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HomeMy WebLinkAboutR-98-0336J-98-383 4/03/98 RESOLUTION NO. 9 V 336 A RESOLUTION, WITH ATTACHMENT (S), APPROVING THE CITY OF MIAMI'S LOCAL HOUSING ASSISTANCE PLAN ("PLAN"), PURSUANT TO THE IMPLEMENTATION OF THE STATE OF FLORIDA'S STATE HOUSING INITIATIVES PARTNERSHIP ("SHIP") PROGRAM IN THE CITY OF MIAMI; AUTHORIZING THE CITY MANAGER TO SUBMIT SAID PLAN, ATTACHED HERETO AND MADE A PART HEREOF, FOR REVIEW AND APPROVAL BY THE STATE OF FLORIDA HOUSING FINANCE CORPORATION; FURTHER AUTHORIZING THE CITY MANAGER TO EXECUTE ANY AND ALL DOCUMENTS AND AGREEMENTS, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY, TO CARRY OUT THE TERMS AND CONDITIONS OF THE SHIP PROGRAM AND THE PLAN;INCREASING THE ADMINISTRATIVE COST PERCENTAGE FOR IMPLEMENTATION OF SAID PROGRAM. WHEREAS, on July 7, 1992, the State of Florida enacted the William E. Sadowski Affordable Housing Act ("Sadowski Act"), which allocates a portion of new and existing documentary stamp taxes on deeds or real estate transactions to local governments for the development and maintenance of affordable housing; and WHEREAS, the Sadowski Act provides a dedicated revenue source for affordable housing and created the State Housing Initiatives Partnership ("SHIP") Program; and WHEREAS, in August, 1994, the City of Miami was notified by the State of Florida that the City would be eligible to receive $1,353,387.00 in SHIP Program funds beginning with the State's 1995-96 Fiscal Year; and ATTACHMENT (S) CONTAINED CITY Cownawon bmmmc; OF APR 1 4 1998 RewhrWn No, 98- 336 WHEREAS, at the November 21, 1996 City Commission meeting, the City Commission, through Resolution No. 96-851, established and approved the City's Local Housing Assistance Plan ("Plan"); and WHEREAS, the Plan outlined the City's strategy for the implementation and administration of the SHIP Program for the period covering fiscal years 1995 through 1998; and WHEREAS, in order for the City to maintain its eligibility to receive SHIP Program funding from the State of Florida, it is necessary that the City prepare and submit a new Local Housing Assistance Plan for the period covering fiscal years 1998-199, 1999-2000 and 2000-2001. NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are hereby adopted by reference thereto and incorporated herein as if fully set forth in this Section. Section 2. The City of Miami's Local Housing Assistance Plan ("Plan"), attached hereto and made a part hereof, prepared pursuant to the implementation of the State of Florida Housing Initiatives Partnership ("SHIP") Program in the City of Miami, is hereby approved. Section 3. The City Manager submit said Plan to the State Corporation for review and approval. is hereby authorizedl/ to of Florida Housing Finance I/ The herein authorization is further subject to compliance with all requirements that may be imposed by the City Attorney, 2 98- 336 Section 4. The City Manager is hereby further authorized to execute any and all documents and agreements, in a form acceptable to the City Attorney, to carry -out the terms and conditions of the SHIP Program and the Plan. Section 5. It is hereby established that any funds received by the City pursuant to the State Housing Initiative Partnership Act, to implement the Plan, shall be used to carry out the following activities: A. Homeownership Development program. It is the intent of the City of Miami's Homeownership Development Program to increase homeownership opportunities for very low, low and moderate -income persons by creating new owner - occupied residential, affordable housing units. SHIP Program funds dedicated by the City for funding of the Homeownership Development Program shall be used for the cost of land acquisition, site development, construction and permanent financing associated with the development of affordable housing units. The SHIP Program funds reserved for this strategy will be utilized by the City to provide acquisition, site development, construction and permanent financing to City of Miami certified Community Housing Development Organizations (CHDOIs) , to assist with the development of homeownership units, affordable to very low, low and moderate -income families. Once construction has been completed, the SHIP Program funds will then be converted into permanent first or including, but not limited to, those prescribed by applicable City Charter and Code Provisions. 3 98- 336 second mortgages to the individual homebuyers for the newly constructed units. B. I2nk=ayment/C1_osina oq-a ec; c nrP program. The City of Miami Is Downpayment/Closing Costs Assistance Program provides down payment and/or closing costs assistance to qualified very low, low and moderate -income persons, to assist in the purchase of owner -occupied residential units, developed by a City of Miami Certified Community Housing Development Organizations (CHDOs). Section 6. The administrative cost percentage for implementation of the SHIP Program in the City is hereby increased from five percent (5%-) but not to exceed ten percent (10%) of the SHIP Program funding allocation. Section 7. This Resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED this 14th day of _ April 1998. JOE CAROLLO, MAYOR ATTEST: WALTER J. FOEMAN, CITY CLERK In accordance with Miami Code Sec. 2-36, since the Mayor did not indicate this legislation by signing it in the designated place provided, said becomes effective with the elapse of ten (10) days from the date of C,_m,,aias;C;; ac; :;n regarding same, without the Mayor exe . in eto. W tter o an, City Clerk 4 98 - 336 PREPARED AND APPROVED BY: LINDA KELLY K ARSON ASSISTANT CITY ATTORNEY APPROVED AS TO LEGAL FORM AND CORRECTNESS: L E. MAXWELL ERIM CITY A ORNEY KK/W2436 5 98- 336 CITY OF MIAMI STATE HOUSING INITIATIVES PARTNERSHIP PROGRAM (SHIP) LOCAL HOUSING ASSISTANCE PLAN FISCAL YEARS 98-99, 99-00, 00-01 98- 336 CITY OF MIAMI STATE HOUSING INITIATIVES PARTNERSHIP PROGRAM LOCAL HOUSING ASSISTANCE PLAN FY'S 98-99,99-00,00-01 I. INTRODUCTION The City of Miami, Florida is committed to addressing the issue of affordable housing, by actively seeking various strategies for meeting the homeownership housing needs of very low, low and moderate income persons. One such strategy is the State Housing Initiatives Partnership Program, hereinafter, referred to as SHIP. SHIP was created through the William E. Sadowski Affordable Housing Act, July 7, 1992. The William E. Sadowski Affordable Housing Act, is a comprehensive funding package for state and local affordable housing programs. The SHIP Program channels a portion of new and existing documentary stamp taxes on deeds directly to local governments for the development and maintenance of affordable housing. SHIP funds will enhance the City of Miami's efforts to facilitate the production of homeownership housing which is affordable to low, very low and moderate income persons. Combined with other supporting housing initiatives, SHIP funding will make it possible to provide affordable homeownership opportunities to a greater percentage of our community that would not have been possible without the assistance of SHIP funds. The following is the City of Miami's Local Housing Assistance Plan, which is required by the William E. Sadowski Affordable Housing Act. The Local Housing Assistance Plan is a description of the method of how the City of Miami will utilize SHIP funds in accordance with the requirements and definitions of the SHIP Program,. pursuant to 420.907-420.9079, Florida Statutes. II. PROGRAM DESCRIPTION This multi -year Local Housing Assistance Plan primarily deals with the City of Miami's continuous efforts in providing affordable homeownership opportunities for very low, low and moderate income eligible persons within the City of Miami. The proposed activities and strategies for providing affordable homeownership housing units to the very low, low and moderate income eligible persons throughout the City of Miami for 1998-99,1999-00,2000-01 program years are as follows: Home Ownership Development Program will provide construction/permanent financing to assist in part with the development of newly constructed affordable homeownership units, developed by City of Miami certified Community Housing Development Housing Organizations. 1 Downpayment/Closing Cost Assistance Program will provide downpayment and/or closing cost assistance to very -low, low and moderate income families who purchase units developed by City of Miami certified Community Housing Development organizations. (CHDO). The City of Miami's Local Housing Assistance Plan was made available for public input at each of the City's thirteen (13) Neighborhood Enhancement Team (NET) Service Centers located throughout the City of Miami. III. LOCAL HOUSING PARTNERSHIP The City of Miami through the Department of Community Development/Housing Division has utilized its affordable housing financing programs to establish relationships with numerous not for profit developers and with Fannie Mae, working with local banking institutions in order to provide funding to affordable housing projects within the City. The City has worked closely with these not -for profit community based organizations, as well as other public financing agencies to enable the maximum amounts of leveraging to newly developed homeownership projects. Through these efforts, The City of Miami takes great pride in its involvement in the creation of homeownership opportunities to low income families. The leveraging of public and private funds are essential in reducing the development cost of affordable housing projects and more importantly the cost to the low income homebuyers. The City of Miami provides financial assistance to various not -for profit social service agencies that in turn provide a number of support services to the resident of the City of Miami. Services such as child care, youth leadership, transportation, recreation, mental health, handicap, and many others are available through these agencies. IV. STRATEGIES The strategies as presented by the City of Miami's Local Housing Assistance Plan are to encourage and provide affordable homeownership housing opportunities for the very low, low and moderate income residents within the City of Miami. The need for affordable housing for the very low, low and moderate income households is addressed in the City of Miami's Consolidated Plan. SHIP funds will provide a financing vehicle for affordable housing and thereby lower the cost to qualified eligible homebuyers. These strategies consist of - Strategy 1: Homeownership Development Program It is the intent of the City of Miami's Homeownership Development Program to increase homeownership opportunities for very -low, low and moderate income persons by creating new single family, affordable housing units. SHIP Program funds dedicated by the City of Miami for funding of the City of Miami's Homeownership Development Program, shall be used for the cost of land acquisition, site development and total direct and indirect construction cost, as well as, permanent financing associate with the creation of affordable housing units. 2 98- 336 The SHIP Program funds reserved for this strategy will be utilized by the City of Miami as follows: To provide acquisition ,site development, soft or indirect project cost, hard or direct project cost and permanent financing to City of Miami certified community Housing Development Organizations (CHDO's), to assist with the development of homeownership single family units, affordable to very -low, low and moderate income families. The SHIP Program funds will then be converted into first, second or third mortgage permanent financing to the individual buyers of the newly constructed units The City of Miami will utilize $1,205,477 of the SHIP funds each fiscal year for the Homeownership Development Program. Housing developments assisted through this program will receive financial assistance of up to $30,200/unit. Community Housing Development Organizations (CHDO's) applying for SHIP Program funding under the Homeownership Development Program Strategy, will be subject to the City of Miami's funding awards criteria. The City of Miami will review each applicants proposal and determine the eligibility or level of funding, based to the following scoring system: • Largest number of SHIP qualified persons aided by proposals. 1) very low income 10 points 2) low income 7 points 3) moderate income 5 points • Largest number of homeownership units. 10 points • Proposals providing provisions of social services, i.e. credit counseling, homeownership counseling, education, etc. 10 points • Proposals including funding sources other than SHIP. 2 sources 10 points 1 source 5 points SHIP only 0 points • Proposals that provide maximum leveraging of SHIP funds. 10 points • Proposals with the least per square footage construction costs. 10 points • Proposals having the least ratio of SHIP dollars to value. 10 points • Proposals planned on publicly owned parcels 10 points 3 98- 336 • Proposal including other local government financial contributions 10 points Eligible persons will be advised of the availability of these homes through notices in at least three local newspapers which have general circulation throughout the City of Miami, as well as, persons who's names are currently on a waiting list with the City of Miami. Applications will be processed on a first -come first served basis until all funds are obligated by income levels: ensuring that at least thirty (30%) percent is designated for low income applicants and thirty (30%) percent for very low income, with the balance of available funds for moderate income applicants. The applicants will be qualified for SHIP first, second or third mortgage loans of up to $30,200 to assist in the purchase of a unit developed under the Homeownership Development Program. The loan will be subject to the criteria as indicated on page6 of this plan. The applicant will be required to obtain a first mortgage from a private mortgage lender pre -determined by the City of Miami. The applicant will also be required to participate in a homeowner education class prior to the closing of these homes. All funds derived from the sales proceeds of a home sold under the Homeownership Development Program, whether from a private mortgage lender, or the homebuyer, will be deposited into the local housing trust fund, and utilized only for SHIP eligible activities. MAXIMUM MORTGAGE AMOUNTS: Mortgage amounts are limited to forty (40%) percent of the purchase price of the unit assisted or $30,200 whichever is less. MORTGAGE INTEREST RATES -TERMS -REPAYMENT First, second or third mortgages made to very low income families will carry an interest rate of one (1%) percent. First, second or third mortgages made to low income families will carry an interest rate of two (2%) percent. First, second or third mortgages made to moderate income families will carry an interest rate of three (3%) percent. First, second or third mortgages will be amortized for a term of thirty (30) years, with principal and interest payments payable monthly during the term of the loan until maturity. All SHIP funds outstanding plus interest will be repaid to the city of Miami upon the sale of the home to a subsequent buyer or upon refinance. In no event shall principal and interest payment of all of the financing plus escrow payments exceed thirty (30%) percent of the family's total gross monthly income. First, second or third mortgage payments or any others requested herein may be waived by the City of Miami for a period of up to one year in hardship situations. 4 98- 336 Strategy 2: Downpayment/Closing Cost Assistance Program The City of Miami's Downpayment/Closing Cost Assistance Program provides downpayment and/or closing costs assistance to qualified low, very -low and moderate income persons, to assist in the purchase of newly constructed single family units developed by a City of Miami certified Community Housing Development Organization (CHDO). Qualified persons will be eligible for either partial or full funding assistance in the form of a deferred loan, secured by the property. The funding assistance will be due and payable to the City of Miami if and when the property is sold to a subsequent homebuyer or if refinanced. Any property receiving funding under this strategy must have been fully constructed or rehabilitated within 12 months from sale of said property. A maximum of $100,000 will be expended for this program each year, with a maximum of $2,500 of assistance per applicant. V. AFFORDABLE HOUSING INCENTIVE PLAN The City of Miami Commission adopted the City of Miami's Affordable Housing Incentive Plan (A.H.I.P.) on October 10, 1996, in compliance with City of Miami Ordinance No. 11253, City of Miami Resolution No. 95-188, City of Miami Resolution No. 95-305, Florida Administrative Code and Section 420.9076 of the Florida Statutes, based on the recommendations made by the City of Miami's Affordable Housing Advisory Committee. The City of Miami's A.H.I.P. provides developers of affordable housing projects with a number of incentives that are intended to expedite the process and reduce the cost of developing affordable housing projects. The incentives available under the City of Miami's A.H.I.P. are as follows: Expedited Permitting Process: Priority is given to affordable housing developments by expediting the permitting process. The City of Miami's Housing Division works closely with the Building Department in assisting developers through this process. Modification of Impact Fee Requirements: The City of Miami currently waives all impact fees, as well as , the Interim Proprietary and General Services fees for affordable housing developments. This incentive provides savings of approximately $0.86 per square foot of construction. Allowance of Increased Density Levels: The provision of a Special Use Permit is to allow the increase in density or square footage to a particular housing development, is available with conditions, through the City's A.H.I.P. Inventory of Publicly Owned Land Suitable for Affordable Housing: The city of Miami has a formal inventory of all locally owned public lands. Said inventory includes land suitable for affordable housing. This list is made available to not -for profit certified 98- 336 Community Housing Development Organizations (CHDO's) for the development of affordable housing units. Reduction of Parking and Setback Requirements: The City of Miami, through Ordinance No. 11009, section 917.6 permits a reduction in the parking requirements for housing projects targeted for low income families and individuals. To obtain consideration under any of the incentives included in the A.H.I.P., a developer must present information concerning the proposed development to the City of Miami's Department of Community Development/Housing Division. If determined that the proposed development is affordable, the City's Housing Division will issue a letter to all applicable City of Miami departments and work closely with the developer and all applicable City departments in order to facilitate the incentives to the proposed affordable housing project. VI. QUALIFICATION REQUIREMENTS In determining the qualification of a household/applicant for a SHIP Program mortgage, the City utilizes the following qualifying ratios 1) the housing expense to income ratio and 2) the total debt to income ratio. The housing expense to income ratio, takes into consideration the total monthly expense of the home being purchased, which includes principal, interest (on all financing), taxes, insurance, and condominium association or homeowners association fees (if any) and dividing the total by the household's gross monthly income. The result can not exceed thirty (30%) percent. The total debt to income ratio consists of the addition of the total housing expenses plus all other monthly expenses such as credit card payments, personal loans, student loans, and auto loans, alimony or child support and any other fixed monthly expenses that will take more than 12 months to pay off. The total of these expenses is divided by the household's total gross income. The result can not exceed forty five (45%) percent. VII. AFFORDABILITY The SHIP Program considers housing affordable when the monthly rents or monthly mortgage payments, including taxes and insurance do not exceed 30 percent of an amount representing the percentage of the median anticipated gross income limits adjusted for family size for the household. VIII. INCOME LIMITATIONS The SHIP Program is designed to benefit very low, low and moderate income families. Current (low, very low and moderate) income limits in Dade County are listed below. These limits shall be adjusted automatically whenever the federal government periodically re -determine the median income for Dade County. rel 98- 336 IX *14 XI Family Size 1 2 3 4 5 6 7 8 Very Low Income Limits $15,050 17,200 19,350 21,500 23,200 24,950 26,650 28,400 MAXIMUM PURCHASE PRICE Low Income Limits (80%) $24,100 27,500 30,950 34,400 37,150 39,900 42,650 45,400 Moderate Income Limits (120%) $36,120 41,280 46,440 51,600 55,680 59,880 63,960 68,160 The maximum purchase price of a SHIP assisted, new or existing homeownership unit will not exceed 90% of the median purchase price of said unit in Dade County. The median purchase price of a home currently in Dade County is approximately $115,000, therefore the maximum sales price of a home new or existing to be assisted with SHIP funds will be no greater than $103,500. SELECTION PROCESS Qualified eligible applicants will be selected or awarded funds on a "first come, first serve" basis after the availability of program funds or activities are advertised. The City of Miami will advertise the availability of funds 30 days prior to accepting applications TARGETED ACTIVITIES AND GROUPS The City of Miami's Local Housing Assistance Plan for FY 1998-99, 1999-00, 2000-01 will use 90% of SHIP funds each fiscal year for homeownership activities. All of the housing units assisted with SHIP funds will consist of newly constructed or rehabilitated homeownership units. In addition all proposed program activities (see STRATEGIES pg. 2-5) will be targeted to very low, low and moderate income person. At the very least 30% of all SHIP funds shall be utilized to assist very low income families, 30% for low income families and no more than 40% will be utilized to assist moderate income families, based on the income limits as defined on pg. 7. XII. ELIGIBLE APPLICANTS The purchaser's gross annual income must not exceed 120% of the median income in Dade County adjusted for family size and must occupy the property as a principal residence. 7 98- 336 The prospective homebuyers must have a good credit history. If a SHIP mortgage is provided to the homebuyer, the homebuyer must be approved for a mortgage from the a participating mortgage lender. Proposed mortgage financing arrangements must be found acceptable and/or beneficial to the participating home buyer. Estimated total mortgage payments including escrow, should not exceed thirty (30%) percent of the homebuyers monthly gross income, when determining affordability of the unit. In the event a first mortgage is provided to a homebuyer, the applicant /household must meet the qualification guidelines as indicated herein. XIIL RECAPTURE PROVISION The City of Miami will provide SHIP assistance in the form of grants and unforgivable loan, not to exceed the maximum limits as indicated in this plan. When loans are provided, the loan shall be fully repayable at a rate determined by the City of Miami and at a maximum term of thirty (30) years. All loans shall be secured by a note and mortgage on the property, which shall be recorded either in a first, second or third lien position. The homebuyer is required to reside in the property as his/her principle residence during the entire term of the loan. The homebuyer may sell the property at any time and must repay the City of Miami the entire amount of SHIP subsidy plus interest from the sales proceeds. Any proceeds remaining after all mortgages especially the SHIP subsidy have been repaid, shall belong to the homebuyer (Seller). The SHIP proceeds repaid to the City of Miami will be used by the City of Miami for other SHIP Homebuyer Assistance. In the event that the proceeds from the sale are insufficient to repay the outstanding SHIP subsidy, the City will recapture whatever proceeds are available after the first mortgage from a private lender (if any) has been repaid. When SHIP funds are provided in the form of a grant, the City of Miami will impose a deed restriction on the subject project that will require the property to remain affordable for a period not to exceed the term of the mortgage providers, or a maximum or thirty (30) years, (affordability period.) The homebuyer is required to reside in the property as his/her principle residence during the entire term of the loan. In the event that the original purchaser sells his/her unit during the affordability period, the subsequent purchaser must be SHIP eligible. The City of Miami will require that the subsequent purchaser be qualified by the Department of Community Development/Housing Division. 98- 3636 XIV. ADMINISTRATION /KT/ The cost of administrating the Local Housing Assistance Program shall be 10% of the local housing distribution received pursuant to SHIP. All administrative activities will be for staff cost (i.e. salaries, office expenses, studies, consultants, etc.). A line item budget accounting sub -activity entitled SHIP General Administration will established in accordance with City's current budget regulations and policies. BUDGET SUMMARY (ADMINISTRATION) FY 1998-99 Salary /FB $135,052.00 Audit/Advertisement 10,000.00 TOTAL $145,052.00 FY 1999-00 Salary/FB $135,052.00 Audit/Advertisement 10,000.00 TOTAL $145,052.00 FY 2000-01 Salary/FB $135,052.00 Audit/Advertisement 10,000.00 TOTAL $145,052.00 BUDGET SUMMARY (PROGRAM STRATEGIES) FY 1998-99 Homeownership Development Program $1,205,477 FY 1999-00 Homeownership Development Program $1,205,477 FY 2000-01 Homeownership Development Program $1,205,477 FY 1998-99 Downpayment/Closing Cost Program $100,000. FY 1999-00 Downpayment/Closing Cost Program $100,000. FY 2000-01 Downpayment/Closing Cost Program $100,000. Totals FY 1998-99 $1,450,529 FY 1999-00 $1,450,529 FY 2000-01 $1,450,529 PLAN DURATION AND EFFECTIVE DATE The City of Miami's Local Housing Assistance Plan will become effective immediately upon its adoption by the City of Miami Commission and subsequently approved by the Florida Housing Finance Agency. The multi -year plan contained herein is for the State fiscal years 1998-99 ,1999-00 and 2000-01. It may be amended dependent upon changes in strategies and other requirement by the partnership and approval by the City of Miami Commission. Any plan amendment will be submitted to the Florida Housing Finance Agency within twenty-one (21) days after adoption by the City of Miami Commission. Florida Housing Finance Agency will be notified promptly if the City of Miami is unable to comply with the provision of this plan. E 98- 336 XVI. AUTHORIZATION/IMPLEMENTATION The City of Miami Local Housing Assistance Program shall be implemented by the City through the Local Housing Partnership. The City of Miami Commission shall be the policy body responsible for program implementation. The City Manager acting through the City's Department of Community Development/Housing Division will be responsible for the overall administration of the program. All assistance provided under this plan will be available on an equal basis to all sponsors and/or persons, without regard to race, creed, religion, color, age, sex, marital status, family status, national origin or handicap status. All sponsors and/or persons receiving assistance under this plan will be contractually obligated to comply with the affordable housing criteria established by the program. Any unit/sponsor/ person receiving assistance from other federal programs shall comply with all federal and SHIP Program requirements. 10 98- 336 CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM TO : The Honorable Mayor, Joe Carollo and Members of the City Commission FROM :Jose Garcia -Pedrosa City Manager RECOMMENDATION: CA-9 DATE : April 1, 1998 FILE SU&JECT : Resolution Approving the State of Florida Required SHIP Program Local Housing Assistance Plan REFERENCES: City Commission Agenda Item ENCLOSURES: April 14, 1998 It is respectfully recommended that the City Commission adopt the attached resolution, approving the City of Miami's Local Housing Assistance Plan, required by the State of Florida, for the City's continued participation in the State Housing Initiatives Partnership (SHIP) Program. BACKGROUND: In 1992, the William E. Sadowski Affordable Housing Act established the State Housing Initiatives Partnership (SHIP) Program, which is administered by the Florida Housing Finance Corporation. SHIP Program funds are derived from set -aside allocations from documentary stamp levies on real estate transactions statewide. The City of Miami was allocated approximately $1.3 million in SHIP Program funds for FY 1995 - '96, with a similar amount allocated for FY 1996 - '97 and 1997 - '98. In May of 1995, through Ordinance No. 11253, the City Commission approved the establishment of the City's Local Housing Assistance Program, pursuant to the State Housing Initiatives Partnership (SHIP) Program. In March of 1995 and November of 1996, through Resolution Nos. 95-188 and 96-851, the City Commission approved the City's Local Housing Assistance Plan in connection with the implementation of the State of Florida's State Housing Initiatives Partnership (SHIP) Program in the City of Miami, for the period covering fiscal years 1995 through 1998. In January of 1998, the City of Miami was notified by the State of Florida that its current Local Housing Assistance Plan, which sets forth the City's strategies and criteria for administering the SHIP Program expires on June 30, 1998. In order for the City to maintain its eligibility to receive SHIP Program funding, it is necessary that the City submit a new Local Housing Assistance Plan to the State of Florida on or before May 2, 1998. It is anticipated that the City will be awarded $1,450,529.00 in SHIP Program funding from the State of Florida for FY 1998 - `99. 98336 - The Honorable Mayor, Joe Carollo and Members of the City Commission April 1, 1998 Page 2 The Local Housing Assistance Plan must provide a description of the City's housing strategy and a breakdown of the way in which the City proposes to expend the SHIP Program funds. The City of Miami's proposed Local Housing Assistance Plan includes the following components: Housing Strategy 1: Homeownership Development Program The City's Homeownership Development Program will provide project funding to City of Miami Certified Community Housing Development Organizations (CHDOs) for the cost of project site acquisition, site development, construction and permanent financing associated with the development of homeownership units affordable to very low, low and moderate -income families in the City. An allocation of $1,205,477.00 is being recommended to be made available under this strategy each year. Housing Strategy 2: Downpayment/Closing Assistance Program The City's Downpayment/Closing Cost Assistance Program will provide downpayment and/or closing cost assistance to qualified, very low and low and moderate -income persons for the purchase of a newly constructed and/or rehabilitated owner -occupied residential unit developed by not -for - profit Housing Community Development Corporations (CDCs). The funding assistance will be made in the form of a deferred loan secured by the property. An allocation of $100,000.00 is being recommended to be made available under this strategy each year, with a maximum of $2,500.00 of assistance per applicant. In an effort to expand the availability of affordable homeownership opportunities in the City, City Commission prova of the attached resolution is recommended. JGP/C C/ I7BH:vh <shared -memo svh>mayorcc46 98- 336 CITY OF MIAMI STATE HOUSING INITIATIVES PARTNERSHIP PROGRAM (SHIP) LOCAL HOUSING ASSISTANCE PLAN FISCAL YEARS 98-99, 99-00, 00-01 98- 336 CITY OF MIAMI STATE HOUSING INITIATIVES PARTNERSHIP PROGRAM LOCAL HOUSING ASSISTANCE PLAN FY'S 98-99.99-00.00-01 INTRODUCTION The City of Miami, Florida is committed to addressing the issue of affordable housing, by actively seeking various strategies for meeting the homeownership housing needs of very low, low and moderate income persons. One such strategy is the State Housing Initiatives Partnership Program, hereinafter, referred to as SHIP. SHIP was created through the William E. Sadowski Affordable Housing Act, July 7, 1992. The William E. Sadowski Affordable Housing Act, is a comprehensive funding package for state and local affordable housing programs. The SHIP Program channels a portion of new and existing documentary stamp taxes on deeds directly to local governments for the development and maintenance of affordable housing. SHIP funds will enhance the City of Miami's efforts to facilitate the production of homeownership housing which is affordable to low, very low and moderate income persons. Combined with other supporting housing initiatives, SHIP funding will make it possible to provide affordable homeownership opportunities to a greater percentage of our community that would not have been possible without the assistance of SHIP funds. The following is the City of Miami's Local Housing Assistance Plan, which is required by the William E. Sadowski Affordable Housing Act. The Local Housing Assistance Plan is a description of the method of how,the City of Miami will utilize SHIP funds in accordance with the requirements and definitions of the SHIP Program,. pursuant to 420.907-420.9079, Florida Statutes. II. PROGRAM DESCRIPTION This multi -year Local Housing Assistance Plan primarily deals with the City of Miami's continuous efforts in providing affordable homeownership opportunities for very low, low and moderate income eligible persons within the City of Miami. The proposed activities and strategies for providing affordable homeownership housing units to the very low, low and moderate income eligible persons throughout the City of Miami for 1998-99,1999-00,2000-01 program years are as follows: Home Ownership Development Program will provide construction/permanent financing to assist in part with the development of newly constructed affordable homeownership units, developed by City of Miami certified Community Housing Development Housing Organizations. 98- 336 Downpayment/Closing Cost Assistance Program will provide downpayment and/or closing cost assistance to very -low, low and moderate income families who purchase units developed by City of Miami certified Community Housing Development organizations. (CHDO). The City of Miami's Local Housing Assistance Plan was made available for public input at each of the City's thirteen (13) Neighborhood Enhancement Team (NET) Service Centers located throughout the City of Miami. III. LOCAL HOUSING PARTNERSHIP The City of Miami through the Department of Community Development/Housing Division has utilized its affordable housing financing programs to establish relationships with numerous not for profit developers and with Fannie Mae, working with local banking institutions in order to provide funding to affordable housing projects within the City. The City has worked closely with these not -for profit community based organizations, as well as other public financing agencies to enable the maximum amounts of leveraging to newly developed homeownership projects. Through these efforts, The City of Miami takes great pride in its involvement in the creation of homeownership opportunities to low income families. The leveraging of public and private funds are essential in reducing the development cost of affordable housing projects and more importantly the cost to the low income homebuyers. The City of Miami provides financial assistance to various not -for profit social service agencies that in turn provide a number of support services to the resident of the City of Miami. Services such as child care, youth leadership, transportation, recreation, mental health, handicap, and many others are available through these agencies. IV. STRATEGIES The strategies as presented by the City of Miami's Local Housing Assistance Plan are to encourage and provide affordable homeownership housing opportunities for the very low, low and moderate income residents within the City of Miami. The need for affordable housing for the very low, low and moderate income households is addressed in the City of Miami's Consolidated Plan. SHIP funds will provide a financing vehicle for affordable housing and thereby lower the cost to qualified eligible homebuyers. These strategies consist of: Strategy1: Homeownership Development Program It is the intent of the City of Miami's Homeownership Development Program to increase homeownership opportunities for very -low, low and moderate income persons by creating new single family, affordable housing units. SHIP Program funds dedicated by the City of Miami for funding of the City of Miami's Homeownership Development Program, shall be used for the cost of land acquisition, site development and total direct and indirect construction cost, as well as, permanent financing associate with the creation of affordable housing units. 2 3 ` 6% The SHIP Program funds reserved for this strategy will be utilized by the City of Miami as follows: To provide acquisition ,site development, soft or indirect project cost, hard or direct project cost and permanent financing to City of Miami certified community Housing Development Organizations (CHDO's), to assist with the development of homeownership single family units, affordable to very -low, low and moderate income families. The SHIP Program funds will then be converted into first, second or third mortgage permanent financing to the individual buyers of the newly constructed units The City of Miami will utilize $1,205,477 of the SHIP funds each fiscal year for the Homeownership Development Program. Housing developments assisted through this program will receive financial assistance of up to $30,200/unit. Community Housing Development Organizations (CHDO's) applying for SHIP Program funding under the Homeownership Development Program Strategy, will be subject to the City of Miami's funding awards criteria. The City of Miami will review each applicants proposal and determine the eligibility or level of funding, based to the following scoring system: • Largest number of SHIP qualified persons aided by proposals. 1) very low income 10 points 2) low income 7 points 3) moderate income 5 points • Largest number of homeownership units. 10 points • Proposals providing provisions of social services, i.e. credit counseling, homeownership counseling, education, etc. 10 points • Proposals including funding sources other than SHIP. 2 sources 10 points - 1 source 5 points SHIP only 0 points • Proposals that provide maximum leveraging of SHIP funds. 10 points • Proposals with the least per square footage construction costs. 10 points • Proposals having the least ratio of SHIP dollars to value. 10 points • Proposals planned on publicly owned parcels 10 points 3 98- 336 • Proposal including other local government financial contributions 10 points Eligible persons will be advised of the availability of these homes through notices in at least three local newspapers which have general circulation throughout the City of Miami, as well as, persons who's names are currently on a waiting list with the City of Miami. Applications will be processed on a first -come first served basis until all funds are obligated by income levels: ensuring that at least thirty (30%) percent is designated for low income applicants and thirty (30%) percent for very low income, with the balance of available funds for moderate income applicants. The applicants will be qualified for SHIP first, second or third mortgage loans of up to $30,200 to assist in the purchase of a unit developed under the Homeownership Development Program. The loan will be subject to the criteria as indicated on page of this plan. The applicant will be required to obtain a first mortgage from a private mortgage lender pre -determined by the City of Miami. The- applicant will also be required to participate in a homeowner education class prior to the closing of these homes. All funds derived from the sales proceeds of a home `sold under the Homeownership Development Program, whether from a private mortgage lender, or the homebuyer, will be deposited into the local housing trust fund, and utilized only for SHIP eligible activities. MAXIMUM MORTGAGE AMOUNTS: Mortgage amounts are limited tp forty (40%) percent of the purchase price of the unit assisted or $30,200 whichever is less. MORTGAGE INTEREST RATES -TERMS -REPAYMENT First, second or third mortgages made to very low income families will carry an interest rate of one (1 %) percent. First, second or third mortgages made to low income families will carry an interest rate of two (2%) percent. First, second or third mortgages made to moderate income families will cart' an interest rate of three (3%) percent. First, second or third mortgages will be amortized for a term of thirty (30) years, with principal and interest payments payable monthly during the term of the loan until maturity. All SHIP funds outstanding plus interest will be repaid to the city of Miami upon the sale of the home to a subsequent buyer or upon refinance. In no event shall principal and interest payment of all of the financing plus escrow payments exceed thirty (30%) percent of the family's total gross monthly income. First, second or third mortgage payments or any others requested herein may be waived by the City of Miami for a period of up to one year in hardship situations. 4 98- 336 Strategy 2: Downpayment/Closing Cost Assistance Program The City of Miami's Downpayment/Closing Cost Assistance Program provides downpayment and/or closing costs assistance to qualified low, very -low and moderate income persons, to assist in the purchase of newly constructed single family units developed by a City of Miami certified Community Housing Development Organization (CHDO). Qualified persons will be eligible for either partial or full funding assistance in the form of a deferred loan, secured by the property. The funding assistance will be due and payable to the City of Miami if and when the property is sold to a subsequent homebuyer or if refinanced. Any property receiving funding under this strategy must have been fully constructed or rehabilitated within 12 months from sale of said property. A maximum of $100,000 will be expended for this program each year, with a maximum of $2,500 of assistance per applicant. V. AFFORDABLE HOUSING INCENTIVE PLAN i The City of Miami Commission adopted the City of Miami's Affordable Housing Incentive Plan (A.H.I.P.) on October 10, 1996, in compliance with City of Miami Ordinance No. 11253, City of Miami Resolution No. 95-188, City of Miami Resolution No. 95-305, Florida Administrative Code and Section 420.9076 of the Florida Statutes, based on the recommendations made by the City of Miami's Affordable Housing Advisory Committee. The City of Miami's A.H.I.P. provides developers of affordable housing projects with a number of incentives that are intended to expedite the process and reduce the cost of developing affordable housing projects. The incentives available under the City of Miami's A.H.I.P. are as follows: Expedited Permitting Process: Priority is given to affordable housing developments by expediting the permitting process. The City of Miami's Housing Division works closely with the Building Department in assisting developers through this process. Modification of Impact Fee Requirements: The City of Miami currently waives all impact fees, as well as , the Interim Proprietary and General Services fees for affordable housing developments. This incentive provides savings of approximately $0.86 per square foot of construction. Allowance of Increased Density Levels: The provision of a Special Use Permit is to allow the increase in density or square footage to a particular housing development, is available with conditions, through the City's A.H.I.P. Inventory of Publicly Owned Land Suitable for Affordable Housing: The city of Miami has a formal inventory of all locally owned public lands. Said inventory includes land suitable for affordable housing. This list is made available to not -for profit certified 5 98- 336 Community Housing Development Organizations (CHDO's) for the development of affordable housing units. Reduction of Parking and Setback Requirements: The City of Miami, through Ordinance No. 11009, section 917.6 permits a reduction in the parking requirements for housing projects targeted for low income families and individuals. To obtain consideration under any of the incentives included in the A.H.I.P., a developer must present information concerning the proposed development to the City of Miami's Department of Community Development/Housing Division. If determined that the proposed development is affordable, the City's Housing Division will issue a letter to all applicable City of Miami departments and work closely with the developer and all applicable City departments in order to facilitate the incentives to the proposed affordable housing project. VI. QUALIFICATION REQUIREMENTS In, determining the qualification of a household/applicant for a SHIP Program mortgage, the City utilizes the following qualifying ratios 1) the housing expense to income ratio and 2) the total debt to income ratio. The housing expense to income ratio, takes into consideration the total monthly expense of the home being purchased, which includes principal, interest (on all financing), taxes, insurance, and condominium association or homeowners association fees (if any) and dividing the total by the household's gross monthly income. The result can not exceed thirty (30%) percent. The total debt to income ratio consists of the addition of the total housing expenses plus all other monthly expenses such as credit card payments, personal loans, student loans, and auto loans, alimony or child support and any other fixed monthly expenses that will take more than 12 months to pay off. The total of these expenses is divided by the household's total gross income. The result can not exceed forty five (45%) percent. VII. AFFORDABILITY The SHIP Program considers housing affordable when the monthly rents or monthly mortgage payments, including taxes and insurance do not exceed 30 percent of an amount representing the percentage of the median anticipated gross income limits adjusted for family size for the household. VIII. INCOME LIMITATIONS The SHIP Program is designed to benefit very low, low and moderate income families. Current (low, very low and moderate) income limits in Dade County are listed below. These limits shall be adjusted automatically whenever the federal government periodically re -determine the median income for Dade County. 31 98- �36 IX. 0.14 U XII. Family Size 2 3 4 5 6 7 8 Very Low Income Limits $15,050 17,200 19,350 21,500 23,200 24,950 26,650 28,400 MAXIMUM PURCHASE PRICE Low Income Limits (80%) $24,100 27,500 30,950 34,400 37,150 39,900 42,650 45,400 Moderate Income Limits (120%) $36,120 41,280 46,440 51,600 55,680 59,880 63,960 68,160 The maximum purchase price of a SHIP assisted, new or existing homeownership unit will not exceed 90% of the median purchase price of said unit in Dade County. The median purchase price of a home currently in Dade County is approximately $115,000, therefore the maximum sales price of a home new or existing to be assisted with SHIP funds will be no greater than $103,500. SELECTION PROCESS Qualified eligible applicants will be selected or awarded funds on a "first come, first serve" basis after the availability of program funds or activities are advertised. The City of Miami will advertise the availability of funds 30 days prior to accepting applications TARGETED ACTIVITIES AND GROUPS The City of Miami's Local Housing Assistance Plan for FY 1998-99, 1999-00, 2000-01 will use 90% of SHIP funds each fiscal year for homeownership activities. All of the housing units assisted with SHIP funds will consist of newly constructed or rehabilitated homeownership units. In addition all proposed program activities (see STRATEGIES pg. 2-5) will be targeted to very low, low and moderate income person. At the very least 30% of all SHIP funds shall be utilized to assist very low income families, 30% for low income families and no more than 40% will be utilized to assist moderate income families, based on the income limits as defined on pg. 7. ELIGIBLE APPLICANTS The purchaser's gross annual income must not exceed 120% of the median income in Dade County adjusted for family size and must occupy the property as a principal residence. 98- 3367 The prospective homebuyers must have a good credit history. If a SHIP mortgage is provided to the homebuyer, the homebuyer must be approved for a mortgage from the a participating mortgage lender. Proposed mortgage financing arrangements must be found acceptable and/or beneficial to the participating home buyer. Estimated total mortgage payments including escrow, should not exceed thirty (30%) percent of the homebuyers monthly gross income, when determining affordability of the unit. In the event a first mortgage is provided to a homebuyer, the applicant /household must meet the qualification guidelines as indicated herein. XIII. RECAPTURE PROVISION The City of Miami will provide SHIP assistance in the form of grants and unforgivable loan, not to exceed the maximum limits as indicated in this plan. When loans are provided, the loan shall be fully repayable at a rate determined by the City of Miami and at a maximum term of thirty (30) years. All loans shall be secured by a note and mortgage on the property, which shall be recorded either in a first, second or third lien position. The homebuyer is required to reside in the property as his/her principle residence during the entire term of the loan. The homebuyer may sell the property at any time and must repay the City of Miami the entire amount of SHIP subsidy plus interest from the sales proceeds. Any proceeds remaining after all mortgages especially the SHIP subsidy have been repaid, shall belong to the homebuyer (Seller). The SHIP proceeds repaid to the City of Miami will be used by the City of Miami for other SHIP Homebuygr Assistance. In the event that the proceeds from the sale are insufficient to repay the outstanding SHIP subsidy, the City will recapture whatever proceeds are available after the first mortgage from a private lender (if any) has been repaid. When SHIP funds are provided in the form of a grant, the City of Miami will impose a deed restriction on the subject project that will require the property -to remain affordable for a period not to exceed the term of the mortgage providers, or a maximum or thirty (30) years, (affordability period.) The homebuyer is required to reside in the property as his/her principle residence during the entire term of the loan. In the event that the original purchaser sells his/her unit during the affordability period, the subsequent purchaser must be SHIP eligible. The City of Miami will require that the subsequent purchaser be qualified by the Department of Community Development/Housing Division. 8 98- 336 XIV. ADMINISTRATION XV The cost of administrating the Local Housing Assistance Program shall be 10% of the local housing distribution received pursuant to SHIP. All administrative activities will be for staff cost (i.e. salaries, office expenses, studies, consultants, etc.). A line item budget accounting sub -activity entitled SHIP General Administration will established in accordance with City's current budget regulations and policies. BUDGET SUMMARY (ADMINISTRATION) FY 1998-99 Salary /FB $135,052.00 Audit/Advertisement 10,000.00 TOTAL $145,052.00 FY 1999-00 Salary/FB 1$135,052.00 Audit/Advertisement 10,000.00 TOTAL $145,052.00 FY 2000-01 Salary/FB $135,052.00 Audit/Advertisement 10,000.00 TOTAL $145,052.00 BUDGET SUMMARY (PROGRAM STRATEGIES) FY 1998-99 Homeownership Development Program $1,205,477 FY 1999-00 Homeownership Development Program $1,205,477 FY 2000-01 Homeownership Development Program $1,205,477 FY 1998-99 Downpayment/Closing Cost Program $100,000. FY 1999-00 Downpayment/Closing Cost Program $100,000. FY 2000-01 Downpayment/Closing Cost Program $100,000. Totals FY 1998-99 $1,450,529 FY 1999-00 $1,450,529 FY 2000-01 $1,450,529 PLAN DURATION AND EFFECTIVE DATE The City of Miami's Local Housing Assistance Plan will become effective immediately upon its adoption by the City of Miami Commission and subsequently approved by the Florida Housing Finance Agency. -The multi -year plan contained herein is for the State fiscal years 1998-99 ,1999-00 and 2000-01. It may be amended dependent upon changes in strategies and other requirement by the partnership and approval by the City of Miami Commission. Any plan amendment will be submitted to the Florida Housing Finance Agency within twenty-one (21) days after adoption by the City of Miami Commission. Florida Housing Finance Agency will be notified promptly if the City of Miami is unable to comply with the provision of this plan. 98-- 336 9 XVI. AUTHORIZATIONAMPLEMENTATION The City of Miami Local Housing Assistance Program shall be implemented by the City through the Local Housing Partnership. The City of Miami Commission shall be the policy body responsible for program implementation. The City Manager acting through the City's Department of Community Development/Housing Division will be responsible for the overall administration of the program. All assistance provided under this plan will be available on an equal basis to all sponsors and/or persons, without regard to race, creed, religion, color, age, sex, marital status, family status, national origin or handicap status. All sponsors and/or persons receiving assistance under this plan will be contractually obligated to comply with the affordable housing criteria established by the program. Any unit/sponsor/ person receiving assistance from other federal programs shall comply with all federal and SHIP Program requirements. 10 9' 3�6. 4/O(983 RESOLUTION NO. A RESOLUTION, WITH ATTACHMENT (S) PPROVING THE CITY OF MIAMI'S LOCAL HOUSING SSISTANCE PLAN ("PLAN"), PURSUANT TO THE I EMENTATION OF THE STATE OF FLORIDA'S TE HOUSING ITIATIVES PARTNERSHIP ("SHI ) PROGRAM IN E CITY OF MIAMI; AUTHOR ING THE CITY AGER TO SUBMIT SAID PLAN ATTACHED HERETO MADE A PART HEREOF,/ FOR REVIEW AND APP VAL BY THE STATE FLORIDA HOUSING FIN E CORPORATION; F ER AUTHORIZING THE CITY ER TO E CUTE ANY AND ALL DO S AND AGRE S, IN A FORM ACCEPT E TO THE CI ATTORNEY, TO CARRY OUT THE TE AND CONDI ONS OF THE SHIP PROGRAM AND THE LAN; IN ING THE ADMINISTRATIVE COST PERC AGE F R IMPLEMENTATION OF SAID PROGRAM. WHEREAS, on July ,.1992, the State of Florida enacted the William E. Sadowski. `"Affor le Housing Act ("Sadowski Act"), which allocates a rtion of w and existing documentary stamp taxes on deeds o ,'real. estate tr sactions to local governments for the develop nt and maintenance affordable housing; and WHEREAS,/ the Sadowski Act prov es a dedicated revenue source for ffordable housing and creat d the State Housing Initiatives /artnership ("SHIP") Program; and,,. WHE S, in August, 1994, the City of MZ by the ate of Florida that the City would receive $1,353,387.00 in SHIP Program funds be State' 1995-96 Fiscal Year; and was notified ®eligible to Limit with the