The purpose of this Rule Chapter is to establish the procedures by which the Corporation shall develop eligibility criteria, administer the Application process, determine loan amounts and make mortgage loans for existing homeowners.

 

FLORIDA HOUSING FINANCE CORPORATION

RULE NOS.:RULE TITLES:

67-59.001Purpose and Intent

67-59.005Definitions

67-59.010Programs

67-59.020Eligibility for UMAP or UMAP/MLRP

67-59.030Eligibility for MLRP Only

67-59.201Overview

67-59.210 Eligibility for PR

67-59.220Application

67-59.230Form of Assistance

PURPOSE AND EFFECT: The purpose of this Rule Chapter is to establish the procedures by which the Corporation shall develop eligibility criteria, administer the Application process, determine loan amounts and make mortgage loans for existing homeowners.

SUBJECT AREA TO BE ADDRESSED: The Rule Development workshop will be held to receive comments and suggestions from persons relative to the development of eligibility and program requirements for the Hardest Hit Fund Program.

RULEMAKING AUTHORITY: 420.507(33) FS.

LAW IMPLEMENTED: 420.507(33) FS.

A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:

DATE AND TIME: October 15, 2013, 10:00 a.m.

PLACE: Florida Housing Finance Corporation, 227 North Bronough Street, 6th Floor Seltzer Room, Tallahassee, Florida 32301. The hearing will be accessible via phone at 1(888)808-6959, Conference Code #9884197.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT IS: David R. Westcott, Director of Homeownership Programs, Florida Housing Finance Corporation, 227 North Bronough Street, Suite 5000, Tallahassee, Florida 32031-1329, [phone]

 

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:

 

67-59.001 Purpose and Intent.

In 2010, the United States Department of the Treasury (“U.S. Treasury”) created the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (“Hardest Hit Fund”) and allocated funds under the Emergency Economic Stabilization Act of 2008 (“EESA”) to Florida and other states. Florida Housing was directed by U.S. Treasury to create and administer foreclosure prevention assistance programs and to use a portion of these funds specifically for targeted unemployment programs that provide temporary assistance to eligible homeowners. Florida Housing’s use of these funds is governed by written agreements with U.S. Treasury. The Agreements, FHHF-01 Rev 8/13 5/12, are hereby adopted and incorporated by reference. Copies may be obtained at no cost, by contacting Florida Housing, HHF program at [phone].

Rulemaking Authority 420.507(33) FS. Law Implemented 420.507(33) FS. History–New 12-4-12, Amended_________.

 

67-59.005 Definitions.

(1) “Applicant” means a person who has applied for Hardest Hit Fund assistance.

(2) “Florida Housing” means the Florida Housing Finance Corporation as defined in Section 420.503, F.S.

(3) “Hardest Hit Fund” means the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets as established by the U.S. Treasury.

(4) “Programs” mean the Unemployment Mortgage Assistance Program (UMAP), and the Mortgage Loan Reinstatement Program (MLRP) and the Principal Reduction (PR) Program created under the Hardest Hit Fund.

(5) “Substantially Underemployed” means having a reduction in income of at least 10% due to an employment-related hardship.

(6)(5)“U.S. Treasury” means the United States Department of the Treasury.

(7)(6) “Unencumbered Assets” means assets including savings, checking and money market accounts, certificates of deposit, stocks, bonds, mutual funds, taxable investment accounts and cash, but does not include qualified retirement accounts such as an IRA, 401(k), 403(b) and 457 and Keough Accounts. It also does not include qualified education accounts such as a Florida Prepaid College Plan, 529 accounts and Coverdell Education Savings Accounts.

Rulemaking Authority 420.507(33) FS. Law Implemented 420.507(33) FS. History–New 12-4-12, Amended _________.

 

67-59.010 Programs.

(1)(a) through (b) No change.

(c) Principal Reduction Program will provide up to $50,000 to pay down the principal balance on mortgage loans for eligible Applicants.

(d) The maximum amount of HHF assistance available to a household from any combination of Programs is $50,000.

Rulemaking Authority 420.507(33) FS. Law Implemented 420.507(33) FS. History–New 12-4-12, Amended _________.

 

Part I – Unemployment Mortgage Assistance Program (UMAP) and Mortgage Loan Reinstatement Program (MLRP)

 

67-59.020 Eligibility for UMAP or UMAP/MLRP.

To be eligible for assistance under the UMAP Program or the MLRP Program when used in conjunction with the UMAP Program:

(1) The Applicant must document that he or she is a borrower or co-borrower on the mortgage loan and document that he or she:

(a) Has suffered a temporary employment-related hardship, meaning that they have become unemployed or Substantially Underemployed through no fault of his or her own;

(b) Is a Florida resident;

(c) Occupies the property as his or her primary residence;

(d) Has a total household income, adjusted for household size, that is below 140% of the county area median income. The Area Median Income List, AMI-01, Rev 12/12 12/11, for counties in Florida is hereby adopted and incorporated by reference. Copies may be obtained at no cost, by contacting Florida Housing, HHF program at [phone]

(e) through (i) No change.

(2)(a) No change.

(b) Is a single family home, a townhouse, a condominium where financial reporting for the condominium association, pursuant to Section 718.111(13), F.S., for the most recent two years is provided by the Applicant, a 1 to 4 family home where the owner occupies one unit or a mobile or manufactured home or mobile home on a foundation permanently affixed to real estate owned by the borrower on a permanent foundation;

(c) through (d) No change.

(3) through (5) No change.

Rulemaking Authority 420.507(33) FS. Law Implemented 420.507(33) FS. History–New 12-4-12, Amended_________.

 

67-59.030 Eligibility for MLRP Only.

To be eligible for assistance under the MLRP Program:

(1) The Applicant must document that he or she is a borrower or co-borrower on the mortgage loan and document that he or she:

(a) Has suffered a temporary employment-related hardship, meaning that they have become unemployed or Substantially Underemployed through no fault of his or her own, from which he or she has now recovered;

(b) through (c) No change.

(d) Has a total household income, adjusted for household size, that is below 140% of the county area median income. The Area Median Income List, AMI-01, Rev 12/12 12/11, for counties in Florida is hereby adopted and incorporated by reference. Copies may be obtained at no cost, by contacting Florida Housing, HHF program at [phone].

(e) No change.

(f) Has a total monthly housing debt less than 31% of the gross monthly household income, unless the Applicant can provide documentation that he or she has recovered from the hardship and is no longer Substantially Underemployed;

(g) through (i) No change.

(2)(a) No change.

(b) Is a single family home, a townhouse, a condominium where financial reporting for the condominium association, pursuant to Section 718.111(13), F.S., for the most recent two years is provided by the Applicant, a 1 to 4 family home where the owner occupies one unit or a mobile or manufactured home or mobile home on a foundation permanently affixed to real estate owned by the borrower on a permanent foundation;

(c) through (d) No change.

(3) through (5) No change.

Rulemaking Authority 420.507(33) FS. Law Implemented 420.507(33) FS. History–New 12-4-12, Amended _________.

 

Part II – Principal Reduction Program

 

67-59.201 Overview.

The PR Program is designed to assist low-to-moderate income homeowners who have consistently paid their mortgage payments, are not delinquent on their mortgage payments, but whose unpaid principal balance is greater than the current market value of their home, by providing Hardest Hit Funds to reduce the amount of their outstanding principal loan balance to an amount as close to 100% loan-to-value as possible and also reduce their monthly mortgage payment.

Rulemaking Authority 420.507(33) FS. Law Implemented 420.507(33) FS. History–New_________.

 

67-59.210 Eligibility for PR.

To be eligible for assistance under the PR Program:

(1) The Applicant must document that he or she is a borrower or co-borrower on the mortgage loan and also document that he or she:

(a) Has a loan-to-value ratio on their first mortgage loan of 125% or greater;

(b) Is a legal U.S. Citizen or lawful permanent resident;

(c) Occupies the property as his or her primary residence;

(d) Has a total household income, adjusted for household size, that is below 140% of the county area median income. The Area Median Income List, AMI-01, Rev 12/12, for counties in Florida.

(e) Does not have a bankruptcy that has not been discharged or dismissed;

(f) Has not been convicted of a mortgage related felony in the last ten years;

(g) Have not been more than 60 days late on their first mortgage loan payments within the last two years; and

(h) The Applicant’s mortgage loan servicer must agree to recast the loan pursuant to The Agreements, after applying the principal reduction payment except in the case of Federal Housing Administration (“FHA”), Veterans Administration (“VA”) and United States Department of Agriculture Rural Development (“USDA-RD”) loans.

(2) The Applicant must document that his or her primary residence:

(a) Is located in Florida;

(b) Is a single family home, a townhouse, a condominium, a 1 to 4 family home where the owner occupies one unit or a mobile or a manufactured or mobile home on foundation permanently affixed to real estate owned by the mortgagor;

(c) Is not abandoned, vacant or condemned;

(d) Is not the subject of any pending litigation; and

(e) Was acquired prior to January 1, 2010.

(3) The Applicant must document that the mortgage loan for his or her primary residence:

(a) Is serviced by a regulated financial institution, Habitat for Humanity, the United States Department of Agriculture or other servicer whose servicing activities are regulated by the State of Florida or the United States Government;

(b) Has an outstanding principal balance that does not exceed $350,000; and

(c) Is in first lien position.

(4) Procedures for determining eligibility are detailed in the Florida Hardest Hit Fund Procedures Manual, HHFM-01, Rev. 6/12, which is hereby adopted and incorporated by reference. Copies may be obtained at no cost, by contacting Florida Housing, HHF program at [phone].

(5) Should Florida Housing or its third party advisor agency determine at any time that an Applicant has provided false or misleading information in an attempt to improperly obtain Hardest Hit Fund assistance, the Applicant will be deemed ineligible for all Programs and the matter will be referred to the U.S. Treasury and other authorities, as appropriate.

Rulemaking Authority 420.507(33) FS. Law Implemented 420.507(33) FS. History–New_________.

 

67-59.220 Application.

(1) Applicants may apply online at www.principalreductionflhhf.org. Applicants without internet access may call [phone] for assistance.

(2) Once their application has been received, Applicants will be assigned to a Florida Housing-approved third party advisor agency that will work with the Applicant and collect the information necessary to make a preliminary eligibility determination.

(3) An Applicant whom an advisor agency determines to be preliminarily eligible for the PR Program will be submitted to Florida Housing for review and underwriting of the preliminary determination of eligibility.

(4) An Applicant deemed ineligible will be issued a letter specifying the reason(s) for ineligibility and provided information on how to dispute the determination.

(5) Upon confirmation of the preliminary determination that an Applicant has met the eligibility criteria, Florida Housing will offer to make payments to the Applicant’s mortgage servicer pursuant to the terms of the PR Program. Should the Applicant’s mortgage servicer decline to participate in the Hardest Hit Fund Programs or decline to accept payments on the Applicant’s loan, then Florida Housing will be unable to provide any assistance to the Applicant. Applicants will be notified if they have been declined by their mortgage servicer.

Rulemaking Authority 420.507(33) FS. Law Implemented 420.507(33) FS. History–New_________.

 

67-59.230 Form of Assistance.

(1) Eligible Applicants who have not been declined by their mortgage servicer will receive assistance under the PR Program in the form of a forgivable loan. Applicants must execute Hardest Hit Fund loan documents before any funds are provided. Funding will be paid by Florida Housing directly to the Applicant’s mortgage servicer.

(2) For loans that are recast pursuant to The Agreements, after the application of the PR assistance, the loan will be in the form of a 0% interest, non-recourse, deferred payment, forgivable loan. The loan will be forgiven over a five year period at a rate of 20% per year.

(3) For Federal Housing Administration (“FHA”), Veterans Administration (“VA”) and United States Department of Agriculture Rural Development (“USDA-RD”) loans, if the borrower fails to refinance the loan within 180 days from the date that the principal reduction payment is made on their behalf, then the loan will only be forgiven 100% at the end of the fifth year (no incremental forgiveness).

(4) If the home is sold or refinanced prior to the maturity date of the HHF loan and there are sufficient funds to the Applicant out of the transaction, then the balance of the loan that has not been forgiven must be repaid.

Rulemaking Authority 420.507(33) FS. Law Implemented 420.507(33) FS. History–New_________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: David R. Westcott, Florida Housing Finance Corporation, 227 North Bronough Street, Suite 5000, Tallahassee, Florida 32031-1329, [phone]

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Len Tylka, Chairman of the Board, Florida Housing Finance Corporation, 227 North Bronough Street, Suite 5000, Tallahassee, Florida 32031-1329, [phone]

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: September 20, 2013

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: Volume 39, Number 56, March 21, 2013.