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HomeMy WebLinkAboutExhibit 11IX. HOME Horne Investment Partnership Program HUD's Home Investment Partnerships (HOME) Program is intended to increase the supply of safe, decent, sanitary, and affordable housing for low and very -low-income households. HOME also seeks to expand the capacity of nonprofit housing providers through CHDOs. Jurisdictions can use HOME funds to carry out a wide variety of housing activities for low- and very low-income families including: • Homebuyer programs, which may include downpayment -. losin : costs assistance, construction loans, or loan guarantees for acquisition, r ation, or new construction; • Rental housing programs, consisting of constructio . ns, p bridge loans, or loan guarantees for acquisition, a: 'tation, n refinancing; • Homeowner rehabilitation programs, inc g grants loans, interest s guarantees to pay for hard costs, relate • _ sts, an . financing expen • Tenant -based rental assistance (TBRA).to pa utility deposits. The City of Miami offers three major pr • Homeownership New Constructio ■ First Time ■ Multifa Rental Homeownership proje• America I ownp dire o -velop ing HOME f - supp 11 strategy. 0 HOME Program Assistance P ent mortgage loans, nstruction, and nd loan costs, securi . deposits, and ed under E Program: ing New Con ction Program using . receive 75% of the City's HOME funds plus 100% of ) funds. The remaining 25% of HOME funds will be f affordab e rental housing units. City homeownership programs ted by other funding sources to maximize the benefits of the City's City of Miami Programs onstruction • omeownership New Construction Program • Multi-famil Rental New Construction Pro ram Annual I'CriOrma ee Measures 95 housing units 250 housin units Homebuyer Assistance ■ First Time Homebuyer Assistance Program 50 housing units The HOME programs are designed to further the City's overall housing development strategy as outlined in the Five Year Consolidated Plan and to meet the objectives of the National Affordable Housing Act of 1990 (NAHA). The NAHA objectives are to: ■ Provide decent affordable housing to lower -income households 2006-2007 Action Plan 49 • Expand the capacity of non-profit housing providers • Strengthen the ability of state and local governments to provide housing • Leverage private -sector participation Affordable Housing Strategy The City of Miami will use HOME funds to carry out the housing development strategy described in the Consolidated Plan for 2004-2009. According to the Consolidated Plan, the top priority for the City of Miami is to preserve affordable housing for low and moderate income f ilies. To do this, the City of Miami will implement of a four -tiered strategy that focuses on: • Preserving affordable rental housing for those mos through rehabilitation of existing rental stock an recommended in the Consolidated Plan, the focu in need of rental assistance, namely small fam 80% of the median income (with the elderl demonstrating the most need). • Assisting existing homeowners to retain a assistance. The goal will be to provide financi homeowners who lack the fincial capacity and/ repair financing from private ` =f . Preference wil Model Blocks and to the elder L` and persons 51 to 80% of the MFI. • Preserving affo be eligible escalati home program. assistance to These s neighborho Development development of supplemented wit detached homes, to wi we e on se d 'ngle pers 30% below the media of housing assistance ction. As those that are most seholds below me it homes thr' +gh rehab nce low and moderate income it history required to obtain home ven to homeowners in the AIDS that are between able homeowne : ipor or working families who may nership but y be price u .ut of the market due to the tate. The Ci will seek to increase the inventory of affordable ugh new con ction and the creation of a Purchase Rehab ide second mo e, down payment, and closing cost ousing development through the creation of a land the incentives. The intent is to create incentives that off -set t to undertake affordable housing projects. ved through new in -fill housing initiatives in the City's distressed tll initiatives will develop properties in the targeted Neighborhood ell as channeling substantial financial resources into intensive redevelopment and residential parcels throughout the City. The in -fill housing strategy will be ulti-unit development in the form of condominiums, town homes and groups of provide a variety of housing alternatives. The Neighborhood Development Zones include Allapattah, Coconut Grove, Edison/Little River/ Little Haiti , East Little Havana, Model City, Overtown and Wynwood. The Neighborhood Development Zones were identified in the City's Five -Year Consolidated Plan for intensive efforts to foster economic redevelopment, preserve affordable housing and improve overall neighborhood quality. The Model Blocks will provide the primary location for the development of new affordable homeownership and rental housing units through a cooperative effort with the private sector housing industry, not -for -profit community development corporations (CDCs), Miami -Dade County, the State of Florida and private banking institutions that have made financial commitments through the Empowerment Zone. 2006-2007 Action Plan 50 The following section provides a description of the various HOME programs that will be used to carry out the strategies described above. Homeownership New Construction Program The Homeownership New Construction Program is designed to provide assistance to developers for the production of new homeownership units for purchase by low-income homebuyers. Home Program funds will be provided for project -specific technical assistance, land acquisition, site development, construction and soft costs associated with the development of new affordable home " ership housing units in the City. Funding through this Program will accomplish the following objecti • Increase the supply of new homeownership units affo • Spur reinvestment of private capital in older resi • Complement other public neighborhood rev • Encourage the participation of CHDOs i The following terms govern the use of Homeo ner e develo. ew C 1. Leveraging of funds: Developers are required w-income residents; neighb. '. 'ds; e forts; and ent of affordab in ction Program ds: matching project funds from other public and/or private s •`a : es to leverage City ance at a minimum ratio of 2:1. 2. Minimum Home Subsidy per 3. Maximum Home Subsidy per U E Subsidy pe Cost Maximu below. Fo Subsidy narra proves that a ount but ing th t ar le 18: Table ry Mortg ous' Bedroom Count 4 or more proposed tha not exceed t ed for the type truction cost 0 per assiste ceed the HUD -published High or the PMSA, as shown in the table xceeds the D-published maximum Basic igh Cost Percentage, City will require a using proposed and a comparison which e higher than in other Miami residential asic and High Cost Percentage Limits Act October 2003 — October 2004 Bask Maximum Subsidy 2005 Non -Elevator Building $43,964 $50,691 $61,134 $78,252 $87,176 $46,267 $53,036 $ 64,492 $83,430 $91,581 217'%0 !Maximum Subsidy Iligb Cost Percentage Nun-I?levator Elevator Building Building Source: http:l/www.hud.gov/offices/hsg/m1h/hicost/basicstatlimits 2006-2007 Action Plan .pdf $95,402 $109,999 $132,660 $169,807 $189,172 $100,399 $115 088 $139,448 $181,043 $198,731 51 4. Homebuyer Eligibility: In accordance with HOME program regulations, an eligible homebuyer is an individual or family whose income does not exceed 80% of the area median income as published annually by HUD, adjusted for family size. The homebuyer must occupy the assisted home as a principal residence. The City program focuses on first-time homebuyers, defined as a homebuyer who has not owned a home during the three years prior to the purchase of the assisted unit. 5. Maximum Purchase Price/Appraised Value: The purchase price or appraised value of an assisted unit may not exceed the maximum HOME value allowed by HUD as published by the Federal Housing Authority (FHA) 203(b) mortgage limit for the type of housing being purchased. 6. Period of Affordability: The affordability period on an assi ' it will be twenty (30) years from the date of purchase by an eligible homebuyer 7. Recapture/Resale Provision: In connection with t homebuyer, each assisted unit will be subject to a re that, in the event that the unit is resold, leased the homebuyer must repay the financial assi Refinancing of an assisted unit during th the City Manager or designee, who w must be repaid in full. e to an eligible ture pr . which provides uring th dability period, ociated with t in full. period requires • : •p 'val by ine whether th . nce R. Code Compliance: All hou ing projects must m - Florida Building Code, the Miami -Dade County Buildin • e, the Section 8 Quality Standard, the City of Miami Building Code, and the - i ergy Building ! D-accepted equivalent. 9. Financing Mechanism: Form: '���• interes sale o build over th the ncing is pro rtizing, defe ip unit. Any po be for ed to the developer or project sponsor in the form of an loan which becomes payable, in full, upon default or of the funds used to cover the excess of the cost to upon completion of the assisted units. est simple a ual interest rate, unless otherwise determined by City staff ibili of the project. limited to, a failure to cure any incident of non-compliance with requirements during the term of the Loan Agreement. s: Construction must commence within six (6) months of the contract exec ' d be completed within eighteen (18) months of the agreement execution date. All unit • e sold to City -approved, eligible homebuyers within twelve (12) months of the issue dat= • the Certificate of Occupancy, not to exceed thirty (30) months from the agreement execution date. First Time Homebuyer Assistance Program The First Time Homebuyer Assistance Program provides funding for subordinated mortgages and down payment assistance to low-income first-time homebuyers for the purchase of a principle residence. This program makes funds available directly to homebuyers for newly constructed or existing singlefamily homes and will be funded, in part, with ADDI funds. The following are essential requirements of this program. 2006-2007 Action Plan 52 1. Homebuyer Eligibility: i) As defined under ADDI, a first-time homebuyer is an individual and his or her spouse who have not owned a home during the three-year period prior to purchase of a home with assistance under ADDI. The term first-time homebuyer includes displaced homemakers and single parents. The definition used for ADDI is located in Title 1 of Cranston -Gonzalez National Affordable Housing Act (Public Law 101-625, approved November 28, 1990) (NAHA) ii) The home must be located within the City of Miami and occupied by the homebuyer as a principal residence throughout the affordability period; and iii) City approval of the (1) homebuyer and (2) homebuyer's su•erior mortgage lender(s) [bank, Mortgage Company and/or non-profit agency] for the highes • ossible, not to exceed 30% of household income, is required. 2. Maximum Homebuyer Assistance: Homebuyer a subsidy limit based on bedroom size. ADDI greater of $10,000 or 6% of the purchase pr 3. Eligible Housing Types: Eligible pr i _ .re limit • to single family •, town homes, condominium units, and cooperativ 4. Homebuyer's Down Payment Equity: Minim 'wn paytnent. of $500. 5. Subordinated Mortgage Fin payments on the combined moi monthly income. If first mortgag assistance may still be provided. 6. Recaptu afforda the u t, prior approv tance 8. Maxim an assisted published by t using being p rovi eriod, t Refin he year of Affor th chase not deral ased. In the event t omebuyer m ing of an assis aa•erord tance c bject to up to the maximum imum of the incipal and int- •a ents plus escrow of exceed 3 1 he household total gross to ma loan under higher ratios, the unit is esold, leased or rented during the repay the financial assistance associated with it during the affordability period requires nee, who will at that time determine whether raised Value: The purchase price or appraised value of the maximum HOME value allowed by HUD as sing Authority (FHA) 203(b) mortgage limit for the type of ility: The affordability period on an assisted unit will be twenty (20) e of purchase by an eligible homebuyer. 9. Form: F ; • ing will be provided to the homebuyer in the form of a deferred, non- amortizi g, non interest -bearing loan which will come payable, in full, in the event of sale, lease or rental of the assisted property during the affordability period. If the homebuyer elects to refinance, the City's approval will be required. Multifamily Rental Housing New Construction Program Multifamily Rental New Construction Program is available for the new, construction of multifamily rental units located throughout the City of Miami. Financial assistance for multifamily rental construction is limited to projects that require local matching funds to be approved for Florida Housing Finance Corporation Housing Credit financing. Approval for financing under this program will be contingent upon 2006-2007 Action Plan 53 funding approval for Housing Credit financing. The program is designed to provide financial assistance for developers to produce new rental housing projects with five (5) or more units and is intended to accomplish the following objectives: ■ Increase the supply of new rental units affordable to very low and low income residents; • Provide standard affordable housing to low and very low income residents; • To spur reinvestment of private capital in older residential neighborhoods, and; • To complement other public neighborhood revitalization efforts. The following terms govern the use of HOME funds for the Multi -Family Rental New Construction Program: 1. Leveraging of funds: Developers are required to secur other public and/or private sources to leverage City a ching project funds from a minimum ratio of 5:1. 2. Minimum HOME Subsidy per Unit: $1,000 as •ted unit. 3. Maximum HOME Subsidy per Unit: High Cost Maximum HOME Subsidy p table below. For any subsidy propose • th Subsidy amount but does not exceed the Big narrative justifying the need for the type of hous proves that project area cons tion costs are high areas. Table 19: Table of Basic and Hig Statutory Mor • • - • Emits National Hctober 2003 Bedroom Count 4 or Source: http: ctober 20 Basic Maximum Subsidy 2005 Non -Elevator Building hud.go Elevator Building $46,267 $53,036 $64,492 $78,252 $83,430 $87,176 $91,581 T i ity will not exceed the it for th iami PMSA, as eds th + D-published m e, City will r oposed and a comparison which in other Miami residential ublished the um Basic uire a 217% Mt,iximum Subsidy High Cost 1'crcenlage Nun -Elevator Elevator Building Building ffices/hsg/mfh/hicost/basicstatlimits.pdf 4. Maxim Monthly Rent: i) Monthly rent charged for HOME assisted units shall not exceed the High HOME Rent published annually by HUD during the Affordability Period, except as provided in (iii) of this section. ii) In keeping with HOME regulations, a minimum of 20% of HOME assisted units in a project will be rented to tenants with income not exceeding 50% of the area media income at a monthly rent that does not exceed the Low HOME Rent published by HUD. iii) A project will not be required to lower monthly rents on HOME assisted units below the HUD level in effect at the time Program documents are executed with the City. $95,402 $109,999 $132,660 $169,807 $189,172 $100,399 $115,088 $139,448 $181,043 $198,731 2006-2007 Action Plan 54 Table 20: Maximum Monthly Rent (Issued by U.S. HUD 02/2004) for Miami, FL PMSA Bedroom count: 0 1 2 3 4 5 6 Low HOME Rent 473 507 608 703 785 865 946 High HOME Rent 595 639 769 880 963 1043 Source: http://www.hud,gov/offices/cpd/affordablehousing/programs/home/limits/rent/2005/florida.pdf 5. Occupancy Requirements: 1124 i) HOME assisted units must be occupied by eligible tenants income that does not exceed 80% of the area median income, adjusted for family size. ii) A minimum of 20% of HOME assisted units must • 'ed by eligible tenants with income that does not exceed 50% of the area median incom sjust- family size. 6. Floating Units: For projects in which less th the program agreement with the City will i "floating" rather than "fixed" and may v flexibility as tenants more in and out units wi ate that HOME assist while re ining comparab 11 ect. 7. Code Compliance: All projects must meet the Building Code, the City of : mi Building Code, Standards, and the Model En = ilding Code or 8. Annual Inspection: Projects sh continuing compliance with mini one year after th ' ate of the certi 1 to • ccup for the dura ffordability p d and affo 9. Affor years e affordabili ificate of occu o an OME assisted, s are Building Code, the Dade County ction 8 Housing Quality ccepted equivalent. annua nspection to insure Th'• inspection will be initiated d will occur annually thereafter ility of units assisted. eriod on an assisted project will be twenty (20) Community Housing Development Organizations (CHDOs) As ed by HOME used a cial assistan Housing . opment 0 City's prog . sted i ram reations, a minimum of 15% of the City's HOME entitlement will be or the production of new housing to be sponsored or owned by Community izations (CHD0s). Financial assistance may be provided through any of the is section, except for ADDI-funded Homebuyer Assistance Specifically, the C will provide government matching for community development corporations (CDCs) applying for tax c edit financing for affordable housing projects. The City wilt also encourage CDCs to partner with private developers by giving developers extra credit points in their RFP applications if they have a 51% partner that is a non-profit. CHDO sponsored projects must meet all the same requirements and are subject to the same terms as non- CHDO sponsored projects under the programs described above. This focus on CHDO sponsored projects is designed to assist the City of Miami in accomplishing the following objectives: ■ To spur reinvestment of private capital in older residential neighborhoods through the production of new affordable housing units sponsored or owned by Community Housing Development Organizations (CHDOs). 2006-2007 Action Plan 55 Strate Targeted unsafe struct Source: SHI • To provide standard housing affordable to low and very low income residents. ■ To complement other public neighborhood revitalization efforts. To qualify for funding as a CHDO, an entity must meet the following HOME criteria: ■ CHDO must be organized under State and/or local laws; ■ Must have a tax exempt ruling from the IRS under Section 501(c)(3) of the Internal Revenue Code of 1986; ■ No part of its earnings (profits) may benefit any members, founders, contributors or individuals; • Provision of decent housing that is affordable to low and . erate income persons must be among the purposes stated in the charter, articles of ation, resolution or by- laws of the CHDO; and • Appropriate organizational structure as require HOME Activities I Below is a list of the activities that the City of Miami wi rtake in the utilization of HOME funds: Strategies to Preserve Afforda • F • I Housing 1. Activity: New Construction of Mul Consolidated Plan Reference Code: Strategy: Incr- - of affordab rental hous available to very low and low income residents thr' new co ction. Targeted a ut • Incre the supply of a f able housing rental stock Sour • ivity: Replace 'dated Plan ovide a omeowners — Homeowner Retention e Housing rence Code: 1 HA (b) tance to homeowners to replace unsafe housing structures. Improve the quality of life of existing homeowners by reducing the number of at are owner occupied. and HOME Strategies to Increase Homeownership 1. Activity: New Construction of Homeownership Units Consolidated Plan Reference Code: 1 HO (a) Strategy 1: Increase the supply of affordable homeownership units through new construction. Targeted Outcome: Provide greater opportunities for low to moderate income families to achieve homeownership and improve their housing conditions. Source: SHIP and HOME 2006-2007 Action Plan 56 2. Activity: Homeownership Financing Consolidated Plan Reference Code: 1 HO (c) Strategy: Assist low to moderate income families obtain homeownership by providing financing assistance (i.e. down payment, closing cost, and second mortgages). Targeted Outcome: Increase the number of households able to achieve homeownership in the Model Blocks and the NDZs through financing assistance Source: HOME, SHIP and ADDI Strategies to Stimulate Affordable Housing Develop 1. Activity: Tax Credit Assistance Consolidated Plan Reference Code: 1 HD (c) Strategy: Provide Tax Credit Assistance to proj providing matching funds and assuring that a are addressed in a timely manner. Targeted Outcome: Increase the number of Tax Blocks and NDZs. Source: HOME 2. Activity: Matching Funds for Non - Consolidated Pia Strategy: Pr develop p Targeted Outco area of real estate 2006-2007 Action Plan ence Code: 1 ilding suppo ate developer rease the pr to non -pro d in the Mode ems on the Tax ica ks and NDZs by ap. ication checklist ns for proje located in the Model it developers by assisting such organizations to ction capacity of local non-profit developers in the 57