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DISCLAIMER This form is provided by the Community Development Law Center (CDLC) for informational purposes only. This is a DRAFT (and by no means perfect) asset management plan, intended to be revised for your particular project. Permission is granted to nonprofit community-based organizations to reproduce and/or adapt this document for their own use, provided proper credit is given. Speaking of which, credit is due and thanks are in order to Local Initiative Support Corp., the Housing Development Center and CASA of Oregon for developing some of the material in this plan, and to HUD, which provided funding for the plan. © 2002 CDLC

ASSET MANAGEMENT PLAN

________________________________________ (Name of Project)

Table of Contents Topic A. B. C. D. E. F. G. Description of the Organization and Project Asset Management Generally Oversight of Property Management Oversight of Financial Performance Oversight of Physical Property Resident and Community Relations Reporting, Recordkeeping and Monitoring 1. 2. 3. 4. 5. 6. Page 2 5 8 11 16 18 20

Attachments Property Management Agreement Property Management Plan Capital Needs Assessment Resident Services Plan Pro Forma Development Budget and Operating Budget Chart of Funder Requirements

Date Asset Management Plan adopted by CDC Board of Directors: ______________________ REVISIONS: Date Revised: Date Revised: Date Revised:

______________ ______________ ______________

Section(s) Revised:_________________________ Section(s) Revised:_________________________ Section(s) Revised:_________________________

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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A. DESCRIPTION OF THE ORGANIZATION AND PROJECT 1. DESCRIPTION OF THE ORGANIZATION

_________ Community Development Corporation (CDC) is a nonprofit community development organization whose general service area includes .... Mission: CDC's mission is..... Portfolio: CDC owns ____ rental units within ___ project sites. This includes ___ single-family rental units and ___ multi-family units. Additionally, CDC is the general partner in, or sponsoring agency of __ projects with ___ rental units. Of the ___ projects in total, CDC manages ___ projects (___ units) and ___ projects (___ units)are managed by outside property management firms. Board of Directors: The CDC is governed by a Board of Directors, whose general roles with regard to asset management are to provide policy direction for the organization and for each project, develop specific policies for each project, and to assume overall responsibility for the success of each project and for the organization. Specific policies that the board is responsible for adopting are noted in the Plan. CDC Asset Management Staff: CDC has a staff of ______ people that perform asset and property management functions as well as other activities related to its mission to develop and maintain affordable housing and to promote community economic development and neighborhood livability. Asset management responsibilities are performed by the Executive Director, Accountant, and Asset Manager (together, these staff members are referred to as "the asset management staff").1 To the extent that other staff (for example, the resident services coordinator and housing developer) are involved with this or other projects, it is the responsibility of the asset management staff to coordinate such involvement in the organization. More specific roles and responsibilities are set forth in the tables of tasks in each section.

ORGANIZATION CHART

Board of Directors Executive Director Resident Services Housing Developer Accountant Asset Manager

Resident Manager Property Manager Maintenance PM Accountant

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In this draft Asset Management Plan, no distinction is made among asset management staff. If "Staff" is designated as responsible party, you should replace "staff" with the title of the particular person on the staff who is responsible (e,g., asset manager, executive director, finance manager, maintenance, etc.).

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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2. DESCRIPTION OF THE PROJECT

Project Name: Project Address: The project is Placed in service on: Legal Owner __________________________________ _________________________________________________________ newly constructed ___________________ the CDC (or) _______________________, of which CDC is the general partner; limited partner is _________________________ sponsoring agency. ___________________________________ (income levels, special needs) Federal low income housing tax credits amount: $__________ HOME (_______________ is the PJ) amount: $__________ Housing Trust Fund amount: $__________ "first-position" bank loan____________________ amount: $__________ (Name of bank) subordinate loan from ______________________ amount: $__________ other: ___________________________________ amount: $__________ other: ___________________________________ amount: $__________ Total Project Cost: $__________ No. of buildings____ Unit Type Studio 1 BR, 1 BR, 2 BR 2 BR 3 BR 3 BR 4 BR 4 BR Other Other Totals Total No. of Units: No. of Units __________ Area in Sq. Ft. Comments (or) acquired and rehabilitated (Yr. Built _______)

Target population: Project financing:

Target Income (% of AMI)

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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TABLE 1. SUMMARY OF MOST RESTRICTIVE PROJECT REQUIREMENTS Special Needs Population: ___________ No. of Units: ___ Source: _______________________________ Maximum Rents Preference or Requirement? (circle)

_____ units at _____% AMI (area median income); ____ units at _____% AMI Rent increase restrictions: __________________________________________ Source: _______________________________ at Initial Occupancy: ___ units at ___% AMI __ units at ___% AMI at Recertification: __________________________________________ Source: _______________________________ Prior Approval of Lease and/or changes required Minimum Lease Term: ________ Good cause eviction? __________ Grievance Procedure? __________ Special Notice Provisions ________________________________ Source: _______________________________ Replacement Reserve: $__________ per unit per year Operating Reserve: $__________ Source: _______________________________ Property insurance $__________________ (coverage amount) Liability insurance $__________________ (coverage amount) Rent loss insurance ________ months Name funder as additional or named insured? (circle appropriate) Notice to funder required before termination? No. of Days: ______ Source: _______________________________ Audit Other financial statements? _________________________ Other reports: _____________________________________________ Frequency (monthly/quarterly/annually/other): _________________________ Source: _______________________________

Tenant Incomes

Lease Restrictions

Reserves

Insurance

Reports

Monitoring Site visit every ___ years, starting ____________ (year) Source: _______________________________ Number of Yrs Restrictions in Place _______ yrs. Source: _______________________________ Expiration Date: _____________________

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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B. ASSET MANAGEMENT GOALS GENERALLY

(CDC) recognizes that strategic asset management is necessary for the successful long-term operation of its housing projects. This Asset Management Plan ("the Plan") has been developed to provide a framework for providing ongoing oversight of CDC's portfolio. The Plan takes into consideration this individual project's goals and the CDC's organizational mission, while recognizing that the operation of this project must be analyzed in the context of CDC's entire portfolio. This Plan is intended to be used not only as a plan, but also as a tool, to identify policies that need to be adopted, tasks to be undertaken, the party responsible for performing the task, and the performance standards to apply. However, it must be understood that this is a plan that is subject to constant revision, and that total compliance with the plan is neither intended nor possible. CDC views this Asset Management Plan as a tool for the systematic plan for and ongoing oversight of the management of this project and CDC's other projects in furtherance of the projects' goals and CDC's mission. CDC's goals for this project are to see that the project provides affordable housing over the long-term to its target population, while fostering CDC's financial health and community reputation. To do so, CDC must keep the property manager, tenants, funders and community happy; it must keep the money flowing while keeping rents affordable; and it must keep the project in good repair over the life of the project. The CDC recognizes that it is typically dealing with (a) difficult to house populations, (b) limited funds, (c) limited ability to raise additional funds, and (d) public agencies requiring maximum accountability. Good asset management systems are needed to make this work!!! CDC needs to be proactive, which means starting out with a well-thought out asset management plan. The Plan differentiates between the role of property management and the role of asset management. The role of asset management is to assure that established standards and expectations regarding financial and physical condition, regulatory and statutory compliance, and reporting requirements are being met. Property management is the day-to-day management of the project. Asset management is seen as an opportunity to step back from the day-to-day operations of the housing and address strategic objectives of the property--is the property achieving its mission, is it helping the CDC achieve the organization's mission? Are there risks or problems that have arisen that were not initially anticipated? What financial trends can be discerned from performance indicators over time? There are three basic questions that CDC's asset management addresses: 1. Is the project financially healthy? If not, what are the problems or risks to its financial stability and how can these be addressed? 2. Is the project being properly maintained to provide decent, safe and sanitary housing for its occupants and to enhance the neighborhood in which it is located? If not, what are the problems and how can they be corrected? 3. Is the project operating in accord with all funders' regulatory requirements and all applicable local, state and federal requirements? If not, what are the problems and how can they be resolved?

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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STAFF AND BOARD ROLES AND RESPONSIBILITIES

The Board of Directors provides policy direction for the organization and for each project, develops specific policies for each project, and assumes overall responsibility for the success of each project and for the organization. The asset management staff includes the Executive Director, Accountant, and Asset Manager.2 To the extent that other staff (for example, the resident services coordinator and housing developer) are involved with this or other projects, it is the responsibility of the asset management staff to coordinate such involvement in the organization. More specific roles and responsibilities are set forth in the tables of tasks in each section.

GENERAL ASSET MANAGEMENT TASKS: Table 2 sets forth general tasks not specific to any

particular area. Tables 3 to 8 set forth asset management tasks related to specific areas of oversight.

2

See footnote 1 (page 2). Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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TABLE 2. GENERAL ASSET MANAGEMENT TASKS

GENERAL ASSET MANAGEMENT TASK Develop and update Asset Management Plan ASSET MANAGEMENT BINDER Compile Asset Management looseleaf binder(s) with following documents:: Project Documents (Loan and Grant Agreements, As-Built Plans and Specs, Warranties and Operations Manuals) (3 sets: 2 for org,, 1 for PM) Summary of Each Funder's Project Requirements (Max. rents, tenant incomes, etc.) Summary of Most Restrictive Project Requirements (Max. rents, tenant incomes, etc.) Calendar of Reporting Requirements Updated Operating Budget and "Sources of Funds" Pro Formas; Have PM adjust its format for budget and income/expense statement to match CDC desired format (e.g., Gr. Potential Inc.) Make sure agreements with development team contain necessary asset management requirements (e.g., builder to provide capital needs assessment info, developer or lawyer to compile asset manager binders) Develop job description for Asset Mgr Make sure funder approvals of mgt docs are obtained as required (lease, budgets, property management agreement and plan, etc.); also any changes to these documents Keep up-to-date on legal requirements placed on project by particular funding sources and by particular laws Investigate, purchase and use software for tracking AM Coordinate AM tasks within organization Provide notices to funders of address changes; maintain current contact list Provide training to staff and board on asset management Evaluate whether project is fulfilling the project's mission and whether the portfolio is fulfilling CDC's mission FREQUENCY Predevelopment, every 3 yrs. RESPONSIBLE PARTY3 Staff and Board FORM, REPORT OR RESOURCE Asset Management Plan

Staff (Developer and/or Lawyer) Staff (Developer) Prior to Initial Occupancy Staff (Developer) Staff (Developer) Staff & PM Staff & PM Predevelopment Staff

See sample table of contents See Form See Form See sample calendar

Contract language in developer and builder agreements Job Description

Predevelopment Lease-Up and prior to changes Ongoing

Staff Staff

Staff Staff & acctg

See Chart of Funder Requirements

Ongoing Ongoing Ongoing Every 2-3 years

Staff Staff Staff & Board Staff and Board Self-assessment tool

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If "Staff" is designated as responsible party, you should replace "staff" with the title of the particular person on the staff who is responsible (e,g., asset manager, executive director, finance manager, maintenance, etc.). Sample Asset Management Plan (from CDLC/HDC Training, January 2002) 7

C. PROPERTY MANAGEMENT OVERSIGHT GOALS OF PROPERTY MANAGEMENT OVERSIGHT

While the property manager oversees the day-to-day operations (including rent collection, record keeping, financial reporting and maintenance), the CDC remains ultimately responsible for the well-being of the project. Good asset management means that the owner: · · · · · chooses a good property manager makes sure that the property manager does a good job reviews the property manager's reports, files whatever additional reports need to be filed, and maintains appropriate records makes sure that the property will remain in good shape for forty years or more, by maintaining appropriate reserves for replacement and for operations makes sure that all the regulatory agencies are happy (which should be true if you've done all the above)

STAFF AND BOARD ROLES AND RESPONSIBILITIES The Asset Manager is the primary contact for communicating with the property manager. The roles of the CDC staff vis-à-vis the property manager are spelled out in the Management Agreement. Where uncertainty exists, the asset manager will discuss these areas with the executive director, who will work with the property manager to resolve the uncertainty. The Board of Directors is responsible for adopting a number of policies related to property management. These are spelled out in Table 3, Property Management Oversight. They include: · · · · · · · · · · criteria for deciding whether to self-manage or hire an outside property manager if there will be outside property management, approving criteria for selecting the property manager, and ultimately making the decision on who is selected approving the property management agreement adopting the Property Management Plan adopting tenant screening and selection criteria, addressing topics such as criminal record checks, credit references (and whether tenant will pay for such), landlord references, income to rent ratios, occupancy guidelines (number of persons per bedroom) adopting a fair housing policy, including policies on affirmative marketing and reasonable accommodation rent collection policies, and how to address late payments, partial payments and non-payments whether to adopt a "good cause" eviction policy, even if it is not required by law adopting a progressive discipline policy adopting written grievance policy if required or desired

PERFORMANCE STANDARDS4 · Property manager (PM) selected and evaluated according to applicable criteria and in timely fashion · Property manager shall comply with all laws and procedures · PM to Certify and Verify Eligibility of All Tenants prior to Occupancy · PM to Recertify and Reverify Tenant Eligibility within 12 months of last certification · Waiting List: Have 5 applicants for each unit size and type; update waiting list every 6 months · Applicants and residents treated fairly; no fair housing violations

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Specific performance standards related to oversight of financial performance, physical property, resident and community relations and reporting, recordkeeping and monitoring are found in those sections. 8

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

TABLE 3. SPECIFIC TASKS FOR PROPERTY MANAGEMENT OVERSIGHT

PROPERTY MANAGEMENT TASK FREQUENCY Predevelopment Predevelopment Predevelopment & every 2-3 yrs Predevelopment & every year Annually Monthly RESPONSIBLE PARTY5 Staff & Board Staff & Board Staff & Board Staff & Prop Mgr w/ Board approval Staff & Board Staff FORM, REPORT OR RESOURCE See CHAM, LISC & HAC papers6 See PM Selection Criteria See sample RFQ & Mgt. Agreement See Management Plan; HCS CFC app

PROPERTY MANAGER OVERSIGHT

Decide whether to self-manage Develop Property Manager selection criteria; Select property manager Adopt and update Property Mgt Plan Evaluate property manager; renew management agreement Make sure procurement policies are complied with

TENANT ELIGIBILITY & SELECTION

Tenant Selection Criteria Fair Housing & Reasonable Accommodation Occupancy Guidelines (# of persons/BR) Review all tenant files for eligibility and for proper file set-up Review random sampling of tenant files: check for tenant eligibility, completeness of file Review waiting lists and waiting list procedure Test for fair housing compliance Prior to Initial Occupancy During lease-up, prior to tenant's occupancy Annually Annually Annuaully Staff & Prop Mgr w/ Board approval Staff, PM, Funders Staff Staff Staff See Samples Summary of Most Restrictive Eeq'ts

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See footnote 1 (page 2). CHAM, (The Consortium for Housing and Asset Management), The Options of Property Management. It discusses the pros and cons of self-management, and includes a checklist to help in evaluating whether self-management is for you. CHAM, 10227 Wincopin Circle, Suite 500, Columbia, MD 21044; (410) 772-2724 LISC, Occasional Paper 2, Selecting a Manager, a Workbook and Forms, from LISC, 733 3rd Ave., 9th Fl., NY, NY 10017; (202) 455-9800 Housing Assistance Council (HAC), Should We Do It Ourselves or Hire Someone Else? A Rural Property Management Planning Guide, from HAC, 1025 Vermont Ave. NW, Washington, D.C. 20005 (202) 842-8600 Sample Asset Management Plan (from CDLC/HDC Training, January 2002) 9

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PROPERTY MANAGEMENT TASK OCCUPANCY Policy for Rent Collections, Partial Payments, Bad debt write-offs Develop Policy for Rent Increases Develop Policy for evictions (For causeno cause), Progressive Discipline, Grievance Procedure. Keep current on applicable regulations/requirements related to sources of financing, landlord tenant law, fair housing Make sure PM makes payments to vendors on time, preferably within time necessary to get discounts

FREQUENCY Prior to Initial Occupancy; Update every 23 yrs. Ongoing

RESPONSIBLE PARTY5

FORM, REPORT OR RESOURCE

Staff & Prop Mgr w/ Board approval Staff & PM

See Samples

Ongoing

Staff

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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D. OVERSIGHT OF FINANCIAL PERFORMANCE GOALS FOR FINANCIAL PERFORMANCE OVERSIGHT

The primary goal of financial performance oversight is to assure that the project remains financially viable over the life of the project. Specific financial goals include assuring that: · this project's financial goals are met: subsidize other projects and/or organization; break even and operate at lowest rents possible; other:_________________________________________) · project meets or exceeds minimum debt coverage ratio · rents do not exceed maximum rent levels · required reports are timely submitted · operating and replacement reserves are adequately funded · plans are in place for one-time events (e.g., LIHTC yr 15, OAHTC yr. 20, balloon payments, etc.) · development team meets with others in organization (asset manager, maintenance, accounting) to assure that new projects have updated cost and expense information Further, CDC recognizes that asset management and resident services are two organizational functions that have historically been underfunded in the organization. CDC desires to assure that the costs of these functions is recovered , preferably by the project and if not by the project then by grants or other funding. STAFF AND BOARD ROLES AND RESPONSIBILITIES The asset manager is responsible for seeing that the Project Documents are compiled and available at the organization's office. The asset manager shall be the contact person for communications between the property manager and the organization. The asset manager is responsible for the monthly review of the financial statements, for calculating financial performance standards, and for the initial review of the annual budget prepared by the property manager. The asset manager shall provide the executive director with a summary report of the performance standards, noting any unusual events requiring executive director and/or board action. The executive director shall provide the Board with regular financial reports related to the project, and shall recommend to the Board any corrective actions required in the event of poor financial performance. The Board (or a subcommittee) shall review the financial performance of the project quarterly and shall approve any extraordinary corrective action required in light of financial non-performance. The full Board shall review the annual audit/year-end financials for the project and shall formally approve the annual project budget.

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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FINANCIAL PERFORMANCE STANDARDS RATIO 1. Debt Coverage Ratios CALCULATION (see below) NOI / P & I portion of loan payment a. 1st position loan b. all "must-pay" loans No. of moves in month / no. units STANDARD > 1.15 (unless higher DCR req'd) > 1.10 < % (annualized)

2. Turnover ratio

3. Economic occupancy rate NRI/ GRI No. units occupied / total units (12 * mo. expenses / # units) Rents written off / GRI Economic Vac. Rate + Bad Debt Loss (acct balance / annual budget)

at least 95% (this means that "economic vacancy rate" is < 5%) at least 95% (this means that "physical vacancy rate" is not more than 5%) < $______ per unit (annualized) < 2% of gross potential rent < = 7% = 25% of annual budget

4. Physical occupancy rate

5. Expenses per unit 6. Bad debt losses 7. Rent loss 8. Operating Reserves 9. Replacement Reserves 10. Asset Management and Resident Services Costs 11. Accounts Receivable

(acct balance / 5 yrs replacement needs) > 20% quantify actual cost of these services Accounts Receivable/ EGI 100% of costs recovered <10%

The above ratios rely on these calculations: Gross Potential Rental Income = (GRI) Net Rental Income = (NRI) Effective Gross Income = (EGI) Rental income to project if all units were rented and all rents were collected Actual rental income collected during period Net Rental Income + Other Income (e.g., laundry income) Total operating expenses during period (includes replacement reserve, pro rata share of one time costs e.g., taxes, insurance, audit, monitoring fee; does not include principal and interest portion of loan payment EGI ­ Operating Expenses NOI ­ all must-pay debt service

Operating Expenses =

Net Operating Income = (NOI) Net Cash Flow =

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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TABLE 4. FINANCIAL PERFORMANCE OVERSIGHT FINANCIAL OVERSIGHT TASK Compile Asset Management looseleaf binder(s) (See "General Asset Management" tasks), with Summary of Each Funder's Project Req'ts; Summary of Most Restrictive Proj. Req'ts; Calendar of Reporting Requirements; and Updated Operating Budget and "Sources of Funds" Pro Formas Have PM adjust its format for budget and income/expense statement to match CDC desired format (eg, show GRI Insurance: Make sure required insurance is in place, with proper coverages, limits & named insureds/additional insureds Monitor perm loan conversion conditions Review project financials and calculate financial ratios Compare w/ YTD budget Consider accruals & expenses not in PM's statements Make sure required payments are made (PITI, reserves, etc.) If reserves have been used, for what? was approval given as required? Phone call/meeting with prop. mgr to discuss problems, potential solutions) Insurance Requirements: Review Risk Management issues, Update insurance Property Tax Exemption or Valuation Prepare Annual Budget Update and verify correctness of Max. Rents, Tenant Incomes, and Utility Allowances; Do phone survey for current Market Rents Compare YTD expenses with last 2-3 years and with other projects, anticipating likely out-of-ordinary increases such as insurance or utilities; Identify any one-time or extraordinary needs for upcoming year (eg, balloon payments, additions to reserves, deferred maintenance); Determine need for rent increase, timeline for implementation; RESPONSIBLE PARTY7 Developer and/or lawyer FORM, REPORT, OR RESOURCE See Chart of Project Requirements, sample calendar

FREQUENCY

Prior to Initial Occupancy

Prior to Initial Occupancy Prior to Initial Occupancy Lease-up Monthly Quarterly

Staff & PM Staff & PM Staff & PM PM prepares; Staff reviews Board reviews See Form ____ Perm loan docs Monthly financials; Performance Stds

Monthly Annually Annually Annually Timeline: draft budget to Bd for approval by Nov., to allow for 30 days notice to tenants & implementation starting Jan. 1

Staff Staff, w/ PM, ins. agt Staff (PM) PM prepares budget; Staff reviews; Board approves

File w/ Assessor Annual Budget Form

7

See footnote 1 (page 2). Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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FINANCIAL OVERSIGHT TASK Review Annual Audit and Year-End Financial Statements Did accountant re-categorize any expenses (e.g., from maintenance to capital expense) or add organizational expenses attributable to project? Check "Notes" section of audit Make sure that income tax filings are made timely (incl. K-1s to partners if applicable) Prepare required financial reports to funders and to board Prepare for and participate in monitoring by funders Evaluate & plan for "end of term" situations (e.g., balloon payment dates, 16th year for tax credit projects, yr. 20 for OAHTC); transfer of reserve accounts Evaluate refinancing options. Workouts ­ In event of poor financial performance, identify causes and develop solutions

FREQUENCY Annually

RESPONSIBLE PARTY7 Staff & Board

FORM, REPORT, OR RESOURCE

Annually Annually or as required As required Staff, PM Staff, Board & PM See Forms ____. _____, ______

Staff & Board

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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TABLE 5. SUMMARY OF PROJECT REQUIREMENTS BY FUNDER Funder Name: ___________________________________________________________________ Contact Person: ______________________________________ Title: _________________________________ Address: ____________________________________________________________________ Phone: ________________ Fax:______________ E-mail: __________________________ Amount: Source: $_____________________________ Date of Funding: ___________________ ______________________________ (e.g. HOME, Housing Trust Fund, etc) Grant Loan Loan Term: _____ yrs. Amortization Period: _____ yrs. Int. Rate: ____% OAHTC? ___ (Y/N) Monthly P&I Payment: $______ Must make loan payment? or Make payment if cash available Loan Position: First Subordinate: ____ position Debt Coverage Ratio: _________ Other (e.g. deferred payments, interest only, balloon payment): ___________________ LIHTC Other equity: ___________________________________________

Equity

Other Subsidy (e.g., rental assistance, property tax exemption): ___________________ Requirements and Restrictions Special Needs Population: ___________ Maximum Rents No. of Units: ___ Preference or Requirement? (circle)

_____ units at _____% AMI (area median income); _____ units at ____% AMI Rent increase restrictions: __________________________________________ at Initial Occupancy: at Recertification: ___ units at ___% AMI __ units at ___% AMI __________________________________________

Tenant Incomes

Lease Restrictions

Prior Approval of Lease and/or changes Minimum Lease Term: ________ Good cause eviction? __________ Grievance Procedure? __________ Special Notice Provisions ________________________________ Replacement Reserve: $__________ per unit per year Operating Reserve: $__________ Property insurance $__________________ (coverage amount) Liability insurance $__________________ (coverage amount) Rent loss insurance ________ months Name funder as additional or named insured? (circle appropriate) Notice to funder required before termination? No. of Days: ______ Audit Other financial statements? _________________________ Other reports: _____________________________________________ Frequency (monthly/quarterly/annually/other): _________________________ Site visit every ___ years, starting ____________ (year) _______ yrs. Expiration Date: _____________________

15

Reserves

Insurance

Reports

Monitoring

Number of Yrs Restrictions in Place

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

E. PHYSICAL PROPERTY GOALS FOR OVERSIGHT OF PHYSICAL PROPERTY:

The primary goal related to oversight of the physical property is to make sure that the project is maintained well and that long-term needs are planned for and taken care of. CDC's goal is to assure that the project is being properly maintained to provide decent, safe and sanitary housing for its occupants and to enhance the neighborhood in which it is located. More specifically, this means that over the expected useful life of the project, CDC's goals are that: · the project meets acceptable building, housing code and maintenance standards · maintenance tasks and inspections are performed in a timely manner · capital replacement needs are identified and quantified, and replacement reserves are adequately funded and appropriately used STAFF AND BOARD ROLES AND RESPONSIBILITIES The asset manager is responsible for seeing that the Project Documents include as-built plans and specs, appliance manuals, systems manuals (HVAC, irrigation, etc.) and that they are available at the organization's office. The asset manager shall be the contact person for communications between the property manager and the organization. While the asset management staff is primarily responsible for oversight of the physical property, other staff in the organization must be consulted to fulfill the above goals. The maintenance team should meet with the organization's housing developers to assure that new projects are well-designed, with durable materials, to assure long-term viability. Likewise, project financing should make adequate allowances for maintenance costs and major repairs and replacements.

PERFORMANCE STANDARDS

Turnover Time Make unit ready: 6 working days Re-lease unit: 10 working days Preventive Maintenance: 90% of preventive maintenance inspections and servicing completed within 14 days of schedule; remaining 10% within 30 days of schedule. Emergency requests done within 24 hours Routine Requests done within 3-7 business days Custodial maintenance done within 2 weeks Work Orders: Work on work orders = 100% Inspections: 100% of units every year Energy Usage: not more than 3% increase in consumption per year Curb Appeal: Clean site daily, to present a pleasing curb appeal at all times

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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TABLE 6. OVERSIGHT OF PHYSICAL PROPERTY

OVERSIGHT OF PHYSICAL PROPERTY TASK GENERALLY: Review plans and specs and development budgets to assure that longterm physical needs of project are adequately addressed MAINTENANCE AND INSPECTIONS Create a Preventive Maintenance Guide, with priorities for different types of repairs Create a Building Systems Manual. Conduct Drive-through inspection of property Review work order summaries, inspection reports Conduct Inspection of unit interiors, exterior and common areas Review all purchases for reasonableness/approve purchases by agent above the established spending limit. EMERGENCIES Develop and post Emergency Contingency Plan (for fire, flood, loss of power or water, etc.) Perform drills to test emergency plan LONG-TERM CAPITAL IMPROVEMENTS Develop/revise capital budgets. Update capital replacement plan; Review change orders for their management & maintenance implications Assess physical condition and determine repair/replacement and capital improvement needs. FREQUENCY Design phase RESPONSIBLE PARTY8 Asset manager, with developer, maintenance staff & PM Asset Manager, Gen. Contractor, Vendors Staff &/or Board Staff Staff Inspection forms, such as HUD 52580 FORM, REPORT, OR RESOURCE

Prior to Initial Occupancy Monthly Monthly Annually

Maintenance Plan

Annually

Staff (PM)

Prior to Initial Occupancy Annually

Bldr, Staff, PM Staff w/ Bd apprvl

Contract language in builder contract

8

See footnote 1 (page 2). Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

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F. RESIDENT AND COMMUNITY RELATIONS GOALS OF RESIDENT AND COMMUNITY RELATIONS OVERSIGHT

It is the goal of CDC to provide opportunities that extend beyond "bricks and mortar," by providing residents with access to services appropriate to the identified needs of the project's target population, by giving residents a voice in property operations, by giving residents an opportunity to develop resident leadership skills, and generally to facilitate resident empowerment. As noted in the "Financial Oversight" section, CDC recognizes that resident services is one of the organizational functions that has historically been underfunded in the organization. CDC desires to assure that the costs of this function is recovered , preferably by the project and if not by the project then by grants or other funding. The project shall have a Resident Services Plan, which will address the following areas: · · · · · · · identify services appropriate for the resident population (e.g., information and referral, health-related services, job training/job placement, educational (day care, tutoring, GED/adult ed, parenting, computer training), counseling (legal, consumer, family. drug), recreational and arts, transportation), will they available on-site or off-site, what equipment, materials, space and staffing is needed, how will they be paid for, are contracts for services needed/in place; what are responsibilities of staff and PM (and resident mgr); will additional insurance be required?

The project shall have a Resident Participation Plan, which will cover the following areas: · how will residents participate in project decision-making? · Will there be a formal grievance procedure for tenants and/or applicants? · Will tenants facing eviction or other disciplinary issues be referred to social service agencies? · Will there be a residents' association.--what role will it play, how will it be sustained, what training will be provided? · What are the expected costs of implementing the Plan and the intended sources of payment? In addition to addressing resident needs, CDC desires that this project is an asset to the community. CDC's intent is not simply to build housing, but also to build a neighborhood. CDC will ask for community input during the design phase, and will work to assure community satisfaction during the operations phase. When appropriate, CDC will offer services to the community that are also offered to residents. CDC will encourage its residents to participate in their community, through such programs as NeighborWatch. STAFF AND BOARD ROLES AND RESPONSIBILITIES The Board of Directors shall adopt a Resident Services Plan and Resident Participation Plan. The asset management staff is responsible for quantifying and funding the expenses related to resident services and resident participation. CDC recognizes the potential conflicts that on-site resident managers face when trying on the one hand to enforce rules and trying on the other hand to see that resident services and resident participation programs are effectively provided. Therefore, CDC's Resident Services Coordinator shall oversee these areas, while relying on the Property Manager to inform the Resident Services Coordinator of tenants who could benefit from such programs. In the event there is a question as to whether CDC or Property Manager is responsible for a particular task, the Resident Services Coordinator shall consult with the Asset Manager, who shall be the primary contact with the Property Manager.

Sample Asset Management Plan (from CDLC/HDC Training, January 2002) 18

PERFORMANCE STANDARDS Resident and community surveys disclose ___% of residents and community members are satisfied with the Project. For Resident Services, evaluation will be based on the extent to which identified services are provided, the level of tenant participation, the number of youths graduating from high school, the number of adults joining the work force, the percent of children receiving inoculation, the number of households using computer room. Other factors to consider include the number of vandalism incidents and the number of other criminal incidents. For both resident services and resident participation, ___% of the costs of such activities is funded from either the project budget or outside sources (other than being subsidized by the organization).

TABLE 7. RESIDENT AND COMMUNITY RELATIONS OVERSIGHT

RESIDENT AND COMMUNITY RELATIONS TASK Adopt and periodically update the Resident Services Plan Review Plans & Specs: evaluate need for physical space for res. services (e.g., community rm, office space, equipment, playground) and resident security (e.g., lighting, fencing); does design include such space, are improvements needed? Adopt and periodically update the Resident participation plan: Review Pro Forma Operating Budget and annual budgets: does it include expenses for res. services (e.g., staff, materials, contracts with other agencies) Assure that Res. Svcs Plan & Res. Participation Plan are implemented Hold tenant meetings Publicize project in community Maintain tenant demographics database (income, family size, where tenants move from/to, etc.) Survey tenants and former tenants: resident services, tenant satisfaction Get feedback from tenants, neighbors, local government and funders FREQUENCY RESPONSIBLE PARTY9 FORM, REPORT, OR RESOURCE HCS Resident Services Plan

Design Phase, and every 2-3 yrs

Staff and Board, with PM & resident input RD: 7 CFR 1944, Part L (1944.551.559)

Design Phase and annually Quarterly Ongoing Ongoing Annually Every 2-3 yrs Every 2-3 yrs

Staff , w/ PM input Staff (with PM input) Staff Staff Staff, w/ PM Staff, w/ PM Staff, w/ PM

9

See footnote 1 (page 2). Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

19

G. REPORTING, RECORDKEEPING AND MONITORING GOALS

It is the CDC's goal to provide needed data and reports to appropriate persons in a timely fashion, to maintain files as required and for required time periods, to participate in monitoring of the project's records and property, and do all this to the satisfaction of the project's funders.

ROLES AND RESPONSIBILITIES

Compliance with reporting and recordkeeping is primarily the responsibility of the Property Manager. The asset manager is responsible to see that these activities are performed satisfactorily. It is expected that asset management staff and the Property Manager will also participate in monitoring, with the Board of Directors providing input as needed.

PERFORMANCE STANDARDS

Full compliance with all reporting and recordkeeping requirements that would otherwise result in adverse findings is required. (For example, if this is a federal tax credit project, any noncompliance may result in issuance of an IRS Form 8823, and therefore is unacceptable.) Where funders provide an opportunity to correct findings without prejudice to the project, substantial compliance is acceptable, provided that any findings are satisfactorily resolved without prejudice to the project or the organization. In addition to containing the proper information, files should be organized so that the information is readily available. Every tenant file should contain an application (containing information on household composition, income, and assets, and dated prior to move-in), screening information, a lease (signed and with all blanks filled in), tenant certification, third party verifications, timely recertifications and verifications (completed within one year of the previous certifation/verification)

TABLE 8. REPORTING, RECORDKEEPING AND MONITORING REQUIREMENTS

Note: There are additional reporting and recordkeeping requirements found in each of the other sections of this Plan. REPORTING, RECORDKEEPING AND MONITORING TASKS See "General Asset Management" tasks for compiling Asset Management looseleaf binder(s), with Calendar of Reporting RESPONSIBLE PARTY10 Developer FORM, REPORT, OR RESOURCE See sample calendar

FREQUENCY

Requirements

Make sure timely reports to funders are provided. Provide timely reports to Board of Directors Review Annual Audit or other annual financial statement Review annual tax return(s); provide K-1s to partners, if applicable As required (usually annually, more often during 1st year) Quarterly Annually Annually Staff or PM See "Project Requirements" Chart

Staff Staff Staff & accounting

10

See footnote 1 (page 2). Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

20

REPORTING, RECORDKEEPING AND MONITORING TASKS FREQUENCY Ongoing Attend compliance and monitoring workshops and get certified as appropriate; have available applicable program manuals from administering agencies (e.g., HOME project manual, LIHTC Compliance Manual) Prepare for Monitoring Visits Per funder's schedule Make sure complete applicant and tenant files are kept, in an organized manner to facilitate third party review Make sure PM files required property tax forms for exemption or for valuation challenge, if applicable.

RESPONSIBLE PARTY10 Staff

FORM, REPORT, OR RESOURCE

Staff, Board, PM

A Good Asset Manager Has Lots of Looseleaf Binders

(Photo courtesy of NPF: Ellen Marie Hannan photographer; Pietro Ferrari binder-keeper)

Sample Asset Management Plan (from CDLC/HDC Training, January 2002)

21

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