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HomeMy WebLinkAboutExhibit AEXHIBIT "A" AFFORDABLE HOUSING TRUST FUND PROGRAMS DEFINITIONS 1. Forgivable Loan - Funds provided in the form of a loan that may be forgiven if certain conditions are met. 2. Rent Regulatory Agreement - A written and recorded document restricting the borrower's rent levels by unit size and renter income. 3. Multifamily Project - A residential property containing five (5) or more dwelling units. 4. Lo.an Term and Interest Rate,- Loans will be amortized for a period of up to thirty (30) years, with an interest rate of zero (0%) to three (3%) percent. Terms will be negotiated individually by project. 5. Available Cash Flow - Cash flow of a development as calculated in the statement of 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 the superior loan(s) and capital expenditures. 6. Re -Sale Provision - The borrower is required to sell the unit to another income eligible borrower approved by the City. 7. Share on Gain- The City shall be entitled to a pro- rated share in any gain by a borrower when affordability restrictions are violated when the property is sold prior to fulfillment of the affordability period. The amount of gain is determined by the numbers of years the borrower resides in the unit which is a percentage pre - approved by the City Commission through resolution. 8. One hundred forty percent (14(%) of Area Median Income - Applicant's household income cannot exceed the limits specified below: (See chart) # of persons in the household 1 2 3 4 140% income limit $95,620 $109,200 $122,920 $136,500 * Households in excess of 4 members will be calculated using the same income limit as reflected in the table ** Income limits are established by HUD and are subject to change on a yearly basis 9. Maximum Subsidy- The maximum subsidy per unit shall be determined by the current policies set forth by the Director of the Department of Housing and Community Development, in his or her sole and absolute discretion, and it is subject to change. ASSISTANCE FOR HOMEBUYERS Assisting low-income homebuyers in the purchase of a home by providing down payment, closing costs and/ or second mortgage financial assistance for the purchase of a newly constructed or existing residential property within the City of Miami. First Time Homebuyers are eligible to receive this assistance in the form of a forgivable loan, after the affordability period of thirty (30) years. Resale restrictions apply. HOMEOWNERSHIP POLICY- BUYERS Repayment Requirements 1. In the case of sale or transfer of the property, prior to the fulfillment of the affordability period, the borrower will be required to pay back one hundred percent (100%) of the outstanding principal plus interest and: 2. In the case of sale or transfer of the unit the City will share in the gain realized by the borrower. a. 0 to 3 Years - City receives one hundred percent (100%) of the City's pro rata share of the gain generated. b. 3 - 20 years — On the third year, City receives eighty-five percent (85%) of the City's pro rata share of the gain generated and borrower receives fifteen percent (15%). Thereafter, the borrower receives an additional five percent (5%) of the City's prorated share per year reducing the City's share by the same percentage until year 20. c. Year 20 and above: The borrower receives one hundred percent (100%) of the gain. The above gain sharing proposal will terminate in foreclosure; however, the city will require lenders to provide us a right of first refusal to purchase the loan at a negotiated price. 3. Forgivable loan after the affordability period of thirty (30) years. Minimum/ Maximum Subsidy See above Affordability Period Thirty (30) Years Security Affordability period to be enforced by a restrictive covenant that will run with the land as well as a mortgage. Income Household income cannot exceed one hundred forty percent (140%) of median income. Minimum Down Payment $500.00 Type of Assistance Down payment assistance and closing costs Maximum Purchase Price/Value of Property $352,000.00 Developers Preference for Local Participation ASSISTANCE FOR DEVELOPERS: (1) HOMEOWNERSHIP DEVELOPMENTS Assisting developers with the construction of new affordable homeownership units. Units can be condominiums town homes, or single-family scattered site developments. The financial assistance will be a forgivable loan converted to a second mortgage for the buyers once project is completed. Second mortgage to buyers will have the same terms as the Homeownership Policy- Buyers, as approved by City Commission. There is a thirty (30) year affordability period commencing at full lease up of the development. Resale restrictions and Share on Gain provisions apply. HOMEOWNERSHIP POLICY- BUYERS Repayment Requirements Forgivable Loan converted to a forgivable 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 Housing programs for a minimum of five (5) years. Second mortgage to buyer will have the same terms as the Homeownership Policy- Buyers, as approved by the City Commission. Minimum/ Maximum Subsidy See above Affordability Period Thirty (30) year affordability period for the second mortgages Security There will be a restrictive covenant and mortgage on the property. Upon completion of the project, the total debt of 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 Up to sixteen percent (16%) of total project costs, less land value/cost. Disbursements based on percentage of construction completion. Minimum Ratio of City Funds to other Funds in the Project 1:2 Desirable on a project -by -project basis Type of Assistance Construction soft costs and hard costs or set -aside for homebuyer assistance after completion Maximum Purchase Price/Value of Property $352,000.00 Income Household income cannot exceed one hundred forty percent (140%) of median income (2) RENTAL DEVELOPMENTS Assisting developers with the construction, rehabilitation, preservation or refinancing of multifamily developments containing five (5) or more units. The financial assistance will be in the form of a loan conditioned on a cash flow analysis of the project as defined by the City. A mortgage will be placed on the property and a rent regulatory agreement controlling the allowable rent. The rent regulatory agreement would restrict the rent amounts, preserving the unit as an affordable housing unit. HOMEOWNERSHIP POLICY- BUYERS Repayment Requirements Loan Terms will include an interest rate between zero (0%) to three (3%) percent determined by the City on a project -by -project basis. A thirty (30) year affordability period will be required. Minimum/ Maximum Subsidy See above Affordability Period Thirty (30) years Security Recorded mortgage on the property. In addition, affordability period to be enforced by a restrictive covenant that will run with the land. In the case of phased developments, the covenant will run with the land making up all phases of the development. In the case of a developer default, the restrictive covenant will continue throughout the affordability period. Default penalties i. Full payment of construction loan (total disbursed amount) and accrued default interest at the maximum rate allowed by law depending on loan amount. ii. Developer and all principals with a minimum of ten percent (10%) share in the development will be barred from participating in any City of Miami programs for a minimum of five (5) years. iii. Recorded covenant will not be removed upon sale of the property. Service Charge One percent (1%) of City Loan up to a maximum $15,000 will be due and payable as good faith commitment fee for for -profit developers, thirty (30) days after funding approval. No commitment fee for non -profits. Program Income Gross income received by the project directly generated from the use of funds. When program income is generated by housing, the income shall be prorated to reflect the percentage of funds used. Type of Assistance Construction soft costs, hard costs (predevelopment), or first mortgage permanent or refinancing. Maximum Rent Determined on a project -by -project basis, in the sole and absolute discretion of the Director of the Department of Housing and Community Development. Miscellaneous 1. Income of renters shall be at income levels not to exceed one hundred forty percent (140%) of AMI. 2. Annual compliance monitoring for duration of affordability period. ASSISTANCE FOR LAND ACQUISITION: Program Description: Funding under this program will be used by the City of Miami to acquire buildable vacant parcels of land suitable for the development of mixed use/mixed income affordable rental or homeownership developments/units to be built by the City of Miami or by organizations that have been procured through a competitive request for proposals (RFP) process. Development financing for projects that have been selected through an RFP process, shall be the responsibility of the Development/Owner Organization. If partial funding is provided by the City of Miami, it shall be in accordance with the specifications detailed in the RFP. Maximum Award: Funding for projects shall be determined based upon the needs and structure of the proposed development. Development Type: Mixed income and mixed -use multifamily rental apartment building(s) of 5 or more units, containing, units of various sizes, with or without common amenities and, single family development of homeownership units. Project designs and specifications must be in compliance with City of Miami planning and zoning requirements. Building construction must be in compliance with City of Miami and Florida Building Codes. Income levels served: Proposed developments shall serve low to moderate level incomes, in proportions that are enumerated in the RFP. Development Ownership: Private fee simple or leasehold ownership is required through For -Profit or Not -For -Profit corporations solely or through Partnerships, OR City of Miami owned. Preference will be given to non-profit Land -trust so as to make the units permanently affordable. Compliance: The City of Miami's Department of Housing and Community Development shall be responsible for the contractual/regulatory compliance of all developments assisted. Annual compliance monitoring shall be conducted by City staff that will review project rent rolls, leases, tenant income files, financial statements, current operational licenses and certificates, annual Inspection of units, etc. Loan Servicing: The City of Miami's Department of Housing and Community Development shall provide all loan servicing, i.e., monthly billing and collection, maintaining current property insurances, tracking delinquencies, providing all required reporting, etc.