80A - AFFORDABLE HOUSING POLICIES

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EXHIBIT 1 Community Development Block Grant Program Source of Funds Funding for this program is provided through the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) program (including program income and residual receipts), and therefore is subject to the federal rules and regulations found in 24 CFR Part 570, as amended from time to time. Eligible Borrowers/Grantees Eligible borrowers are community-based nonprofit housing development corporations (CBDO's) duly organized or with capacity to promote and undertake community development activities on a not-for-profit basis, with proven capacity to develop, own and operate affordable housing, within a neighborhood identified in the Community Development plan (Annual Action Plan). Such organizations are defined in CDBG regulations (24 CFR 570.204(a)(2)(c)(1)). Nonprofit Housing Development Corporations (HDC's) and social service agencies with proven capacity to develop, own, and operate affordable housing, and limited partnerships whose general partner(s) is otherwise eligible under the above provisions, are also eligible to borrow Program funds if the nonprofit partner is the managing general partner throughout the term of the loan and will receive at least 51 % of the developer fee. Nonprofit corporations must have a valid 501(c)(3) or (4) designation from the Internal Revenue Service. Eligible Projects Eligible projects will: (1) have four or more apartment units or fewer than four units in the case of congregate housing, mobile home units or where the Housing Division Manager finds that the project will provide a substantial public benefit; (2) if new construction, have 51% of the units occupied by low income tenants; (3) be free from significant adverse environmental impacts, except those that can be mitigated; and, (4) avoid permanent involuntary tenant displacement to the greatest degree feasible in order to carry out the program. Transitional or permanent supportive housing may be provided. Rents of assisted units shall be affordable to households whose incomes do not exceed 80% of the area median income. Eligible Uses and Activities Funds can be used to make loans to eligible borrowers to provide affordable housing, principally for low and moderate income households, including, but not limited to: (1) acquisition and/or rehabilitation of eligible rental properties; (2) new construction of rental or limited equity cooperative housing by a CBDO is eligible, provided the construction activity is carried out as part of a neighborhood revitalization, community economic development or energy conservation project. New housing construction carried out by an eligible CBDO must be part of a larger effort to revitalize the neighborhood (i.e., a plan for the community's revitalization efforts based on a comprehensive plan, not just for the sake of the CDBG project); Affordable Housing Funds Policies and Procedures Page 32