HOMESAILHCPowerpointPres

							                                        MULTIFAMILY LOAN
                                           PROGRAMS


                                        FLORIDA HOUSING FINANCE
                                              CORPORATION
                                             Rule 67-48, F.A.C.



227 North Bronough Street, Suite 5000
     Tallahassee, Florida 32301
                                          www.floridahousing.org
   850.488.4197 • 850.488.9809 Fax
                                         HOME Rental
                                           Program



227 North Bronough Street, Suite 5000
     Tallahassee, Florida 32301
                                        www.floridahousing.org
   850.488.4197 • 850.488.9809 Fax
      HOME Rental Program

The HOME Rental Program provides non-
 amortized, low interest loans to
 developers for acquisition and/or new
 construction or rehabilitation of affordable
 rental housing to low income families.
       WHO CAN APPLY?


• For-profit developers
• Non-profit housing providers
• Community Housing Development
  Organizations (CHDOs) or local
  governments, redevelopment
  organizations or public housing
  authorities.
         LOAN AMOUNT


• FHFC limits funding to 80% of the HUD
  Maximum Subsidy limits which are
  published by HUD and vary depending
  on the county and the number of
  bedrooms in the unit.
       INTEREST RATE

• 0-1.5%
• 0% for non-profits
• 1.5% for for-profits
• (Pro-rata for NP and FP mix based on % of
  ownership of the general partner)
      LIEN POSITION

Generally second position, but may
be first or subordinate position
      LOAN TERMS

15 years for rehabilitation and 20
years for new construction or may
be co-terminus with first mortgage
loan
AFFORDABILITY PERIOD


 HUD requires a minimum of 15
 years for rehabilitation and
 20 years for new construction;
 FHFC awards additional points for
 Applicants committing to provide a
 longer affordability period.
 MINIMUM SET-ASIDE AND
 INCOME RESTRICTIONS

• Minimum number of HOME-assisted (set-
  aside) units is pro-rata number based on the
  percentage of HOME funding compared to
  the total development cost.
• 20% of the HOME-assisted units must be
  rented to residents at or below 50% AMI
• Balance of set-aside units must be rented to
  residents at or below 60% AMI
 PRINCIPAL AND INTEREST
       PAYMENTS

• Generally principal is deferred until
  maturity
• Interest due annually – no deferral
    SPECIAL SET-
   ASIDES/TARGETS


Minimum of 15% of our annual
allocation must be set aside for
Community Housing
Development Organization,
(CHDO) (by federal rule) – FHFC
sets aside as much at 25%
currently
FUNDING AVAILABILITY


Estimated annual allocation from
HUD of approximately $23 million
which is used by Multifamily Rental
and Single Family Homeownership,
additionally FHFC receives
approximately $10 million per year
in repayments and interest (Program
Income) which is recycled through
the HOME Program.
     FUNDING SOURCE

Federally funded so a number of
federal regulations apply – Federal
Labor Standards (including Davis
Bacon), Environmental Review
Requirements, Section 504, etc.
                                        State Apartment
                                         Incentive Loan
                                        (SAIL) Program




227 North Bronough Street, Suite 5000
     Tallahassee, Florida 32301
                                        www.floridahousing.org
   850.488.4197 • 850.488.9809 Fax
  State Apartment Incentive Loan
         (SAIL) Program


The SAIL program provides low-interest
 loans on a competitive basis to
 affordable housing developers each
 year.
         WHO CAN APPLY?


•   For-profit developers
•   Non-profit housing providers
•   individuals
•   public entities
         LOAN AMOUNT


• Limited to the lesser of 25% of the total
  development cost or $4,000,000 unless
  – 80% farmworker/ commercial fishing worker
    or homeless residency or
  – non-profit with 10% of total development
    cost provided by contributions
       INTEREST RATE

• 1-3%
• 1% for developments with 80% farm-
  workers/commercial fishing workers, or
  homeless occupancy
• 3% for all others
       LIEN POSITION

Generally second position, but may
be first or subordinate position
        LOAN TERMS

Not more than 15 years (to include
construction/ stabilization period)
unless Housing Credits are involved
or FNMA is participating in the
financing in which case co-terminus
may be allowed
AFFORDABILITY PERIOD


 Greater of 12 years, term of the
 SAIL loan, or other period of time
 committed to in the application
MINIMUM SET-ASIDE AND
INCOME RESTRICTIONS

• Minimum of 20% of the units must be rented
  to residents at or below 50% AMI unless
  development also has Housing Credits, then
  minimum of 40% of the units at or below
  60% AMI may be selected.
• Exception for Areas of Critical Concern –
  100% below 120% AMI (Keys)
 PRINCIPAL AND INTEREST
       PAYMENTS

• All principal deferred until maturity
• Interest due annually – deferral possible
  based on cash flow
 SPECIAL SET-
ASIDES/TARGETS

  2006 Current targets are:
• Demographic:
   – Farmworker/
     Commercial Fishing Worker – 10%
   – Homeless – 9%
   – Elderly – 24%
   – Family – 57%
• Counties
   – Small – 10%
   – Medium – 30%
   – Large – 60%
FUNDING AVAILABILITY


Funded from state doc stamps so
the amount varies from year to year
– 2005 cycle had over $63 million,
this includes funds that were
available due to SAIL loan
withdrawals.
     FUNDING SOURCE


State funded so no special federal
requirements such as those required by
HOME Rental
                                        Housing Credit
                                        (HC) Program




227 North Bronough Street, Suite 5000
     Tallahassee, Florida 32301
                                        www.floridahousing.org
   850.488.4197 • 850.488.9809 Fax
Housing Credit (HC) Program



  The Housing Credit program is a
partnership between the private sector
and government to produce affordable
            rental housing.
Housing Credit (HC) Program


• Established in 1986 by the Tax Reform Act
• Governed by Section 42, Internal Revenue
  Code
• Authority: Section 420.5099 Florida
  Statutes, Rule Chapter 67-48 Fl. Admin.
  Code
• Established: 1987
• HC Estimate: 2006-$33 million
  What is a housing credit?

• A dollar-for-dollar reduction in federal
  income tax liability down to the Alternative
  Minimum Tax (AMT). Used for 10
  consecutive years after building is placed in
  service.
• Individuals can only offset approximately
  $10,000.
• Corporations can offset any amount down
  to the Alternative Minimum Tax.
            Types of HC

• 9% HC       New Construction
              Substantial Rehabilitation
• 4% HC      Acquisition
             Federally Subsidized
             (USDA Rural Development,
             Tax-Exempt Bonds)
Rates change monthly and are tied to market
  rates of federal obligations (the average of
  the mid-term rate and long-term rate for
  the month).
       How are they computed?

             Eligible Basis (Depreciable Basis)

              Multiplied by Percent Set-Aside

             Multiplied by the monthly HC Rate

                           Equals

                     Annual Allocation

Eligible Basis may be increased by 30 percent if Development is
in a DDA/QCT.
  How do housing credits
   decrease debt cost?

• Generally a Limited Partnership is
  formed with an investor limited
  partner buying 99% or higher of the
  credits and the development.
• The investor limited partner puts
  equity into the development which
  results in a decrease in debt.
      HC Minimum Requirements

•   Set-Aside:            20% of units at 50% AMI or less
                     OR   40% of units at 60% AMI or less
• Rent Restricted:        30% of the applicable income
                          limitation for the surrounding
                          area. Rent limit includes utilities.
• Affordability Period:   30 years, with an option to
                          convert to market rate after year
                          14
    9% Competitive Credits

Competitive Process
Demand versus Supply in 2006—3.1 to 1
2006 goals/targeting
  $3 million to Front Porch Florida Community
  $300,000 Rural Developments RD 514/515/516
  180-270 units in Florida Keys Area, 2 Urban In-
   Fill, 3 Elderly, 1 Farmworker/Commercial Fishing
   Worker
  59% Large County, 31% Medium County, 10%
   Small County
  Minimum 12% of allocation to Non-Profits
      Universal Application
     Competitive Evaluation
Developer Team Experience
Deep Targeting
Longer Affordability Period
Unit Features and Tenant Programs
Local Government Contributions
Leveraging
Proximity
Ability to Proceed
   Site Control, Zoning, Infrastructure,
    Environmental Site Assessment, Site Plan
   Firm Financial Commitments
4% Housing Credits and Tax-Exempt Bonds



   If at least 50% of the aggregate basis of a
   development is funded by tax-exempt bonds
   (private activity bonds), the development is eligible
   for 4% credits.
   Credits allocated to these developments do not
   come out of the state’s per capita allocation.
4% Housing Credits and Tax-Exempt Bonds
               Continued


      Funding Requirement:
      Developments funded with FHFC bonds:
           -Automatically eligible
      Developments funded with County bonds:
           -Must meet current HC Application
                  threshold requirements
4% Housing Credits and Tax-Exempt Bonds
               Continued


   4% HC Developments generate approx. 58% less
     equity than a 9% HC Development.
   Sometimes this shortage of equity cannot be fully
     made up with the tax-exempt bond interest
     savings. When this happens additional subsidy
     is needed to make a Development financially
     feasible.
                                        For updates on Universal Cycle
                                         Application, rulemaking, and
                                        much more, check our website
                                                       at:




227 North Bronough Street, Suite 5000
     Tallahassee, Florida 32301
                                            www.floridahousing.org
   850.488.4197 • 850.488.9809 Fax