All HOME Rental Development loans shall be in compliance
with the Act, 24 CFR Part 92 and, at a minimum, contain the following terms and
conditions:
(1) The HOME loan may be
in a first, second, or subordinated lien position. The term of the loan shall
be for a minimum period of 15 years for Rehabilitation Developments and 20
years for new construction Developments. The term of the HOME loan may be
extended upon the recommendation of the Credit Underwriter and approval by the
Corporation. With regard to said approval, the Corporation shall consider the
facts and circumstances, inclusive of the financial feasibility of the
Development.
(2) The annual
interest rate will be determined by the following:
(a) All for-profit Applicants that own 100
percent of the ownership interest in the Development held by the general
partner or managing member entity will receive a 1.5 percent per annum interest
rate loan.
(b) All qualified
non-profit Applicants that own 100 percent of the ownership interest in the
Development held by the general partner or managing member entity will receive
a 0 percent interest rate loan. For purposes of determining the annual HOME
interest rate, the definition of Non-Profit found at Rules
67-48.002 and
67-48.0075, F.A.C., shall not
apply; instead, qualified non-profit Applicants shall be those entities defined
in 24 CFR Part
92, Section 42(h)(5)(c), subsection 501(c)(3) or 501(c)(4) of
the IRC and organized under Chapter 617, F.S., if a Florida corporation, or
organized under similar state law if organized in a jurisdiction other than
Florida.
(c) If the Applicant is a
Public Housing Authority, or if the Applicant is an entity created by a Public
Housing Authority under Section
421.08, F.S., and such Public
Housing Authority owns 100 percent of the ownership interest in the Development
held by the general partner or managing member of such Applicant entity, the
loans funded after February 20, 2011 will receive a 0 percent interest
rate.
(d) An Applicant owned in
part by a qualified non-profit or a Public Housing Authority, but which does
not meet the requirements of paragraph (b) or (c), above, will, for loans
funded after February 20, 2011, receive a 0 percent interest rate loan on the
portion of the loan amount equal to the qualified non-profit's or Public
Housing Authority's ownership interest in the Development held by the general
partner or managing member of such Applicant entity. A 1.5 percent interest
rate shall be charged on the balance of the loan amount. The interest rate
charged on the total loan amount shall be determined by blending the rates
proportionately. After closing, should the Applicant sell any portion of the
Development ownership, the loan interest rate ratio will be adjusted to conform
to the new percentage of ownership.
(e) Notwithstanding the provisions of
paragraphs (a) through (d), above, the annual interest rate for those HOME
loans closed after February 20, 2011 where the HOME Developments are at least
partially financed with a MMRB Loan (as defined in rule Chapter 67-21, F.A.C.)
shall be as specified in an applicable competitive
solicitation.
(3) The
loans shall be non-amortizing and repayment of principal shall be deferred
until maturity, unless otherwise recommended by the Credit Underwriter and
approved by the Corporation. Unless otherwise provided in any competitive
solicitation, the Corporation will consider the facts and circumstances,
inclusive of the financial feasibility of the Development.
(a) For HOME Developments that are not at
least partially financed with a MMRB Loan (as defined in rule Chapter 67-21,
F.A.C.), interest payments on the loan shall be paid to the Corporation's
servicer annually on the date specified in the Note.
(b) For HOME Developments that are at least
partially financed with a MMRB Loan (as defined in rule Chapter 67-21, F.A.C.)
where the HOME loan closed after February 20, 2011:
1. 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 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 HOME loan
interest payment, pursuant to the financial reporting process, for the purpose
of determining interest due. Interest may be deferred as set forth in
subparagraph 3. below, without constituting a default on the loan.
2. The HOME loans shall be repaid from all
Development Cash Flow, and Development Cash Flow shall be applied to pay the
following items in order of priority:
a. All
superior mortgage fees and debt service,
b. Development Expenses for the HOME
Development plus up to 20 percent of total Developer Fees per year,
c. Interest payment on HOME loan balance as
stated in subsection
67-48.020(2),
F.A.C., over the life of the HOME loan,
d. Interest payments on the HOME loan
deferred from previous years,
e.
Mandatory payment on subordinate mortgages.
After the full HOME loan interest has been paid, the
Applicant shall retain all remaining monies, unless the Applicant chooses to
prepay a portion of the loan balance.
3. The determination of Development Cash
Flow, determination of payment priorities, and payment of interest on HOME
loans shall occur annually. Any payments of accrued and unpaid interest due
annually on HOME 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 HOME interest, such
under-reporting shall constitute an event of default on the HOME loan. A
penalty of 5 percent of any required payment shall be
assessed.
(4)
As approved by the Board of Directors, loans which finance demonstration
Developments or Developments located in a state or federally declared disaster
area may be provided with forgivable terms.
(5) The accumulation of all Development
financing, including the HOME loan and all existing debt within a Development,
may not exceed the Total Development Cost, as determined and certified by the
Credit Underwriter.
(6) Before
disbursing any HOME funds, there must be a written agreement with the Applicant
ensuring compliance with the requirements of the HOME Program pursuant to this
rule chapter and 24 CFR Part
92.
(7) A representative of the Applicant and the
managing company of the Development must attend a Corporation-sponsored
training session on income certification and compliance procedures.
(8) If the Development has 12 or more units
to be developed under a single contract, the General Contractor and all
available subcontractors shall attend a Corporation-sponsored preconstruction
conference regarding federal labor standards provisions.
(9) 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.
(10) All loans must provide that any
violation of the terms and conditions described in this rule chapter or 24 CFR
Part
92 constitute a default under the HOME loan documents allowing the
Corporation to accelerate its loan and seek foreclosure as well as any other
remedies legally available to it.
(11) If a default on a HOME loan occurs, the
Corporation will commence legal action to protect the interest of the
Corporation. The Corporation shall acquire real and personal property or any
interest in the Development if that acquisition is necessary to protect any
HOME loan; sell, transfer, and convey any such property to a buyer without
regard to the provisions of Chapters 253 and 270, F.S.; and, if that sale,
transfer, or conveyance cannot be consummated within a reasonable time, lease
the Development for occupancy by Eligible Persons.
(12) The Corporation or its servicer shall
monitor the compliance of each Development with all terms and conditions of the
HOME loan and shall require that such terms and conditions be recorded in the
public records of the county where the Development is located. Violation of any
term or condition shall constitute a default during the term of the HOME
loan.
(13) The Applicant shall not
refinance, increase the principal amount, or alter any terms or conditions of
any mortgage superior or inferior to the HOME 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 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
67-48.0205(4),
F.A.C., are met, the original combined loan to value ratio for the superior
mortgage and the HOME mortgage is maintained or improved, and a proportionate
amount of the increase in the superior mortgage is used to reduce the
outstanding HOME loan balance. To calculate the proportionate amount of the
increase in the superior mortgage which must be paid toward the reduction of
the HOME loan balance, the following calculation shall be used: divide the
amount of the original HOME mortgage by the combined amount of the original
HOME 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 HOME 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 HOME loan balance would be $625,000. This $625,000 would be applied
first to accrued interest and then to principal.
(14) Annually, within 151 Calendar Days
following the Applicant's fiscal year end, the Applicant shall provide an
audited financial statement, 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-15417,
shall be submitted to the Corporation's servicer in both PDF format and in
electronic form as a Microsoft Excel spreadsheet. The initial submission will
be due following the fiscal year within which the first unit is occupied. In
the case where the HOME 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 HOME loan closing is observed. The
audited financial statement is 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:
(a) Comparative Balance Sheet with prior year
and current year balances;
(b)
Statement of revenue and expenses;
(c) Statement of changes in fund balances or
equity;
(d) Statement of cash
flows; and
(e) 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 above documents by the stated deadline.
(15) Unless and until a
guarantor's obligations for a HOME 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) An audited financial statement 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, which 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.
Notes
Fla. Admin.
Code Ann. R. 67-48.020
Rulemaking Authority
420.507,
420.508 FS. Law Implemented
420.5089(7), (8), (9) FS.
New 7-22-96, Amended
12-23-96, 7-10-97, 1-6-98, Formerly 9I-48.020, 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,
Repromulgated 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.