HomeMy WebLinkAboutExhibitEXHIBIT "A"
DRAFT
CITY OF MIAMI
DEPARTMENT OF COMMUNITY DEVELOPMENT
MULTIFAMILY REFINANCING GUIDELINES
INTRODUCTION: The Department of Community Development recognizes that the need to
refinance existing debt of multifamily buildings receiving funds for rehabilitation is
essential, in some cases, in making or preserving the units affordable to low income
families. The following guidelines are therefore established to assist the department in
reviewing the feasibility of such developments to ensure the financing mechanism in
place and the development meets regulatory as well as the department's overall goal of
neighborhood revitalization.
Objective:
The department will only refinance existing debt, if the
refinancing will reduce the overall debt service ratio enabling
current lower income families to be served or to create new
affordable housing units. 24 CFR 92.206(b)(2)(iii)
Type of Assistance
Rehabilitation (hard and soft cost) and refinancing existing debt
24 CFR 92.206(b)(2)
Ineligible Debts
Debts made or insured by any Federal government program are
ineligible for refinancing. 24 CFR 92.206(b)(2)(vi)
Location of Property:
The property must be located in the City of Miami. However,
properties within Neighborhood Development Zone or a Model
Block with boundaries as stipulated in the in the Consolidated
Plan will be given priority. 24 CFR 92.206(b)(2)(v)
Minimum
Rehabilitation / unit
$1,000 (excluding refinancing amount) 24 CFR 92.206(b)(2)(i)
Minimum Debt
Service Coverage
Ratio (DSR)
1.05
Management Practices
Satisfactory review of past management practices to ensure that
disinvestment in the property has not occurred, that the long
term needs of the project can be met and that the feasibility of
serving the targeted population over the affordability period can
be demonstrated.[ 24 CFR 92.206(b)(2)(ii)]. A fifteen (15) year
operating pro forma is also required.
Maximum Rent
As published by HUD
Maximum Developer
16% of rehabilitation (hard costs) amount
Fee
Service Charge
• 1% of City Loan up to a maximum of $ 1 5,000 will be
due and payable as good faith commitment fee for for -
profit developers, 30 days after funding approval.
• Charge is not applicable for non-profit organizations.
Repayment
Requirements
• City to impose a permanent mortgage on the property
once project is completed.
• City's loan will be a for a maximum of fifteen (15) years
and the city will be in first position.
• Repayment on the city's loan to commence six (6)
months after loan closing.
• In the case of a Developer default (incomplete project)
full payment of the loan and accrued default interest at
the maximum rate allowed by law.
• In addition, the developer and all principals with a
minimum of 10% share in the development will be
barred from participating in any City of Miami programs
for a minimum of five (5) years.
Security
Affordability period to be enforced by a restrictive covenant that
will run with the land. In the case of a developer default, the
restrictive covenant will continue throughout the affordability
period.
Miscellaneous
• Income of renters must be at or below 130% of Area Median
Income as published by. HUD
• Annual compliance monitoring for duration of affordability
period.
• Affordable units must pass housing quality standards
inspections annually.