HomeMy WebLinkAboutExhibitEXHIBIT "A"
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 requirements as well as the department's
overall goal of neighborhood revitalization.
Objective:
The department will only refinance existing debt, if in
conjunction with a loan for rehabilitation of a rental project;
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) Rehabilitation must be the primary eligible
activity and must be demonstrated by meeting the required
ratio between rehabilitation and refinancing. 24 CFR
92.206(b)(2)(i)
Type of Assistance
Rehabilitation (hard and soft cost) and refinancing existing
Ineligible Debts
Debts made or insured by any Federal government program
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)
Required Ratio-
Will be established by the City based on project size, unit
Rehabilitation/Refinancing
affordability, project location, and other policy
c
considerations. 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
Maximum Developer Fee
Service Charge
Repayment Requirements
Security
Miscellaneous
As published by HUD
16% of rehabilitation (hard costs) amount
• 1% of City Loan up to a maximum of $15,000 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.
• City to impose a permanent mortgage on the
property once project is completed.
• City's loan will be a for a maximum minimum 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.
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.
• Income of renters must be at or below 80% 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.