Image by Brian Rose courtesy of
David Baker + Partners Architect.


Affordable Housing

Developer Due Diligence

DRA is expert in the evaluation of key due diligence items for selection of a master developer, including the following:

  • Track record of affordable housing developers, measured in terms of the number of projects and units of tax credit, HOPE VI, affordable for sale and/or other restricted housing developed. We analyze whether projects were completed on time and within budget, as verified through third party interviews with owners or sponsors.
  • Track record of affordable housing managed, either in-house or through contract property management. We review compliance, as well as actual operating costs in project audits for reasonableness, based on our exhaustive regulatory and market expertise.
  • Developer’s pipeline of projects in planning, predevelopment and construction phases.
  • Capacity given the developer’s pipeline, track record and staffing.
  • Review of financial statements to determine financial strength and the developer’s ability to provide construction, operating deficit, and tax credit investor guarantees, as required. We review the developer’s contingent liabilities and ability to perform on existing as well as proposed guarantees, as well as their ability to satisfy unencumbered net worth requirements.
  • Presence or absence of “black marks” that would be viewed negatively by tax credit allocating agencies, HUD, or other potential funders.


Developer Negotiations: ENA, DDA, Regulatory Agreement, Loan Agreement, Joint Venture Structures

Because DRA serves as both financial analysts and development consultants, we understand every aspect of the real estate development process. We understand how each component of affordable housing development (e.g., predevelopment, legal, construction, finance, asset management) affects other components. DRA can assist with developing the most efficient and effective financial structure for mixed income, Mixed Finance developments, as well as other affordable housing developments.

DRA assists developers and housing agencies in negotiating the terms, conditions and pricing of financial assistance, including detailed guidance on transactional documents such as loan agreements, regulatory agreements, ground leases, disposition and development agreements, owner participation agreements, exclusive negotiating agreements, notes, deeds of trust, homebuyer resale restrictions and equity share provisions.

The RFP/RFQ process is an important tool for selecting appropriate projects to fund and to select the best developer. DRA is expert at developing RFQ/Ps, evaluating information submitted, and negotiating agreements with developers. DRA led the California Redevelopment Association Professional Development Institutes for RFP/RFQ recruitment of developers, and negotiations of developer commitments (e.g., exclusive negotiating agreements, disposition and development agreement, Letter of Intent) statewide for six years.