Item C2
LAND AUTHORITY GOVERNING BOARD
AGENDA ITEM SUMMARY
Meeting Date: July 19, 2001
Bulk Item: Yes No X
Department: Land Authority
Agenda Item Wording: Approval of encumbrances to Bahama Conch Community Land Trust property
located at 227 Virginia Street and 1031 Howe Street in Key West.
Item Background: The subject prop~rty is a vacant parcel at the corner of Virginia and Howe Streets
in Key West purchased by the Land Authority and subsequently donated to the Bahama Conch
Community Land Trust (BCCL T) for development with affordable housing. The Land Authority imposed
deed restrictions on the property prior to this conveyance. Paragraph 7 of said restrictions requires
Land Authority approval of all encumbrances as a means of protecting the Land Authority's investment
in the property.
The proposed encumbrances consist of construction loans and SHIP mortgages totaling $242,000
which BCCL T will use to complete the two single-family homes currently under construction on the site.
Of this total, $72,000 will be 30-year Monroe County SHIP mortgages administered by the Monroe
County Housing Authority for which no monthly principal or interest payments are due so long as the
affordability guidelines are satisfied. These SHIP mortgages are renewable and assumable. The
balance of the funding ($170,000) will be one-year construction loans from a private lender. BCCL Twill
payoff the private loans by using the proceeds from the sale of the two completed houses.
Advisory Committee Action: On June 28, 2001 the Advisory Committee voted 4/0 to approve these
encumbrances.
Previous Governing Board Action: The Board approved the subject deed restrictions on February
17,2000.
Contract/Agreement Changes: NIA
Staff Recommendation: Approval
Total Cost: $ NIA
Budgeted: Yes
No
Cost to Land Authority: $ NIA
Executive Director Approval:
OMB/PurcM:g _
~.~ ''I__
ark J. Rosch
Risk Management
Approved By: Attorney ~
Documentation: Included: X
To Follow:
Not Required:
Disposition:
Agenda Item LA #2
~..
RECEIVED ~\~ 0 2 2001
SPECIAL PROGRAMS OFFICE
c/o Monroe County Housing Authority
1403 12th Street
Key West, Florida 33040
(305) 292-1221 FAX (305) 292-1162
June 30, 2001
Monroe County Land Authority
Key West, Florida
RE: Bahama Conch Community Land Trust
Per our conversation, please be advised that the Monroe County State Housing Initiatives
Partnership (SHIP) Program is working in partnership with the Bahama Conch Community Land
Trust (BCCL T) by providing partial funding of two new construction single family affordable
housing units. -
The SHIP program has committed to provide $36,000 per unit secured by a note and mortgage.
The note/mortgage shall accrue zero interest and require no regular payments for a term of thirty
years. The loan will initially be made directly to the BCCL T and proceeds paid directly to the
contractor in accordance with the construction contract.
Future affordability of the property will be ensured by conditions imposed by the affordable
housing building permit, current recorded deed restrictions and BCCL T Lease Agreement with
future buyers. Provided affordability is maintained in accordance with terms outlined in the
aforementioned documents, the SHIP mortgage provides for a renewal or extension of the SHIP
mortgage, assumption of the mortgage by subsequent qualified buyers and subordination of the
SHIP mortgage to provide access to future primary financing. In the event of a transfer of
ownership triggers one ofthe above provisions of the SHIP Mortgage, the SHIP Administrator
shall verifY compliance and recommend appropriate action relative to the SHIP mortgage.
Please note that the SHIP mortgage will be executed in conjunction with other private financing
and will be subordinate to said financing. Further, in accordance with provisions of the existing
deed restriction, Monroe County Land Authority approval shall be required prior to execution
and funding of the SHIP Mortgage.
A summary of the SHIP Mortgage is attached for your review. Should you have any questions,
please feel free to contact my office.
Sincerely,
11;f~2f.c:+;9 \ .
Programs Administrator
CC: .J. Manuel Castillo, SHIP Administrator
Norma Jean Sawyer, BCCL T
Joe Clark, Loan Officer, Key West Bank
"dedicated to the quality of life through housing and
community initiatives"
July, 2001
Monroe County's State Housing Initiatives Partnership (SHIP) Program
Homeownership Development Strategy
Bahama Conch Community Land Trust
SHIP Loan #1
Owner:
Property:
Amount:
Interest:
Payments:
Term:
Provisions:
Affordability:
Bahama Conch Community Land Trust, Inc.
227 Virginia Street, Key West
$36,000.00 '
0%
Deferred
30 years
Assumable, subordinate position and term extension
Building permit, deed, and land lease agreement conditions
SHIP Loan #2
Owner: Bahama Conch Community Land Trust, Inc.
Property: 1031 Howe Street, Key West
Amount: $36,000.00
Interest: 0%
Payments: Deferred
Term: 30 years
Provisions: Assumable, subordinate position and term extension
Affordability: Building permit, deed, and land lease agreement conditions
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RECEIVED JUN 2 8 200.1
KEY WFSf BANK
June 27, 2001
SPECIAL DELIVERY
Monroe County Land Authority
Mark Rosch, Executive Director
1200 Truman A venue
Suite 207
Key West, Fl33040
Subject: Bahama Conch Community Land Trust of Key West, Inc Loan application 227 Virginia Street and
1031 Howe Streeter Lane, Key West, FL 33040
Dear Mr. Rosch:
Thank you for taking the time to discuss the above referenced properties and Key West Bank's plans to
provide construction and permanent fmancing to Bahama Conch Community Land Trust of Key West
(BCCL T) for the building of two homes on these properties. Key West Bank has been working with
BCCL T and Burlington Associates since 1999. Burlington Associates has provided a tremendous amount
of guidance to BCCL T and Key West Bank in an effort to provide affordable homeownership and housing
in Key West and the Keys. I was most impressed with Burlington's track record with other affordable
housing programs across the country. When I analyzed the plans BCCLT had for these properties, I felt
that they were guided professionally. Additionally, they were able to address any concerns I had regarding
the fmancing package they were requesting of Key West Bank for the development and eventual sale to
homebuyers meeting criteria established by BCCLT and Monroe County Land Authority.
Key West Bank has agreed to provide construction fmancing on two homes on the above properties. The
construction loan will be provided for each home being constructed as separate construction loans. The
loans are established in this fashion so that the new homebuyers can assume and modify the mortgage from
BCCL T at the time of purchase. This will save the buyers considerable costs associated with closing on a
new real estate and mortgage transaction. Below are the terms for the construction loan Key West Bank is
prepared to provide.
. 12 month Construction loan
. Interest only payments due monthly on construction loan proceeds advanced during construction
. Construction draws released to contractor upon inspection by Key West Bank (No funds advanced
for work not completed)
. Inspections performed by Key West Bank
. No prepayment Penalty
. Interest Rate is Wall Street Prime Rate plus 1% (Current Prime rate is 6.75%)
Construction Loan on 227 Virginia Street
. $80,000.00 loan balance
. Assumable to homebuyers qualifying and meeting BCCL T criteria
. Loan modifies into 30 year mortgage to new homebuyers at the time of purchase
. Escrow required for taxes and insurance
. Initial interest rate .50% below Fully indexed interest rate on 1 year Treasury Bill with 3.50%
Margin
. No prepayment penalty
701 WHITEHFAD SllU~ET. KEY WFSf, FLoRIDA 33040. (305) 294~3540. fax (305) 294~2177
Construction loan on 1031 Howe Street
. $90,000.00 loan balance
. Assumable to homebuyers qualifying and meeting BCCL T criteria
. Loan modifies into 30 year mortgage to new home buyers at the time of purchase
. Escrow required for taxes and insurance
. Initial interest rate .50% below fully indexed interest rate on 1 year Treasury Bill with 3.50%
Margin
. No prepayment penalty
The combined mortgages Key West Bank will be providing total $170,000. This gives the opportunity to
the homebuyers to assume the entire balance of the mortgages with zero down payment costs. The funds
the buyers will be required to pay will be minor costs associated with the recording of the assumption and
modification. BCCL T will have some customary closing costs associated with the initial closing which has
been factored into the above loan amounts. We have determined, with confidence, that the SHIP funds and
the loans provided by Key West Bank will be sufficient to complete the construction of the homes on 227
Virginia Street and 1031 Howe Street. It is our understanding that Momoe County Land Authority has
contributed $89,000.00 for the acquisition of the land and that the Tax Increment Fund (TIF) has
contributed $105,106.00 to the development and professional fees for the homes.
Key West Bank is proud to provide home fmancing for these wonderful homes and we look forward to
seeing our new neighbors move into their new homes and build a permanent and hopeful future in Key
West. I hope to provide any additional assistance or clarification you may need to help expedite the
approval process so that construction can commence as soon as possible.
Best Regards,
ciJh~.C9a.L
V ice President/Chief Lending Officer
Cc: Phil Hogue
Nora Williams
Norma Jean Sawyer
Brenda Miller
Kay McMillin