The New Hampshire Housing Finance Authority’s (NHHFA) Underwriting Standards and Development Policies for Multi-Family Finance have been updated in response to feedback received and to better align the standards with current underwriting practices.

Please send your comments to Julia Morgan at jmorgan@nhhfa.org no later than April 24, 2020. The final revised standards will be published on May 1, 2020. Below is a summary of proposed substantive revisions:

  • Section 2.04 – Loan Amounts: The per-unit bond financing limit was updated to reflect the new limit of $100,000 per income and rent restricted unit.
  • Section 2.05(C) – Deferred Payment Loans: Reference to the Deferred Loan Maturity Process was added to provide additional guidance for maturing Authority deferred payment loans.
  • Section 2.07 – Interest Rates: Language was added to reflect interest rate pricing, which allows the Authority to adjust the permanent loan amount upward if the pricing yields an interest rate that is lower than the underwritten interest rate.
  • Section 2.09 – Floodplain Development: Language was added to clarify the floodplain requirements for the 811 PRA program.
  • Section 3.03 – Renewable Energy Guidelines: The Renewable Energy Policy was moved from Appendix C to Section 5.09, keeping its original scope but condensing the narrative significantly.
  • Section 4.05 – Management Agent: Language was added to differentiate management agent documentation requirements between existing properties and new construction projects.
  • Section 4.08 – Specialized Consultants: Language was added to allow for certain consultant fees to be paid outside of the developer fee.
  • Section 5.02(B)(6) – Identity of Interest: Language has been added to summarize the limit for fees when there is an identity of interest between the builder and developer.
  • Section 5.02(B)(7) – Maximum Developer Fee Calculation: The developer fees have been increased by approximately 5% across both general occupancy and age-restricted projects.
  • Section 5.02(E) – Holdbacks: This section has been updated to reflect a change in the holdback policy for the HOME and HTF programs, reducing the 10% holdback to 2%.
  • Section 5.02(F)(2) – HOME/HTF Underwriting: This section has been updated to add project legal fees to the list of HOME and HTF-eligible costs.
  • Section 5.03(A)(4) USDA RD Underwriting: The addition of this section clarifies how projects that use USDA RD financing/rental subsidy are underwritten.
  • Section 5.03(A)(5) Section 811 PRA Underwriting: Language has been added for projects that commit units to the Section 811 PRA program to clarify how the unit rents will be underwritten.
  • Section 5.03(D) Operating Expenses: This section was updated to allow for a reasonable investor servicing fee “above the line” in the operating budget.
  • Section 5.05(D)(2)(i) Operating Reserves: Modifications to this section include allowing a project to access its operating reserves to make capital improvements after year 15 in certain situations.
  • Section 5.06(B) Environmental: This section was updated to reflect the new NHHFA statutory checklist procedure where NHHFA will contract with a single environmental consultant for all HUD statutory checklists.
  • Appendix A – Market Study Requirements: This appendix was removed and will be added to the NHHFA website as a stand-alone document.
  • Appendix B – Closing Insurance Requirements: This appendix was removed and will be added to the NHHFA website as a stand-alone document.
  • Appendix B (new) – Balloon Structure Underwriting Standards: NHHFA received a waiver from HUD to allow for balloon loans under the Risk Sharing Program, allowing NHHFA to provide Risk Sharing loans with a minimum term of 17 years and a maximum amortization period of 40 years.
  • Appendix E – Title Insurance Survey Requirements: This appendix was removed and will be added to the NHHFA website as a stand-alone document.