Rental Rehabilitation Deferred Loan Program United States Department of Agriculture Rural Development Preservation 2023 Request for Proposals Instructions
The deadline to submit applications is Friday, June 9, 2023 at 5:00 p.m. Central Time.

Overview
Minnesota Housing is now accepting applications for the Rental Rehabilitation Deferred Loan (RRDL) Program United States Department of Agriculture (USDA) Rural Development (RD) Preservation 2023 Request for Proposals (RFP). This program operates in accordance with Minnesota Statute 462A.05, subdivision 14 and Minnesota Statute 462A.33. 

The RRDL Program provides financing options for moderate rehabilitation to owners of existing smaller scale, permanent multifamily rental housing in Minnesota. The overarching RRDL Program goal is to repair and preserve rental housing stock with federal project-based rent assistance or permanent rental housing that is naturally Affordable to the Local Workforce and convenient to jobs, transportation, and essential services. 

The RRDL Program supports two of Minnesota Housing’s Strategic Objectives:
•	Preserve and Create Housing Opportunities
•	Strengthen communities

Available Funding
Up to $7 million in state appropriations associated with the RRDL program is now available through a one-time Request for Proposals (RFP). Funds are administered through the RRDL program for the rehabilitation of multifamily rental housing that currently have a USDA Rural Development Section 515 mortgage. Funding availability is contingent upon legislative approval of program appropriations and may increase or decrease.

Applicants may request funding up to $700,000 for rehabilitation of a specific development. Minnesota Housing will select developments for further processing and recommend an award amount. USDA RD will participate with Minnesota Housing in launching the RRDL Program USDA RD Preservation 2023 RFP. 

For complete information on specific terms and conditions, eligible activities, program requirements and limitations, refer to the RRDL Program Guide.

Application Process Overview:

Eligible Applicants and Projects
Eligible Applicants include:
•	Nonprofit Organization
•	A City
•	Joint Powers Board established by two or more cities that owns or will own the housing
•	A Public Housing Agency that owns or will own the housing
•	An Indian Tribe or Indian Tribal Government that owns or will own the housing
•	A Natural Person who owns or will own the housing
•	A private Developer

Borrowers who previously received Minnesota Housing funding and did not successfully meet compliance requirements may not be eligible for RRDL Funds. Minnesota Housing will verify past program performance by consulting with its compliance department. 

Any employee, agent, consultant, officer, or elected or appointed official of Minnesota Housing, who has responsibilities with respect to the RRDL Program, and their families, may not receive RRDL Funds during their tenure, or for one year after termination of their relationship with Minnesota Housing.

Eligible Projects include: 
•	The property must be an existing building(s)
•	The property must have a minimum of 8 units
•	The property must be permanent general occupancy 
•	The property must conform to all applicable zoning ordinances and possess all appropriate use permits

Eligible Uses
RRDL Funds must be utilized for moderate rehabilitation of existing permanent rental housing. Eligible improvements must be permanent, general improvements that have not been started prior to the RRDL Program Loan closing. Improvements must be made in compliance with all applicable health, fire prevention, building, housing codes and standards, and Minnesota Housing’s Limited Scope Projects Abbreviated Design Standards and Limited Scope Projects Sustainability Requirements.

See the RRDL Program Guide for additional details regarding eligible and ineligible uses and expenses.

Program Expectations
Underwriting and Design Standards
Refer to the RRDL Underwriting Standards for information on the RRDL Program’s underwriting criteria. Refer to Minnesota Housing’s Limited Scope Projects Abbreviated Design Standards and Limited Scope Projects Sustainability Requirements for information on design standards.

Rent and Income Limits
Rents on RRDL Program assisted units may not exceed Affordable to Local Workforce rent limits. At the time of initial occupancy, units assisted with RRDL funds must be occupied by households with incomes that do not exceed 80% of the greater of state or area median income (AMI), not adjusted by family size. The current RRDL Program income limits are listed in Table C of the Deferred Loan Income and Rent Limits. Minnesota Housing monitors and requires reporting on resident incomes, rents, and occupancy. 

Required Technical Assistance Meeting
Applicants are required to schedule a one-on-one technical assistance meeting either by phone or virtually via conference call with RRDL Program staff prior to submitting their application. To schedule a technical assistance meeting, contact Cheryl Rivinius at 651.296.3705 or cheryl.rivinius@state.mn.us.

Required Launch Meeting
Once recommendations are approved, selected Applicants are required to schedule a one-on-one launch meeting either by phone or virtually via conference call with RRDL Program staff to review due diligence expectations and answer any questions. Additional information will be provided in the notification letter if selected.

Review Criteria
Minnesota Housing anticipates that this funding round will be competitive in nature, resulting in requests that exceed the amount of funding that is available; therefore, incomplete applications may not be processed, and resubmission may not be allowed during this funding round.

Complete applications will be reviewed and scored by a committee comprised of Minnesota Housing staff. Additional information about the property may be requested from USDA RD staff during this review phase. The selections and funding recommendations will be presented to the Minnesota Housing board for approval. The award decisions of Minnesota Housing are final and not subject to appeal.

The property under consideration in the proposal must meet the following threshold requirements:
•	The property must currently be financed by USDA under the RD Section 515 program
•	The property must have a remaining mortgage term of 20 years, or owner must be willing to re-amortize or extend remaining term to 20 years.
•	The property must have maintained a minimum average occupancy of 85% during the last three years.

Proposals will be evaluated based on the following:
•	Housing need and project feasibility
o	Whether the existing housing is needed in the market based upon population trends, job growth and low rental housing vacancy rates
o	Whether the Project is economically viable and sustainable
o	Whether the nature of the proposed site is subject to environmental impacts or other constraints
o	Geographic distribution of Applicants
o	Scope of work and consequences for not completing this work
o	Scope of work in comparison to the development’s overall long-term capital needs for all building systems
o	Whether the rehabilitation costs are reasonable
o	Whether the Applicant demonstrates cost containment efforts for all stages and aspects of the entire Project without compromising overall quality
o	Anticipated operational or utility cost savings
•	Organizational Capacity
o	Overall completeness of application
o	The Applicant and management company’s related housing experience
o	Whether the Applicant has successfully completed similar Projects or is partnering with other organizations that have successfully completed similar Projects
o	Whether the Applicant has strong current and expected ongoing capacity to complete the proposed rehabilitation Project
o	Whether the Applicant has the capacity to maintain the rental housing long-term

After the review committee has met and the scores have been finalized, state agency staff may incorporate the scores into final funding recommendations that may also be based on geographic distribution, and the applicant’s property management history and capacity to perform the work. 

Additionally, Minnesota Housing reserves the right to request proposal revisions during the post selection due diligence phase, which is after Minnesota Housing Board approval but before the contract is executed.

Application Timeline

Date	Activity	
Monday, March 27, 2023	State Register, Minnesota Housing website and eNews post 2023 RRDL RFP 	
Thursday, April 6, 2023	RRDL USDA RD Preservation 2023 RFP information webinar: Session 1	
Tuesday, April 11, 2023	RRDL USDA RD Preservation 2023 RFP information webinar: Session 2	
Tuesday, April 4, 2023 – Friday, May 12, 2023	Applicants must schedule and complete a Technical Assistance Meeting	
Friday, June 9, 2023	Applications due by 5:00 pm Central Time 	
Thursday, September 28, 2023	Minnesota Housing’s board reviews staff recommendations	
Friday, September 29, 2023 – Friday, October 6, 2023	Applicants notified of status – selected, waitlist, or ineligible 	
Monday, October 2, 2023 – Wednesday, November 22, 2023	Selected Applicants must attend a “Launch Meeting” to review Due Diligence requirements and answer questions	
October 2023 – July 2025	Applicants submit Due Diligence	
September 2025	All projects have completed the closing phase	

Interested Applicants are encouraged to attend one of the two virtual 2023 RFP training webinars RRDL Program staff will be hosting:
Session 1: Thursday, April 6, 2023, from 1 – 3 p.m. Central Time
Session 2: Tuesday, April 11, 2023, from 10 a.m. – noon Central Time

Please check the RRDL Program webpage for registration information. After registering, a confirmation email will be sent with information on how to join the webinar.
The RFP Information webinars will provide an overview of the RRDL Program RFP content and allow time for questions.  Frequently Asked Questions (FAQs) from the sessions and other inquiries will be posted on or around April 24.
	
After Selection
If a Project is selected for further processing, Minnesota Housing will send a letter to Applicants detailing the terms and conditions of funding along with next steps. Note that receiving this letter from Minnesota Housing is not a guarantee of funding. All selected proposals must successfully complete the due diligence phase before closing on the funding.
All selected proposals will be subject to applicable conditions of selection through the term of the loan or applicable period set out in the loan documents.

Application Checklist
Applicants must use the current application form and include all required information. All checklist items must be submitted by June 9, 2023, 5:00 p.m. Central Time to be considered for funding: 
Required Documents for all RRDL Requests	
1.		RRDL Program Application Narrative and Certification	
2.		RRDL Workbook	
3.		Applicant Certification of Known Environmental Conditions	
4.		Photographs of overall property, existing conditions, and all proposed improvement areas	
5.		Property Tax Statement	
6.		Borrower Authorization of Release of Private Information	
7.		RRDL Sponsor Qualification Form including:
-	prior year’s tax returns	-    credit report (individual or corporate)
-	financial statements	-    schedule of income-producing properties	
8.		Qualifications of Management Company and Marketing Agent	
9.		If available, provide any other information to support the application, including purchase agreement, architectural or engineered plans, product specifications, elevator modernization proposals, elevator maintenance records, energy audits, etc.	
10.		If available, 10-year capital plan showing priorities that need to be addressed.	

As part of your application, Minnesota Housing will request a Borrower Authorization of Release of Private Information so that information can be obtained from USDA RD area specialists.  Information may include physical, financial, and occupancy history.

Submission Instructions
Upload application materials to the online Multifamily Secure Upload Tool Portal no later than 5:00 p.m. Central Time on June 9, 2023, in order to be considered for funding.
 
Upload required documents in the original format; do not convert the documents into PDF or other formats except for the signature page of the application.  Each item should be submitted individually under your Partner Login. Do not submit as one document.

To submit all required materials using Minnesota Housing’s secure upload tool:
•	Visit www.mnhousing.gov
•	Click Partner Login
•	Under Rental Housing Information, click Secure Upload
•	Click Secure Upload Tool
•	Enter the recipient email: mhfa.app@state.mn.us

Review the Upload Tool Instructions for more information.

NOTE: Submitted applications are considered final. Late applications will not be considered; incomplete applications may not be considered, and resubmission may not be allowed during this funding round. Minnesota Housing may request additional information or clarification.

Questions  
For more information, please visit Minnesota Housing’s RRDL Program webpage or contact RRDL program staff:
Janine Langsjoen:  janine.langsjoen@state.mn.us, 651.296.6354
Susan Bergmann:  susan.bergmann@state.mn.us, 651.296.3797