Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Ahsp Policy topic
No spam. Unsubscribe anytime.
Buncombe staff propose 50% cash-flow repayment and tougher underwriting in AHSP revisions
Summary
Staff presented a package of Affordable Housing Service Program (AHSP) changes including industry-standard underwriting, a 10% deferred developer fee minimum and a proposal that the county receive 50% of available cash flow after senior debt and expenses; developers and committee members raised concerns about feasibility and lender priority conflicts.
Staff presented a broad rewrite of the county's Affordable Housing Service Program that would formalize underwriting standards and change how some loans are repaid.
Jonathan Jones, a county housing staffer, outlined a set of recommendations that include standard documentation rules, a debt-service-coverage ratio target of 1.15, a 7% vacancy assumption and a proposed minimum of 10% deferred developer fee paid no later than year 15. He told the committee that the county also could structure some loans on a cash-flow basis "so if there is available cash flow, then a calculation would be done to receive 50% of that," adding that the proposal is not a hard debt requirement.
The 50% cash-flow approach drew pushback. A public commenter warned earlier in the meeting that the provision could be "onerous for affordable housing, especially at the stage projects are when they apply to HSP program," noting that projects often rely on soft funds that expect repayment from cash flow.
Committee members questioned how a 50% claim on cash flow would interact with other lenders and programs. One member urged caution, saying the county should avoid terms that make projects "really unworkable for our partners," and compared the risk to past conflicts over subordinate public financing programs.
Jones said staff examined the city of Asheville's CDBG-DR program as a local precedent and offered to seek additional feedback from developers and the three projects that previously used similar funds. He emphasized the recommendations are being presented for discussion and refinement before any formal recommendation to the full board.
Next steps: staff will gather partner feedback and return with a more consolidated set of recommendations at a future meeting timeline noted in the packet.
