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Res 63-93 RESOLUTION NO. 63-93 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, APPROVING THE LOCAL HOUSING ASSISTANT PLAN PURSUANT TO THE STATE HOUSING INITIATIVES PARTNERSHIP (SHIP) PROGRAM, ESTABLISHING A MAXIMUM AWARD SCHEDULE AND MAXIMUM COST PER UNIT, AUTHORIZING THE NECESSARY CERTIFICATIONS BY THE MAYOR AND AUTHORIZING SUBMISSION OF THE PLAN TO THE STATE HOUSING FINANCE AGENCY, PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the State of Florida under specific authority established by State Statute, has established the Housing Initiative Partnership (SHIP) Program, which requires the City to develop a one to three year Local Housing Assistance Plan outlining how funds will be used; and, WHEREAS, the Act also requires adoption of a maximum award schedule of amounts and adoption of a cost per unit and the maximum cost per unit for eligible housing benefiting from awards made pursuant to the SHIP Program, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS: Section 1. That the maximum award schedule for SHIP funds under the City of Delray Beach program shall be $15,000 per unit. ~ That the maximum cost per unit for eligible housing benefiting from awards made pursuant to the SHIP program shall not exceed $75,000. Section 3. The City of Delray Beach is authorized to submit the Local Housing Assistance Plan to the State of Florida Housing Finance Agency for its review and approval. Section 4. That the Mayor is authorized to execute the certifications required as a part of the Local Housing Assistance Plan on behalf of the City. Section 5. That this resolution shall become effective immediately upon its passage. PASSED AND ADOPTED in regular session on this 22nd day of June, 1993. ATTEST: J City,clerk / -2- Res. No. 63-93 MEMORANDUM TO: MAYOR AND CITY COMMISSIONERS FROM: ~CIT¥ MANAGER oA SUBJECT: AGENDA ITEM ~ ~ - MEETING OF JUNE 22. 1993 RESOLUTION NO. 63-93 DATE: June 18, 1993 This is a resolution approving the Local Housing Assistance Plan pursuant to the State Housing Initiatives Partnership (SHIP) Program; establishing a maximum award schedule and maximum cost per unit; authorizing the necessary certifications by the Mayor; and, authorizing submission of the Plan to the State Housing Finance Agency. Recommend approval of Resolution No. 63-93. , Agenda Item No.: AGENDA REQUEST Date= 6/18/93 Request to be placed on:, X Regular Agenda Special Agenda _ Workshop Agenda When: 6/22/93 Description of agenda item (who, what, where, how much)= Approval of Resolution 63-93 ORDINANCE/ RESOLUTION REQUIRED: YES/NO Draft Attached: YES/NO Recomme nda t ion: Approval Department Head Signature: ~~ - ....... = Determination of Consistency with Comprehensive Plan: City Attorney Review/ Recommendation (if applicable): Budget Director Review (required on all items involving expenditure of funds): Funding available: YES/ NO Funding alternatives: (if applicable) Account No. & Description: Account Balance: City Manager Review: Approved for agenda: YES/ NO Hold Until: Agenda Coordinator Review: Received: Action: Approved/Disapproved TO: DAVID HARDEN - CITY MANAGER FROM: LULA BUTLER - DIRECTOR, COMMUNITY IMPROVEMENT SUBJECT: APPROVAL OF RESOLUTION ~63-93 LOCAL HOUSING ASSISTANCE PLAN DATE: JUNE 18, 1993 ITEM BEFORE THE COMMISSION: Commission approval of Resolution 963-93 providing for requirements pursuant to guidelines established under the State Housing Initiatives Partnership (SHIP) Program. Approval of this resolution established the Housing Assistance Plan and authorizes staff to submit it to the State Housing Finance Agency. BACKGROUND: The Commission approved Ordinance 2-93 which set forth the program parameters for the SHIP on February 23, 1993 and also appointed the members to the Affordable Housing Advisory Committee by Resolution %17-93 on March 10, 1993. The final portion of the transmittal is the approval of the Local Housing Assistance Plan which sets forth the program description for activities funded under the SHIP Program. The Housing Assistance Program is developed pursuant to the guidelines established under Rule %91-37 and applicable sections of the Florida State Statutues. RECOMMENDATION: Staff recommends approval of Resolution %63-93 authorizing staff to submit the Local Housing Assistance Plan to the State Housing Finance Agency. LB:DQ Attachments SHIP ShipLtr. CC STATE HOUSING INITIATIVES PARTNERSHIP (SHIP) LOCAL HOUSING ASSISTANCE PLAN CITY OF DEL~AY BEACH, FLORIDA FY 92-93, 93-94 AND FY 94-95 I. LOCAL HOUSING ASSISTANCE PLAN A. DESCRIPTION OF LOCAL PROGRAM The City of Delray Beach established a Local Housing Assistance Program with the adoption of Ordinance No. 2-93 on February 23, 1993. This program description has been created to promote and implement the goals of the City's SHIP program which are consistent with goals and objectives adopted within the Housing Element of the City's approved Comprehensive Plan. The City shall use the funds received from the State pursuant to the State Housing Initiative Partnership (SHIP} Program in the following manner: 1. Ninety percent (90%) of the funds shall be used by the City to implement the following locally designed strategies: (a) New Construction - Eligible sponsors shall be awarded funds to construct eligible housing for eligible persons, including assistance with lot acquisitions. (b} Rehabilitation - very iow-income persons who own and occupy substandard housing units shall be awarded funds to renovate such units as eligible housing. (c) Purchase Assistance - Ownership opportunities shall be created for eligible persons through mortgage interest reductions, and/or Iow interest loans for down payments and closing costs. (d) Acquisition/Rehabilitation - Eligible sponsors may be awarded funds to acquire existing housing units for renovation to provide housing for eligible persons. (e) Impact Fee Assistance - Eligible sponsors may be awarded funds for the payment of impact fees for eligible housing for eligible persons. (f) Provide the local matching funds in order to obtain and use Federal housing grants with mandatory match requirements. Page 2 Local Housing Assistance Plan City of Delray Beach, FL B. LOCAL HOUSING ASSISTANCE PLAN DURATION The City of Delray Beach intends to undertake the activities outlined in this plan for three (3) fiscal years, FY 92-93, FY 93-94 and FY 94- 95. All proposed program activities are identified in the plan and are on an annual basis. The Housing Assistance Plan does not involve an interlocal agreement. Ail activities are carried out within the geographic boundaries of the City limits of the City of Delray Beach. C. LOCAL HOUSING ASSISTANCE PARTNERSHIP The City of Delray Beach, Community Improvement Department staff will work cooperatively with businesses and local agencies to create a Local Housing Partnership to facilitate implementation of various activities defined within the Housing Assistance Plan. The City has experience in the implementation and production of affordable housing program for a number of years. The City in partnership with the Palm Beach County Housing Partnership (a local non-profit organization engaged in developing affordable housing throughout the County) completed the construction of thirty six (36) single family homes within a subdivision known as "Allamanda Gardens." We were also the recipient of one of the last Urban Development Action Grants (UDAG) where we, through a partnership with the developer, completed a 256- unit affordable rental complex. The City has managed an on-going housing rehabilitation program for owner-occupied units since 1985. The City will provide the leadership to bring together community-based organizations, for-profit housing developers, lending institutions, providers of professional services related to affordable housing and service organizations working on behalf of persons with special housing needs. The Local Housing Partnership shall assist the City with implementation of the Local Housing Assistance Program to leverage public/private dollars and to maximize the integration of the multiple programs now being administered by the City's Community Improvement Department. Page 3 Local Housing Assistance Plan City of Delray Beach, FL D. PROGRAM ACTIVITIES GENERAL CONDITIONS: (1) All units constructed, rehabilitated or otherwise assisted with SHIP funds will be occupied by very-low, low-, and moderate- income persons and those who have special housing needs. A minimum of 30% of the units will be occupied by very low-income persons and an additional 30% will be occupied by low-income persons. The remainder (40%) will be occupied by persons who are moderate-income or very low- and low-income persons. Special needs category is included within these percentages. (2) Not less than 65% of the funds will be used for homeownership and not less than 75% of the funds will be reserved for construction, rehabilitation or emergency repair of eligible housing. (3) The sales prices for new or existing eligible housing shall not exceed 90% of the median area purchase price in the area where the eligible housing is located as established by the U.S. Department of Treasury in accordance with applicable sections of the U.S. Housing Act ~of 1937. II. IMPLEMENTATION STRATEGIES: The Plan provides for increasing the availability of affordable housing under three (3) strategies. These are: STRATEGY NO. I - HOMEOWNERSHIP - NEW CONSTRUCTION STRATEGY NO. 2 - HOMEOWNERSHIP/REHABILITATION STRATEGY NO. 3 - HOUSING REHABILITATION/OWNER-OCCUPIED EXISTING UNITS Ail individuals assisted with SHIP funds will be contractually subject to recapture as per the City's recapture requirements. These recapture provisions will be enforced by a note and mortgage on the property for those purchasing homes and an executed agreement between the City and property owner for those receiving rehabilitation assistance for existing homeowners. The maximum award of SHIP funds may not exceed $15,000 per unit. The maximum ceiling includes the aggregate of SHIP awards for purchase assistance and/or rehabilitation assistance which may be used in combination to provide housing unit to an eligible household. Page 4 Local Housing Assistance Plan City of Delray Beach, FL The proposed average cost per unit, SHIP dollars per unit and the number of units to be produced is identified by Fiscal Year under each strategy and in Tables I - III (appendix A). STRATEGY NO. 1: HOMEOWNERSHIP - NEW CONSTRUCTION SHIP funds will be used in FY 93-94 and FY 94-95 to provide incentives for the construction of affordable housing for occupancy by very low-, low-income and moderate-income households through the provision of a combination of purchase assistance as follows: 1. Assistance with Construction Financing - Low or no-interest loans may be made for down payments to reduce the purchase price of units; the payment of closing costs and the payment of impact fees. (Ordinances adopted by Palm Beach County and the City of Delray Beach do not allow impact fees to be waived). Down payment assistance will be secured as a second mortgage on the property and may run for a period of up to 30 years with deferred loan payments. Assistance provided will serve as a principal reduction of the amount borrowed from the private lender, the City assures that all persons assisted will pay no more than 30% of their income for principle, interest, taxes and insurance, PITI. STRATEGY NO. 2 - HOMEOWNERSHIP/REHABILITATION SHIP funds will be used in FY 93-94 and FY 94-95 to provide incentives in the form of purchase assistance and/or rehabilitation assistance to very low-, low- and moderate-income households to acquire existing units in need of some rehabilitation. 1. Home Purchase Assistance/Rehabilitation - The assistance to very low- and low-income households to purchase existing homes which need repair and will be used as their principal home. Assistance provided will be in the form a deferred loan. This assistance will be secured as a second mortgage on the property and will run for 10 years and carry a 0% interest rate. For each year the household lives in the property as their principal residence 1/10 of the SHIP assistance amount and interest will be forgiven. Should the property be sold or the household fail to maintain the unit as their principal residence during the 10-year period, the amount remaining becomes due and payable to the SHIP Housing Trust Fund. Page 6 Local Housing Assistance Plan City of Delray Beach, FL ALLOCATION OF SHIP FUNDS BY PROGRAM YEAR FISCAL YEAR 1992/93 ANNUAL ALLOCATION $28,550 Housing Rehabilitation/Existing Units 28,550 Proposed Average Cost per unit ($15,000) Number of Units Assisted 2 Administration -0- Note: Monies from the City's "Bootstrap" Program (a general Revenue funded program) will be combined with SHIP funds to complete rehab projects. FISCAL YEAR 1993/94 ANNUAL ALLOCATION $65,585 Assistance with Construction Financing 44,385 Average Cost per unit ($8,880) Closing Costs 3,000 Average Cost per unit ($1,000) Housing Rehabilitation 15,000 Average Cost per unit ($15,000) Number of Units Assisted 9 Administration 3,200 Note: Maximum price for unit assisted is $75,000. SHIP funds may be combined in fiscal years 93/94 and 94/95 with available HOME funds to achieve maximum affordability to very low, low and moderate income households. FISCAL YEAR 1994/95 ANNUAL ALLOCATION $79,694 Assistance with Construction Financing 54,900 Average cost per unit ($9,150) Closing Costs 4,894 Average Cost per unit ($1,246) Housing Rehabilitation 16,000 Average Cost per unit ($8,000) Number of Units Assisted 12 Administration 3,90 0 Page 7 Local Housing Assistance Plan City of Delray Beach, FL IV. OTHER ACTIVITIES: Based on the limited dollars anticipated being awarded to the City of Delray Beach and given the planning and work with local non-profit organizations that have already taken place, this plan does not propose to use funds for other eligible activities during the three (3) year duration of the plan. Supportive housing activities such as housing and credit counseling, tenant counseling and other supportive services needed to facilitate affordable programs will be funded by other sources currently available to the City. Three (3) local banks and one bank consortium have agreed to provide home buyer training and credit counseling. The City is working with Habitat for Humanity developing a training program for the new homeowner to assist in making the transition from renter to homeowner. The City has other Federal program funds that will be used to compliment the SHIP program and needs identified to assist eligible persons with homeownership opportunities. V. PARTICIPANT SELECTION: 1. The Community Improvement Department will advertise the availability of home buyer assistance in local newspaper including the free throw-a-ways available to most residents, established homeowners associations newsletters, churches located in the established CDBG target area, and other organized methods that may be available. Additionally, staff will be responsible for the development of flyers describing the program to disseminate to various organizations and agencies including the Delray Beach Housing Authority, Habitat for Humanities and the non-profit local-based Community Development Corporations. 2. Applications for participation may be taken on specified dates if demand warrants. The initial advertised application period does not restrict individuals from making application at any time. All applications will be on a first come, first served basis within the income groups to be served. 3. Eligibility of households will be determined in the same manner as eligibility for the City's Housing Rehabilitation Grant award program, which are modeled after the Section 8 Rental Assistance Program. The guidelines will be used to verify income, assets and other information required. Page $ Local Housing Assistance Plan City of Delray Beach, FL 4. The City staff will select applicants from within the income groups as follows: (a) Income - household income will be verified to determine if household meets SHIP income guidelines. Households not meeting these guidelines will not be processed further and will be notified of their ineligibility. (b) Credit Worthiness - a credit report will be requested and reviewed with the participating lender. Only those households meeting the lenders credit standards will be processed further. Households with credit problems will be informed and referred for counseling assistance with the opportunity to be reconsidered at a later date. (c) Debt Ratio (Affordability) - applicants will be screened on lender income to housing debit ratios. Housing expenses (PITI) should not exceed 30% of household income. (d) Unit Sale Price/Purchase/Rehab Costs - the purchase price of the unit will be compared against program guidelines. Only units meeting these guidelines will be eligible for assistance. 5. Eligible applicants selected to participate will be awarded low or no-interest loans for purchase assistance and/or rehabilitation, to the extent necessary, within program guidelines, to make the eligible unit affordable to the eligible family. 6. The Department of Community Improvement staff in conjunction with the Local Housing Partnership will seek lending institutions to provide favorable financing for the selected applicants. 7. The City will develop an application process which will provide an open and fair process for awarding SHIP funds to eligible sponsors. VI. ASSISTANCE REQUIREMENTS: 1. Homes which are purchased under the SHIP Program may not have a sale price of $75,000 or a price which exceeds 90% of the median area purchase price as established under applicable sections of the U.S. Department of Treasury Housing Act of 1937. 2. Ail loans issued from SHIP funds may not have terms exceeding 30 years, except for deferred payment loans. Page 9 Local Housing Assistance Plan City of Delray Beach, FL 3. Ail units constructed, rehabilitated or otherwise assisted with SHIP Program funds must be occupied by persons who are very low-, low-and moderate-income households or persons with special housing needs. 4. Units constructed or rehabilitated with SHIP funds and sold to homebuyers will be subject to the City's subsidy recapture provisions. 5. The City ensures that the Local Housing Partnership, eligible sponsors and the City shall not discriminate in the loan application process of eligible persons for eligible housing on the basis of race, creed, religion, color, age, sex, marital status, national origin, or handicap in the loan application process for eligible housing. 6. Prior to receiving an award, all eligible persons or eligible sponsors shall enter into an agreement to comply with the affordable housing criteria provided under applicable sections of the Florida Statutes and this Plan. All eligible persons or eligible sponsors shall include in the deed transferring ownership of the property to the eligible person or eligible sponsor a covenant agreeing to comply with the terms of the above-described laws which covenant will run with the land or in the alternative, the agreement shall be made a part of the mortgage agreement. Failure to comply with the covenant in the mortgage shall result in a default of the mortgage with all remedies and rights for enforcement insuring to the benefit of the City. 7. SHIP funds may not be used as a pledge of the debt services on bonds or as rent subsidies. VII. PROGRAM INCOME: All interest earnings on monies deposited into the Trust Fund, monies repaid in accordance with program requirements and other contributions to the Trust Fund will be utilized pursuant to activities specified and identified with the approved Housing Assistance Plan in effect at the time the funds are disbursed. Page 10 Local Housing Assistance Plan City of Delray Beach, FL VIII. PROGRAM BENEFITS: The use of SHIP funds along with Community Development Block Grant (CDBG) funds, General Revenue contributions awarded by the City, participation in the Palm Beach County HOME Consortium, leverages with private sector financing and technical support will provide the basis for increasing the supply of affordable housing for Delray Beach residents. The experience of City staff provides the opportunity to implement affordable housing programs on a timely basis. The City's emphasis on "Neighborhood Stabilization" and support of the same from the City Commission level provides a unique opportunity to increase the number of affordable units made available to our very low-, low- and moderate-income households. Developers and community based non-profit groups will be encouraged to develop vacant lots located in the established CDBG target area. The City will continue its current efforts directed at eliminating slum and blighted conditions in the target area through the preservation of existing single family owner-occupied units, investor- owned properties with very low-income tenants and other conditions contributing to the decline of such neighborhoods. The city believes such efforts will assist in making these areas more attractive for infill housing development. IX. ADMINISTRATION: 1. The Community Improvement Department's Community Development Division will be responsible for the administration of the Housing Assistance Plan. The City of Delray Beach has determined that it is necessary to use 5% of the SHIP allocation in FY 93-94 and FY 94-95 for administration. The funds shall be used to offset a portion of the operating costs. The Neighborhood Program Specialist position created by the City will be a general revenue expense during this plan period. Administrative Costs FY 92-93 -0- FY 93-94 3,200 Newspaper advertisements 800 Mail (dissemination of 400 flyers, correspondence to applicants, lenders) Audit 2,000 Page 11 Local Housing Assistance Plan City of Delray Beach, FL Administrative Costs FY 94-95 3,900 Newspaper advertisements 600 Mail 400 Audit 2,000 General office supplies 400 Printing costs 300 2. SHIP funds will be encumbered during the fiscal year in which they are received. An amended plan will be submitted if 50% or more of the distributed funds have not been encumbered by the mid-point of each fiscal year. Fiscal year 1992-93 is not included in this provision. X. PLAN AMENDMENT: The City shall notify the Florida Housing Finance Agency promptly if the City will be unable to comply with the provisions of the Plan. This plan may be amended by resolution at any time. Plan amendments will be submitted to the State Review Committee within 21 days after adoption. Amendments will not take effect until approved by the State. SHIP Ship. HAP o o O0 CD 0 0 I I '-4