In response to a growing number of requests to modify the restrictive covenants of housing credit apartment communities, the Ohio Housing Finance Agency (OHFA) recently established Restrictive Covenant Modification Guidelines for the review of modification requests. Moving forward, an owner’s request for a covenant modification must include the following:

  • A cover letter fully explaining why the modification is needed. The explanation should include information as to any attempts to refinance the property and any other attempts to stabilize the property
  • Audited financial statements for the last three tax years
  • History of the use of the project’s reserve account (operating/replacement) for the last three tax years
  • Description of any rehabilitation work (i.e. roof, windows, carpet, HVAC systems, parking lot surfacing) that was completed for the last five years
  • OHFA’s Covenant Release Questionnaire (form PC-E41). The questionnaire can be found on our website at www.ohiohome.org. The Questionnaire includes questions on vacancy rates, current condition of the property, attempts to refinance, marketing efforts and why the owner believes the covenant is preventing success of the property’s stability and sustainability.
  • A completed project Proforma. The Proforma can be found on our website at www.ohiohome.org. The Proforma will ensure sufficient data to analyze proposed changes to rents.
  • A non-refundable administrative fee of $500.

In order to help determine if the covenant modification request is based upon market and/or rent problems, OHFA also recommends the owner submit a market analysis.

Questions regarding this email or the modification guidelines may be directed to Brian Carnahan by email at bcarnahan@ohiohome.org or by telephone at (614)728-5608.

Click here to read more about OHFA’s updated Restrictive Covenant Modification Guidelines.