67-50.040. General Program Restrictions

(1) Eligible Developments must:

(a) Be designed and intended for the primary purpose of providing decent, safe, and sanitary residential housing for persons or households;

(b) Consist of at least four (4) Units, with a maximum of fifty (50) Units, with the exception of Scattered Site Developments which are limited to twenty-five (25) Units;

(c) Meet the minimum set-aside requirements and sales price limits of either the HAP or HOME Program, as applicable; and,

(d) Be identified by legal description or street address.

(2) An Applicant may not submit an application for both HAP and HOME funding for the same Development during an Application Period.

(3) Applications shall be limited to one submission per subject property, per Application Period, and funding requests shall be limited to the lesser of twenty five percent (25%) of the Total Development Cost or $1,000,000 for HAP or the lesser of twenty five percent (25%) of the Total Development Cost or $2,000,000 for HOME.

(4) The HLP Construction Loan or Purchase Assistance Loan must be in not lower than a second lien position and shall not share priority with any other liens unless approved by the Board.

(5) HLP funding must be expended within three (3) years of the Loan Closing Date unless otherwise approved by the Board.

(6) The accumulation of all Development financing, including the HLP Loan and all existing debt within a Development, may not exceed the Total Development Cost, as determined by the Credit Underwriter. The accumulated sales generated revenue of all single-family homes must equal the Total Development Cost. Any changes to the Total Development Cost shall result in the adjustment of home sales prices to reflect these changes.

(7) The proceeds from the HLP Purchase Assistance Loan made to an Eligible Homebuyer shall be used to repay the HLP Construction Loan.

(8) Applicants are responsible for:

(a) The construction of affordable housing;

(b) The marketing of Units in the Development and providing referrals of potential Eligible Borrowers to the first mortgage lender;

(c) Meeting the pre-sale requirements established by the first mortgage lender;

(d) Assisting the Corporation and the Servicer with performing Draw inspections, collecting payments and defaults, foreclosure procedures and performing compliance monitoring; and,

(e) With respect to HOME, ensuring compliance with HUD requirements, pursuant to 24 CFR §92.

(9) Prior to disbursing any funds, there must be a written agreement with the Applicant ensuring compliance with the requirements of HLP, pursuant to this rule chapter, Florida Statutes, and HUD Regulations.

(10) The Corporation shall require adequate insurance to be maintained on the Development as determined by the first mortgage lender and the Corporation’s Servicer, including fire, hazard and other insurance sufficient to meet mortgage standards.

(11) The Corporation or its Servicer shall monitor the compliance with all terms and conditions of the HLP loan and any violation of any term or condition shall constitute a default of the loan.

(12) The construction period shall be for a period of not more than three (3) years beginning on the Loan Closing Date, unless otherwise approved by the Board for a specified period of time. Applicants applying for an extension must:

(a) Request the extension in writing at least sixty (60) days prior to the end of the construction period;

(b) State a specific length of time needed to complete the Development and the reason the extension is needed;

(c) Provide a comprehensive work completion plan and construction schedule;

(d) Supply an alternate financing plan in the event the original financing source withdraws; and,

(e) Provide assurance that the extension will result in the successful completion of the Development.

(f) Applicants will be charged a penalty fee of $100 for each extension request, pursuant to Section 420.507(4), F.S., payable at the time of the request.

(13) The Applicant shall not refinance, increase the principal amount, or alter any terms or conditions of any construction loan superior or inferior to the HLP loan without prior approval of the Board.

(14) The unpaid principal balance of the Construction Loan shall be due and payable upon the sale or transfer of the secured property.

(15) If the Board determines that any Applicant or any Affiliate of an Applicant has:

(a) Engaged in fraudulent actions;

(b) Materially misrepresented information to the Corporation regarding any of its Developments within the current Application or in any previous applications for financing or an allocation of Housing Credits administered by the Corporation;

(c) Been convicted of fraud, theft or misappropriation of funds;

(d) Been excluded from federal or Florida procurement programs, or

(e) Been convicted of a felony,

and upon determination by the Board that such action substantially increases the likelihood that the Applicant will not be able to produce quality affordable housing, the Applicant or any Principal, or Affiliate of an Applicant or Developer will be ineligible for funding or allocation in any program administered by the Corporation for a period of two (2) years, which will begin from the date the Board makes such determination, pursuant to Sections 420.507(14) and (34), F.S. Such determination shall be made either pursuant to a proceeding conducted pursuant to Sections 120.569 and 120.57, F.S., or as a result of a finding by a court of competent jurisdiction.

(16) If an Applicant or any Principal, or Affiliate of an Applicant or Developer has any existing Developments participating in any Corporation programs that remain in non-compliance with the Code, the applicable Florida Statutes and rule chapters, loan documents, or any loan commitment after any applicable cure period granted for correcting such non-compliance has ended, at the time of submission of the Application or issuance of a credit underwriting report, the requested allocation will be denied, upon determination by the Board that such non-compliance substantially increases the likelihood that such Applicant will not be able to produce quality affordable housing. The Applicant and the Affiliates of the Applicant or Developer shall be prohibited from new participation in any of the Corporation’s Programs for the subsequent cycle and continuing until such time as all of their existing Developments are in compliance.

(17) Applicants that choose to withdraw from the program prior to developing any units shall be responsible for repayment of any expenses paid by the Corporation, including credit underwriting, environmental review, and monitoring services fees.

(18) If the HLP commitment is cancelled by the Corporation for failure to adhere to rule deadlines or for reasons within the Applicant's control, the Developer will be responsible for reimbursing the Corporation for fees incurred for credit underwriting and environmental review processing.

(19) The name of the Development provided in the Application may not be changed or altered after submission of the Application during the history of the Development with the Corporation unless the change is mandated by local, state or federal governmental authorities, or otherwise approved by the Board. Evidence of such mandate must be submitted to the Corporation upon official notification by the local, state or federal authorities.

(20) The Eligible Homebuyer must maintain replacement cost hazard insurance naming the Corporation as an additional insured.

(21) A mortgagee policy of title insurance in the amount of the HLP Purchase Assistance Loan must be provided naming the Corporation as an additional insured.

(22) Loans shall be evidenced by a properly executed note and secured by a properly executed and recorded mortgage provided by the Corporation.

(23) Failure to comply with the agreed upon income set-aside requirements as stated in the Application shall result in a retroactive interest rate adjustment from the HLP Construction Loan interest rate to the current market rate.

(24) Applicants will be required to submit progress reports, as directed by the Corporation. Failure to provide the information and documentation requested shall result in the withdrawal of any remaining funds.

(25) Failure to comply with any part of this rule chapter without a waiver or variance being granted by the Board, pursuant to Section 120.542, F.S., and Rule Chapter 28-104, F.A.C., shall result in the disqualification of the Applicant and withdrawal of any commitment for loan funds.

Rulemaking Authority 420.507(12) FS. Law Implemented 420.5089(2) FS. History–New 9-5-02, Amended 5-4-03, 12-28-04, 8-9-05.