100% affordable housing developments

October 25, 2022

All apartments in 100% affordable buildings are rented at reduced rates with rent limits and income restrictions. They are built by developers working directly with MOHCD. Often, these developers are non-profit organizations.

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Completed projects

A list of all 100% affordable rental housing projects that received funding from MOHCD or the Office of Community Investment and Infrastructure (OCII) is available on DataSF.

View open rental listings and apply.

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How 100% affordable housing is built

Year 1
  1. MOHCD issues a Notice of Funding Availability,
    a Request for Proposals, or Request
    for Qualifications that developers apply to
  2. MOHCD selects a developer
  3. MOHCD provides predevelopment funding
    to the developer
Years 2-3
  1. Environmental review by SF Planning
  2. Zoning review by SF Planning
Years 3-4
  1. The developer gets permits to build from
    Department of Building Inspection
  2. The developer secures financing from
    MOHCD and other sources
Years 4-5
  1. Construction!
  2. Lease-up of units for new residents

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MOHCD funding process

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The Mayor's Office of Housing and Community Development issues a Notice of Funding Availability ("NOFA") when it has funds available to lend or grant for the acquisition of new sites or buildings for the development of affordable housing or for the preservation of existing affordable housing. Each NOFA specifies the type of funding available, target population such as seniors, homeless or transition age youth, project and borrower eligibility criteria, application procedures and the scoring and selection criteria and procedures that will be used to determine which applicants will be considered for funding.

All applications are first reviewed for basic eligibility and those that satisfy the threshold requirements are scored and ranked. Scoring is based on such criteria as applicant's or the applicant's chosen development team's experience, proximity of the project to appropriate amenities, and cost effectiveness relative to other applicants and to similar recently completed projects. Ranking determines an order of priority for funding if the total of all requests from eligible projects exceeds the funding available.

The Mayor's Office of Housing and Community Development also issues Requests for Qualifications ("RFQ") or Requests for Proposals ("RFP") when a specific development opportunity is available. These are typically for sites or buildings under MOHCD's jurisdiction or development oversight, when MOHCD seeks a qualified developer to undertake the project. The RFQ or RFP will specify the desired development program, eligibility criteria, and the selection process and criteria.  Current NOFAs, RFQs and RFPs can be found here.

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MOHCD only accepts applications for funding of specific projects in response to a Notice of Funding Availability ("NOFA"), Request for Qualifications ("RFQ"), or Request for Proposals ("RFP"). Currently open NOFAs, RFQs, and RFPs can be found on the MOHCD website. As a rule, the NOFA, RFQ, or RFP will have an application or response deadline by which responses must be submitted. All applications must be made using the relevant narrative and budget application forms and all submittals must be made both in hard (paper) copy and electronically, either by email or CD submitted with the hard copy.

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Loan approval and processing

Projects recommended for funding by MOHCD staff are reviewed first by a Peer Review group consisting of MOHCD and Office of Community Investment & Infrastructure staff, who also underwrite affordable housing developments. Once staff analysis is completed a formal Evaluation of Request for Funding is prepared and approved by the Director of Housing Development prior to being submitted to the Citywide Affordable Housing Loan Committee for review and approval at one of its bimonthly meetings. The Citywide Affordable Housing Loan Committee consists of the MOHCD Director, the Office of Community Investment and Infrastructure Executive Director, the Department of Homelessness and Supportive Housing Deputy Director for Programs, the Office of Public Finance Director, and the San Francisco Housing Authority Chief Executive Officer. If this body approves the funding request, it forwards its recommendation for funding to the Mayor for consideration. The Mayor has ultimate approval authority over all projects seeking funding from MOHCD.

For most development projects, MOHCD's initial financing will be for acquisition of a site or building and preliminary pre-construction (or "pre-development") costs such as environmental studies, zoning approvals, and design work needed to prepare applications to appropriate federal or State funding sources.

After a loan or grant is approved by the Mayor, MOHCD staff prepares loan/grant documents for a project sponsor's review. These documents include a Loan or Grant Agreement, Deed of Trust and Assignment of Rents, Declaration of Restrictions, Promissory Note for loans, and Developer Fee Agreement as appropriate (the "Loan Documents"). These documents establish long-term affordability and reporting requirements on all MOHCD-funded projects, regardless of whether MOHCD funds are repaid. The Loan Documents are reviewed by a Deputy City Attorney who approves them as to form before they are executed by the project sponsor or borrower and the Mayor. In addition to Loan Documents, MOHCD staff prepares a closing checklist specifying the additional documents required to close the loan or grant. These may include borrower formation documents such as articles of incorporation, an attorney's letter attesting to the borrower's ability to receive the loan or grant funds, a resolution from the borrower's Board of Directors authorizing the loan or grant, evidence of insurance, preliminary title report, and City vendor information.

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Underwriting guidelines

Once an eligible application is scored and awarded, it is assigned to a MOHCD Project Manager to review and underwrite the funding request in accordance with MOHCD's Underwriting Guidelines and Policies. Starting with the information provided in the application, MOHCD staff works with the applicant to analyze and evaluate the project's overall feasibility. This may include consideration of issues such as the project's location, zoning, potential environmental issues, proposed financing, potential for leveraging of non-City sources, target population, affordability targets, and the degree to which the proposed development and operating budgets are consistent with industry standards or compare to other recent MOHCD funded projects.

While the initial focus of this underwriting process is to analyze a proposal for its consistency with MOHCD's underwriting standards and policies, the goal is to take advantage of appropriate opportunities for increasing the City's stock of affordable housing. Consequently, when appropriate MOHCD staff will work with an applicant to address aspects of a proposed project that may need to be improved or modified before it can be recommended for funding.

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Project design & pre-construction

After a loan or grant has closed for pre-construction financing and a project sponsor has met its procurement requirements for architectural design services, a project sponsor and its development team proceed with preparing architectural and engineering plans and budgets. These generally follow the standard design process of Schematic or Conceptual Design, Design Development, and Construction and/or Bidding/Permitting documents.

Project sponsors submit a monthly report.

MOHCD requires that a project sponsor submit half-size design plans and associated cost estimates for approval at the completion of the schematic design and design development phases before funds will be released for the next phase of design.

MOHCD's design approvals will take into consideration the project's proposed accessibility, suitability of services and community spaces, unit amenities and size given the target population, energy efficiency and green building elements, and available open space. The project sponsor is expected to work closely during the pre-construction period with the Department of City Planning and the Mayor's Office on Disability, as needed, to obtain necessary project approvals.

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Prior to starting construction or rehabilitation, all projects receiving MOHCD financing must seek MOHCD's approval to issue a Notice to Proceed to the general contractor. Approval is subject to fulfilling the submission requirements of MOHCD's Notice to Proceed Checklist.

The checklist requires project sponsors to attend two pre-construction meetings with MOHCD and other compliance monitoring agencies to review compliance issues and regulatory requirements for the construction period. One pre-construction meeting is held with MOHCD's Construction Supervisor and the project team (project sponsor, architect, general contractor and sponsor's construction manager/owner's representative as applicable). At this meeting the payment application and change order protocols are reviewed as well as outstanding Notice to Proceed checklist items. The other meeting is held with the City's Contract Monitoring Division (CMD), Citybuild, MOHCD's wage compliance officer, the project sponsor, general contractor and all subcontractors to review labor, wage and local hiring requirements.

During construction the sponsor provides MOHCD's Construction Manager with copies of all change order requests and construction progress meeting notes and schedules and a monthly report. MOHCD approves all change orders. MOHCD's Construction Manager attends all pay draw meetings with the project sponsor, architect, general contractor, and owner's representative as applicable.

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Draw processing

Disbursement of loan or grant proceeds is either through an escrow account (for acquisition of a site or building for example) or directly to the borrower on a reimbursement basis.

Borrower must submit a Disbursement Request form and Disbursement Tracking sheet. The draw request will not be processed until all appropriate forms, invoices or other evidence of payment of eligible costs has been submitted.

MOHCD's Loan Administrator reviews the draw package for completeness and submits the request to the appropriate MOHCD Project Manager who confirms that the request is consistent with the approved budget. MOHCD's Housing Development Director must approve the request before it is submitted to the Fiscal Department for processing. The approved disbursement may be by check (to the Borrower or Grantee) or wire transfer (to an escrow account).

During construction payments are based on progress and must be approved by MOHCD's Construction Supervisor or the MOHCD Project Manager who attends each monthly pay draw request meeting and inspects construction progress to verify the request. After MOHCD's Construction Supervisor or Project Manager approves the pay draw request on the MOHCD Pay Application cover sheet [hyperlink to Forms page], he/she submits it to MOHCD's Wage Compliance specialist to verify prevailing wage compliance. The approved pay application is then submitted to MOHCD's Loan Administrator for final processing, Housing Development Director's approval and submission to the Fiscal Department.

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Regulatory requirements

Information below is for example only. Applicable regulations will be identified in loan documents. For additional guidance, please request a copy of the “Regulatory and Policy Requirements Matrix for MOHCD Construction Projects” from your assigned MOHCD Project Manager or Construction Representative.

All projects under MOHCD's purview are subject to various regulatory requirements, which may vary depending on the specific funding source being used for the project. Regulatory requirements that apply to all MOHCD funding include but are not limited to:

  • San Francisco Administrative Code Section 14B, which outlines Local Business Hiring goals and procurement protocols for the procurement of professional services, construction services, and other goods and services;
  • San Francisco Administrative Code Section 6.22, which outlines the First Source Hiring rules, ensuring that disadvantaged workers are hired for new construction jobs;
  • and San Francisco Administrative Code Section 79, which requires public noticing of housing projects providing new affordable units; the California Environmental Quality Act [hyperlink to Planning Dept. website] (CEQA), which mandates an environmental review of projects in partnership with the San Francisco Planning Department.

If federal funds such as CDBG or HOME Program funds are involved, federal requirements apply, including: Federal Section 3 [hyperlink to Forms page], which outlines participation of low-income residents in professional and construction trades for projects receiving Federal funds; and the Federal National Environmental Protection Act [hyperlink to Forms page] (NEPA), which requires Federal environmental and historic review for all projects receiving Federal funds.

All MOHCD funded projects are also required to comply either with federal (Davis-Bacon) or State prevailing-wage standards.

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After a project has completed construction or rehabilitation and all permanent financing has closed escrow, a project sponsor must submit all documents specified in MOHCD's Close-Out Checklist by the deadlines set forth in the project's loan or grant agreement with MOHCD. Submission requirements include the MOHCD Project Completion Form, which summarizes final development data; a copy of the project completion audit or cost certification; a report on the use of local business enterprises; a lease-up report, which should include the number of applications and leases as well as tenants' or buyers' demographic and income data; evidence of property and boiler and machinery insurance required under the project's loan or grant agreement; and a HOME rental housing project completion report if the project was funded with HOME Funds.

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Asset management

After completion of construction or rehabilitation and MOHCD's project Close-Out process, MOHCD's Asset Management staff will monitor a project's compliance with requirements under its loan or grant agreement during the term specified in the project's Declaration of Restrictions. Monitoring is conducted annually through MOHCD's Annual Monitoring Report ("AMR") submission process. Project sponsors are required under their loan or grant agreement to submit an AMR by the deadline specified in the AMR letter or on MOHCD's website. The AMR should include the Property Activity Report and the Owner Compliance Certification Form. MOHCD's Asset Management staff also review and process residual receipts payments and waivers, project work-out requests, and loan payoffs.

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