CHAPTER 43
COMMUNITY HOUSING AND SERVICES FOR PERSONS WITH DISABILITIES
REVOLVING LOAN PROGRAM
265—43.1(16) Purpose. Through its community housing and services for persons with disabilities revolving loan program, the authority seeks to further the availability of affordable housing and supportive services for Medicaid waiver-eligible individuals with behaviors that provide significant barriers to accessing traditional rental and supportive service opportunities. Loans from the community housing and services for persons with disabilities revolving loan program fund are to be used to provide financing to construct permanent supportive housing or develop infrastructure in which to provide supportive services, including through new construction, acquisition and rehabilitation of existing housing or infrastructure, or conversion or adaptive reuse. This chapter is intended to implement Iowa Code section 16.5(1) and 2011 Iowa Acts, House File 649, section 50.
Pursuant to 2011 Iowa Acts, House File 649, section 50, housing provided through a project under this chapter is exempt from the requirements of Iowa Code chapter 135O, Boarding Homes.
[ARC 9690B, IAB 8/24/11, effective 8/18/11]
265—43.2(16) Definitions. When used in this chapter, unless the context otherwise requires:
“Authority” means the Iowa finance authority.
“Department” means the Iowa department of human services.
“HOME” means the HOME Investment Partnership Program, authorized by the Cranston-Gonzalez National Affordable Housing Act of 1990.
“Infrastructure” means the building and permanent improvements necessary for the support of Medicaid waiver-eligible individuals.
“Medicaid waiver-eligible” means eligible to receive 19 United States Code Section 1915(c) home- and community-based services waivers under Iowa Administrative Code 441—Chapter 83.
“Permanent supportive housing” means a community-based dwelling that has supportive services for persons with disabilities. This type of supportive housing enables special needs populations to live as independently as possible in a permanent setting.
“PMIC” means psychiatric medical institutions for children.
“Program” means the community housing and services for persons with disabilities revolving loan program.
[ARC 9690B, IAB 8/24/11, effective 8/18/11]
265—43.3(16) Award of loan funds. It is the authority’s intent to award loans under the program to those applicants that meet all of the requirements of this chapter and the published underwriting standards of the loan program. When an applicant for loan funds also qualifies for HOME program funds, the project must satisfy all application requirements of the HOME program adopted by the authority pursuant to rule 265—39.6(16). The authority intends to award the available funds under this program each year if applicants meet all applicable requirements.
[ARC 9690B, IAB 8/24/11, effective 8/18/11]
265—43.4(16) Application process. The authority anticipates that it will, at least annually, publicize the approximate amount of funds available under this program for the applicable fiscal year on the authority’s Web site at www.iowafinanceauthority.gov. Any unallocated or recovered funds, or payments of interest and principal, or any combination thereof, may be awarded or may be carried over to the next year’s cycle of loans at the discretion of the authority. The authority will take such applications from time to time and will analyze and award loans to applicants on an ongoing basis, beginning on or after September 1, 2011. It is the position of the authority that such flexibility in taking and reviewing applications and making awards will best serve to develop and expand community housing and services for Medicaid waiver-eligible individuals.
Applicants may apply for joint funding of a project using both HOME program funds and funds loaned pursuant to this chapter.
[ARC 9690B, IAB 8/24/11, effective 8/18/11]
265—43.5(16) Program guidelines. For-profit and nonprofit sponsors are eligible to apply for assistance under this program based on the following program guidelines; however, prior to submission of the loan application, a service provider must receive approval of a service plan to benefit the Medicaid waiver-eligible individuals who reside in the project. The service provider may apply for the loan fund; however, the service provider does not have to be the applicant for the loan fund. If the service provider is not the loan applicant, a memorandum of understanding must exist between the loan applicant and the service provider which shows an obligation on behalf of the service provider to deliver services to the Medicaid waiver-eligible individuals residing in the project and which shows that the loan applicant is obligated to offer housing to the Medicaid waiver-eligible individuals who need the services provided by the service provider.
	43.5(1) Projects eligible for assistance must meet the following criteria:
	a. 	Written approval must be obtained from the department for the proposed project prior to application for loan funds.
	b. 	In order to be approved by the department, the project must demonstrate all of the following components:
	(1)	The project serves one of the following Medicaid waiver-eligible populations:
	1.	Individuals who are currently underserved in community settings, including individuals who are physically aggressive or have behaviors that are difficult to manage or individuals who meet the PMIC level of care; or
	2.	Individuals who are currently placed out of state by the department; or
	3.	Individuals who are currently receiving care in an Iowa-licensed health care facility.
	(2)	A plan to provide each Medicaid waiver-eligible individual with crisis stabilization services to ensure that the individual’s behavioral issues are appropriately addressed by the provider.
	(3)	Policies and procedures that prohibit discharge of the Medicaid waiver-eligible individual from the waiver services provided by the project provider unless an alternative placement that is acceptable to the individual or the individual’s guardian is identified.
	c. 	In order to be approved by the department for application for funding for development of infrastructure in which to provide supportive services under this chapter, a project shall include all of the following components:
	(1)	Provision of services to Medicaid waiver-eligible individuals who meet the PMIC level of care.
	(2)	Policies and procedures that prohibit discharge of the Medicaid waiver-eligible individual from the waiver services provided by the project provider unless an alternative placement that is acceptable to the individual or the individual’s guardian is identified.
	43.5(2) The following types of activities are eligible for assistance:
	a. 	Acquisition and rehabilitation.
	b. 	New construction.
	c. 	Such other similar activities as may be determined by the authority to fall within the guidelines and purposes established for this program.
	43.5(3) Assistance will be provided upon the following terms and conditions:
	a. 	Generally, the minimum loan amount is $50,000, and the maximum loan amount is $500,000. The maximum loan term and amortization period are each 30 years.
	b. 	The debt service ratio must be at least 1.25:1 for the authority’s first mortgage, as calculated by the authority. In addition, the loan-to-value ratio of the project, as calculated by the authority, will be considered. Notwithstanding the above, the authority may, in its sole discretion, accept a lower debt service ratio based on the final underwriting of the project.
	c. 	Interest rates will be set by the authority, in its sole discretion.
	d. 	Loans shall be secured by a first mortgage, to the extent possible. Construction financing may be awarded to projects.
	e. 	Recipients of assistance must agree to observe several covenants and restrictions all in accordance with such loan and mortgage documents as may be required by the authority under this program.
	f. 	The recipient must provide adequate evidence that its title in the real estate on which the project is to be located is a marketable title pursuant to Iowa Land Title Examination Standards, or other applicable law. Adequate evidence of marketable title is demonstrated by either (1) a title opinion of an attorney authorized to practice law in Iowa showing that the loan recipient has marketable title, or (2) a title guaranty certificate issued by the title guaranty division of the Iowa finance authority showing the recipient as the guaranteed.
	g. 	Recipients must execute such documents and instruments and must provide such information, certificates and other items as determined necessary by the authority, in its sole discretion, in connection with any assistance.
	43.5(4) Loan fees.
	a. 	Loan fees are as follows:
	(1)	Application fee – 0.3 percent of loan amount.
	(2)	Commitment fee (construction period) – 1.0 percent of loan amount.
	(3)	Commitment fee (permanent loan) – 2.0 percent of loan amount.
	(4)	Inspection fee (construction loan) – 0.5 percent of loan amount.
	b. 	The authority may, in limited cases, reduce such fees if necessary in connection with assistance provided under this program. Such decision will be made in the sole discretion of the authority.
[ARC 9690B, IAB 8/24/11, effective 8/18/11]
265—43.6(16) Authority analysis of applications. Authority staff will analyze and underwrite each potential project and will make recommendations for funding assistance to the authority board of directors. Authority staff will use such procedures and processes in its underwriting and analysis as it deems necessary and appropriate in connection with furthering the purposes of this program. In addition, the authority anticipates that, because of the complex nature of each transaction and the particular set of circumstances attributable to each particular application/transaction, the terms and conditions of loans will vary from project to project. The authority will make available its general operating procedures and guidelines for this program.
[ARC 9690B, IAB 8/24/11, effective 8/18/11]
265—43.7(16) Discretion of authority board. The authority board of directors has the sole and final discretion to award or not to award assistance and to approve final loan terms.
[ARC 9690B, IAB 8/24/11, effective 8/18/11]
265—43.8(16) Closing/advance of funds. If all requirements of the authority are not met in accordance with any time frames set by the authority and to the complete satisfaction of the authority, all in the sole discretion of the authority, the authority may determine to cease work on an approved project and, accordingly, not advance any funds for such project.
[ARC 9690B, IAB 8/24/11, effective 8/18/11]
These rules are intended to implement Iowa Code section 16.5(1) and 2011 Iowa Acts, House File 649, section 50.
[Filed Emergency ARC 9690B, IAB 8/24/11, effective 8/18/11]