(1)
The proceeds of all SAIL loans shall be used for new construction or
rehabilitation which creates or preserves affordable, safe and sanitary
multifamily rental housing units.
(2) The SAIL loan may be in a first, second,
or other subordinated lien position. For purposes of this rule, mortgages
securing a letter of credit as credit enhancement for the bonds financing the
first mortgage shall be considered a contingent liability and part of the first
mortgage lien, provided that the Applicant's counsel furnishes an opinion
regarding the contingent nature of such mortgage satisfactory to the
Corporation and its counsel.
(3)
The loans shall be non-amortizing and shall have interest rates as provided in
Section 420.507(22),
F.S., and specified in an applicable competitive solicitation.
(4) Except as provided in Section
420.5087(5),
F.S., the amount of any superior mortgages combined with the SAIL mortgage
shall be less than the appraised value of the Development. Any debt service
reserve requirement associated with a superior mortgage shall be excluded from
the amount of the superior mortgage for purposes of this calculation.
(5) Payment on the loans shall be based upon
the Development Cash Flow, as determined pursuant to the financial reporting
requirements as provided in a competitive solicitation, or shall be due
annually as determined by the Corporation's Board of Directors. Such
determination by the Board shall be based upon a written recommendation by the
Credit Underwriter which has considered the economic and financial viability of
the Development as well as the protection of the Corporation's repayment of
principal and interest. Any distribution or payment to the Principal(s) of the
Applicant or Developer or any Affiliate of the Principal of the Applicant or
Developer or any Affiliate of the Applicant or Developer, whether paid directly
or indirectly, which was not expressly disclosed in determining the annual debt
service coverage in the Board approved final credit underwriting report, with
the exception of payment of the Developer Fee allowable to maximum of 20
percent per year, will be added back to the amount of cash available for the
SAIL loan interest payment, pursuant to the financial reporting process, for
the purpose of determining interest due. Interest may be deferred as set forth
in subsection
67-48.010(8),
F.A.C., without constituting a default on the loan.
(6) The loans described in subsection
67-48.010(3),
F.A.C., above, shall be repaid from Development Cash Flow, and if the SAIL loan
is not a first mortgage loan, each year, subject to the provisions of
subsection
67-48.010(8),
F.A.C., below, Development Cash Flow shall be applied to pay the following
items in order of priority:
(a) All superior
mortgage fees and debt service as calculated and disclosed in the Board
approved final credit underwriting report;
(b) Development Expenses for the SAIL
Development, plus up to 20 percent of total Developer Fees per year;
(c) Interest payment on SAIL loan balance
equal to the percentage specified in the applicable competitive solicitation
over the life of the SAIL loan;
(d)
Interest payments on the SAIL loan deferred from previous years; and
(e) Mandatory payment on subordinate
mortgages.
After the full SAIL loan interest has been paid, the
Applicant shall retain all remaining monies, unless the Applicant chooses to
prepay a portion of the loan balance.
(7) If the SAIL loan is secured by a first
mortgage lien, each year, subject to the provisions of subsection
67-48.010(8),
F.A.C., below, Development Cash Flow shall be applied to pay the following
items in order of priority:
(a) First mortgage
fees and interest payment on the SAIL loan balance equal to the percentage
specified in the applicable competitive solicitation over the life of the SAIL
loan;
(b) Development Expenses on
the SAIL Development plus up to 20 percent of total Developer Fees per
year;
(c) Interest payments on the
SAIL loan deferred from previous years; and
(d) Mandatory payment on subordinate
mortgages.
After the full SAIL loan interest has been paid, the
Applicant shall retain all remaining monies, unless the Applicant chooses to
prepay a portion of the loan balance.
(8) The determination of lien position,
determination of Development Cash Flow, determination of payment priorities,
and payment of interest on SAIL loans shall occur annually. A change in lien
position from subordinate to first changes payment priorities. Any payments of
accrued and unpaid interest due annually on SAIL loans shall be deferred to the
extent that Development Cash Flow is insufficient to make said payments
pursuant to the payment priority schedule established in this rule chapter. If
Development Cash Flow is under-reported and such report causes a deferral of
SAIL interest, such under-reporting shall constitute an event of default on the
SAIL loan. A penalty of 5 percent of any required payment shall be assessed.
(a) By the date that is 151 Calendar Days
after the Applicant's fiscal year end of each year of the SAIL loan term, the
Applicant shall provide the Corporation's servicer with audited financial
statements and a certification detailing the information needed to determine
the annual payment to be made. However, this certification requirement will be
waived until 151 Calendar Days after the Applicant's fiscal year end following
the fiscal year within which the first unit is occupied. In the case where the
SAIL Development contained occupied units at the time of acquisition, the
initial submission will be due following the fiscal year within which the 12
month anniversary of the SAIL loan closing is observed. The certification shall
require submission of audited financial statements, the fully completed and
executed annual reporting form, Financial Reporting Form SR-1, (Rev. 01-23),
and any other financial reporting requirements as provided in a competitive
solicitation. The Form SR-1, which is incorporated by reference and available
from
http://www.flrules.org/Gateway/reference.asp?No=Ref-15416,
shall be submitted to the Corporation's servicer in both PDF format and in
electronic form as a Microsoft Excel spreadsheet. The audited financial
statements are to be prepared in accordance with accounting principles
generally accepted in the United States of America and audited in accordance
with auditing standards generally accepted in the United States of America for
the 12 month fiscal year period just ended and shall include:
1. Comparative Balance Sheet with prior year
and current year balances,
2.
Statement of revenue and expenses,
3. Statement of changes in fund balances or
equity,
4. Statement of cash flows;
and,
5. Notes to financial
statements.
The financial statements referenced above should also be
accompanied by a certification of the Applicant as to the accuracy of such
financial statements. A late fee of $500 will be assessed by the Corporation
for failure to submit the required audited financial statements and
certification by 151 Calendar Days after the Applicant's fiscal year end of
each year of the SAIL loan term. If the Applicant has not submitted the
required audited financial statements, the Corporation servicer shall deem the
Development Cash Flow sufficient and issue a billing for interest due on the
SAIL loan for the Applicant's immediately preceding fiscal year by 212 Calendar
Days after the Applicant's fiscal year end. After receipt of the audited
financial statements, the Corporation servicer shall issue revised billing, if
necessary. Failure to submit the required audited financial statements and
certification by 151 Calendar Days after the Applicant's fiscal year end of
each year of the SAIL loan term shall constitute an event of default on the
SAIL loan. The Applicant shall furnish to the Corporation or its servicer,
unaudited statements, certified by the Applicant's principal financial or
accounting officer, covering such financial matters as the Corporation or its
servicer may reasonably request, including without limitation, monthly
statements with respect to the Development.
For SAIL loans applied for prior to February 22, 2001, the
Corporation will extend the annual filing deadline for submission of the
audited financial statements and certification detailing the information needed
to determine the annual payment to be made, pursuant to subsection
67-48.010(8),
F.A.C., to May 31 of each year of the SAIL loan term. The Corporation servicer
shall issue a billing for interest due on the SAIL loan for the immediately
preceding calendar year by July 31 of each calendar year of the SAIL loan. In
addition, for SAIL loans applied for prior to December 23, 1996, so long as the
executed loan agreements contain a provision to assess a late fee for failure
to provide the audited financial statement and certification detailing the
information needed to determine the annual payment due, such fee will be
assessed by the Corporation as outlined above.
(b) The Corporation servicer shall issue a
billing for interest due on the SAIL loan for the Applicant's immediately
preceding fiscal year by 212 Calendar Days after the Applicant's fiscal year
end of each year of the SAIL loan term.
(c) The Applicant shall remit the interest
due to the Corporation servicer no later than 243 Calendar Days after the
Applicant's fiscal year end of each year of the SAIL loan term. The first
payment of SAIL interest will be due no later than 243 Calendar Days after the
Applicant's fiscal year end following the fiscal year within which the first
unit is occupied. The first payment of interest shall include all interest for
the period which begins accruing on the date of the first Draw and ends on the
date of the Applicant's fiscal year end of the fiscal year during which the
first unit is occupied.
(9) After maturity or acceleration, the Note
shall bear interest at its default interest rate, as provided therein, from the
due date until paid. Unless the Corporation has accelerated the SAIL loan, the
Applicant shall pay the Corporation a late charge of 5 percent of any required
payment that is not received by the Corporation within 15 days of the due
date.
(10) The final billing for
the purpose of payoff of the SAIL loan shall also include a billing for
compliance fees to cover monitoring of SAIL Program requirements beyond the
maturity date of the Note. Such fees shall be computed by determining the
present value of the annual compliance monitoring fee for the number of years
for which the Development will have a set-aside for Very Low-Income persons or
households beyond the repayment date. The applicable present value discount
rate will be determined by the rule in effect at the time of the SAIL loan
payoff. Such amount shall be reduced by the amount of any compliance monitoring
fees for other programs collected by the Corporation for the Development for
the period, provided:
(a) The compliance
monitoring fee covers some or all of the period following the anticipated SAIL
loan repayment date; and
(b) The
Development has substantially equivalent set-asides for Very Low-Income persons
or households mandated through another Corporation program for which the
compliance monitoring fee was collected.
(11) The SAIL loans shall be serviced either
directly by the Corporation or by the servicer on behalf of the
Corporation.
(12) The Corporation
shall monitor compliance of all terms and conditions of the SAIL loan and shall
require that certain terms and conditions be embodied in the Land Use
Restriction Agreement and recorded in the public records of the county wherein
the Development is located. Violation of any material term or condition of the
documents evidencing or securing the SAIL loan shall constitute a default
during the term of the SAIL loan. The Corporation shall take appropriate legal
action to effect compliance if a violation of any material term or condition
relative to the set-asides of units for Very Low-Income persons or households
is discovered during the course of compliance monitoring or by any other
means.
(13) The Corporation shall
require adequate insurance to be maintained on the Development as determined by
the first mortgage lender, the Corporation, or the Corporation's servicer, but
which shall, in any case, include fire, hazard and other insurance as required
by the terms and conditions outlined in a competitive solicitation.
(14) The SAIL loan term shall be for a period
of not more than 15 years. However, if both a SAIL loan and federal Housing
Credits are to be used to assist a Development, the Corporation may set the
SAIL loan term for a period commensurate with the investment requirements
associated with the Housing Credit syndication. The term of the loan may also
exceed 15 years if the lien of the Corporation's encumbrance is subordinate to
the lien of another mortgagee, in which case the term may be made coterminous
with the longest term of the superior loan.
(15) After accepting a firm commitment, the
Applicant shall not refinance, increase the principal amount, or alter any
terms or conditions of any mortgage superior or inferior to the SAIL mortgage
without prior approval of the Corporation. With regard to said approval, the
Corporation shall require an analysis from the Credit Underwriter and consider
the facts and circumstances of the Applicant's request, inclusive of market
circumstances outside of the Applicant's control. If the Corporation's decision
is to deny the Applicant's request, the Board shall consider the facts and
circumstances of the Applicant's request and the Corporation's denial, and make
a determination of whether to grant the request. An Applicant may reduce the
interest rate on any superior or inferior mortgage loan without the Board's
permission, provided that no other terms of the loan are changed. The
Corporation must be notified in writing of any such change.
Following construction completion, the Corporation will
recommend that the Board deny any requests to increase the amount of any
superior mortgage, unless the criteria outlined in subsection
67-48.0105(5),
F.A.C., are met, the original combined loan to value ratio for the superior
mortgage and the SAIL mortgage is maintained or improved, and a proportionate
amount of the increase in the superior mortgage is used to reduce the
outstanding SAIL loan balance. To calculate the proportionate amount of the
increase in the superior mortgage which must be paid toward the reduction of
the SAIL loan balance, the following calculation shall be used: divide the
amount of the original SAIL mortgage by the combined amount of the original
SAIL mortgage and the original superior mortgage; then multiply the quotient by
the amount of the increase in the superior mortgage from the current balance.
For example, if the amount of the original SAIL mortgage is $2,000,000, the
original superior mortgage is $4,400,000, with a current balance of $3,000,000,
a proposed new superior mortgage of $5,000,000, then the amount of the increase
in the superior mortgage would be $2,000,000, and the proportionate amount of
the increase in the superior mortgage which must be paid toward the reduction
of the SAIL loan balance would be $625,000. This $625,000 would be applied
first to accrued interest and then to principal.
(16) All SAIL loans shall be in conformance
with applicable federal and state statutes. The Corporation shall allow units
dedicated to occupancy by the Elderly in a Development designed for occupancy
by elderly households pursuant to authorization by HUD under the Fair Housing
Amendments of 1988 as implemented by 24 CFR Part
100.
(17) Rent controls are determined in a manner
consistent with Section 42(g)(2) of the IRC. The gross monthly rent shall not
exceed 30 percent of the imputed income limitation applicable to such unit as
committed to by the Applicant in its Application.
(18) The documents creating, evidencing or
securing each SAIL loan must provide that any violation of the terms and
conditions described in rule Chapter 67-48, F.A.C., any competitive
solicitation, or both, constitutes a default under the SAIL loan documents
allowing the Corporation to accelerate its loan and to seek foreclosure as well
as any other remedies legally available to it.
(19) A failure to pay any principal or
interest due under the terms of this section shall constitute a default on the
SAIL loan.
(20) If, after a
four-month rent-up period commencing after issuance of the last certificate of
occupancy on the units, an Applicant is unable to meet the agreed-upon
demographic commitment for Elderly, Homeless, Persons with Special Needs,
Farmworker or Commercial Fishing Worker, the Applicant may request to rent such
units to Very Low-Income persons or households without demographic restriction.
(a) The written request must provide
documentation of marketing efforts implemented over the past four-month period
which demonstrate the inclusion of sources of potential residents, advertising
to be used, other means of encouraging residents to rent at the Development,
and priority to the original targeted group of residents. If the Corporation
determines that prior marketing efforts were insufficient, a revised plan which
is satisfactory to the Corporation must be submitted and implemented for a
four-month period prior to reconsideration.
(b) The Corporation will recommend that the
Board require that Applicants provide additional amenities or resident programs
suitable for the proposed resident population.
(c) The Corporation will recommend that the
Board require that Applicants to modify loan documents to conform to the terms
and conditions, including the interest rate, as outlined in the competitive
solicitation, or to accelerate payments of SAIL loan principal or
interest.
(21) Failure
to provide the Corporation and its servicer with any financial reporting
required in a competitive solicitation detailing the information needed to
determine the annual payment to be made pursuant to this rule chapter shall
constitute a default on the SAIL loan.
(22) For SAIL loans applied for prior to
March 17, 2002, at the borrower's request, the Corporation will include up to
20 percent of total Developer Fees per year as a Development Expense when
calculating the interest due on the SAIL loan for the 2003 calendar year for
the billing issued in 2004 and for the billing for interest due each calendar
year thereafter. Development Expense will not include Developer Fees for
determination of payment of interest on SAIL loans applied for prior to March
17, 2002 for the 2002 calendar year or any previous calendar year. For purposes
in this paragraph, Development Expense has the same meaning as Project Expense
and Eligible Project Expense as those terms are used in SAIL loans applied for
prior to March 17, 2002.
(23) The
Compliance Period for a SAIL Development shall be, at a minimum, a period of
time equal to the greater of:
(a) The term of
the loan,
(b) 12 years from the
date the first residential unit is occupied, or
(c) Such longer period agreed to by the
Applicant in the Application.
The set-aside requirements apply to the total number of
residential units in the Development beginning on the later of the first day on
which any residential unit in the Development is occupied or the SAIL loan
closing date. For a period of 12 months beginning on the SAIL loan closing date
(the "transition period"), the failure to satisfy the set-aside requirements
shall not cause noncompliance.
(24) Unless and until a guarantor's
obligations for a SAIL loan are terminated as approved in writing by the
Corporation or its servicer, each guarantor shall furnish to the Corporation or
its servicer financial statements as provided in paragraphs (a) through (c),
below, as the Corporation or its servicer may reasonably request.
(a) The audited financial statements are to
be prepared in accordance with accounting principles generally accepted in the
United States of America and audited in accordance with auditing standards
generally accepted in the United States of America for the 12 month fiscal year
period just ended and shall include:
1.
Comparative Balance Sheet with prior year and current year balances,
2. Statement of revenue and
expenses,
3. Statement of changes
in fund balances or equity,
4.
Statement of cash flows; and,
5.
Notes to financial statements.
The financial statements referenced above should also be
accompanied by a certification of the guarantor(s) as to the accuracy of such
financial statements; or
(b) If an audited financial statement has not
been prepared, a federal income tax return filed for the most recently
completed year, or
(c) For
individual guarantors, if an audited financial statement is not available a
financial statement certified as true and complete without qualification by
such guarantor and a copy of the most recently filed individual federal income
tax return.
(25) Any SAIL
Applicant from SAIL Application cycles with non-amortizing loans at 9 percent
simple interest per annum with payments based on Development Cash Flow pursuant
to the applicable cycle rule, may submit a written renegotiation request to the
Corporation to modify their SAIL loan interest rate going forward from 9
percent simple interest per annum to 3 percent simple interest per annum with
payments based on Development Cash Flow pursuant to subsections
67-48.010(5)
-(10), F.A.C., in exchange for providing a payment to the Corporation of the
deferred interest based on an accrual rate of 3 percent simple interest per
annum in no more than five (5) equal annual installments but in no event shall
it be later than the maturity date of the loan. Payments made from Development
Cash Flow, shall be included as Development Expenses as stated in paragraph
67-48.010(6)(b),
F.A.C. All loan renegotiation requests must be submitted in writing to the
Special Assets Director. In addition to any related professional fees, the
Corporation shall charge a non-refundable renegotiation fee as outlined in the
most current competitive solicitation. The Corporation shall not proceed with
the request until the Applicant or Developer has satisfied any financial
obligations for which the Applicant or Developer, or Principal, Affiliate or
Financial Beneficiary of the Applicant or Developer is in arrears to the
Corporation or any agent or assignee of the Corporation.
Notes
Fla. Admin.
Code Ann. R. 67-48.010
Rulemaking Authority
420.507,
420.508 FS. Law Implemented
420.5087 FS.
New 7-22-96, Amended
12-23-96, 7-10-97, 1-6-98, Formerly 9I-48.010, Amended 11-9-98, 2-24-00,
2-22-01, 3-17-02, 4-6-03, 3-21-04, 2-7-05, 1-29-06, 4-1-07, 3-30-08, 8-6-09,
11-22-11, 10-9-13, Amended by
Florida
Register Volume 40, Number 185, September 23, 2014 effective
10/8/2014, Amended by
Florida
Register Volume 42, Number 169, August 30, 2016 effective
9/15/2016, Amended
by
Florida
Register Volume 43, Number 090, May 9, 2017 effective
5/24/2017, Amended
by
Florida
Register Volume 44, Number 124, June 26, 2018 effective
7/8/2018, Amended by
Florida
Register Volume 45, Number 123, June 25, 2019 effective
7/11/2019, Amended
by
Florida
Register Volume 46, Number 112, June 9, 2020 effective
6/23/2020, Amended
by
Florida
Register Volume 47, Number 086, May 4, 2021 effective
5/18/2021, Amended
by
Florida
Register Volume 48, Number 120, June 21, 2022 effective
7/6/2022, Amended by
Florida
Register Volume 49, Number 114, June 13, 2023 effective
6/28/2023.