to rise due to tight market although sales
volume has decreased
•Low supply of homes for-sale; especially entry-level (sub $250K)
•Mortgage rates low…increasing affordability (sub 4%)
•Buyers on sidelines or losing interest…back in market w/more supply
•Home Prices appreciating faster than wages/income gains
•First-time home buyer % remains low
•Tax reform: negative on 2nd home buyer, higher-priced markets
•Older adults & seniors holding real estate assets longer
•Distressed properties: < 2% of market
•New construction unable to keep up w/demand
•Builders unable to deliver affordable new product (sub $300k-$400k)
•Rising cost for new construction: lots, labor, materials, regulatory
•Lot size compression
•New single-family home sizes trending modestly lower
•Expected rise in attached and other multifamily concepts
•Significant price gap between existing homes & new construction
•HH income gains lagging home pricing appreciation
•Demand has historically moved out for affordability, but this is
changing and younger households want to remain in closer in; will
rent for a longer period or perhaps indefinitely
New Construction Housing
Rental Housing Market
•Record setting apartment deliveries: 2019 (8k) & 2020 (11k)
•Market peaking; construction expected to taper
•New development continues to move out from the core
•Low vacancies = pent-up demand
•Rent growth expected to moderate with new supply
•Barbell demand from Millennials & Baby Boomers
•New product caters to smaller HH sizes & “lifestyle renters”, but is
luxury and not generally affordable
•Alternate rental products being considered (i.e. single-family rentals;
condo rentals as investments; short-term rentals (Air BnB)
•Challenges delivering new product @ reasonable price points
Senior Housing Market
•Record year in senior housing delivery past three years (2,000+ units)
•Shift from non-profit developers to for-profit (85% in 2019)
•Seniors continue to delay selling their homes…holding back supply
•65+ population will triple in Metro Area by 2040
•Assisted living vacancies are soft in most developments
•Middle market faces shortfall
•Development costs continue to escalate, competition for land
•Boomers (56 to 74) years away from services
•Senior housing not an option for everyone
Mary Bujold
Maxfield Research & Consulting, LLC
612.904.7977
mbujold@maxfieldresearch.com
www.maxfieldresearch.com
http://twitter.com/realestatedev
https://www.facebook.com/MaxfieldResearch/
https://www.linkedin.com/company/228591
Contact Information:
Questions & Comments
Date: March 12, 2020 Agenda Item #: VIII.A.
To:Chair & Commissioners of the Edina HRA Item Type:
Other
From:Jennifer Garske, Executive Assistant
Item Activity:
Subject:Correspondence Information
Edina Housing and Redevelopment
Authority
Established 1974
CITY OF EDINA
HOUSING & REDEVELOPMENT
AUTHORITY
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
None.
INTRODUCTION:
There has been no correspondence since the last meeting.