1

Florida Housing Finance Corporation 2006 Rental Recovery Loan Program (RRLP)

Public Meeting Tallahassee City Hall, Commission Chambers

300 South Adams Street Tallahassee, FL 32301

May 23, 2006

A. Overview of RRLP Program Requirements

The 2006 Florida Legislature passed HB 1363, appropriating $92.9 million for the 2006 Rental Recovery Loan Program (RRLP). Utilizing the Hurricane Housing Work Group’s February 2005 recommendations as a guide and based on the SAIL program changes approved by the 2006 Florida Legislature, the current draft of the 2006 RRLP Application and Rule include the following provisions: 1. Who Can Apply

• RRLP funds may be used for proposed Developments located in the

following 24 counties:

Brevard Lee Broward Martin Charlotte Miami-Dade Collier Florida Keys Area (Monroe) De Soto Okeechobee Escambia Orange Franklin Osceola Glades Palm Beach Hardee Polk Hendry St. Lucie Highlands Santa Rosa Indian River Volusia

• Applicants can apply for RRLP funds to be used in conjunction with:

o FHFC or Local Government-issued tax-exempt mortgage revenue bonds; or

o Competitive HC for proposed High Rise Developments located

in Broward County, Miami-Dade County or Palm Beach County; or any proposed Developments located in the Florida Keys Area (Monroe County)

2

2. Set-Aside Requirements

• Total set-aside of at least 70 % of the units at or below 60% AMI • ELI set-aside of at least 15% of the total units at or below the ELI

level for the applicable county based on the ELI County Chart • Overall total affordability period of 50 years • Affordability period for ELI units of 20 years; units can convert to

60% AMI level for remaining 30 years

3. Funding

• RRLP funding will consist of a base loan, plus a supplemental loan amount of $65,000 per unit for the mandatory 15% ELI units. Supplemental loan amount is available for up to 25% of the total units set-aside at the required ELI level.

• The $92.9 million of RRLP funds will be divided as follows:

o $23,225,000 for Elderly Developments (25% of the allocation) o $69,675,000 for Family Developments

• Approximately $9 million of the 2007 Housing Credit Allocation Authority will be available for RRLP Applications located in the applicable counties

4. Loan Terms

• Pro-rata portion of base loan attributable to non-ELI units based on 1% interest and subject to cash flow interest payment requirements

• Pro-rata portion of base loan attributable to ELI units based on 0%

interest and not subject to cash flow interest payment requirements • Supplemental loan based on 0% interest; principal forgivable • Set-Aside units rent restricted at HC rent levels; Section 8 voucher

holders cannot be used to satisfy the ELI set-aside requirement unless those households’ vouchers are paying rents only up to the ELI rent level

3

• Developer fee limited to:

o 16% of Development Cost for RRLP/Competitive HC Applications and 18% of Development Cost for RRLP/Tax-Exempt Bond Applications

o 4% of cost of building acquisition, exclusive of land o 10% of Development cost for Substantial Rehabilitation of

buildings funded by FHFC for other construction work within 14 years of the RRLP Application Deadline

• Developer may elect to have the loan underwritten to a 1.0 debt

service coverage ratio or without a minimum debt service coverage ratio subject to deferral of a minimum percentage of developer fee

5. Application Requirements

• Developments on which construction has already been started are ineligible to participate, except under the ELI unit buy-down provision

• No minimum number of units per building • Local Government Certification of Support form demonstrating that

the proposed development, in that location, with approximately that number of units, servicing that demographic category, is consistent with the long-term hurricane recovery needs of the community

• Demographic Commitment – Elderly or Family • Mandatory resident programs for all tenants:

o financial assistance with purchase of a home o first time home buyer seminars o financial counseling

6. Ranking and Selection Criteria (as more completely outlined in the

RRLP Application Instructions)

• To be eligible to receive any funding, Applicants requesting RRLP/Competitive HC must be successful in receiving the full Competitive HC request and at least partial funding of the RRLP. Applicants may be awarded partial funding of the RRLP funds, subject to the Ranking and Selection Criteria requirements; however, there will be no partial award of Competitive HC.

4

• Funds awarded in priority order first to Tier I impacted counties, then to Tier II counties, subject to fund availability, scoring groups (1, 2 and 3), tie-breakers, SAUL, and the 60% funding test for the RRLP funds

• RRLP funds not awarded to eligible developments in either the elderly or family demographic each may be used to serve the other demographic category

• RRLP funds not awarded or returned to the program will be awarded to partially funded Developments, offered to RRLP Applicants on the waiting list and/or offered via an RFP process to buy down to ELI levels existing units currently set aside pursuant to a recorded LURA, EUA or similar document, for households at 60% AMI, with preference given to units located in Tiers I and II sequentially.

B. Other items for discussion 1. Funding Limits Part V.A.1. of the 5-16-06 Draft Application Instructions sets out the

following proposed funding limits. Should these maximum request amounts be reduced?

a. If requesting RRLP in conjunction with Corporation-issued

MMRB or Local Government-issued Tax-Exempt Bonds:

County Size* RRLP Base Loan Maximum Request Amount

Large County

$11 million

Medium or Small County

$9 million

* County size is based on the County Category Chart set out at Part III.A.2.d. of the Application Instructions b. If requesting RRLP and Competitive HC:

RRLP Base Loan Maximum Request

Amount

Competitive HC Maximum Request Amount

Broward County and Miami-Dade County

$2,435,000

Palm Beach County

$2,010,000 $5 million

Florida Keys Area (Monroe County)

$1,435,000

5

2. Exhibits a. Applicants may use the blank forms from the 2006 Universal

Application or the forms that will be included in the 2006 RRLP Application (interactive pdf forms will be available in the near future).

b. The Local Government Certification of Support form is required

for the 2006 RRLP Application. This form is not included in the Universal Application.

c. Infrastructure must be in place as of RRLP Application Deadline. d. Zoning must be in place as of “cure” deadline. e. Qualified contract to demonstrate site control must have a term

through at least November 30, 2006. 3. Proximity

Provisions are the same as in the 2006 Universal Application, with the following exceptions:

a. Grocery Store – the definition has been revised to require 4,500

square feet or more of contiguous air conditioned space available to the public.

b. 2006 RRLP Development Proximity List

• List consists of the 24 eligible counties and includes

Developments funded in 2005 RRLP cycle • Proximity of a proposed Development to Developments on

the List – if there are Developments on the List that meet the criteria for both “31 or more units” and “30 units or less”, points will be awarded based on the 31 units or more criteria

4. Tie-Breakers a. A proposed Development that is not currently in Credit

Underwriting or where the invitation to enter Credit Underwriting has been accepted, but the Application has been withdrawn by the end of the “cure” period will receive preference over a proposed Development where the invitation to enter Credit Underwriting has

6

been accepted and the Application has not been withdrawn as of the end of the cure period.

5. Equity Pay-in The 35% requirement will be reduced to 20%. 6. Emergency Rule a. Debt Service Coverage The following will be added to Rule 67ER06-30: The maximum debt service coverage shall be 1.50 for the RRLP

Loan, including all superior mortgages. In extenuating circumstances, such as when the Development has deep or short term subsidy, the debt service coverage may exceed 1.50 if the Credit Underwriter’s favorable recommendation is supported by the projected cash flow analysis.

b. The following will be deleted from Rule 67ER06-30: (26)(b) “...and the cost of the independent market study...” This phrase will also be deleted from the Detail/Explanation Sheet

in the Application. c. The following will be added to Rule 67ER06-27(14): Total Set-Aside Percentage as stated in the last row of the total set-

aside breakdown chart in the Set-Aside Commitment section of the Application.

d. Rule 67ER06-34(15) will be changed to read:

The RRLP base loan term shall be for a period of 15 years or such amount of time 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 lien. The supplemental loan term shall be for a period of 20 years.

C. Other items participants would like to discuss