I'm looking for guidance regarding Community Development Loans in connection to Affordable Housing. The purpose of the loan is to refinance an apartment complex located in a Middle Income census tract. Of the 6 surrounding tracts- 2 are moderate income and 4 are upper income. There are 100 units in the complex- 100 of the 100 units are below Fair Market Rent. The project is proximate to historic neighborhoods with major employment centers nearby. Would this scenario be CDL eligible?

Is the loan greater than 1 million?

yes

Yes

This is not what one would call low hanging fruit. My examiners would ask a question similar to this:

"Prove to us that the majority of tenants in the units have incomes less than 80% of the area median income."

Also make sure you have the rent roll and compare them to the Fair Market Rents published by the Department of Housing & Urban Development (HUD. You can obtain the information based on where the property is located.

Same for me Pale, it must be nice to have examiners that will use FMR to compare to rent rolls for proving low income. I had several CD loans in our last exam that made this comparison and only one was accepted and only because it was in an LMI geography. My examiner wanted to see marketing targeted to LMI or use of non-profit or government affordable housing advocacy resources.

I agree that detail on how the owner solicits tenants, restrictions on income in marketing to low or mod income, etc. Is needed.

Also how income is verified for applicants.

Otherwise, don't count on the loan counting for CRA.

I have two questions based on the previous comments
(1) How does this conform to the Q&A guidance regarding using a standard e.g. FMR to determine affordability
(2) has anyone ever considered using HOME rents rather then FMR?