Fla. Stat. § 420.5087 – State Apartment Incentive Loan Program

There is hereby created the State Apartment Incentive Loan Program for the purpose of providing first, second, or other subordinated mortgage loans or loan guarantees to sponsors, including for-profit, nonprofit, and public entities, to provide housing affordable to very-low-income persons.

(1) Program funds shall be distributed over successive 3-year periods in a manner that meets the need and demand for very-low-income housing throughout the state. That need and demand must be determined by using the most recent statewide low-income rental housing market studies available at the beginning of each 3-year period. However, at least 10 percent of the program funds distributed during a 3-year period must be allocated to each of the following categories of counties, as determined by using the population statistics published in the most recent edition of the Florida Statistical Abstract:
1. (a) Counties that have a population of more than 500,000 people;
2. (b) Counties that have a population between 100,000 and 500,000 people; and
3. (c) Counties that have a population of 100,000 or less. Any increase in funding required to reach the 10-percent minimum shall be taken from the county category that has the largest allocation. The corporation shall adopt rules which establish an equitable process for distributing any portion of the 10 percent of program funds allocated to the county categories specified in this subsection which remains unallocated at the end of a 3-year period. Counties that have a population of 100,000 or less shall be given preference under these rules.
(2) The corporation shall have the power to underwrite and make state apartment incentive loans or loan guarantees to sponsors, provided:
1. (a) The sponsor uses tax-exempt financing for the first mortgage and at least 20 percent of the units in the project are set aside for persons or families who have incomes which meet the income eligibility requirements of s. 8 of the United States Housing Act of 1937, as amended;
2. (b) The sponsor uses taxable financing for the first mortgage and at least 20 percent of the units in the project are set aside for persons or families who have incomes below 50 percent of the state or local median income, whichever is higher, which shall be adjusted by the corporation for family size; or
3. (c) The sponsor uses the federal low-income housing tax credit, and the project meets the tenant income eligibility requirements of s. 42 of the Internal Revenue Code of 1986, as amended. This subsection does not prohibit a tenant from qualifying under the income eligibility criteria of paragraph (a), paragraph (b), or paragraph (c) due to the tenant's participation in a job training program approved by the corporation. Compliance with the provisions of this subsection must be contractually provided for the term of the loan or 12 years, whichever is longer; however, this subsection does not apply to loans made to housing communities for the elderly to provide for lifesafety, building preservation, health, sanitation, or security-related repairs or improvements. Such loans shall be subject to tenant income criteria established by corporation rule.
(3) During the first 6 months of loan or loan guarantee availability, program funds shall be reserved for use by sponsors who provide the housing set-aside required in subsection (2) for tenants in the three tenant groups designated in this subsection. The reservation of funds to each of these groups shall be determined using the most recent statewide very-low-income rental housing market study available at the time of publication of each notice of fund availability required by paragraph (6)(b). The reservation of funds within each notice of fund availability to the three tenant groups designated in this subsection may not be less than 10 percent of the funds available at that time. Any increase in funding required to reach the 10-percent minimum shall be taken from the tenant group that has the largest reservation. The three tenant groups are:
1. (a) Commercial fishing workers and farmworkers;
2. (b) Families; and
3. (c) 1. Elderly persons.
  2. Ten percent of the amount reserved pursuant to subparagraph 1. shall be reserved to provide loans to sponsors of housing for the elderly, as defined in s. 420.503, for the purpose of making building preservation, health, or sanitation repairs or improvements which are required by federal, state, or local regulation or code, or lifesafety or security-related repairs or improvements to such housing. A loan for a lifesafety, building preservation, health, sanitation, or security-related repair or improvement may not exceed $200,000 per housing community for the elderly. In order to receive the loan, the sponsor of the housing community for the elderly must make a commitment to match at least 15 percent of the loan amount to pay the cost of such repair or improvement. The corporation shall establish the rate of interest on the loan, which may not exceed 3 percent, and the term of the loan, which may not exceed 15 years. The term of the loan shall be established on the basis of a credit analysis of the applicant. The corporation shall establish, by rule, the procedure and criteria for receiving, evaluating, and competitively ranking all applications for loans under this subparagraph. A loan application must include evidence of the first mortgagee's having reviewed and approved the sponsor's intent to apply for a loan. A nonprofit organization or sponsor may not use the proceeds of a loan received pursuant to this subparagraph to pay for administrative costs, routine maintenance, or new construction.
(4) Loans shall be in an amount not to exceed the lesser of 25 percent of the total project cost or the minimum amount required to make the project economically feasible; however, loans exceeding 25 percent of project cost may be made as provided in s. 420.507.
(5) The amount of the mortgage provided under this program combined with any other mortgage in a superior position shall be less than the value of the project without the housing set-aside required by subsection (2). However, the corporation may waive this requirement for projects in rural areas or urban infill areas which have market rate rents that are less than the allowable rents pursuant to applicable state and federal guidelines. In no event shall the mortgage provided under this program combined with any other mortgage in a superior position exceed total project cost.
(6) On all state apartment incentive loans, except loans made to housing communities for the elderly to provide for lifesafety, building preservation, health, sanitation, or security-related repairs or improvements, the following provisions shall apply:
1. (a) The corporation shall establish two interest rates in accordance with s. 420.507(22)(a)1. and 2.
2. (b) The corporation shall publish a notice of fund availability in a publication of general circulation throughout the state. Such notice shall be published at least 60 days prior to the application deadline and shall provide notice of the temporary reservations of funds established in subsection (3).
3. (c) The corporation shall provide by rule for the establishment of a review committee composed of the department and corporation staff and shall establish by rule a scoring system for evaluation and competitive ranking of applications submitted in this program, including, but not limited to, the following criteria:
  1. Tenant income and demographic targeting objectives of the corporation.
  2. Targeting objectives of the corporation which will ensure an equitable distribution of loans between rural and urban areas.
  3. Sponsor's agreement to reserve the units for persons or families who have incomes below 50 percent of the state or local median income, whichever is higher, for a time period to exceed the minimum required by federal law or the provisions of this part.
  4. Sponsor's agreement to reserve more than:
  a. Twenty percent of the units in the project for persons or families who have incomes that do not exceed 50 percent of the state or local median income, whichever is higher; or
  b. Forty percent of the units in the project for persons or families who have incomes that do not exceed 60 percent of the state or local median income, whichever is higher, without requiring a greater amount of the loans as provided in this section.
  5. Provision for tenant counseling.
  6. Sponsor's agreement to accept rental assistance certificates or vouchers as payment for rent; however, when certificates or vouchers are accepted as payment for rent on units set aside pursuant to subsection (2), the benefit must be divided between the corporation and the sponsor, as provided by corporation rule.
  7. Projects requiring the least amount of a state apartment incentive loan compared to overall project cost.
  8. Local government contributions and local government comprehensive planning and activities that promote affordable housing.
  9. Project feasibility.
  10. Economic viability of the project.
  11. Commitment of first mortgage financing.
  12. Sponsor's prior experience.
  13. Sponsor's ability to proceed with construction.
  14. Projects that directly implement or assist welfare-to-work transitioning.
4. (d) The corporation may reject any and all applications.
5. (e) The corporation may approve and reject applications for the purpose of achieving geographic targeting.
6. (f) The review committee established by corporation rule pursuant to this subsection shall make recommendations to the board of directors of the corporation regarding program participation under the State Apartment Incentive Loan Program. The corporation board shall make the final ranking and the decisions regarding which applicants shall become program participants based on the scores received in the competitive ranking, further review of applications, and the recommendations of the review committee. The corporation board shall approve or reject applications for loans and shall determine the tentative loan amount available to each applicant selected for participation in the program. The actual loan amount shall be determined pursuant to rule adopted pursuant to s. 420.507(22)(f).
7. (g) The loan term shall be for a period of not more than 15 years; however, if both a program loan and federal low-income housing tax credits are to be used to assist a project, the corporation may set the loan term for a period commensurate with the investment requirements associated with the tax credit syndication. The term of the loan may also exceed 15 years if necessary to conform to requirements of the Federal National Mortgage Association. The corporation may renegotiate and extend the loan in order to extend the availability of housing for the targeted population. The term of a loan may not extend beyond the period for which the sponsor agrees to provide the housing set-aside required by subsection (2).
8. (h) The loan shall be subject to sale, transfer, or refinancing. However, all requirements and conditions of the loan shall remain following sale, transfer, or refinancing.
9. (i) The discrimination provisions of s. 420.516 shall apply to all loans.
10. (j) The corporation may require units dedicated for the elderly.
11. (k) Rent controls shall not be allowed on any project except as required in conjunction with the issuance of tax-exempt bonds or federal low-income housing tax credits.
12. (l) The proceeds of all loans shall be used for new construction or substantial rehabilitation which creates affordable, safe, and sanitary housing units.
13. (m) Sponsors shall annually certify the adjusted gross income of all persons or families qualified under subsection (2) at the time of initial occupancy, who are residing in a project funded by this program. All persons or families qualified under subsection (2) may continue to qualify under subsection (2) in a project funded by this program if the adjusted gross income of those persons or families at the time of annual recertification meets the requirements established in s. 142(d)(3)(B) of the Internal Revenue Code of 1986, as amended. If the annual recertification of persons or families qualifying under subsection (2) results in noncompliance with income occupancy requirements, the next available unit must be rented to a person or family qualifying under subsection (2) in order to ensure continuing compliance of the project.
14. (n) Upon submission and approval of a marketing plan which demonstrates a good faith effort of a sponsor to rent a unit or units to persons or families reserved under subsection (3) and qualified under subsection (2), the sponsor may rent such unit or units to any person or family qualified under subsection (2) notwithstanding the reservation.
15. (o) Sponsors may participate in federal mortgage insurance programs and must abide by the requirements of those programs. If a conflict occurs between the requirements of federal mortgage insurance programs and the requirements of this section, the requirements of federal mortgage insurance programs shall take precedence.
(7) There is authorized to be established by the corporation with a qualified public depository meeting the requirements of chapter 280 a separate fund to be named the "State Apartment Incentive Loan Fund," which shall be administered by the corporation according to the provisions of this program. Any amounts held in the State Apartment Incentive Loan Trust Fund for such purpose as of January 1, 1998, must be transferred to the corporation for deposit in the State Apartment Incentive Loan Fund and the State Apartment Incentive Loan Trust Fund must be closed. There shall be deposited into the fund moneys from the State Housing Trust Fund as created by s. 420.0005, or moneys received from any other source, for the purpose of this program and all proceeds derived from the use of such moneys. In addition, all loan repayments, proceeds from the sale of any property, and any other proceeds that would otherwise accrue pursuant to the activities conducted under the provisions of the State Apartment Incentive Loan Program shall be deposited in the fund and shall not revert to the General Revenue Fund. Expenditures from the State Apartment Incentive Loan Fund shall not be required to be included in the corporation's budget request or be subject to appropriation by the Legislature. If a loan commitment for program funds is entered into during the state fiscal year for which the program funds were appropriated, the funds shall continue to be made available for use during the entire construction period, even if it extends beyond the state fiscal year in which the loan commitment was entered.
(8) If a default on a loan occurs, the corporation may foreclose on any mortgage or security interest or commence any legal action to protect the interest of the corporation or the fund and recover the amount of the unpaid principal, accrued interest, and fees on behalf of the fund. The corporation may acquire real and personal property or any interest therein when that acquisition is necessary or appropriate to protect any loan; to sell, transfer, and convey any such property to a buyer without regard to the provisions of chapters 253 and 270; and, if that sale, transfer, or conveyance cannot be effected within a reasonable time, to lease such property for occupancy by eligible persons. All sums recovered from the sale, transfer, conveyance, or lease of such property shall be deposited into the State Apartment Incentive Loan Fund.

History.--s. 8, ch. 88-376; s. 7, ch. 89-121; s. 40, ch. 89-294; s. 2, ch. 90-192; s. 5, ch. 91-27; s. 5, ch. 91-429; s. 22, ch. 92-317; s. 9, ch. 93-181; s. 1, ch. 95-383; s. 13, ch. 97-167; s. 7, ch. 98-56; s. 22, ch. 99-378.