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Item L1BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: August 17 2011 Division: Monroe County Housing Authority Bulk Item: Yes x No _ Department: MC SHIP PROGRAM Staff Contact Person/Phone #: J. Manuel Castillo Sr. Executive Director AGENDA ITEM WORDING: A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA APPROVING A REVISION TO THE MONROE COUNTY STATE HOUSING INITIATIVE PROGRAM (SHIP) LOCAL HOUSING ASSISTANCE PLAN, HOMEBUYER ASSISTANCE STRATEGY; AND PROVIDING FOR AN EFFECTIVE DATE. ITEM BACKGROUND: The Monroe County Housing Authority on behalf of Monroe County manages the State Housing Initiative Program (SHIP) funded by the Florida Housing Finance Corporation. SHIP Homebuyers who have purchased their homes over the last 4 to 5 years are finding that their homes are not saleable in the current real estate market and have little or no equity in these homes. This Resolution permits assumption by eligible purchasers making these homes marketable. This strategy will expire on June 30, 2013. PREVIOUS RELEVANT BOCC ACTION: BOCC Resolution 118-2010 Approval of 10-11/11-12/12-13 MC LHAP. CONTRACT/AGREEMENT CHANGES: N/A STAFF RECOMMENDATIONS: _ Approval. TOTAL COST: N/A INDIRECT COST: BUDGETED: Yes No x DIFFERENTIAL OF LOCAL PREFERENCE: COST TO COUNTY: SOURCE OF FUNDS: REVENUE PRODUCING: Yes No x AMOUNT PER MONTH Year " APPROVED BY: County Attu OMB/Purchasing Risk Management DOCUMENTATION: Included x Not Required DISPOSITION: Revised 7/09 AGENDA ITEM # RESOLUTION NO. , 2011 A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA APPROVING A REVISION TO THE MONROE COUNTY STATE HOUSING INITIATIVE PROGRAM (SHIP) LOCAL HOUSING ASSISTANCE PLAN, HOMEBUYER ASSISTANCE STRATEGY; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the State of Florida enacted the William E. Sadowski Affordable Housing Act, Chapter 92-317 of Florida Sessions Laws, allocating a portion of documentary stamp taxes on deeds to local government for the development and maintenance of affordable housing; and. WHEREAS, the State Housing Initiatives Partnership (SHIP) Act, SS. 420.907- 420.9079, Florida Statutes (1992), and Rule Chapter 67-37, Florida Administrative Code, required local governments to develop a one to three-year local Housing Assistance Plan outlining how funds will be used; and WHEREAS, the Monroe County Board of County Commissioners approved the Monroe County three year Local Housing Assistance Plan (LHAP) by Resolution 118-2010 on 4/21/2010; and WHEREAS, SHIP Homebuyers who have purchased their homes over the last four (4) to five (5) years are finding that their homes are not saleable in the current real estate market and they have little or no equity in their homes; and WHEREAS, lending institutions are willing to finance the purchase of these housing units if the SHIP Loans are assumable; and WHEREAS, the SHIP mortgage loan portfolio as of June 30, 2011 totals $9,066,297 and approximately 80 of these homes totaling $3.600,000 in SHIP loans are estimated to be not marketable at this time; and WHEREAS, the Monroe County Housing Authority, Administrator of the Monroe County SHIP Program, is recommending approval of the amendment below and attached as Exhibit A-2011 in order to enhance the marketability of these homes. NOW, THEREFORE, BE IT RESOLVED, by the Board of County Commissioners of Monroe County Florida, that the County hereby: Approves the following amendment to the Monroe County State Housing Initiatives Partnership (SHIP) Program, 2010-2011, 2011-2012 and 2012-2013 Local Housing Assistance Plan (LHAP), Homebuyer Assistance Strategy, and also attached hereto as "Exhibit A-2011 ". Terms, Recapture, Default and Assumption: .... Individual SHIP Homebuyer Mortgage Loans may be assumable in order to enhance the owner occupied property's marketability when the current appraised value is equal to or less than the original purchase price plus the balance of the SHIP loan on a case by case basis and must be recommended by the SHIP Program Coordinator and approved by the SHIP Program Administrator. This assumption provision shall expire on June 30, 2013. PASSED AND ADOPTED by the board of County Commissioners of Monroe County, Florida at a regular meeting of said Board on the 17 th day of August, 2011. Mayor Heather Carruthers Mayor Pro Tem David Rice Commissioner Kim Wigington Commissioner George Nugent Commissioner Sylvia Murphy SEAL: ATTEST: DANNY L. KOLHAGE, Clerk BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA BY: Deputy Clerk Approved as to legal sufficiency: Date: M. Mayor Heather Carruthers MONROE COUNTY SHIP PROGRAM 2010-2011, 2011-2012 AND 2012-2013 LHAP EXHIBIT A-2011 B. Name of the Strategy: HOMEBUYER PURCHASE ASSISTANCE A. Summary of the Strategy: Funding assistance for the purchase or construction of a single-family, residential, owner occupied property, including condominiums and townhouses. B. ]Fiscal Years Covered: 2010-2011 /2011-2012/2012-2013 C. Income Categories to be served: Very low, low and moderate D. Maximum award is noted on the Housing Delivery Goals Charts: Mortgage loan not to exceed $45,000.00. Inspection costs in excess of the maximum award will be a program expense, shall not exceed $350.00 and will be a grant to the borrower. E. Terms, Recapture, Default and Assumption: Mortgage loans will be a deferred payment loan for a period of thirty (30) years with zero % interest. The loan will be due and payable in full upon payment in full of the first mortgage, sale or transfer of the property, thirty years (30), failure to comply with the terms of the SHIP mortgage or death of the last surviving homeowner. In the event of the death of the last surviving homeowner, any income eligible heir residing in the home may assume the SKIP Loan as long as they can obtain title to the entire property within one (1) year of the death of the last surviving homeowner and the first mortgagee consents to the assumption of their loan. Individual SHIP Homebuyer Mortgage Loans may be assumable in order to enhance the owner occupied property's marketability when the current appraised value is equal to or less than the original purchase price plus the balance of the SHIP loan on a case by case basis and must be recommended by the SHIP Program Coordinator and approved by the SHIP Program Administrator. This assumption provision shall expire on June 30, 2013, F. Recipient Selection Criteria: Applications for Homebuyer Assistance must include: L A contract for purchase of an existing housing unit or one under construction. An "under construction" housing unit shall be defined as having a building permit and pilings/foundation complete and inspected. 2. A lending institution pre -qualification letter for the amount to be financed which may assume a $45,000 SHIP loan. 3. An affidavit from the Seller in the event this is a unit under construction, indicating the delivery date of the housing unit [cannot be more than five months from the date of the SHIP Notice of Funding Availability (NOFA)]. In the event there are more applicants than funds available, upon completion of the initial advertising, lotteries will be utilized to determine the order of the funding. Applications will be ranked by date and time of receipt. The day, time and location of the lottery will be made available to the eligible applicants within one week of the end of the NOFA. An independent 3d party will draw numbers to establish the order of ranking. Applicants do not have to be present at the drawing to participate. Funding will be awarded in the order drawn, in the event an applicant withdraws his application, the next person on the list will be funded. Applicants who fail to submit complete applications, who do not meet SHIP threshold requirements or cannot close due to financing or any other reason, may not reapply for SHIP assistance until the following application cycle. No new applications will be accepted for this strategy until all previously ranked by lottery applicants have had an opportunity to participate. In the event additional funding slots become available, the program will re -advertise the availability of funds and if need be, conduct a new lottery. G. Sponsor Selection Criteria: N/A H. Additional Information: Buyer(s) must contribute a minimum three percent (3%) down payment. Property must meet minimum health and safety standards as defined under the U.S Department of Housing and Urban Development's, Housing Quality Standards (HQS). Any HQS deficiencies must be corrected prior to or as part of the purchase transaction. In the case of new construction, a Certificate of Occupancy (CO) may be substituted for the HQS inspection. Mortgage loans to public entities, which retain ownership of the land under the terms of a ground lease, shall extend to the improvements. The dwelling unit purchased must be financed with a federally insured financial institution. In the event other financing methods are utilized and approved by the SHIP Administrator, the SHIP Note and Mortgage must be a first mortgage. Priority will be given to those applicants demonstrating innovative design, green building principles, storm resistant construction or other elements that reduce long term costs relating to maintenance, utilities or insurance. I. Shared Appreciation Provision: All SHIP funds under this strategy are subject to a mortgage that shall contain recapture provisions which provides for shared appreciation between the buyer(s) and the Monroe County SHIP Program. The amount due Monroe County upon sale, refinancing or transfer of the property shall be calculated by adding the sum of the principal balance of the SHIP loan and 50% of the appreciated value. The appreciated value shall be the difference between the original purchase price and the sales price less any real estate commission, less the value of any permitted improvements. Housing units constructed utilizing Affordable Housing Permits which restrict appreciation in the housing unit's value, shall not be subject to the Shared Appreciation Provision.