PHAs need to state their owner proposal selection procedures in their PHA administrative plans. You may solicit proposals through either a Request for Proposals (RFP) or by attaching assistance to a project previously selected through another qualifying solicitation process. HUD guidelines on owner proposals can be found in (Subpart B) of the regulations.
Solicitation method 1: Request for Proposals
This method is most advantageous if your PHA wants full control of the competitive process under which you select projects. Each RFP should be specific about the type of housing you want to support. Doing so helps to narrow the response rate to those projects which best align with the goals of your program and prevents developers from spending time and money on applications that won’t ever be selected. While specific sites may not be solicited, PHAs may emphasize features of the projects they are seeking to fund. Some examples of RFP criteria for supportive housing projects might include:
- The minimum number of units that must be dedicated to homeless households.
- A commitment from a service provider to support tenants in housing.
- Demonstrated experience in development, property management and supportive services on the part of the owner and/or its partners.
- Written agreements between the owner and its partners.
- Proposed contract rents.
- Operating and service budgets.
- The submission deadline (required).
To advertise your RFP, you must provide broad public notice. You can create your own advertising methods and list them in your administrative plan. Many PHAs are now using their websites and email lists to advertise the availability of project-based vouchers. You may also ask other funders you are working with to send it to stakeholders on their email lists. HUD suggests publishing in a local newspaper of general circulation and by minority media. The advertisements must comply with HUD fair housing requirements.
Please note that PHA-owned units may be project-based only if the HUD field office or HUD-approved independent entity reviews the selection process and determines that the units were appropriately selected in accordance with the PHA’s administrative plan.
Solicitation method 2: Use another qualified competitive process
This method is most advantageous if your PHA has the same goals as another funder of supportive housing; if you are looking to reduce some initial administrative work; and/or if you want to establish common priorities and collaboration among funders. If you choose to attach assistance to projects selected through another competitive process, the process you choose must be administered by a federal, state or local government housing assistance, community development, or supportive services program that requires competitive selection. These processes can be considered “qualified” competitive processes.
You may only attach project-based vouchers to projects that were selected through another qualified competitive process within the previous three years of your selection date for PBV assistance. The process can not have involved any consideration that the project would receive PBV assistance. The reason for this is that project-basing offers a critical subsidy that both developers and funders would like to count on during the early stages of development financing. If there was an indication that project-basing would later be available to projects underwritten without it, some might have had an unfair advantage and/or other funding sources may have been reduced or increased. Project-basing in newly constructed and rehabilitated housing also triggers a number of construction-related regulatory requirements that are not triggered by existing housing. If a PHA had intended to attach project-based vouchers to a project during a previous funding round but did not make it public, the opportunity to meet these regulations would have been missed.
One example of attaching assistance to another qualified process is the 9% Low Income Housing Tax Credit program. Several state housing finance agencies allocate 9% Low Income Housing Tax Credits competitively, and many give competitive preference to projects that provide supportive housing. A number of PHAs find it advantageous to attach their assistance to projects that were selected through the allocation of tax credits because the equity derived from 9% tax credits is often a very important part of the development financing for new supportive housing.
A word about collaborative funding
Whenever possible, CSH encourages funders to collaborate in their allocation of supportive housing resources. Collaboration can occur among multiple funders of capital, operating and/or service dollars. PHAs can meet the requirements for issuing an RFP while also aligning with other funders. Doing so can give your PHA more certainty that the other fund sources needed to make the project successful will be committed. This also reduces the time and resources that owners spend applying for multiple fund sources for the same project. Click here for examples of PHAs that have administered RFP processes in collaboration with other funders.
Once you have solicited proposals, you will need to select those that most closely meet your PHA’s goals and HUD’s regulations and requirements. Your administrative plan must describe your procedures for proposal selection. You may want to consider involving staffs from partner funders to help you review proposals. Having people on your review team with backgrounds and expertise in housing development and supportive services can be highly advantageous. Once you have selected a proposal, you must give prompt public notice of your selection.
Go to the next section to learn about new construction, rehabilitation and the Agreement to enter into a Housing Assistance Payments.