Division of Housing Application and Contract Project

The Department of Local Affairs’ Division of Housing is deeply committed to executing contracts in a timely manner, in support of our mission as well as applicants’ projects in getting affordable housing to the citizen’s of Colorado. Internally, we’re working to develop clear agency-wide metrics to track and measure our efficiencies and effectiveness. We are however also reliant on you, as our partners, to commit to consistent timely turnaround times to ensure we can execute contract language in support of our goal to build more housing now.

The general templates provided are intended to allow applicants to see the contractual language before the specific project drafts are provided. The project’s contract specialist will be able to answer any questions at the time of the kickoff call.

Project-specific drafts are provided within 14 days of the kickoff call. In order to ensure timely review, the Division of Housing requests comments on project-specific drafts be limited to Exhibit B and Exhibit F. In the case of a loan agreement, there are times when the other lenders may request some minor changes to Exhibits G, H, and I. If an applicant provides substantive or substantial comments on any other sections of the project-specific drafts, other than to correct factual matters, and/or provides comments back on the first project-specific drafts after 21 days, the timeliness of executing a contract before the award letter expires may be jeopardized.

90-Day Contracting Process Timeline

The 90-Day Contracting Process Timeline above is broken into two categories: Days 1-60 and Days 61-90. The following information is conveyed in the image above.

Days 1-60

• The Division of Housing confirms documentation is complete, hands off to applicant, and schedules a kickoff within 7 days.
• The joint kickoff call occurs.
• The Division of Housing contract specialist contacts applicant with questions and sends initial agreement draft, which includes details from kickoff, within 14 days.
• The applicant reviews the initial draft and returns to the Division of Housing with 21 days. The first draft returned after 21 days can cause delays. Brief, simple, common, and non-substantive comments will see faster turnaround throughout the process. Substantial comments will likely result in the applicant not meeting the award letter timing. Comments returned are substantial and/or substantive on areas besides Exhibit B or F. Comments made outside these areas may not be considered at all. Requesting an extension can only be granted for events outside the applicant's control. Comments that are discouraged and may not warrant an extension are comments that are stylistic (commas) or editorial, comments made on any sections besides the Statement of Work and Use Covenant, or comments that will add more time to the drafting and negotiation process without representing a business need.
• The Division of Housing incorporates revisions and sends updated draft to applicant within 7 days. This review is intended just to capture errors. Substantial comments will likely result in not meeting the timeline.
• The applicant reviews updated draft and returns to DOH within 7 days. Substantial comments will likely result in not meeting the timing.

Days 61-90

• The Division of Housing contract specialist finalizes and provides documents for state review within 7 days.
• The Division of Housing conducts internal reviews for program, procurement, and accounting and may contact applicant about outstanding award letter conditions. Sends final draft to applicant within 10 days.
• The applicant signs all documents and routes subordination agreements to other lenders for signature. Returns to DOH within 10 days. Grants are uploaded to DocuSign and circulated for electronic signature. Loans are printed by the borrower and other lenders, signed, and returned to DOH. DOH must sign last and can't sign pages to be held in escrow at a title company. Note that extension requests must be made at least 20 days before award letter expiration.
• The Division of Housing routes documents for signature within 7 days. Agreement is executed.
• The Division of Housing routes final documents to applicant or title for recording.

As the Division of Housing (DOH) works toward the directives in Governor Polis’ executive order, DOH is amending its award letters to clearly state the timelines necessary for DOH and its grantees and borrowers to meet in order to successfully close deals within 90 days.

The new award letter format will include a shorter award letter expiration aimed at meeting the 90-day directive. DOH award letters will now expire 105 days from issuance. This timeframe includes 15 days for projects to be handed off to DOH’s contracting team.

Have a question? Ask us.

Go to a web page that describes this image, the 90-day contracting process timeline.

The Division of Housing (DOH) recently published updated development application instructions that will take effect for applications submitted on or after April 1, 2024. The application instructions, along with all of the other resources you need to apply, are available on the Office of Housing Finance & Sustainability funding application page.

These updated policies and procedures resulted from the fall 2023 contracting and process improvement period.

The improvements include:

• Updated subsidy per unit and cost assessment ranges
• Guidance on recommendations of grants versus loans
• Application due diligence requirements
• Pre-application compliance requirements

Updated Subsidy and Cost Assessment Ranges

The following have been updated in the application instructions.

Maximum Subsidy Per Unit

Cost Assessment Ranges

Guidance on Grants versus Loans

Staff have clarified the criteria for determining if an award will be in the form of a grant or loan. This guidance is contained in the updated application instructions.

Pre-application Letter of Intent, Meeting, and Compliance

Applicants will be required to:

• Submit a pre-application letter of intent at least 15 days prior to the application submission
• Set a meeting with your housing development specialist between letter of intent and application submission
• Work with compliance staff to remedy any compliance issues on other projects

Application Due Diligence Documentation Requirements

The new, streamlined requirements include a checklist of due diligence items and supplemental CDBG checklist (for projects applying for CDBG) that must be completed at the time of application.

Contact your housing development specialist with any questions.

The Division of Housing has launched a new group of housing stakeholders from around the state to provide expert advice.

The new nine-member Resource Advisory Group includes representatives from a variety of affordable housing providers and industry experts from all around the state.

The group held its first meeting on March 4 and kicked off by diving into the overall structure of DOH’s Office of Housing Finance and Sustainability (OHFS), a gap funding budget update and a report out on the results of DOH’s recent Contract and Process Improvement Project (CPIP). To learn about the meeting discussion, view the slide deck.

This group will meet regularly to advise on DOH’s implementation of new programs, policies and processes for gap funding.

The group of housing experts and advisors includes:

• Dayna Ashley-Oehm - The Housing Authority of the City of Aurora, Housing Development Director - Metro Housing Authority
• Laura Brudzynski - Archway Communities, COO - Non Profit Developer
• Amy Case - Foothills Regional Housing, Chief Real Estate Development Officer - Metro Housing Authority
• Hilary Cooper - Office of Economic Development & International Trade, Director of Innovative Housing - Standing Member
• Alex Gano - Bryan Cave Leighton Paisner LLP, Associate with BCLP - Front Range
• Kathryn Grosscup - Colorado Housing and Finance Authority, Manager Housing Tax Credit - Standing Member
• Robin Hickey - Elevation Community Land Trust, CFO - ECLT - Homeownership
• Karen Kallenberg - Habitat for Humanity of Colorado, Executive Director - Habitat - Homeownership
• Jennifer Kermode - The Kermode Outcome (TKO), Consultant - Rural Resort
• Max Lubarsky - Colorado Coalition for the Homeless, Director of Housing Development - Homelessness
• Bob Munroe - RMM Advisors, Consultant - For Profit Developer Consultant

The division is looking forward to working with this group.

The Division of Housing has posted the following draft updates and changes to its Gap Funding program policies, guidelines, and processes for public comment and feedback. Updates include new per-unit funding guidelines, updated development cost ranges, Grant vs. Loan policy, and updates to the DOH gap funding application process and requirements.

Please review the proposed updates and provide feedback on the ones you wish to.

Starting in 2024, DOH is forming a stakeholder group that will meet quarterly to advise DOH as it rolls out new programs, processes and policies pertaining to its gap funding resources or as it reviews and considers changes to existing gap funding programs, processes and policies. The Resource Advisory Group will consist of nine stakeholders aimed at diverse representation (homelessness, homeownership, rental, modular, rural, urban, etc.) from around the state. Additional information as well as details on how interested stakeholders may apply, can be found on this website

Apply to be part of the Resource Advisory Group.

We are soliciting stakeholder feedback regarding their experience in the pay request and reimbursement process as a part of the response to the recent Executive Order (V.)(D.), which directs DOH to make all reasonable efforts to streamline this process. We appreciate and value your candid feedback.

Take the survey on evaluating and streamlining payment processing.

This update will cover process and document template changes, their reasons, unchanged aspects, and a contract template review. Your continued involvement is invaluable.

New Loan Agreement Templates

These are for reference only; the final form of any loan agreement will vary based on the details of a project and its underwriting.

• 1 HDG Loan Agreement
• 2 HDG Loan Exhibit B Statement of Work
• 3 HDG Loan Exhibit D Rent and Income Limits
• 4 HDG Loan Exhibit F Use Covenant and Regulatory Agreement
• 5 Exhibit G Promissory Note
• 6 Exhibit H Deed of Trust
• 7 Exhibit I Subordinate Agreement

Please note that the Office of the State Controller must approve, review, and periodically update these and all other State Contracting templates. The most up-to-date version of the State Grant Agreement template is on the Office of the State Controller Contract and Grant Templates website.

Loan Agreement Updates: Process, Template Changes, and Unchanged Elements Review

Process and Template Revisions: What's New

• The standard Loan Agreement and Statement of Work Templates have been updated to include clarifications and exceptions to insurance provisions to better align with the single-asset entity nature of many borrowers, less restrictive bid bond requirements, and additional notice opportunities for tax credit investors.
• The transfer sections in the Use Covenant and Deed of Trust documents have been updated to establish exceptions to transfer consent requirements more clearly and broadly. This will reduce administrative timelines during the life of the loans and allow for a wider variety of transfers pursuant to security interests.
• Notice and cure provisions throughout the documents have been updated and added, which will help borrowers and third-party stakeholders to remain apprised of the status of projects supported by the State and increase opportunities to solve possible future issues.
• The Subordination Agreement template has been updated to include provisions frequently requested by senior lenders, such as updated definitions and bankruptcy, notice and condemnation, and casualty provisions, which will increase confidence for senior lenders in the security of their loans.
• Drafter’s Notes have been added throughout the template documents to clarify language that cannot be modified, including explanations regarding where to find alternative language that meets the need or State law or policy that prohibits modifications.

Unchanged Elements: What Remains Consistent

• Requests to accommodate particular lender-level or grantee-level revisions that more than one lender or borrower does not generally request were not included in the interest of maintaining more widely applicable templates.
• Requests that are prohibited under State law or policy, such as adding more affirmative third-party beneficiary rights, were not included.
• Requests oriented toward overall process or application improvement, such as providing more information during the application phase, more consistently reserving inapplicable provisions, or providing template documents as a resource, will be considered and implemented as part of separate process improvement initiatives.

Moving Forward

Our priorities going forward include continuing to implement loan agreement template updates, starting to execute OIT solutions, and performing information collecting and developing responses to the executive order.

The Division of Housing (DOH) is actively working to align with Governor Polis' Strategic Growth Executive Order by reducing contracting time to 90 days or less.

Application Update

During our Contract and Process Improvement Phase, DOH staff are working on 20 application policy and process improvement initiatives both large and small. These initiatives range in size and scope from software optimization to an analysis and recommendation of DOH’s per unit and per project subsidy funding caps. Staff will begin to roll out draft recommendations to the public for feedback in October through this site.

• “Handing Off” between when an application has been awarded funds and when it is ready for contracting has been identified as a pain point for both applicants and DOH staff. Of the 55 awards that were handed off prior to July 1st, 10 have been executed, 6 are with the borrowers for signature, 30 are in process and 9 have been paused for delays due to things ranging from insufficient documentation to waiting for entitlement processes. DOH will undergo a Process Improvement Event on October 17th and 18th to help identify common themes, scenarios or roadblocks that lead to delays in the contracting process and how to identify these early on in the process in order to set appropriate timelines and expectations. Help us to streamline the hand-off by taking this survey. DOH will also be conducting a facilitated workshop with stakeholders of projects that are paused for delays. Reports from this workshop will be included on this site.
• Housing Development Pre-Agreement costs will now be allowable (state funds only and subject to underwriting and SHB approval) effective with award letter dates on or after October 10, 2023 for costs incurred on or after the date of the award letter. Upon complete execution of a grant or loan agreement documents, Grantees and Borrowers will be eligible for reimbursement of pre-approved eligible costs listed in their award letter. Any costs for which reimbursement is requested must be documented pursuant to or otherwise in compliance with the invoicing and pay request process requirements to be set forth in the contract documents. In the event that a state funded grant or loan agreement is not executed, the State will not make any reimbursement for costs incurred. There is no commitment by the State to reimburse eligible costs unless a grant or loan agreement is executed. An awardee may not rely on the award letter for reimbursement in the absence of a fully executed agreement.

Contracting Update

Stakeholders from the State of Colorado and the affordable housing industry gathered on Wednesday, September 20th, to discuss implementing updated language in the Division of Housing development loan agreements. This meeting supports the Division’s work to meet the Governor’s EO on affordable housing, focusing on reducing project processing time.

Throughout October, DOH and the Office of the State Controller (OSC) are reviewing stakeholder input and DOH is drafting an updated contract loan template for more efficient processing giving Coloradans faster access to affordable housing solutions. DOH will pilot the new Loan Template in November. The goal is to limit or eliminate excessive negotiations in order to make the 90 day directive.

A huge thank you to the organizations that joined us in this critical conversation:

• State Controller’s Office
• Volunteers of America
• Enterprise Communities Partners
• BlueLine Development
• Bryan Cave Leighton Paisner
• Lewis Roca Rothgerber Christie
• State Housing Board

Division of Housing Gap Resource Advisory Group

Starting in 2024, DOH is forming a stakeholder group that will meet quarterly to advise DOH as it rolls out new programs, processes and policies pertaining to its gap funding resources or as it reviews and considers changes to existing gap funding programs, processes and policies. The Resource Advisory Group will consist of nine stakeholders aimed at diverse representation (homelessness, homeownership, rental, modular, rural, urban, etc.) from around the state. Additional information as well as details on how interested stakeholders may apply can be found on this website.

The Division of Housing (DOH) has seen many applications, awards, and contracts over the past 24 months. This dramatic increase in volume has put a strain on DOH's internal contracting process and systems. DOH continues to look at all aspects of the Application to Executed Contract life cycle to reduce the contracting-specific turnaround time to 90 days by June 30, 2024, as outlined is Governor Polis’ Executive Order D 2023 014:

This survey is focused on the time between the State Housing Board, the award letter, and when development is ready to start the contracting process.

Take the Survey