The Kentucky Housing Corporation (KHC) opened applications for 2021 Tax-Exempt Bonds (TEB) and four percent LIHTC projects on March 16. Due to limitations on the available private activity bond cap, KHC has revised the process to apply for and be allocated TEB cap. These changes are an effort to better align the reservation of TEB cap with the timing of bond issuances.

Proposed projects must meet the following requirements. Failure to meet established timeframes will result in KHC withdrawing the bond reservation and making it available to other applicants in a future bond application. Any project that has a bond reservation withdrawn for failing to meet the established timeframe and wishes to reapply in a future bond application round will be required to pay a new application fee to do so. All application fees will be non-refundable.

  • Applicants must utilize a minimum of $5,000,000 in Tax-Exempt Bonds for construction and/or permanent financing.
  • Applicants must present a project timeline demonstrating the ability to meet the following deadlines:
    • Inducement Resolution by KHC Board of Directors – approximately two to three months after pre-application submission.
    • Full Application Submission – no later than 90 days from pre-application submission. Extensions may be considered through the administrative waiver process.
    • Technical Submission – no later than 90 days from full application submission. Extensions may be considered through the administrative waiver process. Once KHC has reviewed and approved all items required at technical submission, a conditional reservation letter will be issued reserving TEB cap and other resources (if applicable) for the proposed project. Conditional reservation letters will be issued on a quarterly basis, in the order of technical submission approval date, so long as KHC has TEB cap available to be allocated subject to published terms and conditions.
    • Closing Deadline – no later than nine months from KHC’s conditional reservation letter. Failure to meet the closing deadline will result in KHC withdrawing the bond reservation and making it available to other applicants in a future bond application round.
    • Completion Deadline – Projects must be completed and placed in service no later than 24 months after the date of the closing of all KHC resources.
  • Applicants must meet the requirements of the 2021-2022 QAP and Multifamily Guidelines, as revised in March 2021.
  • Applicants must engage an attorney or attorneys to serve as bond counsel who is a member in good standing of the Kentucky Bar Association and has a comprehensive understanding of KHC’s bond policies and procedures.

Applications must be submitted through the Universal Funding Application. Applicants should select the “2021 Tax-Exempt Bond Only Application.” Development team members who have not received a capacity approval letter, or whose capacity approval letters have expired, must submit the Development Team Capacity Application and receive approval from KHC prior to submission of the TEB application.

 

Please note that KHC anticipates issuing a Notice of Funding Availability (NOFA) for Tax-Exempt Bonds with Gap Financing (HOME, KHC Affordable Housing Trust Fund, National Housing Trust Fund) later this spring.

KHC will accept written comments on the changes to this policy, along with changes to the Multifamily Guidelines.  All comments must be submitted to multifamily@kyhousing.org by Thursday, March 18, 2021.

KHC also made some minor clarifications and revisions to the Multifamily Guidelines and scoring workbook. One important change to note is the timeframe of the Notification of Application for Funding form. Previously, KHC’s policy was that this form must be sent no less than 30 days prior to the application submission due date; however, because some months have 31 days, there was some confusion about by what date the proof of receipt had to be signed. In an effort to simplify this process for everyone, the signed proof of receipt now must be dated no later than one month prior to the application date, irrespective of the number of days in the month. For example, for funding applications with a due date of August 19, the signed proof of receipt must be dated no later than July 19.

KHC will accept written comments on the revisions to the Guidelines until 5 p.m. ET on Thursday, March 18, 2021. All comments must be submitted to multifamily@kyhousing.org. The scoring workbook is not open to public comment at this time.