02-004137 Florida Low Income Housing Associates, Inc. vs. Florida Housing Finance Corporation Status: Closed Recommended Order on Wednesday, May 14, 2003.

Summary: FHFC found Home Rental applicant did not meet threshold and did not show development experience similar in magnitude, but improperly bumped applicant when it erroneously credited another applicant with points for match.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA LOW INCOME HOUSING )

ASSOCIATES, INC., )

)

Petitioner, )

) Case Nos. 02 - 4137

vs. ) 02 - 4594

) 02 - 4726

FLORIDA HOUSING FINANCE )

CORPORATION, )

)

Respondent. )

______________________________)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division

of Administrative Hearings, conducted the final hearing in

Tallahassee, Florida, on February 25, 2003.

APPEARANCES

For Petition er: Jon C. Moyle, Jr.

Cathy M. Sellers

Moyle Flanigan Katz

Raymond & Sheehan, P.A.

118 North Gadsden Street

Tallahassee, Florida 32301

For Respondent: Paula C. Reeves

Deputy General Counsel

Hugh R. Brown

Assistant General Counsel

227 North Bronough Street, Suite 5000

Tallahassee, Flo rida 32301 - 1329

STATEMENT OF THE ISSUES

All cases involve loan funding in the 2002 funding cycle

for the HOME Rental program. The issue in DOAH Case No. 02 - 4137

is whether Respondent properly determined that Petitioner's

application for the Magic Lake Villas development failed to meet

the applicable scoring threshold. If Petitioner fails to

prevail in DOAH Case No. 02 - 4137, DOAH Case No. 02 - 4594 is moot.

If Petitioner prevails in DOAH Case No. 02 - 4137, the issue in

DOAH Case No. 02 - 4594 is whether Res pondent's rescoring of the

application of the competing developer of the Brittany Bay

development erroneously placed the Brittany Bay application

ahead of the Magic Lake Villas application. The issue in DOAH

Case No. 02 - 4726 is whether Respondent's rescor ing of the

application of the competing developer of the Brittany Bay

development erroneously placed the Brittany Bay application

ahead of Petitioner's application for another development,

Magnolia Village. The 2002 funding cycle is closed, so,

pursuant t o Rule 67 - 48.005(4), Florida Administrative Code,

Petitioner's application or applications would be included in

the 2003 funding cycle, if it prevails in DOAH Case No. 02 - 4594

or 02 - 4726.

PRELIMINARY STATEMENT

By Amended Petition for Formal Administrative Hearing

Pursuant to Sections 120.569 and 120.57(1), Florida Statutes,

filed September 12, 2002, Petitioner alleged that it submitted a

HOME Rental Application for the 2002 funding cycle for funds to

construct Magic Lakes Villas, a garden apartment complex of 72

units in Ocala. Respondent allegedly assigned 84 points to

Petitioner's application, which allegedly would have been

sufficient for funding. However, Respondent determined that

Petitioner's application did not meet the scoring threshold

because th e application revealed that Petitioner lacked the

required applicable developing experience. Petitioner's

challenge of this determination is DOAH Case No. 02 - 4137.

By Petition for Formal Administrative Hearing Pursuant to

Sections 120.569 and 120.57(1), Florida Statutes, filed

November 12, 2002, Petitioner alleged that it submitted a HOME

Rental Application for the 2002 funding cycle for funds to

construct Magic Lake Villas. Respondent allegedly assigned 84

points to Petitioner's application, which alleg edly would have

been sufficient for funding. However, a competing applicant,

the Brittany Bay developer, allegedly prevailed in an informal

appeal of the scoring of its application, and its score

increased from 81.55 to 86 points. This change in score

al legedly caused Brittany Bay's developer to receive funding at

the expense of Petitioner. Petitioner's challenge of this

rescoring of the Brittany Bay application, so as to place it

ahead of the Magic Lake Villas application, is DOAH Case No.

02 - 4594. In separate notes in the petition, Petitioner conceded

that its eligibility for funding ahead of the Brittany Bay

developer was contingent upon its prevailing in DOAH Case No.

02 - 4137.

By Petition for Formal Administrative Hearing Pursuant to

Sections 120.5 69 and 120.57(1), Florida Statutes, filed

November 12, 2002, Petitioner alleged that it submitted a HOME

Rental Application for the 2002 funding cycle for funds to

construct Magnolia Village. Respondent assigned 82.65 points to

Petitioner's application, w hich allegedly would have been

sufficient for funding. However, the Brittany Bay developer

allegedly prevailed in an informal appeal of the scoring of its

application, and its score increased from 81.55 to 86 points.

This change in score allegedly caused Brittany Bay's developer

to receive funding at the expense of Petitioner. Petitioner's

challenge of this rescoring of the Brittany Bay application, so

as to place it ahead of the Magnolia Village application, is

DOAH Case No. 02 - 4726.

Even if Petitioner prevails in DOAH Case No. 02 - 4594 or

DOAH Case No. 02 - 4726, the Brittany Bay development would not be

adversely affected. The Brittany Bay application has proceeded

to credit underwriting and may even have proceeded to funding.

The practical result of t hese cases would only be to allow

Petitioner to obtain funding in the next funding cycle, not

obtain the funding already allocated to the Brittany Bay

developer.

At the hearing, Petitioner called four witnesses and

offered into evidence 19 exhibits: Peti tioner Exhibits 1 - 11 and

13 - 20. Respondent called three witnesses and offered into

evidence three exhibits: Respondent Exhibits 1 - 3. At the

hearing, all exhibits were admitted except Petitioner Exhibits

8, 11, 16, and 20 which were proffered.

Due to ev identiary problems that arose at the hearing, the

Administrative Law Judge gave Petitioner ten days after the

hearing to authenticate and produce certain exhibits. On

March 7, 2003, the parties filed a Joint Stipulation as to

Authenticity of Petitioner's Exhibits. In this stipulation,

Respondent agreed to authenticity, but reserved all other

objections, which are now overruled. It is clear from the

stipulation that Petitioner has provided the basis for the

admission of Petitioner Exhibits 11 (which is al so Respondent

Exhibit 3) and 20, so those exhibits are now admitted. (As to

Petitioner Exhibit 20, the February 7, 2003, letter is from the

original set of exhibits, but the February 12, 2003, response is

now from the stipulation attachments, not the orig inal set of

exhibits.) The rulings at the hearing excluding Petitioner

Exhibits 8 and 16 were on grounds other than authenticity, so

those rulings stand. It appears that the remaining materials

attached to the stipulation are either intended to fall with in

Petitioner Exhibits 14 or 17, and they are admitted as well.

For ease of reference, the Administrative Law Judge has added

the stipulation with attachments to the exhibits, rather than

try to incorporate stipulation attachments into exhibits

identified at the hearing, and whenever the stipulation

attachments conflict with any of the exhibits admitted at the

hearing, the former shall prevail.

The court reporter filed the transcript on March 11, 2003.

The parties filed their proposed recommended orders on April 1,

2003.

FINDINGS OF FACT

1. Respondent is a public corporation whose purpose is to

administer programs for the financing and refinancing of

affordable housing in Florida. The HOME Rental program is one

of the programs administered by Respondent .

2. Petitioner is a not - for - profit corporation that is in

the business of developing affordable residential housing in

Florida. Petitioner filed two applications for funding in the

2002 HOME Rental funding cycle. Petitioner's Magic Lake Villas

applicat ion sought $5 million in HOME funds for a development

costing about $6.5 million, and Petitioner's Magnolia Village

application sought $3 million in HOME funds for a development

costing about $3.5 million.

3. Respondent receives funds for the HOME Renta l program

from the U.S. Department of Housing and Urban Development (HUD).

Because the federal funds allocated to Florida are insufficient

to meet demand, Respondent has adopted a competitive process for

the allocation of these funds to developers seeking to develop

qualifying projects.

4. Rules 67 - 48.004 and 67 - 48.005, Florida Administrative

Code, detail the scoring procedure applicable to HOME Rental

applications. The application for the HOME Rental program 2002

funding cycle contains certain thresho ld items. Respondent

rejects any application that fails to pass the threshold items.

The scoring process for qualifying applications starts with a

preliminary score for each application. Applicants may

challenge these preliminary scores assigned to comp eting

applications for scoring errors by issuing Notices of Possible

Scoring Error (NOPSEs).

5. After examining the NOPSEs filed against its

application, as well as Respondent's proposed decision

concerning each NOPSE, a developer may submit supplementa l

information, which is known as a Cure. The Cure information is

limited to material responsive to the NOPSEs or preliminary

scoring. After the applicant has submitted a Cure, competing

applicants may issue Notices of Alleged Deficiencies (NOADs) to

chal lenge the information submitted as a Cure. Respondent then

rescores each application, issues a final score, and ranks all

applications based on their final scores. Aggrieved applicants

may challenge these pre - appeal scores in formal or informal

hearings. After the conclusion of the hearings, Respondent

issues the post - appeal scores and the final rankings of the

applications. If a challenger prevails after the final rankings

are approved by Respondent, the challenger's approved

application is assigned to the next year's funding cycle. In

these cases, Respondent issued the final rankings on October 8,

2002.

6. In DOAH Case No. 02 - 4137, Petitioner challenges

Respondent's determination that its Magic Lake Villas

application fails to meet the threshold requ irements. The Magic

Lake Villas application is for funding to construct a 72 - unit

garden apartment complex in Ocala.

7. Item III.A.3 of the HOME Rental Application

(Application) requires the applicant to indicate the type of

development design by check ing a box next to one of eight

categories. The categories are: "garden apartments,"

"townhouses," "high rise (a building comprised of 7 or more

stories)," single family," "duplexes/quadraplexes," "mid - rise

with elevator," "single - room occupancy," and "ot her."

8. Petitioner selected "garden apartments" to describe the

11 one - story buildings that it was proposing to develop on 9.67

acres for a gross density of 7.45 units per acre. The proposed

development nearly encircles a lake that is used for drainage.

9. Item II.B.1 of the Application requires the applicant

to "Provide the Developer's Prior Experience Chart behind the

tab labeled "Exhibit 11." Exhibit 11 contains a certification,

which Petitioner executed, that represents, among other things:

"I hav e developed and completed at least two affordable housing

developments similar in magnitude to the Development proposed by

this Application as evidenced by the accompanying prior

experience chart."

10. The "Chart of Experience" that Petitioner attached as

part of Exhibit 11 lists information under six columns: "Name

of Development," "Location (City/State)," "New Const. or

Rehab.," "Design Type," "# of Units," and "Affordable/Subsidized

market." Petitioner's chart supplies four rows of information,

by d evelopment. The first development is "Citrus County

Scattered Sites," which comprise 40 single - family units of new

construction in Citrus County under the HOME program. The

second development is "Marion County Scattered Sites," which

comprise 40 single - f amily units of new construction in Marion

County under the HOME program. The third development is "Heron

Woods Homeownership," which comprises 49 single - family units of

new construction in Inverness, Florida. The fourth development

is Heron Woods Rental, which comprises 50 single - family units of

new construction in Inverness, Florida.

11. Item II.B.1.c of the Home Rental Application

Instructions and Information (Instructions) addresses the

requirement of developer experience. The Instructions require:

The Developer or principal(s) of Developer

must demonstrate experience in the

completion of at least two affordable

housing developments of similar magnitude by

providing a prior experience chart behind a

tab labeled "Exhibit 11." The chart must

includ e the following information . . ..

12. For the developer - experience chart, the Instructions

require: "Name of Development," "Location (City & State),"

"Construction Category (New Construction or Rehabilitation),"

"Design Type: garden, townhouses, high - rise, duplex/quad., mid -

rise w/ elevator, single family, or other (specify type)," and

"Number of Units."

13. The ninth Threshold Requirement contained in the

Instructions states: "Experience of the Development team must

be demonstrated."

14. Petitioner has failed to prove that any of its listed

single - family development experience is similar in magnitude to

garden apartment development. Petitioner has thus failed to

satisfy the threshold requirement of prior developer experience.

15. Garden apartments are a form of multifamily

residential development -- usually involving 6 - 12 units per

building and a limited number of buildings, which may be one to

three stories. As reflected by the itemization contained in the

instructions, each of these types of devel opment represents

differences in developed density and development difficulty. In

ascending order of developed density and development difficulty,

the typical order would be single family, townhouses,

duplex/quadraplex units, garden apartments, mid - rise w ith

elevator, and high - rise.

16. Petitioner's development experience has involved

single - family construction, which contains simpler draw

schedules than does multi - family construction. Petitioner's

development experience has involved projects that were a ll

consistent with the zoning, which may often not be the case with

higher - density development. Petitioner's development experience

has been limited to providing the typically less - demanding

infrastructure needs of the relatively low - density single - family

development. Higher - density multi - family development normally

requires more planning for stormwater management, common area

and facilities, parking and roads, and central water and sewer.

17. Petitioner has failed to prove that its single - family

devel opment experience, as reflected on its application, was of

a similar magnitude to the garden apartments that it proposed as

Magic Lake Villas. Petitioner has thus failed to prove that

Respondent incorrectly determined that Petitioner's Magic Lake

Villas a pplication failed to pass the threshold requirement of

developer experience. This determination moots DOAH Case No.

02 - 4594.

18. In DOAH Case No. 02 - 4726, Petitioner challenges

Respondent's decision to fund another development, rather than

Magnolia Villa ge. Petitioner's Magnolia Village application

passed the threshold requirements and received 82.65 points,

which would have been sufficient for funding, until Respondent,

following an informal hearing, rescored the application for the

Brittany Bay, which is located in Collier County. The rescoring

raised Brittany Bay's score from 81.55 points to the maximum

available 86 points.

19. To prevail, Petitioner must prove that Respondent

erroneously added at least 3.35 points to Brittany Bay's score.

Althoug h Petitioner has identified two issues concerning the

rescoring of Brittany Bay's application, one of them involves

only 0.4 points, so it is irrelevant to this case, given the

point spread of 3.35 between Petitioner's Magnolia Village score

and Brittany B ay's rescore. The other issue is relevant because

it involves 4.45 points. If Petitioner demonstrates that

Respondent improperly awarded these points to the Brittany Bay

application, Petitioner's Magnolia Village application would

receive funding in the 2003 funding cycle.

20. Respondent assigned the Brittany Bay application 4.45

more points because it qualified for a nonfederal match. In

this case, Petitioner must prove that the match identified in

the Brittany Bay application did not qualify as mat ch under

applicable law.

21. Item III.F of the Instructions addresses match and

states in relevant part:

1. Insert requested HOME loan amount and

calculate the state required match amount.

HUD regulation 24 CFR Part 92.220 requires

Florida Housing to match funds for each HOME

dollar spent on a Development. Applicants

who can provide the full 25 percent match

requirement will receive the maximum score

of 5 points. For information on eligible

match sources and instructions on how to

calculate match, re fer to the HUD HOME

regulations at 24 CFR Part 92.220. . . .

2. Provide amounts of each source of match.

For each source of match funding identified,

Applicant must provide a signed statement

from the source detailing the type of

contribution, amount, and how it was

calculated. If the amount of contribution

is determined based upon a present value

calculation, include the actual present

value calculation as described in 24 CFR

92.220. No points will be awarded for any

source for which a narrative and documented

evidence are not provided. This

documentation must be provided behind a tab

labeled "Exhibit 28."

22. The specific references to 24 CFR Section 92.220 do

not relieve the applicants or Respondent from the necessity of

complying with all applic able HUD regulations. The first

sentence of the Instructions states: "All Applicants are

encouraged to review Rule 67 - 48, F.A.C., 24 CFR Part 92 and the

following instructions before completing this Application."

23. The original Brittany Bay applicatio n contained no

documentation for Exhibit 28 because the developer was not

seeking points for match. Even though no NOPSE addressed match,

the Brittany Bay developer added match information in its Cure,

pursuant to a practice -- endorsed by Respondent and un challenged

by Petitioner -- in which developers may add match to a Cure even

though their original applications omitted match.

24. The Cure contains three elements in describing the

match for which points are sought. First, the Cure states:

"Collier Count y's commitment to or issuance of $10,200,000 in

Multi - Family Housing Revenue Bonds will result in $5,100,000 in

eligible HOME match. This match created by other affordable

housing communities is being made available to Brittany Bay

. . . by the Housing Fi nance Authority of Collier County."

25. Second, the Cure states that "tax - exempt bond

financing may be utilized to provide HOME match equal up [sic]

to 50% of the amount of tax - exempt financing," again noting

Collier County's "commitment to provide up to 50% of the tax -

exempt financing issued or committed to on [sic] behalf of other

multi - family projects in 2002 to Brittany Bay . . . for purposes

of a HOME match."

26. Third, the Cure incorporates a letter dated June 26,

2002, from the general counsel of the Housing Finance Authority

of Collier County, which states:

The Housing Finance Authority of Collier

County (the "Authority") has committed to or

has issued Multifamily Housing Revenue Bonds

totaling $10.2 million for two affordable

housing communities this year.

It is our understanding that fifty (50)

percent of the loan amounts made from bond

proceeds to multifamily affordable housing

developments quali[f]y as HOME Match funds

under the HUD regulations.

Based upon this understanding, we are

requesti ng that [Respondent] consider the

appropriate percentage of our Multifamily

Housing Revenue Bonds as eligible match for

the HOME loan requested for Brittany Bay

. . .. The Authority is pleased to support

this community . . . without an allocation

of Regio n Eight Private Activity Bond

Allocation or other Collier County

resources.

27. This Cure drew several NOADs. One NOAD notes that the

Brittany Bay project is self - funded and was not using any tax -

exempt bonds, but the claimed match was from tax - exempt b onds.

This NOAD contended that bonds from unrelated developments do

not qualify for match. Another NOAD asserts that the Brittany

Bay developer does not claim to be receiving any funds from the

Collier County tax - exempt bond proceeds, which are instead g oing

to two other developments. This NOAD states that bond proceeds

qualify as match only if the proceeds are made available to the

development seeking the match. A third NOAD stresses that

"match contributions must be attributed directly to the proposed

HOME financed development and used to reduce the cost of the

affordable housing development." A fourth NOAD notes that a

non - participating jurisdiction is not authorized to commit match

without providing bonds to the development purporting to receive

the match. This NOAD states that HUD officials agreed that

Brittany Bay would not qualify for match under these

circumstances. The factual contentions of these NOADs are true.

28. Unmoved by the Cure materials seeking match,

Respondent's staff declined to award the Brittany Bay developer

any points for match. The reason for declining to award points

for the match was: "Per HUD, the Bond match which applicant

requests in the cure can be considered as match is not eligible

match. Funds from a HOME - like dev elopment which is not under

control of [Respondent] is [sic] not eligible."

29. Upon the request of the Brittany Bay developer and,

due to the absence of disputed issues of fact, an informal

hearing took place on, among other things, the accuracy of

Respo ndent's refusal to assign Brittany Bay any points for the

claimed match, as described above. The transcript of the

hearing reveals that the parties addressed the issue addressed

in DOAH Case No. 02 - 4726 -- whether the Brittany Bay application

should be awar ded points for match -- but they focused on largely

different arguments.

30. In defending the decision not to recognize Brittany

Bay's claimed match, Respondent raised questions concerning the

technical sufficiency of the Cure materials. Respondent

chall enged the general counsel's letter. Respondent argued that

the letter inadequately described the source of the funds and

thus failed to preclude the possibility of a source that was a

Section 501(c)(3) organization, from which a match cannot be

derived fo r the HOME Rental program. Respondent also contended

that the Brittany Bay developer was relying on information not

contained in the Cure or other application materials to obtain

the points for match.

31. Respondent's proposed recommended order in the

Brittany Bay case does not explicitly rely on the points raised

by Petitioner in this case. Brittany Bay's proposed recommended

order incorrectly asserts that the sole federal regulation

governing match, as suggested by the portion of the Instructions

cov ering match, is 24 CFR Section 92.220. Addressing directly

the severance of the recipient of the match from the recipient

of the funds used to generate the match, Brittany Bay's proposed

recommended order contends that 24 CFR Section 92.220 does not

so li mit match and that Respondent agrees that this severance

may take place, even when the recipients of the funds are not

HOME - assisted.

32. The recommended order succinctly addresses the

complicated match issue by reciting the three elements of the

Cure per taining to "nonfederal match sources" and concluding:

"Petitioner properly documented well in excess of $1,562,500 in

non - federal match funds issued by the Collier County Housing

Finance Authority for affordable housing." The final order

adopted the reco mmended order without elaboration.

33. It would have been a reasonable inference for the

hearing officer to determined that Respondent's argument

concerning a possible Section 501(c)(3) source of the funds was

too improbable. But that inference, alone, w ould probably not

account for the decision. If, as seems likely, the hearing

officer also relied on the assurances of the general counsel, a

problem would arise because the general counsel's assurance was

expressly conditioned on "our understanding" that the match

would qualify under HUD regulations -- which is exactly the issue

in question.

34. As implied by the Cure and stated by the NOADs,

Collier County attempted to provide Brittany Bay match out of

bond proceeds that were allocated to two unrelated p rojects,

Saddlebrook Village and Sawgrass Pines. In other words, Collier

County attempted to sever the match, by sending it to Brittany

Bay, from the funds, which were going to two projects that are

not HOME - assisted. Neither Collier County nor the Colli er

County Housing Finance Authority was a participating

jurisdiction, as designated by HUD, at the time of the

allocation of the match to the Brittany Bay developer.

35. HUD imposes upon Florida and other states certain

match requirements. However, Flori da currently maintains a

large surplus in match, surpassing all HUD match requirements

through a multifamily rental bond program unassociated with the

HOME Rental program. As one of Respondent's witnesses

testified, Florida could go years without any new match and

continue to meet HUD match requirements. Based on these facts,

Respondent does not now object to Brittany Bay acquiring more

points by using the match that arises out of revenue bonds,

whose proceeds are allocated to two developments having noth ing

to do with Brittany Bay.

36. On the other hand, regardless whether Florida needs

match, the purpose of awarding points to an applicant

demonstrating qualifying match is to recognize some superior

quality in its proposed development in terms of meeting the

goals of the HOME Rental program. It is questionable whether

qualities suitable for recognition include the mere fact that a

development would be located within the jurisdiction of a

funding entity or that the developer somehow succeeds in

obtaining from the funding entity a designation that does not

carry with it the expenditure of any of the entity's funds, but

confers competitive advantage to that developer in seeking

limited HOME Rental funding from Respondent. If match is

untethered from funding , there may be sufficient available match

for local governments to provide the maximum match points to all

applicants for HOME Rental funding, so that the match criterion

would become meaningless.

CONCLUSIONS OF LAW

37. The Division of Administrative He arings has

jurisdiction over the subject matter. Section 120.57(1),

Florida Statutes. (Unless otherwise indicated, all references

to Sections are to Florida Statutes. All references to Rules

are to the Florida Administrative Code.)

38. Petitioner bears the burden of proving the material

allegations. Department of Transportation v. J. W. C. Company,

Inc. , 396 So. 2d 778 (Fla. 1st DCA 1981).

39. Petitioner has failed to prove that its prior

developer experience is of similar magnitude to the type of

dev elopment represented by Magic Lake Villas. Single - family

development does not approach in magnitude and complexity

multifamily development, even that represented by garden

apartments.

40. Rule 67 - 48.002(82) states: "'Match' means non - federal

contribut ions to a HOME Development eligible pursuant to the HUD

Regulations. Rule 67 - 48.015(1) provides: "[Respondent] is

required by HUD to match non - federal funds to the HOME

allocation as specified in the HUD Regulations. One of the

criteria for selecting HO ME Developments will be its ability to

obtain a non - federal local match source pursuant to HUD

Regulations."

41. Recognizing that the match issue is not governed

exclusively by 24 CFR Section 92.220, Respondent states in its

proposed recommended order, "2 4 CFR 92.118 through 24 CFR 92.220

govern the two match contribution issues." (The two match

issues are the issue that this recommended order addresses and

the issue that this recommended order rejects as irrelevant due

to the lack of sufficient points to change the outcome.) The

above - quoted language at the beginning of the Instructions and

the two rules require the consideration of all relevant HUD

regulations.

42. Several HUD regulations emphasize the connection

between an actual contribution and a ma tch. For example, 24 CFR

92.219(a), which applies to match contributions to HOME - assisted

housing, states that a "contribution is recognized as a matching

contribution if it is made with respect to" various qualifying

recipients or portions of a developme nt. The regulation cited

in the portion of the Instructions is 24 CFR 92.220(a), which

identifies 11 eligible forms of contribution with the following

introductory language: "Matching contributions must be made

from nonfederal resources and may be in the form of one or more

of the following . . .." The fifth eligible form of

contribution is "[p]roceeds from multifamily and single family

affordable housing project bond financing validly issued by a

State or local government . . .." Like the fifth eligibl e form

of contribution, each of the other ten eligible forms of

contributions identifies a real contribution with economic

substance -- namely, cash, forebearance of fees, donated real

property, the reasonable value of in - kind donations, and the

direct cost of services.

43. For each of the 11 eligible forms of contribution, 24

CFR Section 92.221 governs when the credit for the match is

given for a matching contribution, carrying forward excess

match, and which participating jurisdiction will receive HUD

cr edit for the match, as follows:

(a) When credit is given. Contributions

are credited on a fiscal year basis at the

time the contribution is made, as follows:

(1) A cash contribution is credited when

the funds are expended.

(2) The grant equival ent of a below -

market interest rate loan is credited at the

time of the loan closing.

(3) The value of state or local taxes,

fees, or other charges that are normally and

customarily imposed but are waived,

foregone, or deferred is credited at the

time the state or local government or other

public or private entity officially waives,

forgoes, or defers the taxes, fees, or other

charges and notifies the project owner.

(4) The value of donated land or other

real property is credited at the time

ownersh ip of the property is transferred to

the HOME project (or affordable housing)

owner.

(5) The cost of investment in

infrastructure directly required for HOME -

assisted projects is credited at the time

funds are expended for the infrastructure or

at the time the HOME funds are committed to

the project if the infrastructure was

completed before the commitment of HOME

funds.

(6) The value of donated material is

credited as match at the time it is used for

affordable housing.

(7) The value of the don ated use of site

preparation or construction equipment is

credited as match at the time the equipment

is used for affordable housing.

(8) The value of donated or voluntary

labor or professional services is credited

at the time the work is performed.

(9) A loan made from bond proceeds under

§92.220(a)(5) is credited at the time of the

loan closing.

(10) The direct cost of social services

provided to residents of HOME - assisted units

is credited at the time that the social

services are provided dur ing the period of

affordability.

(11) The direct cost of homebuyer

counseling services provided to families

that purchase HOME - assisted units is

credited at the time that the homebuyer

purchases the unit or for post - purchase

counseling services, at the time the

counseling services are provided.

(b) Excess match. Contributions made in a

fiscal year that exceed the participating

jurisdiction's match liability for the

fiscal year in which they were made may be

carried over and applied to future fiscal

y ears' match liability. Loans made from

bond proceeds in excess of 25 percent of a

participating jurisdiction's total annual

match contribution may be carried over to

subsequent fiscal years as excess match,

subject to the annual 25 percent limitation.

(c ) Credit for match contributions shall be

assigned as follows:

(1) For HOME - assisted projects involving

more than one participating jurisdiction,

the participating jurisdiction that makes

the match contribution may decide to retain

the match credit or permit the other

participating jurisdiction to claim the

credit.

(2) For HOME match contributions to

affordable housing that is not HOME -

assisted (match pursuant to § 92.219(b))

involving more than one participating

jurisdiction, the participating ju risdiction

that makes the match contribution receives

the match credit.

(3) A State that provides non - Federal

funds to a local participating jurisdiction

to be used for a contribution to affordable

housing, whether or not HOME - assisted, may

take the ma tch credit for itself or may

permit the local participating jurisdiction

to receive the match credit.

44. In these regulations, HUD consistently requires, in

its dealings with states, that match, or, more accurately,

matching contributions must have econ omic substance to be

recognized. Participating jurisdictions have certain

flexibility in carrying forward excess match, in 24 CFR Section

92.211(2), and exchanging match among themselves, in 24 CFR

Section 92.221(3), but neither Collier County nor the Col lier

County Housing Finance Authority was a participating

jurisdiction at the relevant time.

45. Respondent's use of "match" to evaluate applications

and HUD's requirement of "matching contributions" seem to have

taken separate paths. However, the HUD regulations, which

continue to govern match in the scoring process, offer no

support for untethering the concept of match from an actual

contribution of something of real value. Respondent erroneously

awarded Brittany Bay 4.45 points for matching contribu tions that

did not exist.

46. Rule 67 - 48.005(4) provides:

Following the entry of final orders in all

petitions filed pursuant to Section

120.57(2), F.S., and in accordance with the

prioritization of the QAP and Rule Chapter

67 - 48, F.A.C., the Corporatio n shall issue

final rankings. For an Applicant that filed

a petition pursuant to Section 120.57(1),

F.S., which challenged the scoring of its

own Application but has not had a final

order entered as of the date the final

rankings are approved by the Board , the

Corporation shall, if any such Applicant

ultimately obtains a final order that

modifies the score so that its Application

would have been in the funding range of the

applicable final ranking had it been entered

prior to the date the final rankings we re

presented to the Board, provide the

requested funding and/or allocation (as

applicable) from the next available funding

and/or allocation, whether in the current

year or a subsequent year. Funding refers

to SAIL or HOME and allocation refers to HC.

Not hing contained herein shall affect any

applicable credit underwriting requirements.

47. Pursuant to this rule, Respondent should provide

Petitioner the funding that it requested in the Magnolia Village

development described in its application from the ne xt available

funding cycle, subject to credit underwriting requirements.

RECOMMENDATION

It is

RECOMMENDED that the Florida Housing Finance Corporation

enter a final order:

1. Dismissing Petitioner's challenge in DOAH Case Nos.

02 - 4137 and 02 - 4594; and

2. In DOAH Case No. 02 - 4726, determining that Petitioner's

Magnolia Village application should have been included in the

funding range for the 2002 funding cycle of the HOME Rental

program and funding the application in the next funding cycle,

subject to the requirements of credit underwriting.

DONE AND ENTERED this 14th day of May, 2003, in

Tallahassee, Leon County, Florida.

________________________________

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administr ative Hearings

this 14th day of May, 2003.

COPIES FURNISHED:

Mark Kaplan, Executive Director

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301

Elizabeth Arthur, General Coun sel

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301

Jon C. Moyle, Jr.

Cathy M. Sellers

Moyle Flanigan Katz

Raymond & Sheehan, P.A.

118 North Gadsden Street

Tallahassee, Florida 32301

Paula C. Reev es

Deputy General Counsel

Hugh R. Brown

Assistant General Counsel

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301 - 1329

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this recommended order. Any exceptions to

this recommended order must be filed with the agency that will

issue the final order in this case.