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Home My WebLink AboutPreLegislation 2City of Miami Legislation Resolution: R-06-0327 City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com File Number: 06-00655 Final Action Date: 5/25/2006 A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), AMENDING THE CITY OF MIAMI DEPARTMENT OF COMMUNITY DEVELOPMENT'S 31ST YEAR HOUSING PROGRAM POLICIES FOR HOMEOWNERSHIP ACTIVITIES, AS ATTACHED AND INCORPORATED. WHEREAS, pursuant to Resolution No. 05-0099, adopted February 10, 2005, the City Commission approved the 31 st year policies related to Public Service, Economic Development, Housing Activities and the Housing Opportunities for Persons with AIDS Program funds; and WHEREAS, the Administration has proposed revising the Department of Community Development's 31 st Year Housing Program Policies for homeownership activities, as attached and incorporated; 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 adopted by reference and incorporated as if fully set forth in this Section. Section 2. The City of Miami Department of Community Development's 31 st Year Housing Program Policies for homeownership activities, are amended, as attached and incorporated. Section 3. This Resolution shall become effective immediately upon its adoption and signature of the Mayor. {2} Footnotes: {1} Words/and or figures stricken through shall be deleted. Underscored words and/or figures shall be added. The remaining provisions are now in effect and remain unchanged. Asterisks indicate omitted and unchanged material. {2} If the Mayor does not sign this Resolution, it shall become effective at the end of ten calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission. City of Miami Department of Community Development Housing P;.ogram Summary HOMEOWNERSHIP POLICY —BUYERS •. l L.. ,_ ,:• .. Program Description To assist low income homebuyers in the purchase of a home -by providing -own payment. closing costs and/or second mortgage financial assistance for the purchase of a newly construc4ed or existing residential property within -the City. 1 Funding HOME, SHIP. COSG, AHT Repayment Requirements Zero (0%) interest loan for a period of 30 years. In the -case of sa.le'or'transferof the unit. the entire assistance amount will be due and payable. Minimum/ Maximum Subsidy $1-0 540.000 Affordability Period 30 Years SecurityAffordability period to be enforced by a restrictive covenant that will run with the land as well as a mortgage. Developer Fee N/A Minimum Down Payment • '5500:00 Minimum Ratio of City . Funds to other Funds in the Project N/A ' , , Type of Assistance Down payment assistance and closing -costs Maximum Purchase 'PriceNalue of Properly 1 $236 000 00 City of Miami Department of Community Development Housing Program Summary HOMEOWNERSHIP POLICY - EUYERS 41 Program Des To assist low income hornebuyers in the purchase of a home -by 'providing down ription payment, -closing costs and!or second mortgage financial assistance for the i purchase of a newly constructed or existing'esidential property within lheClty. funding ; HOME, SHIP, CDBG, AHT Repayment - 'Requirements 1. Forgivable loan after the affordability period of 30 years 2. In the case of sale or transfer of the unit, the entire assistance amount will be due and payable. In addition, the City will share in :he'gain,reali ed by the borrower according to the following schedule: e. 0 to 3 years-1.00%•af theCity's-pro reta'share,ofthhe✓ a+n,gerera;ed. b. 3 - 30 years -On the 3"r year; -City receives #15%-of•theCity`s -pro rata shere of the -gain generated and borrower receives 1'5%. 'Thereafter, \ the borrower receives additionar'5% of the City's •prorate share per year reducing the city's share by :he same percentage. 3. The a ve gain sharing proposal will terminate in foreclosure; however, the city wit acquire lenders to provide vs a right of first refusal -to purchase the loan at a negoated price. in the event of a fosure, provides the City Manager or his designee the authority to exercise negotiate endexecute a purchase agreement with the l Special Provision Minimum Maximum Subsidy Affordability Period Security e right of first refusal to e er. 30 Years as welt �as mortgage N/A $ 1,000 $40 000 and equity ring to be enforced Affordability period a by a restrictive covenant that will run with the land Developer Fee Minimum down .aayment Minimum ratio of City funds to other funds in the ,project 00:00 Type of Assistance Down payment assists and closing Goes Maximum Purchase PriceNalue of Property -$236,400.00 City of Miami Department of Community Development Housing Program'Summary HOMEOWNERSHIP POLICY -DEVELOPERS J•( i J(1 , IC r. t Program Description Provides assistance to developers for the -construction of new affordable homeownership units. The units can be condos. lownhomes. or single family scattered site developments. Funding HOME, SHIP, CD8G. AHT Repayment Requirements c Forgivable Loan converted to a zero.(0%) interest repayable second mortgage for the buyers once project is completed. In the:case of a Developer default (incomplete project) full _payment of construction 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 4or a minimum of five(5) years. Second mortgage to buyer will have the following terms. -1-. Repayable at -0% irfterestafter the affordability period of 30 years 2 In the case of sate or transfer of the unit the entire assistance amount will be due and payable. . Minimum/Maximum Subsidy 51.000 per unit to NUO Maximum subsidy cap as published based on bedroom size. - Affordability Period 30 year affordability period for .the second mortgages. The -second mortgages will be at same terms andconditions as that for direct subsidy -to buyers at the time -of closing. Security There will be a restrictive covenant and mortgage on the property. Uponcompletion of the project. the total debt to the developer is transferred in pro-rata share to•each assisted unit. In the event of a•developerdefault. the restrictive covenant -will remain on the property and applicable interest rates will be due. Developer Fee Up to16% of total project costs. -Disbursements based on percentage of construction completion. Service Charge 1 % of City Loan with a maximum of 51'5,000 will be due and payable as good faith commitment fee for for -profit -developers, 30days after funding approval. Minimum Ratio of City funds to other Funds in the Project 1:2 Desirable on a project by project basis Type of Assistance Construction hard costs and soft -costs or�pzside for hornebuyer assistance atter Maximum Purchase PriceNalue of Property S238 000,00 Miscellaneous 1. Income of buyers must be at orbelow 80% of Area Median Income es published by HUD-(upto 120%.of AMI for SHIP funds; up .to 150% for AHT funds) City of Miami Department of Community Development Housing Program Summary HOMEOWNERSHIP POLICY — DEVELOPERS Program Description i?rovides assistance to developers for the construction of new affordable hgmeownership units. The units can be condos, townhomes, or single family scattered site,developments. Funding • HOME, SHiP, CMG, AHT — Repayment Requirements . Forgivable't,oan converted to second mortgages for -the buyers once project is completed. ih,the case of a Developer default (incomplete project) full payment of construction loan and accrued default Interest at the maximum rate allowed by law. In addition, the d' eloper and all principals with a minimum of 10% share In the developmentwill be\barred from participating in any City of Miami programs for a minimum of five (5) years. Second mortgage to b' yer will have the following terms: 1, Forgivable loanAfter the affordability period of 30 years 2. In the case of sale''Rr transfer of the unit, the City will share in the gain realized by the borrower. a. 0 to 3 years - 1004\of the City's pro rata share of the gain generated. b. 3 — 30 years — On tha\3id year, City receives 85% of the City's pro rata share of the gain gen& ted and borrower receives 15%. Thereafter, the borrower receives additi al 5% of the City's prorate share per year reducing the City's share the same percentage. The above gain sharing proposal will t Into In foreclosure; however, the city will require lenders to provide us a right of fiat refusal to purchase the loan at a negotiated price. Minimum/Maximum Subsidy $1,000 per unit to HUD Maximum subsidy cap 2 e published based on bedroom size. AffordabilityPeriod 30 year affordability period for the second mortgages. The second mortgages will be at same terms and conditions as that for direct subsidy}\to buyers at the time of closing. Security There will be a restrictive covenant and mortgage on the property. Upon completion of the project, the total debt to the developer is transferred In pro rata share to each assisted unit. In the event of a developer default, the restrictive.covenant will remain on the property and applicable interest rates will be due. Developer Fee p Up tole% of total project.costs. Disbursements based on percentage of construction completion. Service Charge g 1% of City Loan with a maximum of $15,000 will be due and payable as good faith commitment fee for for -profit developers, 30 days after funding approval. Minimum ratio of City funds to other funds In the project , 1:2 Desirable on a project by project basis a...;ieo n4-1n41A Type of Assistance Construction hard costs and soft costs or set -aside for homebuyer assistance after completion. Maximum Purchase PriceNalue of Properly $236,000.00 Miscellaneous 1. Income of buyers must be at or below 80% of Area Median Income as published by HUD (up to 120% of AMI for SHIP funds; up to 150% for AHT funds) ; 1