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Home My WebLink AboutExhibit FCity of JKiami Department of Housing and Community Development HOUSING DEVELOPMENT UNIT CONTRACT COMPLIANCE PROCEDURES MANUAL Table of Contents I. BACKGROUND 4 A. Affordable Housing Development as a City Priority 4 B. Community Development's Housing Division 4 C. Responsibilities of Contract Compliance Analyst and Housing Unit Division 4 D. Consolidated Plan 5 E. Annual Action Plan 5 F. Conclusion 5 II. THE CITY OF MIAMI'S FUNDING PROCESS 7 A. Source of Miami's Funds 7 B. Types of Awards 7 C. Accessing Miami's funding: Request for Proposals ("RFP") 7 D. RFP Question and Answer Workshop 7 E. Review and Recommendation 8 F. Project Underwriting 8 G. Housing and Commercial Loan Committee 8 H. Loan Committee Preparation 9 I. Post -Meeting Procedures 9 III. PROJECT SET-UP: GETTING TO LOAN CLOSING 10 A. Background 10 B. Special Instructions for Legal Set-up 10 C. Review of Loan Terms by Developer 11 D. Loan Closing 11 E. Loan Document Routing 11 F. Loan Agreement Routing Packet 12 G. Recording of Loan Documents 12 H. Post -Recording Routing 12 IV. REIMBURSEMENT REQUEST 14 A. Initiation of Reimbursements — The Line Item Budget 14 B. Transmittal Memorandum 15 C. Reimbursement Period 16 D. Fiscal Assistant Review of Draw 16 E. Routing 16 V. EXHIBITS 17 c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 2 of 50 1. Exhibit A — HCLC Recommendation Letter (Sample) 18 2. Exhibit B 1 — Award Letter (Sample) 22 3. Exhibit B2 — Award Letter (Sample) 23 4. Exhibit B3 — Award Letter Tax Credit (Sample) 26 5. Exhibit C — Commitment Letter (Sample) 27 6. Exhibit D — Checklist for Loan doc (Law Dept) 31 7. Exhibit E — Loan Agreement Routing Form 32 8. Exhibit F1 — Payment Processing Procedure — Multi -Family Projects 34 9. Exhibit F2 - Payment Processing Procedure — Scattered Sites 36 10. Exhibit F3 - Payment Processing Procedure — Single Family Rehab 38 11. Exhibit F4 - Payment Processing Procedure — Tax Credit Projects 40 12. Exhibit F5 - Payment Processing Procedure — Replacement Homes 42 13. Exhibit G — Budget Transmittal 44 14. Exhibit H — Housing Contract Compliance Monitoring Report 44 c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 3 of 50 I. BACKGROUND A. Affordable Housing Development as a City Priority Affordable housing development is included as one of the City of Miami's priorities in its 5-year Consolidated Plan. The goals outlined in the Consolidated Plan's Housing Strategy are designed to meet the intent of the National Affordable Housing Act of 1990 (HOME) and provide the department's mission. These goals are to: ■ Provide decent affordable housing to lower -income households ■ Expand the capacity of non -profits housing providers ■ Leverage private -sector participation B. Housing and Community Development's Housing Division The Department has various distinct housing units: 1. Home Ownership (New Home) 2. Multi -Family Housing Development (formerly known as "Brick & Mortar" (B&M)). 3. Housing Program Management Support 4. Rehabilitation a. Multi -family b. Homes (normally more than one home) The Contract Compliance Analyst (CCA) must be knowledgeable of the CFR (Code of Federal Regulations) Title 24 Part 92 - Home Investment Partnerships Program. The Housing Development Unit creates affordable housing by providing recipient - developers with funding which is below market rate. The Annual Action Plan, along with other sources, will indicate the property types eligible for, or generally funded (e.g. multifamily, scattered site single-family). Traditionally, the funding was not repaid and therefore essentially considered a grant C. Responsibilities of Contract Compliance Analyst and Housing Unit Division The Contract Compliance Analyst works with the profit and non-profit developers on projects in an intra- and inter -departmental effort to guide housing development projects through various stages of the funding process. The analyst's major tasks involve: ■ Reviewing and scoring RFP's ■ Performing underwriting tasks ■ Drafting recommendation memorandum and letters for the Department's Director in relation to the Housing and Commercial Loan Committee c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 4 of 50 • Undertaking project "set-ups" which is to establish a new project into the city's various systems: finance, contracts, legal, environmental, etc. • Maintaining updated information all project files. • Visiting sites monthly (at a minimum), taking pictures • Ensure compliance with federal, state, and local funding regulations. • Troubleshooting for project delays • Provide information and collaborating with other department staff to complete various reports required of the department by HUD. • Attend Draw meetings • Require and review the Quarterly Progress Reports D. Consolidated Plan One of the most significant aspects of the Consolidated Plan is the creation of Neighborhood Development Zones (NDZ) and the very hard -to -development "Model Block" zones. Model Block: The goal of the Model Block concept is to concentrate investments in a small, hard -to -develop, geographic area to stimulated change in the surrounding blocks of the NDZ. Each NDZ has at least one Model Block. As a housing unit, our objective is to provide homeownership opportunities and expanded housing choices for low- and moderate -income families. E. Annual Action Plan The Action Plan summarizes the major housing and community development needs of the City, while incorporating the overall goals and objectives of the Consolidated Plan and community needs. More specifically, the plan identifies how the funds from the U.S. Department of Housing and Urban Development (HUD) will be spent in the coming year benefiting low and moderate income individuals. The Action Plan is therefore the application to HUD for CDBG, HOME, HOPWA, and ESG funds, and any other funding provided through HUD F. Conclusion Overall, the Housing Development Unit is responsible for the successful and timely development of projects. More particularly, the unit ensures that we safeguard and administer correctly our federal funds and that the projects we assist ultimately comply with the various rules and regulations of the funding sources. Rules under which the Analyst operates come from various sources, including the City of Miami resolutions, various departmental rules, federal funding sources (HOME, CDBG, HOPWA), and in some case other private funding sources. A keen knowledge of the rules of various, overlapping funding sources --including the city's internal regulations --is very important to avoid pitfalls as a project develops. The purpose of this manual is to c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 5 of 50 expedite the learning of the various rules by compiling and summarizing them in one complete compendium. As early as possible, the analyst should grasp these rules. Once the analyst learns them, he or she can apply them and get a clear understanding of the project's scope, its affordability component, the loan terms, and ongoing monitoring obligations. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 6 of 50 II. THE CITY OF MIAMI'S FUNDING PROCESS A. Source of Miami's Funds Some of the major sources of housing development funds the City of Miami administers are HOME, CDBG , and HOPWA (federal funds). These are provided to the City by the U.S. Department of Housing and Urban Development (HUD). The City also receives SHIP (State Housing Initiatives Partnership) Funds which are provided by the State of Florida. For more information about this Florida Housing program and its affordable housing programs, visit their web site at www.floridahousinq.org. B. Types of Awards The Housing Development Unit (HDU) provides funds via two types of awards: ■ Development funds — which can pay for acquisition, construction and/or soft costs and may come from either CBDG or HOME. • Housing Program Management Support (HPMS) provided only to Community Housing Organizations (CHODOs) non -profits and used to pay for overhead, administration or pre -development of HOME eligible projects. This type of funding is provided subject to the requirements of 24 CFR HPMS funded activity must be directed toward the creation of a particular housing project. HPMS is funded only by HOME (SSHLLC) and has traditionally been a non -repayable grant. C. Accessing Miami's funding: Request for Proposals ("RFP") The primary means that developers access city funds is through the Request For Proposal (RFP) process wherein Community Development advertises in the newspaper a legal notice seeking applications from developers with a specific housing type and selection criteria. There are generally two to three RFP's throughout the year depending on the Department's goals and objections. Local Match RFP: RFP's are advertised to provide local City of Miami support funds for applicants to Florida's tax credit rental program. Applicants to Housing Tax Credit program are required by the funding source, Florida Housing Finance Corporation, to obtain a minimum of funds in local match. D. RFP Question and Answer Workshop Staff holds a question and answer workshop for those persons interested in submitting an RFP application. The workshop is held approximately at the mid -point between the c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 7 of 50 day the RFP is first available and the date they are due. A brief overview should be given of the RFP (scope, peculiarities, if any, scoring criteria details, etc.). All questions from potential applicants should be written down by staff so at a later time they can be answered in a formal medium (via letters to applicants or the website). The questions should also be used as a basis for clarifying future RFP's. E. Review and Recommendation For RFP's, submittals are reviewed by the Analysts in teams. The CCA is usually assigned a portion of the applications received and takes part in the review and scoring of them. The review consists of ranking the project according to a given scoring criteria provided with the RFP. The determination of eligibility, as well as the project's feasibility, is communicated to the Department Director. For projects deemed eligible and feasible, a Departmental funding recommendation may be made to the Housing and Commercial Loan Committee (HCLC). (See Exhibit A - HCLC Recommendation Letter) F. Project Underwriting Analysts must note that all project underwriting standards are typically included in the RFP. All projects must be underwritten according to the guidelines as specified in the RFP. Such underwriting must include the evaluation of risk associated with market conditions, project feasibility, borrower capacity, and to ensure that all programmatic parameters such as maximum and minimum subsidy levels and subsidy layering analysis. G. Housing and Commercial Loan Committee The Housing and Commercial Loan Committee (HCLC) has been delegated the power to allocate funding by the City Commission. Decisions as to whether to fund or not, de - obligate previously funded projects, and the terms of funding are all decided by the HCLC. The Loan Committee is comprised of thirteen (13) members, 11 who are appointed by the City Commission upon recommendation by staff and another 3 who are recommended by the Mayor and City Manager. Meetings are generally held monthly. A quorum of members five (5) must attend in order to proceed. In cases where there is not the requisite forum, the meeting is postponed and agenda items are taken up at the following month's meeting. Project Sponsors' attendance at the HCLC meetings is generally mandatory if their project is on the agenda so they can be available to answer committee members' questions. If a Project Sponsor representative fails to attend, the item may be pulled from the agenda and rescheduled for a later date. H. Loan Committee Preparation The Housing Unit Division staff, along with the management, holds monthly meetings to determine the items to be on the agenda of the next HCLC meeting. Once the agenda c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 8 of 50 is determined, the CCA will start to prepare recommendation memos for their projects on the agenda. A significant portion of the CCA's time leading up to an HCLC meeting may be spent preparing documents relating to the meeting. The following represent the documents related to the HCLC proceedings: Loan Committee Agenda: The agenda is generated with the input from both Management and Housing Unit Division. Recommendation Memos: Each item on the agenda is represented by a recommendation memo requesting the board to take action. The CCA is responsible for creating recommendation memos for projects they have been assigned. Newly funded projects should generally have a Cost Allocation budget and a Project Profile. Any return items, previously funded by the Loan Committee, should include any necessary attachments. Loan Committee Packets: At least one week before the meeting, each committee member is delivered a packet which contains the meeting agenda, the department's recommendations, and all the supporting documentation for each recommendation. Pre -Meeting Notice: Once a recommendation memo has been approved by the Director, the CCA communicates to the Project Sponsors that their project will be taken before the committee. This notice can take the form of a fax or letter which includes the recommendation and provides the location, date and time of the meeting. 1. Post -Meeting Procedures The Loan Committee usually endorses the staff's recommendations. Committee members may add conditions to the recommendation based on its discussion. It is important for the CCA to take accurate notes of comments, and questions for use in the follow-up letter that is written to Project Sponsors summarizing the determination(s) and/or requests of the board. These post -Loan Committee letters are generally referred to as "award" letters. Award Letter (see Exhibit B1-B3): After the Loan Committee meeting, an "award letter" is sent to the developer. This letter should be sent within five (5) days of the meeting. For new projects, the award letter states the basic terms and conditions of the loan which includes a checklist of required documents for the drafting of the loan documents and a Commitment Letter (see Exhibit C) is attached to it. In addition to the award letter, the Post -Loan Committee activities for newly funded projects will include Project Set-up, which is discussed later in the Manual. III. PROJECT SET-UP: GETTING TO LOAN CLOSING This section provides a description of the procedures the analyst undertakes from the point after loan committee approval for funding of a new project (loan set-up) all the way to the closing of the City's loan. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 9 of 50 A. Background Once a project has received the HCLC approval for funding, the Analyst must undertake the "set-up" of the project. This is done by submitting the approved Loan Committee Memo (along with all its attachments) to the following Employees/Units for certain action to be taken to implement the project: ■ Administrative Aide responsible for entering all the Contracts information in CD's Data Base ■ Environmental Specialist ■ Davis Bacon /Section 3 ■ Finance ■ Legal Dept. B. Special Instructions for Legal Set-up Legal set-up is by far the most challenging of all the set-ups. A law -specific memo is drafted from the Community Development Director to the City Attorney requesting loan documents be drafted for the project. The Legal Service Request (LSR) memo restates the basic terms found in the award letter (sponsor information, source of funds, amount funded, the number of affordable units) and highlights any unusual aspects of the project that may affect the legal set-up. In addition to the LSR memo and the Project Profile, the Assistant City Attorney requires several documents which are listed and in Exhibit D: ■ The stamped -as -approved loan committee memo authorizing the loan. ■ The approved minutes of the meeting in which the funding was approved. ■ The approved minutes of the meeting approving the minutes of the meeting in which the funding was approved (i.e. minutes of the meeting held two months from the authorizing meeting). ■ Corporate Resolutions (authorized person / acceptance by organization). This document should be reviewed by the analyst for date and substance. It should not be more than 90 days old. ■ Survey of the property ■ Title Insurance Commitment ■ Scope of Work & Project Schedule (Exhibit A of the Loan Agreement) ■ Cost Allocation Budget (Exhibit C of the Loan Agreement) ■ Operating Agreement /Management Agreement (for limited partnerships) ■ Uniform Business Report ■ Signage Requirements (Exhibit H of the Loan Agreement) ■ Affirmative Fair Housing Marketing Guidelines (Exhibit E of the Loan Agreement) Legal Q&A Memo: Once the LSR memo is sent up to law, a response memo (Q & A) from the Assistant City Attorney assigned to the case may follow. This Q&A memo will seek clarification and/or confirmation of terms, facts, etc. The answers to the inquiry must be approved by the Director before being sent back up to the Assistant Attorney. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 10 of 50 Community Development provides a priority list to the Assistant City Attorney (ACA). The priority list identifies the order the Contracts should be drafted by the ACA. The Contract Analyst should be aware of the priority status of all their projects. An updated list should be requested from the Supervisor. Contract Analyst should also keep the Developers updated in regards to their contracts. C. Review of Loan Terms by Developer Once the legal documents are drafted by Law and agreed to internally between Community Development and Law, copies are forwarded via email to the Project Sponsor (the Developer) for their review. D. Loan Closing The CCA should be in communications with the City Assistant Attorney to confirm that they are ready for closing. If the CCA is in agreement, they arrange a date with the Developer. E. Loan Document Routing In the loan closing, only the project sponsor signs the loan documents. Once executed by the sponsor, the Loan Agreement is routed to the various departments of the City for their approval and signatures. The orders of routing and for signing -off on the documents are as follows: 1. Risk (insurances) 2. Budget 3. Law 4. City Manager's Office 5. City Clerk. The date that the City Clerk affixes her acknowledgement of the City Manager's signature is called the "Effective Date" and is the start -point for many of the loan agreements time terms. The Contract Compliance Analyst is responsible for assembling the routing packet of loan documents and supporting documents for routing. However, the Administrative Assistant is responsible for the logging of the documents through the various departments using the City's "Contract Routing form. The loan documents may go directly to the department following it or it may come back to this department then resubmitted. If they come back between departments, the Administrative Assistant will handle the logging and forwarding. F. Loan Agreement Routing Packet c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 11 of 50 The packet should include the following items: • Routing Sheet (see Exhibit E) • 3 Loan Agreements • The Note(s) • The Mortgage(s) • Restrictive Covenants • Rent Regulatory Agreements(s) • Insurance Certificate • Certification (see the risk checklist), and • The Disbursement Agreement G. Recording of Loan Documents Simultaneous with the routing of the loan documents, a check requested should be prepared for recording the mortgage, the restrictive covenant, and if the project is a rental, the rent regulatory agreement. If the City is paying for an acquisition, a copy of the original deed also needs to be recorded. However, if the funds are reimbursing a Sponsor for past acquisition costs, we only need a copy and we do not have to record. The form used for recording requires submitting the number of pages of the various recorded documents. The form along with draft copies of each of the documents to be recorded is given to the Fiscal Assistant. The Fiscal Assistant will need the original signed documents to record. H. Post -Recording Routing The Administrative Aide coordinates the routing of loan documents. The fully executed documents from the City Clerk's office are forward to the Analyst for review. The Analyst reviews the documents for completed signatures and notarization. Upon completing the review, the originals of the recordable documents (mortgage, restrictive covenant, and rent regulatory agreement) are forwarded to Loan Servicing for recording. After recording, certified copies will be returned to the Department. The Analyst joins the certified copies with the other signed original documents and gives them to the Administrative Aide who prepares packets as shown for the following persons: Document CCA City Clerk & Developer Loan Svc. Original Agreement x x Original Disbursement Agreement x x Original Note(s) x - Copy of Note(s) x Original Record Mortgage(s) x - Copy Record Mortgage(s) x Original Record Restrictive Covenants x - Copy Record Covenant x Original Record Rent Reg. Agree. x - Copy Record Rent Reg. Agree x Insurance Certificate x - c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 12 of 50 Certifications x Copy of the Cert. Copies of all Doc. x As shown above, the original loan agreements are kept by Community Development Analyst, the City Clerk and the developer; servicing unit of Community Development retains a copy of the Loan Agreement as well as the original Rent Regulatory Agreement, Note and Mortgage. The law department receives a copy of the loan agreement packet. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 13 of 50 IV. REIMBURSEMENT REQUEST Reimbursement request submitted by sponsors for payment are also known as "draws" and "draw -downs". The reimbursement request package is submitted and is logged in by the receptionist before forwarding to the finance unit. Each reimbursement request must contain certain documents which are specified in Exhibits F1 through Exhibit F5. A. Initiation of Reimbursements — The Line Item Budget The line item budget is included as an Exhibit in the Loan Agreement. Usually after the loan agreement is fully executed the line item budget is submitted to Community Development's Finance Unit, via a Transmittal Memorandum (Exhibit G) from the Contract Analyst (CA). The financial information required to complete the transmittal memorandum is given to the CA from the Sr. Budget & Financial Advisor in the Finance Unit (or who is assigned the duties of loading the budget and new projects). The Fiscal Assistant uses the transmittal memorandum to setup their excel spreadsheets. These spreadsheets document and track the payments history of the projects. The Transmittal Memorandum, as shown below, has the following documents attached to ensure the Fiscal Assistant that they have the necessary clearance to begin processing payments: 1. A copy of the loan agreement (first and last page), 2. A copy of the Approved Budget, 3. A copy of the Authorized Representative Statement, 4. A copy of the Disbursement Agreement 5. A copy of the city's Environmental Clearance, and 6. If the Project Sponsor is new to the system, a W-9. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 14 of 50 B. Transmittal Memorandum REIMBURSEMENT CLEARANCE Date: 3/02/XX Agency Name: Allapattah Business Development Authority, Inc. Contract Type: Housing Quality Standard Inspection Services Cleared for Reimbursement up to: $60,000 Period of Reimbursement: December 1, 2006 — September 30, 2007 ORACLE Code: 91-02223 IDIS Code: 2223 Resolution Number: R-06-0650 Attached: Approved Budget, 1st & last page of contract, Authorized Representative Statement, Disbursement Agreement, Environmental I have reviewed the enclosed budget(s); the line items included are allowable, necessary and the amounts indicated are reasonable for this type of program. Contract Analyst: Original Contract X Fiscal Assistant: Amendment Date Cleared by Environmental _3/1/07 Budget Modification APPROVED BY: DATE APPROVED: c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 15 of 50 C. Reimbursement Period The period that expenses are allowed to be reimbursed generally start on the date of the loan agreement (first page), but cannot be paid before the agreement is fully executive (the date of the City Clerk signature). The disbursement agreement can also supersede the date on the loan agreement. The CA and the Fiscal Assistant must be mindful of these dates and cross check them with the invoice dates submitted in the reimbursement request. D. Fiscal Assistant Review of Draw Reimbursement packages may be returned by the Fiscal Assistant in the event that items are missing or that something is inherently wrong with the reimbursement submitted (see Exhibits F1 through Exhibit F5). The Fiscal Assistant should identify any and all deficiencies in the package and inform the CA, the Assistant Director and the Fiscal Administrator before returning a reimbursement request. This will help the CA to communicate all the concerns with the developer. The Fiscal Assistant will also need to update their log regarding the package being returned so their records do not reflect a delay in processing the payment. E. Routing Reimbursement requests are dropped off at the front desk. Once stamped as received, they are transferred to an Administrative Aide who logs them into the computer. They are then forwarded to the appropriate finance staff person for review and processing. The fiscal assistance verifies all expenses are eligible and allowable, i.e., the expense was incurred during the reimbursement period and fit within the specifications of the budget submitted. The Inspector must visit the project, takes pictures and signs off verifying that the work was completed. The Assistant Director signs the reimbursement request approving payment. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 16 of 50 V. EXHIBITS c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 17 of 50 1. Exhibit A — HCLC Recommendation Letter (Sample) Members of the Housing and June 8, Commercial Loan Committee George Mensah, Director Department of Community Development Village Allapattah Phase I, LLC Village Allapattah BORROWER Village Allapattah Phase I, LLC is a joint venture between the Carlisle Development Group, LLC and Biscayne Housing Group, LLC to develop and provide affordable housing to the residents of City of Miami and Miami -Dade County. Principals: MM Village Allapattah Phase I, LLC, Managing Member, .01%: • Biscayne Housing Group, LLC, .0050% • TCG Allapattah I, LLC, .0050% Lloyd J. Boggio &/or assigns, Investor Member, 99.99% Developer Entity: Village Allapattah Development, LLC: • Carlisle Development Group, LLC, 50% • Biscayne Housing Group, LLC, 50% BACKGROUND In February 2007, the City of Miami issued a Request for Proposal for the local match contribution required for tax credit applications to Florida Housing Finance Corporation (FHFC). Village Allpattah will be a newly constructed eleven -story building located at 2370 NW 17th Avenue in the Allapattah neighborhood. The project will consist of a total of one hundred ten (110) units of which all will be City -assisted. All units will be affordable to low-income families. In response to the 2007 Housing RFP, Village Allapattah Phase I, LLC requested $730,192 in gap funding in order to as a consequence of high construction costs. DEPARTMENTAL RECOMMENDATION The Department of Community Development has reviewed the borrower's request and based on the information provided by the borrower the Department recommends the following: 1. $630,192 in HOME Investment Partnerships (HOME) Program funding to Village Allapattah to assist eleven (11) units with a subsidy of $57,290.18; and c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 18 of 50 2. Additional $100,000 in Affordable Housing Trust Fund (AHTF) Program funding to assist the remaining ninety-nine (99) units with a subsidy of $1,010.10. The following terms and conditions shall apply: 1. Use of Funds: HOME and AHTF funds will be used for construction hard costs. 2. City Assisted Units: Eleven (11) Project units shall be assisted with HOME and Ninety - Nine (99) shall be assisted with AHTF funding. 3. Maximum Rent Levels: Rents charged on City -assisted units are subject to 24 CFR 92. 4. Affordability Period: An affordability period of twenty (20) years will apply commencing from the date the City approves the closeout of the project. 5. Loan Repayment & Interest Rate Terms: The loan repayment and interest during the Affordability Period will be as follows: • Year 1 — 15: The loan shall not bear interest and no principal payments are due (includes two (2) year construction period). • Year 16 — 20: The loan shall bear the rate of one percent (1%) simple interest only, subject to available cash flows, with the entire principal balance and any accrued and unpaid interest and other charges due at maturity. However, if the Borrower meets all of its obligations under the Loan Documents, is in full compliance throughout the affordability period and is bound by an Extended Low -Income Housing Agreement with the Florida Housing Finance Corporation, at the maturity of the loan the City will assign its interest in the Note and the other Loan Documents to the Managing General Partner of the Project Sponsor, or its designee, for no additional consideration. 6. City Incurred Costs: Borrower understands and agrees that $15,000 of the HOME Funds was awarded to the Project for, and may be used by the City to cover, costs incurred by the City on behalf of the Project. Such costs may include, but are not limited to, environmental advertising costs and recording fees. The $15,000 will be charged to the project; any unused portion shall be retained by the City of Miami. 7. Retainage(s): Five Percent (5%) of each draw request will be retained up to a maximum of $10,000 until the City has received confirmation of completion of the Scope of Work and, at the Borrower's sole cost, a Final Cost Certification prepared by an independent certified public accountant, both in form and substance acceptable to the City. 8. Commitment Fee: There will be no commitment fee. 9. Environmental Clearance: Construction on the project shall not commence until the Borrower is notified in writing that the Project has been environmentally cleared as required by U.S. Department of Housing and Urban Development (HUD). Funds will not be disbursed until the Removal of Grant Condition is received by the City from HUD. 10. Eligible Project Costs: Eligible project costs will be effective from the date of environmental clearance. 11. Reporting Compliance: Borrower is subject to compliance reporting requirements related to previously funded City projects which are under construction or in the affordability period including applicable Office of Management and Budget (OMB) Circular(s) reporting and current insurance certificates. ' SAIL's definition of Available Cash flow is defined as the cash flows prepared in accordance with generally accepted accounting principles and as adjusted for items including but not limited to extraordinary fees and expenses, payments on debt subordinate to senior loans and capital expenditures. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 19 of 50 12. Development Benchmarks/Scope of Work: The project shall: (a) commence construction within six months from the Effective Date2 of the contract; (b) obtain all certificates of occupancy required for the Project within twenty-four (24) months from the Effective Date and (c) have all project units rented within twelve (12) months after the issuance of Project certificate(s) of occupancy, but in no event later than thirty-six (36) months from the Effective Date. At the end of the Affordability Period and upon compliance with all requirements stated in the Loan Documents and the project is bound by an Extended Low - Income Housing Agreement with the Florida Housing Finance Corporation at the maturity of the City loan, the City will forgive all principal and interest on the City loan and release its collaterally assigned security interest. 13. Reimbursement of Funds: The City will not reimburse any funds for land acquisition. Hard costs will be reimbursed with the submission of a completed AIA form and a partial release of lien for the previous draw down. The final reimbursement request must include the final release of liens and also a certification by the general contractor and each subcontractor that there has been no kick- back according to HUD form that will be provided by the City. 14. Insurance Requirements: Borrower shall obtain and furnish evidence of insurance coverage as the City may require in connection with the Project. 15. Affirmative Marketing Plan: Borrower shall provide an Affirmative Marketing Plan using HUD's approved form and report to the City annually on all actions taken to comply with said plan. 16. Project Signage: Borrower shall furnish signage identifying the Project and shall acknowledge the contribution of the City by incorporating the seal of the City and the names of the City commissioners and officials in all documents, literature, pamphlets, advertisements, and signage, permanent or otherwise. All such acknowledgments shall be in a form acceptable to the City. 17. Project Default: If the City determines that the project is in default, the following conditions will apply: • The highest interest rate available under the law will be applicable for the funds disbursed from date of disbursement; and • The Restrictive Covenant will remain as a restriction on the Project property throughout the Affordability Period; and • The borrower, Project developer, managing partner(s) of the borrower and/or other individuals, principals and/or other entities as determined by the City will be debarred from receiving any City funding for a period of five (5) years. Transferring HOME Program funds to Village Allapattah Phase I, LLC 2 The "Effective Date" is the date on which the contract has been signed by the City Manager and attested to by the City Clerk. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 20 of 50 Source Sources of Reallocation Amount Recommended Redistribution to: Activity Name / Description Amount 2008 HOME & AHTF Allocation N/A $630,192.00 $100,000.00 Village Allapattah New Construction Mutlifamily Rental $730,192 HOUSING AND COMMERCIAL LOAN COMMITTEE DECISION: Approved as Recommended by Staff To Include Additional Conditions or Restrictions Disapproved To Include Further Action Specify any further action, conditions or restrictions: Yes ❑ No ❑ N/A ❑ Yes III No III N/A III Yes III No III N/A III Yes III No III N/A III Chairperson or Representative Stamp Date c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 21 of 50 2. Exhibit Bl — Award Letter (Sample) February 27, 2007 Mr. Jorge B. Muniz President River Run South Apartments, Inc. 2130 SW 13 Ave Miami, FL 33145 Re: River Run South Condominiums project Dear Mr. Muniz: This correspondence serves to advise you that on February 26, 2007, the Housing and Commercial Loan Committee (HCLC) approved to extend the project completion date from December 25, 2006 to June 29, 2007 in connection with the $800,000 in Home Investment Partnerships (HOME) Loan Agreement. If you require additional information regarding this matter, please do not hesitate to contact Mr. George Mensah, Contract Manager, at 305-416-1765 or Ms. Maria T. Ason, Contract Compliance Analyst, at (305) 416-1971. Sincerely, George Mensah Director c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 22 of 50 3. Exhibit B2 — Award Letter (Sample) June 12, Mr. Marc S. Plonskier Lafayette Square II, Ltd. 120 Forbes Blvd. Mansfield, MA 02048 Re: Lafayette Plaza project Dear Mr. Plonskier: This correspondence serves to advise you that on June 8, 2007, the Housing and Commercial Loan Committee (HCLC) approved the following in connection with the Lafayette Plaza project: (1) A total of $723,709 in HOME Investment Partnership (HOME) Program funding to assist eleven (11) units with a subsidy of $65,792 per unit; and (2) A total of $442,798 in Affordable Housing Trust Fund (AHTF) funds to assist the remaining one hundred twenty-five (125) units with a subsidy of $3,542 per units. The following terms and conditions shall apply: 6. Use of Funds: HOME and AHTF funds will be used for construction hard costs. 7. Eligible Project Costs: Eligible project costs will be effective from the date of environmental clearance. 8. City Assisted Units: Eleven (11) Project units shall be assisted with HOME and one hundred twenty-five (125) units shall be assisted with AHTF funding. The HOME Assisted units will consist of two (2) one-bedroom/one-bathroom units; five (5) two- bedroom/one-bathroom; four (4) three-bedroom/two-bathroom units. The AHTF Assisted units will consist of twenty (20) one-bedroom/one bathroom units; fifty-nine (59) two- bedroom/one-bathroom units; and forty-six (46) three-bedroom/two-bathroom units. 9. Maximum Rent Levels: Rents charged on City -assisted units are subject to 24 CFR 92. 10. Affordability Period: An affordability period of twenty (20) years will apply commencing from the date the City approves the closeout of the project. 11. Loan Repayment & Interest Rate Terms: The loan repayment and interest during the Affordability Period will be as follows: • Year 1 — 15: The loan shall not bear interest and no principal payments are due (includes two (2) year construction period). • Year 16 — 20: The loan shall bear the rate of one percent (1%) simple interest only, subject to available cash flow3, with the entire principal balance and any accrued and 3 SAIL's definition of Available Cash flow is defined as the cash flows prepared in accordance with generally accepted accounting principles and as adjusted for items including but not limited to extraordinary fees and expenses, payments on debt subordinate to senior loans and capital expenditures. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 23 of 50 unpaid interest and other charges due at maturity. However, if the Borrower meets all of its obligations under the Loan Documents, is in full compliance throughout the affordability period and is bound by an Extended Low -Income Housing Agreement with the Florida Housing Finance Corporation, at the maturity of the loan the City will assign its interest in the Note and the other Loan Documents to the Managing General Partner of the Project Sponsor, or its designee, for no additional consideration. 7. City Incurred Costs: Borrower understands and agrees that $15,000 of the HOME Funds was awarded to the Project for, and may be used by the City to cover, costs incurred by the City on behalf of the Project. Such costs may include, but are not limited to, environmental advertising costs and recording fees. The $15,000 will be charged to the project; any unused portion shall be retained by the City of Miami. 8. Retainage(s): Five Percent (5%) of each draw request will be retained up to a maximum of $10,000 until the City has received confirmation of completion of the Scope of Work and, at the Borrower's sole cost, a Final Cost Certification prepared by an independent certified public accountant, both in form and substance acceptable to the City. 9. Commitment Fee: There will be no commitment fee. 10. Environmental Clearance: Construction on the project shall not commence until the Borrower is notified in writing that the Project has been environmentally cleared as required by U.S. Department of Housing and Urban Development (HUD). Funds will not be disbursed until the Removal of Grant Condition is received by the City from HUD. 11. Reporting Compliance: Borrower is subject to compliance reporting requirements related to previously funded City projects which are under construction or in the affordability period including applicable Office of Management and Budget (OMB) Circular(s) reporting and current insurance certificates. 12. Development Benchmarks/Scope of Work: The project shall: (a) commence construction within six months from the Effective Date4 of the contract; (b) obtain all certificates of occupancy required for the Project within twenty-four (24) months from the Effective Date and (c) have all project units rented within twelve (12) months after the issuance of Project certificate(s) of occupancy, but in no event later than thirty-six (36) months from the Effective Date. At the end of the Affordability Period and upon compliance with all requirements stated in the Loan Documents and the project is bound by an Extended Low - Income Housing Agreement with the Florida Housing Finance Corporation at the maturity of the City loan, the City will forgive all principal and interest on the City loan and release its collaterally assigned security interest. 13. Reimbursement of Funds: The City will not reimburse any funds for land acquisition. Hard costs will be reimbursed with the submission of a completed AIA form and a partial release of lien for the previous draw down. The final reimbursement request must include the final release of liens and also a certification by the general contractor and each subcontractor that there has been no kick- back according to HUD form that will be provided by the City. 14. Insurance Requirements: Borrower shall obtain and furnish evidence of insurance coverage as the City may require in connection with the Project. 4 The "Effective Date" is the date on which the contract has been signed by the City Manager and attested to by the City Clerk. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 24 of 50 15. Affirmative Marketing Plan: Borrower shall provide an Affirmative Marketing Plan using HUD's approved form and report to the City annually on all actions taken to comply with said plan. 16. Project Signage: Borrower shall furnish signage identifying the Project and shall acknowledge the contribution of the City by incorporating the seal of the City and the names of the City commissioners and officials in all documents, literature, pamphlets, advertisements, and signage, permanent or otherwise. All such acknowledgments shall be in a form acceptable to the City. 17. Project Default: If the City determines that the project is in default, the following conditions will apply: • The highest interest rate available under the law will be applicable for the funds disbursed from date of disbursement; and • The Restrictive Covenant will remain as a restriction on the Project property throughout the Affordability Period; and • The borrower, Project developer, managing partner(s) of the borrower and/or other individuals, principals and/or other entities as determined by the City will be debarred from receiving any City funding for a period of five (5) years. Attached you will find a checklist of the required documents for the drafting of loan documents. If you have any questions, please contact Mr. George Mensah, at 305-416-1765 or Ms. Maria T. Ason, Contract Compliance Analyst, at (305) 416-1971. Sincerely, George Mensah Director c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 25 of 50 4. Exhibit B3 — Award Letter Tax Credit (Sample) June 13, 2007 Mr. Michael Cox Friendship Village One, LLC 150 SE Second Ave, Suite 1202 Miami, Fl, 33131 Re: Friendship Village Tower One $330,000 Local Matching Funds Dear Mr. Cox: This correspondence serves to advise you that on June 8, 2007, the Housing and Commercial Loan Committee (HCLC) approved the following in connection with the Friendship Village Tower One project: 1. A total of $330,000 in HOME funds to Friendship Village One, LLC in connection with the Friendship Village Tower One as the local match; 2. Said funding will be subject to the successful approval and award of an allocation of Housing Program Credits from FHFC and brought back to the Housing & Commercial Loan Committee for approval; 3. Should the project not receive any funding allocation from FHFC for the 2007 Universal Cycle, any commitment letter provided pursuant to this recommendation will be null and void. If you have any questions, please contact Mr. George Mensah, Assistant Director, at 305-416-1765 or Ms. Maria T. Ason, Contract Compliance Analyst, at 305-416-1971. Sincerely, George Mensah Director c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 26 of 50 5. Exhibit C — Commitment Letter (Sample) June 21, Mr. Marc S. Plonskier Lafayette Square, LLC 120 Forbes Blvd. Mansfield, MA 02048 RE: Lafayette Square project The purpose of this correspondence is to set forth the terms of the $2,000,000 Loan Agreement between the City of Miami (City) and Lafayette Square, LLLC in connection with the Lafayette Square project. The $2,000,000 award consists of $949,938 in HOME Investment Partnerships Program (HOME) funding and $1,050,062 in Community Development Block Grant (CDBG) funding. Borrower: Lafayette Square, LLC (Borrower) is a Florida limited liability company and Managing General Partner of Lafayette Square, Ltd. Description of the Project: The Lafayette Square project is located at 150 NE 79 Street, Miami, Florida. The Project consists of one hundred sixty (160) units, of which thirty (30) units are one- bedroom/one-bathroom, ninety (90) units are two-bedroom/one-bathroom, and forty (40) units three-bedroom/two-bathroom. Use of Funds: HOME funds will be used for construction hard costs and CDBG funds will be used for construction soft costs. Eligible Project Costs: Eligible project costs will be effective from the date of environmental clearance (January 13, 2006). City Assisted Units: Eleven (11) Project units shall be assisted with HOME funds. Said units consist of three-bedroom/two-bathroom units. One hundred sixty (160) Project units shall be assisted with CDBG funds. Said units consist of thirty (30) one-bedroom/one-bathroom; ninety (90) two-bedroom/one-bathroom units; and forty (40) three-bedroom/two bathroom units. Maximum Rent Levels: Rents charged on City -assisted units are subject to 24 CFR 92. Affordability Period: An affordability period of twenty (20) years will apply commencing from the date the City approves the project closeout. Loan Repayment & Interest Rate Terms: The loan repayment and interest during the Affordability Period will be as follows: c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 27 of 50 • Year 1 — 15: The loan shall not bear interest and no principal payments are due (includes two (2) year construction period). • Year 16 — 20: The loan shall bear the rate of one percent (1 %) simple interest only, subject to available cash flows, with the entire principal balance and any accrued and unpaid interest and other charges due at maturity. However, if the Borrower meets all of its obligations under the Loan Documents, is in full compliance throughout the affordability period and is bound by an Extended Low -Income Housing Agreement with the Florida Housing Finance Corporation, at the maturity of the loan the City will assign its interest in the Note and the other Loan Documents to the Managing General Partner of the Project Sponsor, or its designee, for no additional consideration Collateral Subordination: 1st Mortgage Lender: First Housing Development Corporation of Florida in the amount of $2,675,000 2nd Mortgage Lender: Miami -Dade County in the amount of $6,500,000 3rd Mortgage Lender: Metro Miami Action Plan in the amount of $1,300,000 4th Mortgage Lender: City of Miami in the amount of $2,000,000 City Incurred Costs: Borrower understands and agrees that $15,000 of the HOME Funds was awarded to the Project for, and may be used by the City to cover, costs incurred by the City on behalf of the Project. Such costs may include, but are not limited to, environmental advertising costs and recording fees. The $15,000 will be charged to the project; any unused portion shall be retained by the City of Miami. Retainage(s): Five Percent (5%) of each draw request will be retained up to a maximum of $10,000 until the City has received a final cost certification prepared by an independent certified public accountant, a rent roll, and release of liens. Retainage will only apply to hard cost. Commitment Fee: There will be no commitment fee. Environmental Clearance: Construction on the project shall not commence until the Borrower is notified in writing that the Project has been environmentally cleared as required by U.S. Depaitinent of Housing & Urban Development (HUD). Funds will not be disbursed until the Removal of Grant Condition is received by the City from HUD. Reporting Compliance: Borrower is subject to compliance reporting requirements related to previously funded City projects which are under construction or in the affordability period including applicable Office of Management and Budget (OMB) Circular(s) reporting and current insurance certificates. 5 SAIL's definition of Available Cash flow is defined as the cash flows prepared in accordance with generally accepted accounting principles and as adjusted for items including but not limited to extraordinary fees and expenses, payments on debt subordinate to senior loans and capital expenditures. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 28 of 50 Development Benchmarks/Scope of Work: The project shall: (a) commence construction within six months from the Effective Date6 of the contract; (b) obtain all certificates of occupancy required for the Project within twenty-four (24) months from the Effective Date and (c) have all project units rented within twelve (12) months after the issuance of Project certificate(s) of occupancy, but in no event later than thirty-six (36) months from the Effective Date. At the end of the Affordability Period and upon compliance with all requirements stated in the Loan Documents and the project is bound by an Extended Low -Income Housing Agreement with the Florida Housing Finance Corporation, at the maturity of the City loan, the City will forgive all principal and interest on the City loan and release its collaterally assigned security interest. Reimbursement of Funds: The City will not reimburse any funds for land acquisition. Soft costs will be reimbursed based on the following: • The cost was approved in the original budget or if it has been approved by the Department of Community Development in a fully executed budget modification; and • An invoice from the service provider is attached. If the City pays more than fifty percent (50%) of the invoice, an original invoice will be required; and • A copy of the check in payment of the invoice is received. Within sixty (60) days of the payment of the reimbursement request by the City, a copy of the cancelled check must be received or the cost will be disallowed. Hard costs will be reimbursed with the submission of a completed AIA form and a partial release of lien for the previous draw down. The final reimbursement request must include the final release of liens and also a certification by the general contractor and each subcontractor that there has been no kick -back according to HUD form that will be provided by the City. Insurance Requirements: Borrower shall obtain and furnish evidence of insurance coverage as the City may require in connection with the Project. Affirmative Marketing Plan: Borrower shall provide an Affirmative Marketing Plan using HUD's approved form and report to the City annually on all actions taken to comply with said plan. Project Signage: Borrower shall furnish signage identifying the Project and shall acknowledge the contribution of the City by incorporating the seal of the City and the names of the City commissioners and officials in all documents, literature, pamphlets, advertisements, and signage, permanent or otherwise. All such acknowledgments shall be in a form acceptable to the City. Project Default: If the City determines that the project is in default, the following conditions will apply: • The highest interest rate available under the law will be applicable for the funds disbursed from date of disbursement; 6 The "Effective Date" is the date on which the contract has been signed by the City Manager and attested to by the City Clerk. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 29 of 50 • The Restrictive Covenant will remain as a restriction on the Project property throughout the Affordability Period; and • The borrower, Project developer, managing partner(s) of the borrower and/or other individuals, principals and/or other entities as determined by the City will be debarred from receiving any City funding for a period of five (5) years This Commitment Letter is intended to be a summary of the most important elements of the agreement between the City and the Borrower to enter into a loan transaction and is subject to all requirements and conditions contained in Loan Documents to be executed by the Borrower. Not every provision that imposes duties, obligations, burdens, or limitations on the Borrower is contained herein, but shall be contained in the final Loan Agreement satisfactory to City and the Office of the City Attorney . This Commitment Letter supersedes any prior commitment letter(s) between the City and the Borrower with regard to the Loan described herein. Sincerely, George Mensah Director THE FOREGOING COMMITMENT LETTER IS ACKNOWLEDGED AND ACCEPTED THIS DAY OF 2007. By: Name: Title: c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 30 of 50 6. Exhibit D — Checklist for Loan doc (Law Dept) Documents Required for Drafting of Loan Documents (Items checked are attached hereto) Project Name: Pinnacle Place Borrower/Developer: Pinnacle Place, Limited Partnership ❑ Approved Loan Committee Memo ❑ Approved Final Minutes of Loan Committee action ❑ Approved Minutes of the following Loan Committee Meeting ❑ Final Approved City Commission Resolution (if applicable) ❑ Award Letter ❑ Commitment Letter ❑ Title Commitment and hard copies of title exceptions ❑ Current survey ❑ Other: Evidence of good standing: ❑ Certificate of Good Standing from the State or Print out from the Website of the State ❑ Registration to do business in Florida, if incorporated or organized in another State ❑ Certificate of Corporate Resolutions, Corporate Status and Incumbency ❑ Certified Copy of Partnership Agreement (if Partnership) ❑ Certified Copy of Operating Agreement (if Partnership) ❑ Certified Copy of Certificate of Limited Partnership Agreement (if Limited Partnership) ❑ Certified Copy of Limited Partnership Agreement (if Limited Partnership) Exhibits to Loan Agreement: ❑ Scope of Work (Development Schedule) ❑ Budget (Cost allocation form) ❑ Affirmative Marketing Plan (US HUD form) along with required attachments ❑ Signage Requirements ❑ Insurance Requirements Amendment to Loan Agreement: ❑ Executed Loan Agreement ❑ Executed Disbursement Agreement ❑ Recorded Mortgage & Security Agreement ❑ Recorded Restriction of Covenants ❑ Recorded Rent Regulatory Agreement (If applicable) ❑ Recorded Assignment of Rents (If applicable) ❑ Note c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 31 of 50 7. Exhibit E — Loan Agreement Routing Form Department of Community Development Housing Development Loan Agreement Routing Form -Brick and Mortar Developer / Borrower: Legal File #: Amount: Date: Analyst Initials: Funding Source: ❑CDBG ❑HOME ❑ESG ❑HOPWA ❑ SHIP ❑Program Income ❑Other: Type of Contract: ❑ New Construction Homeownership ❑ New Construction Rental ❑ Multi -Family Rehabilitation ❑Other: Loan Agreement ROUTING DATE INITIALS Closing at City Submitted to Contract Tracking Submitted to Risk Management Returned from Risk Management Submitted to City Attorney Returned from City Attorney Submitted to Budget Returned from Budget Submitted to Assistant City Manager Received by City Manager's Office Signed by City Manager (includes notarized signatures as needed) Attested to by City Clerk (includes confirming notarized signatures of City Mgr.) Returned to CD Department c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 32 of 50 Forwarded to City Clerk Forwarded to Project Sponsor / Borrower Forwarded to Servicing/Law/CCA c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 33 of 50 8. Exhibit Fl — Payment Processing Procedure — Multi -Family Projects x b ,, 01.. ,,. 4` I■GM SIATE9 It II �;ti� ,� - City of Miami Finance Unit Department of Community Development Multi -Family Projects: • DOCUMENTS NEEDED FROM THE CON I'RACT ANALYST (CA) BEFORE PROCESSING A REIMBURSEMENT REQUEST: o Copy of the Contract: • First Page • Last page — with all the appropriate signatures binding the contract o Copy of the Disbursement Agreement o Copy of the Environmental Clearance o Copy of the Budget - Cost Allocation (Source & Use of Funds) - approved by the Assistant Director acknowledging the items are (1) Reasonable (2) Allowable, and (3) Necessary. • The Contract Analyst (CA) should send the Budget to the Agency acknowledging their approval. o Authorize Personal signatures o Mortgage - do not have to be recorded before the 1st payment, (unless there is only one payment), but must be provided before the next payment is process. o The CA must provide the Fiscal Assistant (FA) the General Contractor information including an approved AIA form before the Hard Cost can be paid which verifies they are qualified per the City's guidelines. • ITEMS THAT SHOULD BE INCLUDED IN AN REIMBURSEMENT PACKAGE TO PAY SOFT COST: o The Cover Letter for Multi -Family Soft Cost (Exhibit — B) signed by the Developer o Invoices - the original invoice if requesting more than 50% of the invoice amount o Copies of canceled checks • ITEMS THAT SHOULD BE INCLUDED IN AN DRAW REQUEST TO PAY HARD COST: o AIA Form — signed by the Developer and the Architect c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 34 of 50 o List of Sub -Contractors o Releases of Liens from prior draws must be provided with every draw request. • Final Release of Lien from the Sub -Contracts • Partial Release of Lien from the General Contractor until the final payment which will require the Final Release of Lien. o Copy of the City of Miami Building Permit Multi -Family Projects (cont.): o The Cover Letter for Multi -Family Hard Cost (Exhibit-C)is required to be signed by: • The Developer • Community Development's Inspectors who will take pictures for support of every reimbursement package, and • Community Development's Employee responsible for Davis Bacon and Section 3 o Disbursement Retainage amount for Multi -Family is per the Disbursement Agreement o Allocation Retainage - 5% up to a maximum of $10,000 o Release of Retainage: • Final Release of Lien - from the General Contractor and Sub -contractors • Completed and signed Financial Close -Out Report • CD must have the approved accomplishments (s) o Budget Modifications - amendments to Contracts • The City must be notified of any Change Orders affecting the project • Finance Staff must inform the CA when a modification is necessary • The CA will review the modification • The letter to the Project Sponsor (Developer) must be signed by the Director or their designee (the Director is authorized to sign on behalf of the City Manager). • OTHER ITEMS: o We do not pay for Land Acquisition o We do not pay Developer Fees o FA must inform and verify with the CA of any cost being disallowed o FA cannot hold a reimbursement package that they cannot pay for more than 72 hours unless the Assistant Director signs off allowing the hold; FA must inform the CA, the Assistant Director (Finance) and the Fiscal Administrator • SERVICING UNIT: o Servicing Unit should post payments in the ABS data base using the same date of the checks o Servicing Unit must give the accomplishments information to the Assistant Director of Policy & Program Development within 30 days after the fmal payment. BEFORE ADVERTISING EXPENSES OCCUR: • Before an advertising request can be made, a Exempt Environmental Clearance has to be obtained OTHER CONCERNS: c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 35 of 50 • Builders Risk — for any construction, the Contract Manager must acknowledge that the Developer has Builders Risk Insurance; Insurance & Bond Certificates must be current at all times for the Project Sponsor, Developer, Architect/Engineer, and others as named in invoices for reimbursement. 9. Exhibit F2 - Payment Processing Procedure — Scattered Sites �� { ,* �NGORe�gfiRi{p� qiii 1114,r�..1V.-•;1 City of Miami Finance Unit Department of Community Development Scattered Sites: • DOCUMENTS NEEDED FROM THE CONTRACT ANALYST (CA) BEFORE PROCESSING A REIMBURSEMENT REQUEST: o Copy of the Contract: • First Page • Last page - with all the appropriate signatures binding the contract o Copy of the Disbursement Agreement o Copy of the Environmental Clearance o Copy of the Budget - An AIA approved by the Assistant Director o Copy of the Mortgage - does not have to be recorded before the 1st payment unless there is only one payment, but must be provided before the next payment is approved o Authorized Signature Form o W-9, if it is a new vendor • ITEMS THAT SHOULD BE INCLUDED IN AN REIMBURSEMENT PACKAGE TO PAY SOFT COST: o The Cover Letter for Scattered Sites Soft Cost (Exhibit-E) signed by the Developer o Invoices - you must have the original invoice o Copies of the checks • ITEMS THAT SHOULD BE INCLUDED IN AN REIMBURSEMENT PACKAGE TO PAY HARD COST: o All Construction Expenditure must be submitted on an approved AIA Form. o The AIA form must be signed by the General Contractor and the Architect, if applicable. o List of Sub -Contractors from the General Contractor before the first payment o Releases of Liens must be included with every draw request: • Final Release of Lien from the Sub -Contracts • Partial Release of Lien from the General Contractor with every draw request. o Copy of City of Miami Permit with 1st Draw o The Cover Letter for Scattered Sites Hard Cost(Exhibit-D)is required to be signed by: • The Developer • Community Development's Inspectors who will take pictures for support of every reimbursement package, and c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 36 of 50 • Community Development's Employee responsible for Davis Bacon and Section 3 o Retainage - 10% will be retained until the Final Release of and the Certificate of Occupancy is obtained. o Final Payments: • Final Release of Lien - from the Developer / General Contractor • Completed and signed Financial Close -Out Report • The approved accomplishments; verify with the CA • Final Certificate of Occupancy o Change Orders - amendments to Contracts • Change Orders must be pre -approved before the work is done • Finance Staff must inform the CA when a modification is necessary • The CA will prepare the modification • The letter to the Project Sponsor (Developer) must be signed by the Director or their designee (the Director is authorized to sign on behalf of the City Manager). • OTHER ITEMS: o We do not pay profit or overhead o The Final Payment will approved by the Assistant Director. o Fiscal Assistant (FA) must inform the General Contractor of any cost being disallowed with the reason. o FA cannot hold a draw request that is incomplete for more than 72 hours unless the Assistant Director signs off allowing the hold; FA must inform the General Contractor in writing of the missing items and /or incomplete information. • SERVICING UNIT: o Servicing Unit should post payments in the ABS data base using the same date of the checks o Servicing Unit must give the accomplishments information to the Assistant Director Assistant Director of Policy & Program Development within 30 days after the final payment. OTHER CONCERNS: • The Assistant Director should be notified of problems encounter by the Finance Staff persons processing draw request. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 37 of 50 10. Exhibit F3 - Payment Processing Procedure — Single Family Rehab ��, ,'�,� City of Miami * INC9RP ' pR0.i!'8 Finance Unit 5, 18`48 ''- ' Department of Community Development Single Family Rehabs • DOCUMENTS NEEDED FROM THE HOUSING UNIT BEFORE THE PROCESSING OF A REIMBURSEMENT REQUEST: o Copy of the Environmental Clearance o Copy of the Budget - An AIA approved by the Assistant Director. o Copy of the Mortgage - does not have to be recorded before the lst payment unless there is only one payment, but must be provided before the next payment is approved o Homeowner Agreement o Authorized Signature Form o W-9, if it is a new vendor • ITEMS THAT SHOULD BE INCLUDED IN AN REIMBURSEMENT PACKAGE TO PAY SOFT COST AND PURCHASES OF MATERIAL: o The Cover Letter for Single -Family Soft cost (Exhibit-E) signed by the Developer o Invoices - you must have the original invoice o Copies of the checks • ITEMS THAT SHOULD BE INCLUDED IN AN REIMBURSEMENT PACKAGE TO PAY HARD COST: o All Construction Expenditure must be submitted on an approved AIA Form. o The AIA form must be signed by the General Contractor and the Architect, if applicable. o List of Sub -Contractors from the General Contractor before the first payment o Releases of Liens must be included with every draw request: • Final Release of Lien from the Sub -Contracts • Partial Release of Lien from the General Contractor with every draw request. o Copy of City of Miami Permit with 1st Draw. o The Cover Letter for Single Family Rehab (Exhibit -A) must be signed by the General Contractor, the Homeowner, and Community Development (CD) Inspector. o Change Orders: • Must be approved by CD's Inspector before the work is done. • The Mortgage Modification must be update by the Underwriter if necessary • The letter to the General Contractor approving any changes must be signed by the Director or her designee (The Director is authorized to sign by the City Manager). c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 38 of 50 Single Family Rehabs (cont.) o Retainage — 25% will be retained until the Final Payment. Before this payment can be made you must have the following: • Final Release of Lien from the Contractor and Sub -contractor for the total amount of the Job with their Corporate Seal. • Warranties for Roof, Air Condition, etc. • Final Permit and C.O. • OTHER ITEMS: o The Final Payment will be approved by the Assistant Director. o Fiscal Assistant (FA) must inform the General Contractor of any cost being disallowed with the reason. o FA cannot hold a draw request that is incomplete for more than 72 hours unless the Assistant Director signs off allowing the hold; FA must inform the General Contractor in writing of the missing items and /or incomplete information. • SERVICING UNIT: o Servicing Unit should post payments in the ABS data base using the same date of the checks o Servicing Unit must give the accomplishments information to the Assistant Director Assistant Director of Policy & Program Development within 30 days after the final payment. OTHER CONCERNS: • The Assistant Director should be notified of problems encounter by the Finance Staff persons processing draw request. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 39 of 50 11. Exhibit F4 - Payment Processing Procedure — Tax Credit Projects ' k "`` '` INOO1Ir OWE° 11 SI f�"` (-.,V1, �' r City of Miami Finance Unit Department of Community Development Tax Credit Projects: • DOCUMENTS NEEDED FROM THE CONTRACT ANALYST (CA) BEFORE PROCESSING A REIMBURSEMENT REQUEST: o Copy of the Contract: • First Page • Last page — with all the appropriate signatures binding the contract o Copy of the Disbursement Agreement o Copy of the Environmental Clearance o Copy of the Budget - Cost Allocation (Source & Use of Funds) - approved by the Assistant Director acknowledging the items are (1) Reasonable (2) Allowable, and (3) Necessary. • The Contract Analyst (CA) should send the Budget to the Agency acknowledging their approval. o Authorize Personal signatures o Mortgage - do not have to be recorded before the lst payment, (unless there is only one payment), but must be provided before the next payment is process. o The CA must provide the Fiscal Assistant (FA) the General Contractor information including an approved AIA form before the Hard Cost can be paid which verifies they are qualified per the City's guidelines. • ITEMS THAT SHOULD BE INCLUDED IN AN REIMBURSEMENT PACKAGE TO PAY SOFT COST: o The Cover Letter for Multi -Family Soft cost (Exhibit — B) signed by the Developer o Invoices - the original invoice if requesting more than 50% of the invoice amount o Copies of canceled checks • ITEMS THAT SHOULD BE INCLUDED IN AN DRAW REQUEST TO PAY HARD COST: o AIA Form — signed by the Developer and the Architect o List of Sub -Contractors o Releases of Liens from prior draws must be provided with every draw request. • Final Release of Lien from the Sub -Contracts • Partial Release of Lien from the General Contractor until the final payment which will require the Final Release of Lien. o Copy of the City of Miami Building Permit c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 40 of 50 Tax Credit Projects (cont.) o The Cover Letter for Multi -Family Hard Cost (Exhibit-C)is required to be signed by: • The Developer • Community Development's Inspectors who will take pictures for support of every reimbursement package, and • Community Development's Employee responsible for Davis Bacon and Section 3 o Disbursement Retainage amount for Multi -Family is per the Disbursement Agreement o Allocation Retainage - 5% up to a maximum of $10,000 o Release of Retainage: • Final Release of Lien - from the General Contractor and Sub -contractors • Completed and signed Financial Close -Out Report • The approved accomplishment(s) • Final Certificate of Occupancy • Cost Certification o Budget Modifications - amendments to Contracts • The City must be notified of any Change Orders affecting the project • Finance Staff must inform the CA when a modification is necessary • The CA will review the modification • The letter to the Project Sponsor (Developer) must be signed by the Director or their designee (the Director is authorized to sign on behalf of the City Manager). • OTHER ITEMS: o We do not pay for Land Acquisition o FA must inform and verify with the CA of any cost being disallowed o FA cannot hold a reimbursement package that they cannot pay for more than 72 hours unless the Assistant Director signs off allowing the hold; FA must inform the CA, the Assistant Director (Finance) and the Fiscal Administrator • SERVICING UNIT: o Servicing Unit should post payments in the ABS data base using the same date of the checks o Servicing Unit must give the accomplishments information to the Assistant Director of Policy & Program Development within 30 days after the fmal payment. BEFORE ADVERTISING EXPENSES OCCUR: • Before an advertising request can be made, a Exempt Environmental Clearance has to be obtained OTHER CONCERNS: • Builders Risk — for any construction, the Contract Manager must acknowledge that the Developer has Builders Risk Insurance; Insurance & Bond Certificates must be current at all times for the Project Sponsor, Developer, Architect/Engineer, and others as named in invoices for reimbursement. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 41 of 50 12. Exhibit F5 - Payment Processing Procedure — Replacement Homes �` OF * pupa!96FWED C4ti1L13 City of Miami Finance Unit Department of Community Development Replacement Homes: • DOCUMENTS NEEDED FROM THE CON TRACT ANALYST (CA) BEFORE PROCESSING A REIMBURSEMENT REQUEST: o Copy of the Contract: • First Page • Last page - with all the appropriate signatures binding the contract o Copy of the Disbursement Agreement o Copy of the Environmental Clearance o Copy of the Budget - An AIA approved by the Assistant Director o Copy of the Mortgage - does not have to be recorded before the 1st payment unless there is only one payment, but must be provided before the next payment is approved o Authorized Signature Form o W-9, if it is a new vendor • ITEMS THAT SHOULD BE INCLUDED IN AN REIMBURSEMENT PACKAGE TO PAY SOFT COST: o The Cover Letter for Replacement Homes Soft Cost (Exhibit-C1) signed by the Developer o Invoices - you must have the original invoice o Copies of the checks • ITEMS THAT SHOULD BE INCLUDED IN AN REIMBURSEMENT PACKAGE TO PAY HARD COST: o All Construction Expenditure must be submitted on an approved AIA Form. o The AIA form must be signed by the General Contractor and the Architect, if applicable. o List of Sub -Contractors from the General Contractor before the first payment o Releases of Liens must be included with every draw request: • Final Release of Lien from the Sub -Contracts • Partial Release of Lien from the General Contractor with every draw request. o Copy of City of Miami Permit with 1st Draw o The Cover Letter for Replacement Homes Hard Cost (Exhibit-C) is required to be signed by: • The Developer • The Homeowner • Community Development's Inspectors who will take pictures for support of every reimbursement package, and • Community Development's Employee responsible for Davis Bacon and Section 3 o Retainage - 10% will be retained until the Final Release of and the Certificate of Occupancy is obtained. c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 42 of 50 o Final Payments: • Final Release of Lien - from the Developer / General Contractor • Completed and signed Financial Close -Out Report • The approved accomplishments; verify with the CA • Final Certificate of Occupancy o Change Orders - amendments to Contracts • Change Orders must be pre -approved before the work is done • Finance Staff must inform the CA when a modification is necessary • The CA will prepare the modification • The letter to the Project Sponsor (Developer) must be signed by the Director or their designee (the Director is authorized to sign on behalf of the City Manager). • OTHER ITEMS: o We do not pay profit or overhead o The Final Payment will approved by the Assistant Director. o Fiscal Assistant (FA) must inform the General Contractor of any cost being disallowed with the reason. o FA cannot hold a draw request that is incomplete for more than 72 hours unless the Assistant Director signs off allowing the hold; FA must inform the General Contractor in writing of the missing items and /or incomplete information. • SERVICING UNIT: o Servicing Unit should post payments in the ABS data base using the same date of the checks o Servicing Unit must give the accomplishments information to the Assistant Director Assistant Director of Policy & Program Development within 30 days after the final payment. OTHER CONCERNS: • The Assistant Director should be notified of problems encounter by the Finance Staff persons processing draw request. 13. Exhibit G — Budget Transmittal City of Miami c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 43 of 50 * IN6p RP'PRAilO 1g96 Contract Compliance Unit Department of Housing and Community Development BUDGET TRANSMITTAL MEMORANDUM REIMBURSEMENT CLEARANCE Date: 3/2/07 Agency Name: Allapattah Business Development Authority, Inc. Contract Type: Housing Quality Standard Inspection Services Cleared for Reimbursement up to: $60,000 Period of Reimbursement: December 1, 2006 — September 30, 2007 ORACLE Code: 91-02223 IDIS Code: 2223 Resolution Number: R-06-0650 Attached: Approved Budget, 1st & last page of contract, Authorized Representative Statement, Environmental I have reviewed the enclosed budget(s); the line items included are allowable, necessary and the amounts indicated are reasonable for this type of program. Contract Analyst: _Dollila Pinkhasov Original Contract X Fiscal Assistant: Amendment Date Cleared by Environmental 3/1/07 Budget Modification APPROVED BY: DATE APPROVED: 14. Exhibit H — Housing Contract Compliance Monitoring Report City of Miami Community Development c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 44 of 50 Housinz Contract Compliance Monitoring Report Date: Contract Analyst (print): Project Name: DeveloperBorrower: Contract Period: Effective Date: Term: thru Type of Funding: Amount: $ Type of Entity: Profit Entity Non Profit Entity CHDO Semi Annual Monitoring Report Final Monitoring Report Location of Monitoring: Site Visit Sponsor's Office Visit Objective of the Housing Unit Monitoring Tool: • To minimize the City's liability by identifying and correcting major program deficiencies before resulting in financial payment or funding sanctions • To conduct monitoring of construction as part of an overall process to ensure that benchmarks are met • To ensure compliance with items in the Agreements/Contracts, and • To serve as a semi-annual document to the file of pertinent work activities as the project continues to completions I. Overview - Summary of the Project Status: IL Current Monitorinj Findinjs or Areas of Concerns: c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 45 of 50 III. Outstanding Monitoring Findings: Date the last Report of Findings were delivered: IV. Construction Commencement/ Completion Deadlines (Progress Reports): Commencement date of construction per contract: Actual commencement date of construction: Completion date of construction per contract: of Completion % of monies expensed to date: Amount of monies expensed to date: $ Is the Project on schedule: Yes No If No, please explain why and what the developer is doing to correct the problem: Does the current rate of spending indicate the project funds will be spent by the 5-year expiration date? Describe the progress made on the items in Exhibit "A" of the contract: c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 46 of 50 V. List of Subcontractors: please attach VI. Sijnaje: VII. Inventory Report: VIII. Approved Budgets Amount: Note if Budget Modification is required Does the Approved Budget match the amount shown on the AIA G702? Yes No Explain if No. Does the financial information recorded in HUD's financial management system match the official accounting records? Yes No Explain if No. IX. Current Proof of Project Insurance & Bond Certificates (General, Workers Comp., Builders' Risk / OCP, Fidelity Bond, etc.): X. Annual Audit Reports: Fiscal Year End: Date of their last Audit: Type of Audit Required per Contract: c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 47 of 50 XL Compliance with Davis -Bacon Act & Section 3 Clause: Does the Davis -Bacon Act apply? Yes No If Yes: Are Payroll Reports submitted on a timely matter? Yes No Explain if No: Does Section 3 Clause apply? Yes No If Yes and their Plan was approved: Are notices of Section 3 posted in conspicuous places at the work site? Yes No Are the Section 3 Compliance Reports submitted on a timely matter? Yes No When are the Section 3 Compliance Reports submitted? Weekly Monthly XII. Retention of Records: (three years after the affordability period) Is there evidence of retention of record? Yes No Explain if No: MIL Lease -up or Sales Info: Did the Developer submit the Tenant /Homebuyers information? Yes No XIV. Suspension / Debarment Information: A suspension or debarment is a discretionary action taken by the Government to protect Federal procurement and programs from unethical contractors or contractors that have an unsatisfactory business records. The suspension/debarment process is meant to be a separate process from the civil or criminal justice system which has the objective of punishing the guilty parties. Suspension temporarily excludes individuals from participating in Federal assistance programs while a debarment action is being processed. Causes for suspension include adequate evidence of a cause for debarment, such as an indictment. A debarment is generally in place for 3 years, although longer periods may be imposed. Are any of the following debarred? Please attach proof c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 48 of 50 A. The Developer? Yes No B. The General Contractor? Yes No C. The Sub -Contractors? Yes No XV. Conflict of Interest: It is the Officers responsibility (or all parties involve??) to complete the Conflict of Interest disclosure. Do any of the following have a conflict of interest; owing 10% of interest or more? Please attach proof A. The Developer? Yes No A. The Owners? Yes No A. The Officers? Yes No A. The General Contractor? Yes No A. The Sub -Contractors? Yes No XVL Final Comments: Submitted by: c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 49 of 50 Print Name Title Signature Date Reviewed by: Print Name Title Signature Date c:\users\xealban\desktop\housing bond validation exhibits\sop housing development unit policies and procedures.docx Page 50 of 50