Capital projects are defined as the acquisition, rehabilitation, and/or new construction of housing projects or units within housing projects that are affordable to and that benefit low, very low, and extremely low-income households as defined in Section 5: "Additional RFP Information" for Income Limits.

Eligible Capital Project Types

A “project” is defined as one or more buildings on a single site or multiple sites that are under common ownership, management, and financing that is done as a single undertaking.

Affordable homeownership housing: Projects can use capital funds awarded under this NOFA for the development of affordable homeownership housing for resale to eligible homebuyers; or
Affordable rental housing: Projects can use capital funds awarded under this NOFA for the development and/or preservation of permanent affordable rental housing for lease to eligible tenants.

Eligible Uses of Capital Funds

Acquisition of existing standard property, or substandard property in need of rehabilitation;
Acquisition of vacant land to be used for new construction;
New construction;
Alteration, improvement, rehabilitation, or modification of existing structures;
Conversion of an existing structure from another use to housing;
On-site improvements, including sidewalks, utility connections, sewer, and water line connections where none are present;
Demolition of an existing structure if construction will begin on the project within twelve (12) months;
Reasonable and necessary project related soft costs, including but not limited to: financing costs, professional services (i.e., architectural, appraisal, environmental, engineering, market studies, legal, and capital needs assessments), audit costs, affirmative marketing, insurance, permits, and other project related soft costs approved by Pierce County and/or the Pierce County Community Development Corporation (CDC); and
Developer fees of up to twelve percent (12%) of the project costs depending on the size and complexity of the project. The developer fees can be provided only upon the completion of specific milestones as outlined in the contract and/or written agreement.

Ineligible Uses of Capital Funds

Ongoing operating and maintenance funding;
Rental assistance (project or tenant-based);
Funding for construction of public housing units;
Delinquent taxes or fees;
Equipment purchases;
Refinancing (payoff of bridge financing is allowable if costs are eligible);
Capitalization of operating or replacement reserves; and
Other ineligible costs as defined by the County and/or Pierce County Community Development Corporation (CDC).

Affordability Requirements

A. Homeownership Projects

Eligible homebuyers: At a minimum, all homebuyers purchasing homes assisted with capital funds under this NOFA must have a gross annual household income at or below eighty percent (80%) of Area Median Income.
Maximum sales price: The maximum sales price for one-unit single family homes assisted with capital funds is based on ninety-five percent (95%) of median sales price for homes in Pierce County. As of the date of publication of the NOFA those limits are:
- For existing housing, the sales price cannot exceed $532,000.
- For newly constructed housing the sales price cannot exceed $636,453.
Ongoing Affordability/Principal Residence: The homebuyers that purchase homes must reside in the home as their primary residence. Please refer to Attachment H: 1406 Affordable Housing Sales Tax Requirements, Attachment I: 2060 Affordable Housing DRF Requirements, and Attachment J: Home Program Requirements for program requirements for recapture and resale.

B. Rental Projects

Eligible tenants: At minimum, all tenants residing in rental housing units assisted with capital funds under this NOFA must have a gross annual household income at or below sixty percent (60%) of Area Median Income at initial occupancy. To be eligible for HOME and 1406 capital funding, tenants must have a gross annual household income at or below sixty percent (60%) of Area Median Income at initial occupancy. To be eligible for 2060 capital funding tenants must have a gross annual household income at or below fifty percent (50%) of Area Median Income at initial occupancy. Income limits are defined in Section 5: "Additional RFP Information" Income Limits.
Maximum allowable rents: The rents charged to tenants in units assisted with capital funds under this NOFA cannot exceed the applicable program rents less the utility allowances. The rent limit requirements for the HOME program are outlined in Attachment J: Home Program Requirements, the rent limit requirements for the 2060 program are outlined in Attachment I: 2060 Affordable Housing DRF Requirements, and the rent limit requirements for the 1406 program are outlined in Attachment H: 1406 Affordable Housing Sales Tax Requirements. See Section 5: "Additional RFP Information" Rent Limits for the chart of rent limits and definitions.
Tenant leases: Tenants must have a lease with the owner of the property. For HOME, funded projects the lease must comply with the lease requirements outlined in Attachment J: Home Program Requirements. For 2060 funded projects the lease must comply with the lease requirements in Attachment I: 2060 Affordable Housing DRF Requirements. For 1406 funded projects the lease must comply with the lease requirements in Attachment H: 1406 Affordable Housing Sales Tax Requirements. All leases regardless of the capital fund source must comply with Washington State Landlord Tenant Law, and other applicable local landlord tenant laws.
Ongoing affordability: Owners must lease the affordable units assisted with capital funds under this NOFA to eligible tenants for the relevant period of affordability. The period of affordability and ongoing monitoring requirements for HOME are outlined in Attachment J: Home Program Requirements, the period of affordability and ongoing monitoring requirements for 2060 are outlined in Attachment I: 2060 Affordable Housing DRF Requirements, and the period of affordability and ongoing monitoring requirements for 1406 are outlined in Attachment H: 1406 Affordable Housing Sales Tax Requirements.

Property Standards

A. New construction projects must meet the following property standards:

State and local residential building codes, ordinances, site and neighborhood standards, and zoning requirements;
Accessibility requirements under section 504 and the Federal Fair Housing Act; and
Mitigate disaster impact as applicable per State and local codes and ordinances.

B. Rehabilitation projects must meet the following property standards:

State and local building codes and ordinances;
Accessibility requirements under section 504 and the Federal Fair Housing Act;
HUD and State lead safe housing rules;
Be free of deficiencies in accordance with the County’s written rehabilitation standards;
Projects involving the rehabilitation of more than twenty-six (26) units must provide a Capital Needs Assessment prepared by an independent third (3rd) party;
The rehabilitation work must be completed in accordance with the County’s written rehabilitation standards; and
The rehabilitation work must address the useful life of major systems, and upon completion of rehabilitation all major systems should have five (5) years remaining life.

C. Acquisition only projects must meet the following standards:

The property must be free of deficiencies in accordance applicable HUD property standards, and local written rehabilitation standards; and
The property must be free of Lead Based Paint hazards.
HUD Property Standards: The County currently uses the Housing Quality Standards (HQS) for acquisition only and ongoing monitoring. Note: As of September 30, 2023, the County will use HUD NSPIRE Standards.
Local Standards: Please consult with Pierce County Planning and Public Works or the municipal jurisdiction (incorporated city or town) the project is in for questions regarding local codes, ordinances, site and neighborhood standards, disaster standards and local zoning requirements. The County will provide its written rehabilitation standards upon request.
State Public Work Requirements: Applicants awarded capital funds from this NOFA are responsible for meeting the state RCW’s related to public work requirements (Chapter 39.12 RCW). This includes the payment of prevailing wage on projects involving construction, alteration, or improvements.

Timeliness Requirements

A. Acquisition/New Construction projects must be completed within four years from the date of the funding award and meet the following milestones:

Applicant must have site control at the time of application (1–4-unit single family projects see exceptions) and will have one year from the date of funding award to acquire the property.
All necessary funding commitments to complete the project (permanent financing) shall be secured within two years of funding award.
Construction must commence no later than two years from the date of funding award. Once the construction starts it must be completed in two years.
Rental properties will be required to be leased up within one year of project completion. Homeowner properties will be required to be sold within six months of project completion.

B. Acquisition/Rehabilitation projects must be completed within two years from the date of the funding award and meet the following milestones:

Applicant must have site control at the time of application and will have one year from the date of funding award to acquire the property.
All necessary funding commitments shall be secured within one year of funding award.
Rehabilitation shall commence no later than one year from the date of the funding award. Once the rehabilitation starts it must be completed in one year.
Rental properties will be required to be leased up within six months of project completion. Homeowner properties will be required to be sold within six months of project completion.

C. Acquisition Only projects must be completed within one year from the date of the funding award and meet the following milestones:

Applicant must have site control at the time of application and verify that no rehabilitation is needed. The property must be acquired within one year from the date of award.
All necessary funding commitments shall be secured within one year of funding award.
Rental properties will be required to be leased up within six months of project completion. Homeowner properties will be required to be sold within six months of project completion.

D. Rehabilitation Only rental projects must be completed within 18 months from the date of the funding award and meet the following milestones:

Applicant must have fee simple title to the property at the time of application.
All necessary funding commitments shall be secured within six months of funding award.
Rehabilitation shall commence within six months of the date of the funding award. Once the rehabilitation starts construction must be completed in one year.
Rental properties will be required to be leased up within six months of project completion.

E. Exceptions to timeliness requirements: Projects involving the acquisition of existing single family one to four-unit properties for homeownership or permanent rental housing do not need site control at the time of application. However, the project must meet all other timeliness requirements outlined in this NOFA.

Cost and Unit Allocations

Applicants can allocate specific units in a project as an affordable housing unit benefiting income eligible homebuyers or tenants. This allows for market rate units in the project and/or mixed-use projects. See below methods for determining the minimum number of affordable units in mixed income or mixed-use project:

A. For comparable projects: If all units in the project are of similar size, amenities and use, the formula for allocating affordable units is:

Capital (HOME/2060/1406) investment divided by total eligible project costs = County/CDC Capital investment %; THEN
County/CDC Capital investment % times the total units in the project = minimum affordable units in the project (rounded up).

B. For non-comparable projects: If the units in the project are not of similar size, amenities and use the number of affordable units must be determined by the applicant and identified in the application at the time the application is submitted.

There is no maximum per unit subsidy for 2060/1406. However, the number of 2060/1406 funded units in the project must be proportional to the total 2060/1406 investment in the overall project cost.
The HOME program has a maximum per unit subsidy. The formula determining per unit subsidy on a non-comparable HOME funded project, and the maximum per unit HOME subsidy is outlined in Attachment J: Home Program Requirements.

Funding Source

Applicants must submit their application without regard to funding source. The County and/or CDC will allocate capital funding to successful applicants consistent with the regulations governing each.

The HOME program can fund eligible capital projects within Pierce County and its cities and towns excluding the city limits of Pacific, and Auburn. The requirements for projects awarded HOME funds are in Attachment J: Home Program Requirements.
The SHB 2060 program can fund eligible capital projects within Pierce County and its cities and towns. The requirements for projects awarded 2060 funds are in Attachment I: 2060 Affordable Housing DRF Requirements.
The 1406 program can fund eligible capital projects within Pierce County and its cities and towns. The requirements for projects awarded 1406 funds are in Attachment H: 1406 Affordable Housing Sales Tax Requirements.

Please note, information regarding Area Median Income Limits may change per HUD annual updates.

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Affordable Housing Development and Preservation NOFA

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