HomeMy WebLinkAboutJ-8 Resolution: Housing Rehab and Ownership ProgramCity of ~Vliami ~ard~ens
1515-200 NW 167~' Street
Miami Gardens, Florida 33169
Date: July 11, 2007
Fiscal Impact: No X Yes ^
Aqenda Cover Paqe
Public hearing ^
Mayor Shirley Gibson
Vice Mayor Oscar Braynon II
Councilman Melvin L. Bratton
Councilman Aaron Campbell Jr.
Councilwoman Sharon Pritchett
Councilwoman Barbara Watson
Councilman Andre Williams
Quasi-Judicial o
(If yes, explain in Staff Summary) Ordinance ^ Resolution X
Funding Source:CDBG 1 st Reading ^ 2nd Reading ^
ContracUP.O. Requirement: Yes ^ NoX Advertising requirement: Yes X No ^
Sponsor Name/Department: Community Development RFP/RFQ/Bid # N/A
Title
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF MIAMI GARDENS, FLORIDA, APPROVING THE
REVISED HOUSING REHABILITATION AND
HOMEOWNERSHIP PROGRAM POLICIES ATTACHED
HERETO AS EXHIBIT A; PROVIDING FOR THE
ADOPTION OF REPRESENTATIONS; PROVIDING AN
EFFECTIVE DATE.
Staff Summarv
Backqround
In an effort to ensure a desirable level of efficiency and accountability in the
administration of the City's housing programs, the Department of Community
Development developed policies that would serve to govern the processes of both the
Housing Rehabilitation and Homeownership Assistance programs. The original policies
were approved by City Council at their December 13, 2006 meeting (resolution # 2006-
159-505). Since implementing both of these programs, Community Development staff
has determined that certain changes should be made to the policies. Key policy
amendments include clarity on the generation of the scope of work, elaboration of the
contractor selection process, clarification of the procedure for performing the
underwriting and processing of the loans, and a change in the program limits for the
Disaster Recovery Program from $15,000 to $20,000. The revised polices would be
effective immediately and are available for review by the general public upon request.
J-8) CONSENT AGENDA
RESOLUTION
REVISED HOUSING
REHABILITATION AND
HOMEOWNERSHIP PROGRAM
Recommendation
City staff recommends the approval of the resolution amending the Housing
Rehabilitation and Homeownership Program Policies.
RESOLUTION No. 2007-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MIAMI
GARDENS, FLORIDA, APPROVING THE REVISED HOUSING
REHABILITATION AND HOMEOWNERSHIP PROGRAM POLICIES
ATTACHED HERETO AS EXHIBIT A; PROVIDING FOR THE ADOPTION
OF REPRESENTATIONS; PROVIDING AN EFFECTIVE DATE.
1 WHEREAS, the City has embarked upon a program of community improvement
2 through, among other means, the rehabilitation of its housing stock funded by, and
3 through, various funding sources, and
4 WHEREAS, it is desirable to improve the levels of efficiency and accountability in
5 the administration of such programs, and
6 WHEREAS, to those ends, the Department of Community Development
7 developed policies intended to govern the processes of both the Housing Rehabilitation
8 and the Homeownership Assistance Programs, and
9 WHEREAS, the original policies were approved by the City Council at its
10 December 13, 2006, meeting pursuant to Resolution No. 2006-159-505, and
11 WHEREAS, since implementing both of the Programs, the Community
12 Development staff has determined that certain revisions should be made to the policies
13 to further improve the efficiencies and accountabilities with respect thereto, and
14 WHEREAS, the Department of Community Development has offered various
15 amendments and recommends that the Amended Housing Program Policies and
16 Procedures Manual, attached hereto as Exhibit A, be adopted as the official expression
17 of the policies of the City concerning same,
18 NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
19 OF MIAMI GARDENS, FLORIDA, AS FOLLOWS:
20 Section 1. ADOPTION OF REPRESENTATIONS: The foregoing Whereas
21 paragraphs are hereby ratified and confirmed as being true, and the same are hereby
22 made a specific part of this Resolution.
23 Section 2. APPROVAL: The City Council of the City of Miami Gardens,
24 hereby approves and adopts the revised Housing Rehabilitation and Homeownership
25 Program Policies attached hereto as Exhibit A for the purposes therein expressed.
26 Section 3. EFFECTIVE DATE: This Resolution shall take effect immediately
27 upon its final passage.
28 PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF MIAMI
29 GARDENS AT ITS REGULAR MEETING HELD ON JULY 11, 2007.
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SHIRLEY GIBSON, MAYOR
ATTEST:
RONETT~A TAYLOR, CMC, CITY CLERK
Prepared by JAMES C. BRADY, ESQ.
Assistant City Attorney
SPONSORED BY: DR. DANNY O. CREW, CITY MANAGER
MOVED BY:
VOTE:
Mayor Shirley Gibson (Yes) (No)
Vice Mayor Oscar Braynon, II (Yes) (No)
Councilman Melvin L. Bratton (Yes) (No)
Councilman Aaron Campbell (Yes) (No)
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Councilman Andre Williams
Councilwoman Sharon Pritchett
Councilwoman Barbara Watson
JCB/teh
261801 _1. DOC
(Yes)
(Yes)
(Yes)
(No)
(No)
(No)
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~'xh-l~~~-~- ~-
CI2~ O~ .~VII.~~.~VL.~ ~'.?I.R,D ~NS
D epartment of
Community D ev e Copment
HOUSING PROGRAM
POLICY AND PROCEDURES
MAN UAL
Effective 12-1-2006
Revised 1L07/2006
2
Contents
1. Defmitions
2. General Policy
3. Program Summaries
3.1. Housing Rehabilitation Program
3.1.1. Emergency Rehabilitation
3.1.2. Disaster Loan Program
3.2. Replacement Homes Program
3.3. Homeownership Assistance Program
4. Housing Rehabilitation Program Procedures
5. Replacement Homes Program Procedures
6. Homeownership Assistance Program Procedures
7. Emergency Rehabilitation Program
8. Single Family Rehabilitation And Replacement Home Inspections
9. Appendix
SECTION 1: DEFINITIONS
1. Decent, Safe and Sanitary Housing: A dwelling unit or building meeting
Federal Occupancy Standards as defined in 24 CFR 882.109 and CFR
882.405
2. Director: City of Miami Gardens Department of Community Development
Director or his/her designee.
3. Dwelling Unit: An independent living unit containing, at a minimum, a
bathroom, kitchen or kitchenette and a living area/bedroom.
4. Emergency Condition: A condition that represents an eminent physical danger
to anyone in the household. Examples of an Emergency Condition may
include, but is not limited to, a roof collapse or faulty electrical wiring
providing a risk of fire.
5. Grant: An outright gift of cash requiring no repayment.
6. Hazardous Coodition: A code violation that is an immediate, serious threat to
the health and/or safety of the occupant(s) of a dwelling unit.
7. Household: Immediate members of a family living together who may be
expected to contribute to the income of the household for a substantial period
of the term of the loan. Household may also include unmarried adults living
in the same unit as the applicant if they are expected to contribute to the
income of the household for a substantial period of the term of the loan.
8. Income: The gross amounts received from all sources by every person residing in
the dwelling including wages, pension, social security, interest, rent, dividends
etc.
9. Income Limits: 'The maximum amounts that can be earned to qualify for a
specific assistance category, based on family size (those actually living in the
dwelling unit). Derived from a percentage of the median income for Miami as
determined by the Deparlment of Housing and Urban Development (See
Appendix for current limits).
10. Investor-Owned: The owner of a residential properly who does not live in the
siructure.
4
11. Loan: An advance of funds which must be repaid or may be forgiven, and is
secured by a mortgage on the property.
12. Owner-occupant: The title holder to a residential property whose primary living
unit is located in the structure.
13. Replacement Homes: A home that is built when the rehabilitation repairs
required to bring the home the Housing Quality Standards exceed the program
limitations. T'he existing house is then demolished and a new home is built.
14. Single Family Dwelling: A property with one to four dwelling units, including
town homes, twin homes and condominiums.
SECTION 2: GENERAL POLICY
2.1. INTRODUCTION
The City of Miami Gardens Department of Community Development utilizes the
grant funds it receives from the federal and state government sources to aid in the
development of a viable urban community. The primary objective of this department
is to provide decent housing, a suitable living environment and the expansion of
economic opportunities for the neediest persons in our community. The Department
serves our City's most economically disadvantaged residents by carrying out a wide
range of community development activities directed toward neighborhood
revitalization, economic development, improved community facilities and services,
and assisting those least likely to benefit from the economic growth and prosperity
projected for the City of Miami Gardens.
All Housing Programs of the Department of Community Development are designed
to fulfill the Deparhnent's goal of providing safe and decent housing to all residents
of this great City. The policies enumerated here were pulled from Federal and State
Statutes and Regulations governing the programs we manage, as well as industry
practices that ensure prudent and efficient use of limited government resources for the
benefit of the residents of the City of Miami Gardens.
2.Z. STATUTES AND REGULATIONS
The Housing Rehabilitation Program utilizes Federal and State affordable housing
funds. The following Statutes and Regulations govern the program and is the source
of the policies in this document.
2.2.1. HOME Program:
Federal Statute: Title 42 - The Public Health and Welfare; Chapter 130 -
National Affordable Housing; Subchapter ii -Investment in Affordable
Housing. Title 42. Sections 202-290
Regulations: 24 CFR Part 92
2.2.2. CDBG Program:
Federal Statute: Title 1- The Housing and Community Development Act of
1974. 42 U.S.C.-5301
Regulations: 24 CFR 570
2.23. SHIP Program:
Florida Statute: Chapter 420.907
Regulations: Florida Housing Finance Corporation Rule Chapter 67-37
2.3. ELIGIBLE PROPERTIES
23.1. All properties assisted by this department must be in the corporate limits of
the City of Miami Gardens.
23.2. The property shall not consist of more than four (4) residential units.
However, most of the programs aze limited to one (1) residential unit. For properties
with more than one unit, further investigation may be required to ensure that
assistance can be provided.
23.3. The property must conform to the requirements of the City of Miami Gardens
Zoning Ordinance.
2.4. MAXIMUM ASSIS'TANCE
The m~imum assistance to be provided to applicants for all Housing Programs shall
be governed by the Housing Policy approved by the City Council for the period in
question and established each fiscal year in accordance with the Community
Development Budget.
2.5. SECURITY
All financial assistance provided to residents must be secured by a mortgage lien on
the property. The term of the lien shall be based on the Housing Policy, as approved
by the City Council for the period in question.
2.6. UNDERWRITING GUIDELINES
Loans will be underwritten using standard industry risk assessment tools that evaluate
the ability and willingness of the applicant to make payments on this loan, if any, and
all other obligations. In addition, applicants and the property will be underwritten for
program eligibility based on the source of funds being used for the program.
Funds available far the Housing Programs can be from tt~e Community Development
Block Grant program (CDBG), the Home Investment Partnership program (HOME),
American Dream Down payment Initiative (ADDI), the State Housing Initiative
Program (SHIP) and SURTAX from Miami-Dade County.
2.7 .~PPRAISAI.S
All loans originated by the Depariment of Community Development must incorporate
one of the methods below to indicate the property value.
2.7.1. Rehabilitation Program: the Market Value of the property used will be that
as determined by the Miami-Dade County Property Appraiser. ~
2.7.2. Replacement and Homeownership Programs: appraisals by a licensed
professional appraiser will be required. ~
Deleted: In situations where the use of
dus value resulu in a 6igher tt~an the
ma~am~ Loan-to-Value Iatio for the
program, an appraisal or a Value
Estimator using tec6nology from an
established secondary market company
will be required Q
D21CtCd: Tlus appraisal mus[ be
assigned to the City of Miami Gardens.¶
Pormatted: Not Double
strikethrough
2.8 TOTAL LOAN TO VALUE ~MAXIMUM~
This is the sum of all loans on the property as a percentage of the value of the
property. The value of the property is the lesser of the market value as determined
above (7) or the purchase price.
The following is the m~imum Total (or Combined) Loan to Value Ratios (CLT'V):
2.8.1. Housing Rehabilitation 150%
2.8.2. Replacement Homes 125%
2.8.3. Homeownership Assistance 105%
Loans with Combined Loan-to-Value Ratios (CLTV) above the maximum can only
be originated with an exception request as noted in Section 17.
2.9. CONTRACTOR SELECTION
2.9.1. Contractor's wanting to participate in the City's Housing Pro~rams must first
submit an eli ibilit,}~ ap~lication to the Ci .,ty's Procurement Department. Upon
the Procurement De~artment's review and approval of the a~,plication, the
contractor will be placed on the Department's list of a~proved contractors. This
list will be utilized by the Department when seekin~ bids on either Housing
Rehabilitation or Replacement Home proiects. The list will also be made
available to City residents on our website. The contractors will be responsible
for u~dating their insurance and licensin~ information as reguired.
All eligible contractors will be invited to a Pre-Bid meeting held by the Citv
appointed Inspector. At this meeting, the contractors will be provided with a
Scope of Work Report that will detail the work to be completed for the
Qarticular proiect. They will be ~iven a timeframe in which thev must present
their Bid Estimates to the Department in a sealed envelope. These estimates
will be made per ]ine item and will include 25% for overhead and profit.
The Department will require a minimum of 3 bidsper ~roiect. The Department
wil] review the estimates and rank them bv bid amount. All bids that fall within
10% of the Office Estimate are eligible for selection. The homeowner will
make the final Contractor selection.
Contractors will oniv be awarded a maximum of two nroiects at the same time.
Therefore, if two contracts have been awarded to a single contractor and the
work is in progress, until those projects are completed, theY will not be awarded
any additional contracts. Those contractors will still be allowed to participate in
the biddi~~process and the determination of whether an exception can be made
will be ]eft u~ to the Director. The decision will be based on the current project
activitv and the level of accomplishment and satisfaction from prior contracts.
If the Department finds that a contractor fails to meet its obligations with the
homeowner and/or the City, and does not remedy the situation, the contractar
will be removed ftom the list and will be denied from participatin~ in the City's
Housin~Pro,grams.
2.10. SCOPE OF WORK
2.10.1. All Rehabilitation and Replacement loans will require a Scope of Work
Report, which will include the estimated costs and will be ~ompleted by ~n _. -
inde~pendent inspection firni. The Report will putline in detail the work to be
~ __
performed ~'or the project and in some instances indicate whv the repair must be l
made. e Scope of Work Report will be reviewed with the applicant prior to it `,
being submitted to contractors for bidding. The version of the Report provided
to the contractors as part of the bidding package will not include anv costs. (In
emergency situations, where the structure has been deemed as unsafe by the
City's building official, this requirement may be waived by the Director.)
A copy of the Sco~e of Work Re~ort will be provided to the City's Building
Department for their review and to assist with the process of expeditin,~ the
permit process. The cost of the Scope of Work Report will be charged to the
loan directlv.
2.11. MAXIMUM HOUSEHOLD INCOME
2.11.1. For loans funded using ~DBG or HOME, the maa~imum household income for
all rehabilitation, replacement and homeownership loans is 80% of the median
household income adjusted for family size, based on the most recent figures
from the US Department of Housing and Urban Development and approved by
Florida Housing Finance Corporation.
2.l 1.2. For loans funded using SHIP, the income limit can be as high as 120%,
however, approval of the Loan Program Manager is required to ensure that the
total grants or loans funded at the various income levels are within the statutory
ratios.
Annual Household Gross Income is as defined by Florida Statutes Chapter 420.9071
which is attached as Appendix 2A and incorporated in this policy. Also refer to
Determining Annual Income: Appendix 2B as provided by the SHIP program.
2.12. CONFLICTS OF INTEREST
No loans will be made to City of Miami Gardens employees or their immediate
relatives without the express written permission of the City Manager. Full disclosure
on the part of the applicant will be required at the time of application. Failure to
disclose said relationship will result in an immediate rejection of the loan and/or will
~e~eted: , ro be
~eleted: ~he c~ry°s sui~a~~
Depazm~ent Inspection ~
~eleted: unic. ~
DeleYCd: determine the feasibility and
appropnateness
- ~
Deleted: of ~
Deleted: the thoroughness, acairacy 1
and reasouableness ofthejob. T ~
Deleted: should be signed by the ~
Deleted: ¶
In cases where consultants are used, t6e
Maoager from the City's Building
Depar~ent Inspection Unit will be
required to review and either reject or
accept the Report done by the consultant.
require full repayment of the loan includ'mg interest accrued at the ma~cimum interest
rate allowed.
2.13. DISBURSEMENTS
Funds will be drawn in accordance with the payout schedule agreed to by the
applicant, tt~e contractor and the Inspection Unit. The Department will be
responsible for ensuring that payments are made in accordance with the Scope of
Work Report, all applicable Department of Community Development and City of
Miami Gardens' procurement and contracting policies.
All payments requested (invoices) by a contractor are to be submitted to and
approved by the Director of the Community Development Department or his/her
designee. Those invoices will then be forwarded to the City's finance department for
review and processing of payment. At no time are invoices to be submitted directly
to the finance department. Moreover, the fmance department will not process any
payments that have not been reviewed and approved by the Director or his/her
designee.
I 2.14 ESCROW~ REAL ESTATE TAXES~ INSURANCE~ RESERVES
The City of Miami Gardens will escrow for real estate t~es, homeowners' hazard
and/or flood insurance, if the City's loan will be the first mortgage or if the first
mortgage lender does not escrow for taxes and insurances. In situations where the
homeowner has shown the ability to make such payments over a considerable amount
of time, an exception to this policy may be granted.
For all other loans, the City will require annual proof of payment of real estate taJtes,
homeowner's association dues, if applicable, and renewals of insurance policies. In
all cases, applicants will be required to add the City of Miami Gardens as additional
insured on all insurance policies. All properties located in flood zones must have
flood insurance.
2. ~ S FEES
The City shall charge applicable loan closing costs which will be passed along to the
applicant and made part of the loan. Such fees may include title search and
commitment, appraisal, credit report and any other third party fees that the City may
incur in the making of the loan.
~ 2.16 LOAN APPROVALS
Loans will be recommended for approval after program eligibility and credit review
of the application is completed. T'he Loan Program Manager will review the file and
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recommend approval of the loan to tt~e Director based on the current policies for the
program as approved by the City Council for the period in question.
Authority to commit the City to making a Housing Rehabilitation loan is vested in
the City Manager.
I 2.17 EXCEPTIONS TO POLICY
Exceptions to policy will be considered on a case-by-case basis. The Loan Program
Manager must review such a request and make a recommendation to the Director for
an approval or rejection citing reasons, which should include the policy from which
the request is based and the reason for the exception. The decision to allow an
exception must be based on the ability of the City to make that exception and whether
the granting of the exception will put the City's investment at risk. Final approval of
cases where exceptions will be made lies with the City Manager.
In situations where the exception conh-adicts the Statutes or Regulations for the
funding source, an exception should first be obtained from the funding source. Such
exception requests should be in writing and a written response solicited and made part
of the loan file.
2.1 S ADDITIONS AND CONVERSIONS
It is not the policy of the City to fmance additions to existing buildings or projects
that change the Certificate of Occupancy. However, in overcrowding situations, an
exception to this policy can be granted by the Director. In providing an exception,
the Director will review the composition of the family to ensure that the family
composition will remain the same in the foreseeable future.
2.19 SWEAT EQUITY
The City of Miami Gardens will not fmance any rehabilitation in cases where the
applicant performs tt~e work.
2.20 PERMITS, LICENSES AND LICENSES
The City of Miami Gardens will not issue a Notice to Proceed on any job unless all
applicable licenses and proof of insurance, including workers compensation, have
been presented to the Building Department Inspection Unit. In addition, the loan will
not be disbursed unless a proper permit is filed with the City for the work to be
performed.
All contractors working with the Housing Rehabilitation and the Replacement Home
Programs will be required to add the City of Miami Gardens as an additional insured
on all insurance policies.
License from the Department of Business and Professional Regulation or from
Miami-Dade County for the particular trade area is required. It is the responsibility of
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the General Contractor to ensure that all sub-contractors are licensed and insured. The
City will require Workers' Compensation Insurance and General Liability coverage of
not less than one million dollars ($1,000,000) in addition to the homeowner's liability
insurance carried by the applicant.
2.21 OTHER FEDERAL REQUIREMENTS
Z.Z ~ . ~ ENVIItONMENTAL
All rehabilitation work will be done in accordance with Federal and State
environmental regulations. With respect to any assistance using HOME or
CDBG funds, an environmental review will be performed by the
Department of Community Development and/or their assignee in
accordance with the provisions of the National Environmental Policy Act
of 1969 (NEPA) and the related authorities listed in HUD's implementing
regulations at 24 CFR parts 50 and 58. The cost of Environmental
Reviews is considered an administrative expense and will be borne by the
Department of Community Development.
2.? 1.2. FEDERAL REGULATIONS
When Federal funds are used, the assistance provided will be in
accordance with all other Federal requirements regarding the use of
CDBG or HOME funds. Such requirements will include but will not be
limited to affirmative marketing, labor, displacements and relocations,
lead-based paint, and any other requirement in force at the rime of the
processing of the assistance in accordance with 24 CFR 92 or 24 CFR 570.
2.22. ESTABLISHMENT OF WAITING LIST
2.22. L The availability of funds for all Housing Programs will be advertised in a
newspaper of general circulation that services ethnic and diverse
neighborhoods within the City. T'he advertising will run for at least 30
days before the beginning of the application period. All programs will
also be made public by posting notifications in City Hall and on the City
of Miami Gardens website.
2.22.2. An application period of not less than two weeks will be established for
the receipt of applications. All applications received will be logged in the
order received. Applications will be processed on a first-come, first-served
basis from all applicants meeting program eligbility criteria, subject to
funding availability. Applicants will be funded on a first-come, fust-ready
basis with priority given to the elderly and disabled homeowners.
Applicants not funded will be put on a Waiting List and will receive
priority in the next funding cycle.
2.223 The Waiting List will be managed by the Loan Program Manager. It will
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only be opened for additional applications upon the approval of the
Department Director or his/her designee.
2.22.4 An applicant can only be allowed priority, irrespective of the Waiting List,
upon petitioning to the Assistant City Manager responsible for the
Community Development Department and on the submission of proof of
imminent danger to the health and safety of the residents. Upon approval
of the petition, the applicant will receive assistance subject to the
availability of funds.
222.5. All applicants with Code Violations pertaining to home repair and without
any liens will be given priority. Applicants with Ciry Code Violations
must be approved in conjunction with the City Attorney's Office.
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SECTION 3: PROGRAM SUMMARY
3.1 HOUSING REHABILITATION PROGRAM
Program Description:
The program provides 0% interest loans to homeowners in the City of Miami Gardens
on a first-come, first-served, first-ready basis to repair their properties. Homeowners
select their contractors based on a com~rehensive selection process that will require at
minimum three bids. The work required is deterrnined by a contracted~nspect~and _
a contractors is selected to complete the work and~aid upon comple 'on of the work,
with written approval by the homeowner and proof of~nrovedpermits, if required.
Source of Fundin~: CDGB or SHIP
Maacimum Assistance: $35,000
Eligible Rehabilitations: All repairs necessary to bring the house to a decent, safe
and sanitary condition. The following are the eligible trade areas: Plumbing,
Electrical, Roofmg Mechanical and Structural.
Eligible Properties:
• Single family owner-occupied units in the City of Miami Gardens; and
• Property market value as determined bY Miami-Dade Coun Propertv
Appraiser cannot exceed $250,000.00; and
• Condominiums and Townhomes are eligible provided that repairs are in
conformity to the Association By-Laws.
Eligible Owners
• Households with income less or equal to 80°/a of inedian income adjusted for
ousehold size. However, in the case of rehabilitation funded by SHIP funds,
_ _ _ __ __ _ _
the maximum household income can be less or equal to120% of inedian
income adjusted for Household size. (See Section 10.2); and
•~vlust be current in their existing mortgage~ and real estate property ta~ces.
• Must have Homeowner's Insurance and Flood Insurance if required.
Loan Terms:
Funding will be provided as a zero erp cent (0%) non-amortizing 5 year deferred loan.
The entire principal and accrued interest will be forgiven at the end of the term if all
requirements are met.
oe~etea: is
oe~eted: ea by city employees
~ - ~ Deleted: aze ~
Deleted: ed ~
~De1CtCd: the Ciry Building inspector ,~
~etea: r~y I
p~~: <#>Ability ro afford a ~
monthly paymeut, if require~ based on
the income and debt; and¶
Deleted: , ins~aance
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Underwritin,g Ratios:
•_ ._.. -~-- -~------- - - - - - -
CLTV of 150% (Combined Loan to Value ratio)
Securi : The loan will be secured by a second mortgage lien on the property.
Restrictions: Principal and all accrued interest will be due on sale or transfer of the
property prior to loan maturity. In the case of a refmancing, the City Manager or his
designee will determine whether anv amount is to be paid towards the outstandin~
balance on such refmancing.
In the case of the death of the homeowner, the heirs can assume the indebtedness,
provided they have been certified as income eligible by the City, and that they reside
in the house as their primary residence. Otherwise, the total principal and all accrued
interest will be due immediately.
3.1.1. EMERGENCY REHABILITATION PROGRAM: The Deparlment will provide a
loan for the intent to remedy an Emergency Condition with the same terms
as the Rehabilitation Program.
Source of Fundin~: CDGB or SHIP
M~imum Assistance: $15,000
Eli ig•bili ~ Requirements: Rehabilitation Program eligibility and criteria
would apply.
T'he Department would handle these cases in an expedited manner which
would inciude
• Prioritization to the applicant
• rL,imited Documentation
-__.
• Waiver of Three Bid Requirement
• Expedited Permitting Process
3.1.2. DISASTER Lo.a.t•1 PROG~1vt: The Department will provide a loan with the
same terms as the Rehabilitation Program for the intent to remedy any
damages caused by the 2005 Hurricanes.
Source of FundinQ: CDBG through Miami-Dade OCED
De1CY2d• 60% Total deb[ to income
ratio. ¶ •
MaYimum Assistance: 9'r,~0,000 _
Eligibilitv Requirements: Rehabilitation Program criteria apply.
Additionally, repairs must remedy damages caused by the 2005
Hurricanes.
Deleted: Reqnirement of ~
oe~eted: ls
15
The repairs are limited to roof, windows and rurricane miti~atior~,
Exceptions to this can be presented to the Director and fmal approval will
come from the City Manger.
3.2 REPLACEMENT HOMES PROGRAM
Prog,ram Description:
The Replacement Homes Program is designed to address substandard and dilapidated
housing units that the cost of repairs needed cannot be addressed through the Housing
Rehabilitation Program. It involves the demolition and reconstruction of a new 3
bedroom 2 bath house on the same lot.
Source of Fundin~: SHIP or CDBG, depending on Household income.
Maacimum Assistance: $150,000
Eligible Costs: All soft and hard costs relating to the construction of the new home
are eligible. In addition, relocation, moving and storage charges can also be paid out
of the loan proceeds.
Eligible Properties:
• Single family owner-occupied units in the City of Miami Gardens with major
structural defects that cannot be rehabilitated; and
• Must be free and clear of all liens and mortgages, except City of Miami
Gardens municipal liens; and
• Properties with first mortgages, will qualify for replacement only if
a. the Department is able to secure additional funding to pay off the first
mortgage and the homeowner can afford the monthly payment
associated with the new mortgage,
b. or the first mortgage lender subordinates to the City.
• Condominiums and Townhomes are not eligible for this program.
Eli~ible Owners
• Households with income less or equal to 120% (for SHIP funds) or 80% (for
CDBG funds) of inedian income adjusted for family size.
• Preference is given to elderly and disabled homeowners.
• Ability to afford their current monthly debt obligations.
• Must be current in their mortgage, insurance and taxes. However, one year
insurance and t~es can be paid from the loan proceeds.
Deleted: related dry wall ~
oe~eted: a~es - -
16
Loan Terms:
Funding will be provided as a zero to three percent (0 to 3%) non-amortizing 30 year
defened loan. Interest rate will be determined on income. The entire principal and
accrued interest will be forgiven at the end of the term if all requirements are met.
1. Applicants with incomes less than 50% of inedian income will receive a
zero percent (0%) amortizing loan with a term of thirty (30) years.
Payment of principal and accrued interest at sale or rental of the property.
2. Applicants with incomes at fifty percent (50%) or higher but less than
sixty percent (60%) of inedian income will receive a one percent (1%)
fuily amortizing loan with a term of thirty (30) years. Payment of
principal and accrued interest at sale or rental of the property.
3. Applicants with incomes at sixty percent (60%) or higher but less than
seventy percent (70%) of inedian income will receive a two percent (2%)
fully amortizing loan with a term of thirty (30) years. Payment of
principal and accrued interest at sale or rental of the property.
4. Applicants with incomes at seventy (70%) or higher but less or equal to
eighty (80%) of inedian income will receive a three percent (3%) fully
amortizing loan with a term of thirty (30) years. Payment of principal and
accrued interest at sale or rental of the property.
5. Applicants with incomes at eighty percent (80%) or higher but less or
equal to one hundred and twenty percent (120%) of inedian income will
receive a three percent (3%) fully amortizing loan with a term of thirty
(30) years. Payments of the loan will begin six (6) months from the
issuance of a certificate of completion and occupancy of the home.
Underwriting Ratios:
60% Total Debt to Income Ratio
150% CLTV (Combined Loan to Value ratio) if applicant has a first mortgage
Securi : The loan will be secured by a second mortgage on the property.
Restrictions: Principal and all accrued interest will be due on sale or transfer of the
property prior to loan maturity. In the case of a refmancing, the City Manager or his
designee will determine the amount that has to be paid on such refinancing.
In the case of the death of the homeowner, the heirs can assume tt~e indebtedness,
provided they have been certified as income eligible by the City, and that they reside
17
in the house as their primary residence. Otherwise, the total principal and all accrued
interest will be due immediately.
In the case of sale or transfer of the unit, the City of Miami Gardens will share in the
gain realized by the borrower under the following terms:
i. 0 to 3 years - 100% of both the City's loan balance and shared
appreciation (gain).
ii. 3- 30 years - On the 3`d yeat~ City receives 100% of the loan
balance and 85% of the shared appreciation (gain) and the
borrower receives 15%.
iii. Thereafter, the borrower receives an additional 5% of the shared
appreciation (gain) reducing the City's share by the same
percentage
3.3 HOMEOWNERSHIP ASSISTANCE PROGRAM
Program Description:
T'he Homeownership Assistance will provide a modest level of subsidy ttiat could be
leveraged against other programs within the County to increase homeownership
opportunities to assist low-to-moderate income first time homebuyers
The City of Miami Gardens underwrites the loan based on the first mortgage lender's
commitment.
Source of Fundine: CDBG or SHIP depending on applicant characteristics.
Ma~cimum Assistance: The lesser of $20,000 or the amount necessary for credit
underwriting.
Eli~ible Properties:
• Single family unit in the City of Miami Gardens; and
• Sales price cannot exceed the median sales price as established by Florida
Housing Finance Corporation; and
• The property to be purchased must meet Housing Quality Standards (24 CFR
982.401.); and
• All repairs to bring the property to Housing Quality Standards must be completed
prior to closing or be made as part of the purchase. (Repair escrow will be
required)
Eli ib~ le Buvers:
• Households with incomes less or equal to 80% of inedian income adjusted for
family size with CDBG Funding or 120% of inedian income with SHIP Funding.
18
• Ability to afford a monthly payment based on the income and debt.
• Contribute at least $500.00 of personal funds towards the purchase of the home.
• Must not have owned a home in the last 3 years. Exceptions will be made to
single parents who are displaced homemakers.
• The homebuyer must attend and complete a Homebuyer Counseling Course.
• Credit acceptable to the first mortgage lender. However, the City of Miami
Gardens reserves the right to reject any application based on credit.
Loan Terms:
• The first $10,000 of assistance will be provided in the form of a zero percent (0%)
non-amortizing 30 year deferred payment loan. The balance to be forgiven at
maturity provided that the participant has continued living in the residence and
has not transferred ownership to any other entity.
• Any additional assistance, up to $10,000, will be provided as a zero percent (0%)
30 year loan, repayable in 360 equal monthly payments.
• Full repayment of all the assistance is reyuired if the home is not the primary
residence of the participant or if the participant transfers ownership of properiy to
any other entity.
Underwritin~Ratios:
• 30°/a - Total Housing to Income ratio unless tl~e first mortgage lender approves
ratios more than 30%.
• 45% - Total Debt to Income ratio
• CLTV of 105% (Combined Loan to Value Ratio)
First Mortgage Restrictions
The City of Miami Gardens will only provide down payment and closing cost assistance
on first mortgages that meet each of the following terms:
1. The term of the loan must be 40 years
2. The interest rate must be fixed
3. No adjusted rate mortgages
4. No pre-payment penalties
5. Loan must be full documentation only. No stated income and/or assets loans.
6. The total percentage charged for Discount, Origination and Broker fees
cannot exceed 2 points.
19
7. All other lending fees (example: application fees, processing fees, ta~t service
fees, administration fees, etc) must be reasonable. However, they cannot
exceed $500 or 0.5% of the loan amount, whichever is greater.
Securi : Mortgage Lien on the Property. The City will take a subordinate position
based on fmancing and additional subsidy.
Restrictions: The applicant must reside in the house at all times. The loan will be due at
maturity, sale or transfer of the property or if it ceases to be the residence of the
applicant.
In the case of refinances, the City Manager or his designee will determine the amount that
has to be paid back based on the funding source.
In the case of the death of the homeowner, the heirs can assume the indebtedness,
provided they have been certified as income eligible by the City, and that they reside in
the house as their primary residence. Otherwise, the total principal and all accrued
interest will be due immediately.
In the case of sale or transfer of the unit, the City will share in the appreciation/gain
realized by the borrower according to the following schedule:
i. 0 to 5 years - 100% of both the City's loan balance and shared
appreciation (gain).
ii. 6- 10 years - On the 6th year, the City receives 100% of the loan
balance and 85% of the shared appreciation (gain) and the
borrower receives 15%.
iii. Thereafter, the borrower receives an additional 5% of the shared
appreciation (gain) reducing the City's share by the same
percentage
The above gain sharing proposal will terminate in the case of foreclosure; however, the
City will require lenders to provide us a right of first refusal to purchase the loan at a
negotiated price.
20
Pre-Application
is received.
Pre-Application is
reviewed for eligibility.
--
If applicant is eligible, a
letber will be mailed,
r+equesting documenls
to be provided within 15 ~
days.
In-Take for Loan
Pre-Approval.
If loan is pre-approved, ~
physical inspection of
property scheduled.
(5 Days)
Appllcant must solicit
construction bids and
make selection within
30 days.
Loan is approved and
closing is scheduled
within 5 days.
Within 5 days of loan
closing, Contractor is
given Proceed Order.
(execution of Contract
between Homeowner
and Contractor done at
closing.)
Contractor must
commence work within
30 days of Proceed
Order.
Contractor has a
maximum of 90 days
(from Proceed Order) to
complete rehab work.
21
PROCEDURES (Department Use Onlv)
SECTION 4: HOUSING REHABILITATION PROGRAM
4.1 PROGRAM OB.TECTIVES
The objectives of the program are as follows:
a. To prevent moderately declining neighborhoods in the City from further
deterioration by providing assistance for rehabilitation.
b. To provide safe and decent housing to residents of the community by
rehabilitating owner-occupied single unit properties.
c. To encourage interest in preservation in the broader neighborhood through
our rehabilitation activities.
d. To partner with contractors and the construction indusiry in providing
access to jobs in the neighborhoods by encouraging the hiring of
neighborhood residents.
4.2 MAXIMUM ASSISTANCE
a. The Loan Amount for the applicant will be determined by the sum of the
cost of the rehabilitation and all loan related costs paid to third parties.
b. The Loan Amount, as determined in 4.2(a) above, cannot be more than the
maacimum loan amount for the program as established by the Housing
Policy in effect for the applicable year.
4.3 ELIGIBLE REHABILITATION COSTS
a. The actual cost of rehabilitation necessary to bring the property to the
decent sanitary standard, i.e. correct health and safety violations.
b. The actual cost of rehabilitation necessary to bring the property to Florida
Building Code, i.e. correct code violations.
c. The cost of rehabilitation to correct or remove incipient violations
including all physical conditions of the property which, if not repaired,
would deteriorate into actual violations of the decent, safe, and sanitary
standard of the Florida Building Code within two years.
d. The cost of building permits and related fees required to carry out the
proposed rehabilitation work, including but not limited to architectural and
engineering fees.
e. For Disaster Loan Program, damages being repaired must have been
caused by the 2005 Hurricanes and those repairs are limited to roof,
windows and hurricane miti a,~ tion• ~~~: reiar~a a~ W~u W°`k
22
4.4 INELIGIBLE COSTS
a. Work so extensive as to be equivalent to new construction or
reconstruction of the property. (This does not exclude gut rehabilitation of
a property if necessary to meet the Florida Building Code provided it can
be accomplished within the maYimum amount established under the
program)
b. General property improvement for cosmetic reasons.
c. The repair or construction of swimming pools is an ineligible cost,
however, the cost to fill in or eliminate them from the property is an
eligible cost.
d. Materials, fixtures, equipment or landscaping of a type or quality which
substantially exceeds that customarily used in Miami Gardens for
properties of the same general type as the property to be rehabilitated.
e. Purchase, mstallation or repair of furnishings.
f. Cost of acquiring the property to be rehabilitated.
g. Any reimbursement for work done prior to approval of the fmancial
assistance or contracted for, either verbally or in writing, prior to the
approval of assistance.
h. Payment of any lien or judgment against the property including back
taaces. However, the cost of one annual property insurance premium can
be paid out of the loan proceeds with evidence that homeowner can
continue to maintain the insurance covera~e.
4.5 SELECTING HOMEOWNERS
a. The availability of rehabilitation funds will be advertised in a newspaper
of general circulation that services ethnic and diverse neighborhoods
within the City. When advertising SHIP funded activities, the advertising
will run~t least 30 days before,~ommittin~ any funds. °~~` f°`
- - _ Deleted: the beginning of the
b. An application period of not less than two weeks will be established for arr~~ati~ p~~ __
the receipt of applications.
c. All applications received will be logged in the orderFeceived. °~~' "WaS
d. Applications will be processed on a first-come, first~served basis from all -~+~a:
- ,
applicants meeting program eligibility criteria, subject to funding
availability.
e. Applicants will be funded on a first-come, first-ready, first-served basis.
f. Priority will be given to
i. Elderly and disabled residents
ii. Applicants with code violations pertaining to home repair.
23
iii. Applicants with repairs that pose eminent danger to members of
the household
iv. Applicants residing in one of the twelve (12) target areas identified
in the City's Comprehensive Plan.
g. Applicants not funded will be put on a waiting list and will receive priority
in the ne~ funding cycle.
4.6 UNDERWRITING
4.6.1 REQUIRED DOCUMENTATION:
The applicant's application package must contain sufficient information
for the City to reach an informed decision about the loan. Extra
importance must be placed on documents that ensure that the loan meets
programmatic guidelines.
At a minimum all files must have the following documents:
a. City of Miami Gardens Pre-Application (Appendix 4A)
b. Scope of Work~Appendix 4B) {~~a: m s~s W~r~ o~~e e~a~es ,
- -
c. ~roperty Market Value from Countv Appraiser's web site (Appendix .{ o~etea: nP~~~ Re~rt ~~f~eQ~ea~, ;
4C)
d. Verification of Household Income
e. Verification of Household Assets
f. Verification of Mortgage/Rent
g. Credit Report
h. Credit explanations (If delinquencies within the last one-year)
i. Proof of ownership (Deed)
j. Proof of Insurance °~~: (~° ~ p~a fr°m ~°e°
. _ _ _ _ _ _ proceeds)
k. Proof of,~urrent property taxes _ . _ - - - - - - - - - - - - - - _ _ _ _ _ _ - ~eted: ~~~ac of ~
1. Copies of identification~or all applicants ~~; ~~ ~
m. Copies of birth certificates for all mino o~etea: a~~a~au J
n. Additional documentation may be required based on the employment
situation or property type or apparent environmental hazard.
pocument~, must be no mare than 90 days old on the date the loan is o~~a: c~t a~~eot
_ __ - __
closed. oeietea: s
4.6.2 CREDIT:
The selection of applicants will not be made solely on credit, however, the
interest of the City will be protected by ensuring that applicants have the
24
willin~ess and ability to make all other monthly obligations, especially,
housing payments. Such willingness to make all monthly obligations must
be determined by reviewing the number and severity of delinquencies
within the last 12 months.
a. All judgments, collections and profit and loss write-offs within the last
12 months must be satisfactorily explained.
b. All bankruptcies must be discharged for at least 12 months.
~ __ - .
c. The absence of a credit profile will not disqualify any applicant from
receiving assistance.
d. Credit scores will not be used for making decisions on credit profile of
applicants.
4.63 RATIOS':
~
e
> >
~
. ~
4.6.4 COLLATERAL:
The value of the property cannot be more than the amount establi.shed bv
the Deoartment of Communitv Develooment Housin~ Policv for the
applicable progrc~am year. ~
In addition, the Combined Loan to Value ratio (CLT~ percentage of all
existing mortgages on the property including the rehabilitation loan as
compared to the value of the property, cannot be more than 150%. ~
4.6.5 AssETS:
The interest from all interest eaming assets must be added to the income
of the household. The total of liquid assets of applicants, with the
exception of funds in a retirement account cannot be more than $10,000.
The City will expect applicants with liquid assets in excess of $10,000 to
Deleted: 24
- Comment {e1]: Ratios will not be
calculated f~ Housing
Re6abilitation/Emergency/Disasler
Houswg Prog~ams. Neither of these
Prog~ams wi71 required repayment
Deleted: the maximum purchase price
for e~cisting properties as established by
Florida Housing Finance Corporation aud
adopted by the City Commission in the
Housing Policy for the Community
Development Deparament. (See Section
3) ~
Deleted: However, in cases w6ere an
appreisal is not available and the Couuty
Appraisec's Market Value is used, the
CLTV can be more than 150%.
25
use the excess liquid asset in the rehabilitation of the property. Any
shortfall will then be covered using funds from the program.
4.6.6 IrrCOME:
Income must be derived for the household according to SHIP and HUD
guidelines as enumerated in Section 2.
Applicants must establish long-term, stable income from employment or
other sources. The Loan Program Manager must verify the applicant's
employment for two full years that precede~ the loan application. usin~
preferable method which is a third party completed verification of
employment. If the income can not be determined throu~h this method,
alternatives such as pavstubs and W-2's can be utilized individually or
oiJ ntl~ . _ _ _ _ _
4.7 PROCESSING
4.7.1 P~-~rrT~
a. Review Pre-Application (Appendix 4A) to ensure that the property is
in the City of Miami Gardens, that no taxes are delinquen that the
property market value does not exceed proQram limit, that the existing
mortga~es do not exceed the CLTV maximum and that the income
denoted on the pre-application is within the income limits. Use the
property information as obtained from the Miami-Dade Property
Appraiser's website. (Appendix 4C)
Deleted: ed
{ Deleted: usi^g W-2s. 1
Deleted: If the applicant has an
employment history of less than two
years, an explanation with coiresponding
records must be obtained w~c~mmeat the
file. and was previously in school or the
military, the Loan Progam Manager
I must obuin a copy of his or her diploma,
`ticarisc;ripts or discharge papers. ~
If applicant does not qualify based on the above criteria (Appendix
4D), they will receive a denial form lette~ The denial letter will be neieted: s~s~ea by r~e -.o~, ~os~
sent to the applicant within ten (10) working days of the submittal of Ma"~e`
the pre-application. The Department of Community Development will ~^n~tea: Not ooubie
strikethrough
strive to identify and refer the applicant to other available programs
that are not funded by the City of Miami Gardens.
c. If applicant does qualify based on the criteria in 4.7.1 a, they will
receive a pre-qualification lette~ The pre-qualification letter will be
sent to the applicant within ten (10) working days of the submittal of
the pre-application. The letter will either~nsiruct the applicant to
schedule an intake appointment in order to proceed with the loan
application process or will advise that they have been placed on a
waiting list and will be contacted in the order received and in
consideration of fundin~ availabilitv_
d_The intake must be scheduled within rve 5) vsiness days from the ~
__
date of the ]etter: Applicants should allocate about one and half hours
for an intake interview.
Deleted: Appendix 4D
Deleted: si~ed by the Loan Progrem
Manager.
Formattsd: Not Double
strikethrough
ne~eted: ana wiu
l DC~CtI'd: .
Formatted: Indent: Left: 1",
Numbered + Level: Z + Numbering
Style: a, b, c, ... + Start at: 1+
Alignment: Left + Aligned at: 0.75"
+ Tab after: 1" + Indent at: 1",
Tabs: 1.25", List tab + Not at 1"
Deleted: seven (7
Deleted: working
26
I '
Deleted: ¶
4.7.2. INT~
a. ~Complete all the information on a blank Fannie Mae 1003 (Appendix neietea: ~aP„c or ~a~.~;ce
4E) Denote as N/A if information does not pertain to the applicant.
b. Make sure that the applicant signs the application.
c. Loan officer or intake specialist must sign the application after the
applicant signs.
d. Collect all documents from applicant checking offthe documents on
the checklist (Appendix 4F) as it is handed over to you.
e. Review all the documents while the applicant is with you to ensure
that you have the correct documents.
f. In addition ta the 1003, the applicant must si~n a 4506 IRS Form, a
Conflict of Interest Disclosure, an Affidavit of Understanding, an
Authorization to Release Information Form and Employment and
Deposit Verification Forms.
g. Prepare a Missing Documents Form(Appendix 4G) for the applicant
establishing a deadline and keep a copv in the applicant's file. The
deadline is calculated as five ~) business davs from the Intake Date,
exceptions will be made upon Staff's discretion.
4.7.3 INPUT L.OAN INFORMATION
a.Input the information into the desi~nated jrackin~lo~irrunediately after oe~eted: s~eaa~e~c
~
the intake.
b.Ensure that all the pertinent information is completed.
c. Send out Employment and Deposit Verification Forms per HUD
guidelines._(Print verifications from the system). For other non
applicant members of the household use blank verification forms.
(Appendix 4H)
4.7.4 ASSIGrr Lonrr Nu~ER
Assi T Loan Number will include digits such as follows:
a. Program Year
b. Funding Source (CDBG, SHIP, HOME)
c. Program (Rehabilitation, Replacements, Homeownership, Disaster,
and Emergency.)
d. Sequential Number from start of program
27
4.7.5 REVIEW ALL DOCUMENTS - PROCESSING AND UNDERWRITING
a. Review all documents presented within five(5) business days of intake..
b. Ensure that the a~plicant has ownership interest in the propertv. Check
that the addresses on the various documents_presented are the same and
reflects the propertv address.
c. Calculate the total Loan To Value to make certain that the Combined
Loan To Value does not exceed l 50%.
d. Calculate incomeper fi u~ res provided on 6m~lovment Verification
Form. If not available, use pav stubs or available income documents as
per HUD/SHIP guidelines.
e. Calculate income from assets utilizing information provided on the
Verification of Deposit. Otherwise, manually calculate from the bank
statements provided.
£ Verify the County Recorders Website and search for existing mort~aQCS
related to the applicant's propertv. This is done as a preliminary
measure of calculatine the Combined Loan to Value.
f. Assure that all household members are documented in the file, this
includes their income~assets and address confirmation.
4.7.6 LOAN DATA INPUT
a. Input loan information into the Finance Tracking Sheet. (Appendix 4I)
b. Request a Contract number from the Procurement Deparhnent.
4.S TITLE W~RK
4.8.1. Initiate Requisition for Title Work Purchase Order.
4.8.2. Unon Purchase Order bein~ anvroved. re4uest an Ownership and
Encumbrance re~ort from the designated Title Work provider.
4.8.3. Retain a coQy of the request for the file as well as the payment
documentation for this service.
4.8.4. Loan Propram Manager will review report upon receipt far total
encumbrances and to confirm propertv ownership.
28
4.9 INSPECTION
4.9.1. If title work is received and found with no exceptions, reguisition for
Inspection can be initiated. .
4.9.2. Request for Initial Inspection should contain all the pertinent inforniation
completed as listed on the order form. (Appendix 4J)
~4.9,~. Retain a copy of the request for the file as well as the payment
-
documentation for this service.
4.9.5. From the Inspection a Scope of Work will be provided with 10 business
davs from bein~ ordered. The Scope of Work will be reviewed b. s~
4.9.6. Once finalized, a co~y the Scope of Work is sent to the homeowner and
copies are also sent to all the City approved General Contractars to
schedule appointments with the homeowners and present them with their
estimates.
4.9.6. The homeowner has thirty (30) days to collect a minimum of three (3)
responsible estimates and present them to the Department.
4.9.7. The Department will review the estimates to confirm that the~are
resnonsible and the contractor with the lowest st~ imate will be selected.
4.9.8. The homeowner will be advised of the selection.
4.1 O LOAN APPROVAL RECOMMENDATlON MEMO
pelCtCd: </!>Make siae that the amourt
stipulated on the mquest is the maximum
loan amount less closing costs.¶
<#>Provide Building Inspection Unit
with v*operty informatioo from the
Miami-Dade County Property
Appraiser's web site. ¶
Deleted: 4
Deleted: bid ~
4.10.1 Loan Program Manager will prepare a Loan Approval Recommendation
Memo for the Director's and City Manager's,~pproval. (Appendix 4K) -{ Deleted: si~ature
4.10.2~The amount to be anproved should include the rehabilitation estimate, the _- o~etea: u~~~PosS~b~e-o~
- . . _ . amount for Loan Apptoval
title cost, the inspection cost, credit report cost, recordin~ fees and anv Recommendation Memo if the
other fees bein~collected from the loan proceeds. ~ehaba~r~rio~ e~a~e ~S oo~ e~~~abie.
4.103. Memo must be completed only after receipt of all verifications and re-
calculation of the household income if applicable. Use HUD's Income
Determination website and print the fmdings for the file. (Appendix 4L)
HUD Income Calculator
~4.11. REQUEST HUD ENVIRONMENTAL REVIEW ~~~~: Highlight
__ . _
4, i 1.1. R uest Environmental v e-mail to the assi ed erson. ~~`~' ~°°~~`~ ~`
~Q ~... ~~ Evwonme~al Request Memo from the
(Appendix 4 N(i)) and ~e Project
4.11,.2. Property Information from County Appraiser's website information (A~endix 4 N(u)) with tbe
following attac6mears
4.113. Signed Application for assistance (F'NMA Form 1fl03 Appendix 4E)
4.11.4. Scope of Work Write-Up (Append'u~ 4B)
4.11.5. Proof of Flood Insurance (if pmperty is in a flood zone)
4.11.6. First two pages of the property appraisal's report {if available)
29
412. PREPARE SHIP CERTIFICATION (Appendix 4P) and AWARD LETTER (Appendix
4Q), if applicable.
4.12.1. This will take place after all eligible bids are received and approved by the
Director and City~ Mana~er. { ~e~etea: °s swia~,s ~~~u~ utic
4.12.2. T'he loan amount listed should be a sum of the bid amount and any and all
closing costs associated with the loan.
4.12.3. Request applicant sign SHIP Income certification or mail income
certification to applicant with a self-addressed stamped envelope. All
mailed income certifications must be notarized.
4.12.4. Upon receipt of SHIP income certification, submit to SHIP Administrator
(Loan Program Manager) for signature.
4.12.5. Print Commitment Letter (or use award letter) and mail to applicant and
all interested parties
4.13. PREPARE CLOSING PAPERS
4.13.1. Contact the Applicant,pnd Contractor to schedule closing. ~°t~~' ~°~~`°` ~
4.13.2. Prepare closing documents using closing checklist (Appendix 4R) to
ensure that all required documents are printed.
4.133. Review the documents to ensure that (i) name, (ii) address of the property,
(iii) closing date, and (iv) terms are correct with no spelling errors.
4.13.4. Put signature tabs on all pages requiring applicant and co-applicant
signatures.
4.13.5. Request check from Finance for Recording Fees and Taxes.
4.14. CLOSE LOAN
4.14.1. Ensure that the applicant and co-applicant sign all required pages.
~
~4.14,K. Record Mortgage at the County Recorder s Office. - Deleted: 4.142. . Request check from
F;,,~~ f~ R~aa;~e Fus ~a T~S.q
4.14,~. The Mortgage must be recorded prior to any payments being made other ~~~ 3
--
-- -
than the initial closing costs. oe~eted: a
4.14~4. Mortgage should be taken to County Recorder's office with a pre-stamped u~etea: s
-
envelope for return of the Recorded Document.
4.14,~5. After the 3 Day Right of Rescission period has elapsed, have contractor ~e~et~a: 6
~
- _
sign the Contractor-Homeowner Agreement and the Notice of
Commencement.
30
4.15. POST CLOSING
4.15.1 Create tickler file to track for the return of the original mortgage from the
County Recorder's office.
4.15.2 Original Note and Mortgage should be kept separate from loan file,
preferably in a fire proof cabinet.
4.153 Copy of the Note and Mortgage should be kept in the loan file for review
and audit purposes.
4.15.4 Loan File will be kept in the office until:
a. the loan is paid off in its entirety
b. the loan has matured and the mortgage is satisfied.
c. the original recorded satisfaction is received back from the County
Recorder's Office.
i. Original Satisfaction and Mortgage should be sent back to the
borrower marked paid.
ii. Copy of Satisfaction should be placed in the file and the file sent
to storage.
416 PAYMENT PROCESSING ~INVOICES SUBMITTED BY CONTRACTORS~
4.16.1. Prior to commencement of the rehabilitation work on the approved
property by the selected contractor, the Department would have received a
copy of the estimated work schedule along with payment time lines. The
original of this document is to be submitted to the homeowner.
4.16.2. In order to submit payment requests, the contractor is to obtain the
approval of the homeowner to ensure that work far payment being
requested is satisfactory. The contractor may also be required to obtain
the building department approval if an inspection is required for the work
that has been completed up to that point.
4.163. Upon obtaining the necessary approvals, the contractor will submit
invoices to the Community Development Department for payment
approval.
4.16.4. The Director or his/her designee will approve the invoice utilizing the
Contractor Payment Request form (Appendix 4S) and will forward the
invoice along with this form to the City's Finance Department. T'he
Finance Department will then process the invoice for payment in
accordance with their established internal procedures.
31
SECTION 5: REPLACEMENT HOME PROGRAM
S.1 PROGRAM OBJECTIVES
The objectives of the program are as follows:
a. To prevent moderately declining neighborhoods in the City from further
deterioration by replacing dilapidated homes.
b. To provide safe and decent housing to residents of the community.
c. To encourage interest in preservation in the broader neighborhood through our
replacement home activities.
d. To partner with contractors and the construction industry in providing access
to jobs in the neighborhoods by encouraging the hiring of neighborhood
residents.
S.2 MAXIMUM ASSISTANCE
5.2.1. The Loan Amount for the applicant will be determined by the hard and
soft cost of the new construction and all loan related costs paid to third parties.
5.22. 1'he Loan Amount, as determined in 4.2(a) above, cannot be more than the
maximum loan amount for the program as established by the Housing Policy
in effect for the applicable year.
5.3 ELIGIBLE COSTS
a. All hatd and soft costs associated with the construction of the replacement
home, will be an eligible cost.
b. All costs associated with the demolition of tt~e properiy and the preparation of
the lot for the new replacement home will be an eligible cost.
5.4 INELIGIBLE COSTS
a. Materials, fixtures, equipment or landscaping of a type or quality which
substantially exceeds that customarily used in Miami Gardens for properties
of the same general type as the properly to be replaced.
b. T'he repair or construction of swimming pools is an ineligible cost; however,
the cost to fill in or eliminate them from the property is an eligible cost.
c. Purchase, installation or repair of furnishings.
d. Cost of acquiring the property to be replaced.
e. Any reimbursement for work done prior to approval of the fmancial assistance
or contracted for, either verbally or in writing, prior to the approval of
assistance.
32
f. Payment of any lien or judgment against the property including back taxes.
However, the cost of an annual property insurance premium can be paid out of
the loan proceeds.
S.S SELECTING HOMEOWNERS
a. The availability of rehabilitation funds will be advertised in a newspaper of
general circulation that services ethnic and diverse neighborhoods within the
City. The advertising will run for at least 30 days before the beginning of the
application period. The availability of rehabilitation funds may also be made
public by posting notifications in City Hall and on the City of Miami Gardens
website.
b. An application period of not less than two weeks will be established for the
receipt of applications.
c. All applications received will be logged in the order it was received.
d. Applications will be processed on a first-come, first served basis from all
applicants meeting program eligibility criteria, subject to funding availability.
e. Applicants not funded will be put on a waiting list and will receive priority in
the next funding cycle.
S.G UNDERWRITING
Applications for replacement home will be underwritten using the criteria
established in Section 4.6.
5.7 PROCESSING
Replacement home applications will be processed as enumerated in Section 4.7.
33
SECTION 6: HOMEOWNERSHIP ASSISTANCE PROGRAM
G.1 PROGRAM OBJECTIVES
The objectives of the program are as follows:
a. To provide assistance to First-Time Homebuyers in purchasing properties in
the City of Miami Gardens.
b. To increase the homeownership rates in the City thereby bringing stability in
our neighborhoods.
c. To increase the wealth of our residents through the building of equity as
homeowners.
d. To partner with the financial sector in bringing investments in our community.
6.2 MAXIMUM ASSISTANCE:
a. The M~imum Assistance to be provided under this program is as established
by the Housing Policy in effect.
6.3 ELIGIBLE COSTS
a. All down payment and closing costs associated with the purchase of a single
family home, condominium or a co-operative in the City of Miami Gardens.
However, the applicant must contribute at least five hundred dollars ($500.00)
of his or her own funds to the down payment or closing costs associated with
the purchase.
b. Rehabilitation costs can be made part of the purchase transaction, however,
the funds must be escrowed by the first mortgage lender and a certificate of
completion provided to the City upon the completion of the rehabilitation.
G.4 INELIGIBLE COSTS
a. If rehabilitation is financed with the purchase, the following will not be an
eligible cost:
i. Materials, fixtures, equipment or landscaping of a type or quality which
substantially exceeds that customarily used in Miami Gardens for
properties of the same general type as the property to be replaced.
ii. The repair or construction of swimming pools is an ineligible cost,
however, the cost to fill in or eliminate them from the property is an
eligible cost.
b. Closing costs that are predatory and not customary to a purchase transaction.
34
c. Cost of acquiring fumishings as part of the purchase transaction.
6.S SELECTTNG APPLICANTS
6.5.1. The availability of down payment and closing cost will be advertised in a
newspaper of general circulation that services ethnic and diverse
neighborhoods within the City. The advertising will run in accordance to
funding source requirements, at least 30 days before the beginning of tt~e
application period. An application period of not less than two weeks will be
established for the receipt of applications. All programs will also be made
public by posting notifications in City Hall and on the City of Miami Gardens
website.
a. All applications received will be logged in the order received.
b. Applications will be processed on a first-come, first served basis from all
applicants meeting program eligibility criteria, subject to funding availability.
c. Applicants not funded wiIl be put on a waiting list and will receive priority in
the next funding cycle.
6.6 UNDERWRITING
Underwriting under the First-time Homebuyer program will be restricted to
programmatic eligibility. Credit underwriting will be limited to the ability of the
borrower to manage the housing payments and to over leveraging of the property.
6.7 REQUIRED DOCUMENTATION
The application package must contain sufficient information for the City to reach
an informed decision about the loan. Extra importance must be placed on
documents that ensure that the loan meets programmatic guidelines. It should be
noted that applicants for this program should first work with a first mortgage
lender (bank) of their choosing. The City of Miami Gardens will have identified
approved lenders that are familiar with the City's program guidelines. The lender
would then collect all of the required documents from the applicant and submit
them to the Department of Community Development on the applicant's behalf.
At a minimum all files must have the following documents:
i. Application for pown Payment Assistance (City of Miami Gardens form)
ii. Application Form 1003- (handwritten or typed) signed by client
iii. Good faith Estimate and Truth -in-Lending from First Mortgage lender
iv. Credit Report
v. Verification of Income and Employment
35
vi. Verification of Down Payment or $SU0.00.
~
viii. IRS Form 4506
ix. Last 3 Bank Statements (VOD) 6 months if using SHIP
x. Verification of Rent
xi. Sales Contract
xii. Commitment letters from all other lenders
xiii. Copy of Appraisal
xiv. Certificate of Homeownership Training
xv. Title Commitment Endorsement
xvi. Loan Closing Frotection Letter from Closing Agents
xvii. Insurance Endorsed to City of Miami Gardens (hazard, flood,
windstorm, if applicable)
xviii. Certificate of Occupancy (if new construction)
xix. Tax print-out of property
Credit documents must be no more than 90 days old on the date the loan is closed.
G.8 CREDIT
The selection of applicants will not be made solely on credit, however, the interest
of the City will be protected by ensuring that applicants have the willingness and
ability to make all other monthly obligations, especially, housing payments. Such
willingness to make all monthly obligations must be determined by reviewing the
number and severity of delinquencies within the last 12 months.
a. All judgments, collections and profit and loss write-offs within the last
12 months must be satisfactorily explained.
b. All bankruptcies must be discharged for at least 24 months.
a The absence of a credit profile will not disqualify any applicant from
receiving assistance.
d. Credit scores will not be used for making decisions on credit profile of
applicants.
6.9 RnTios
The ability of the applicant to make all monthly obligations will be measured by
the percentage of their monthly income spent on housing payments as well as the
percentage spent on all monthly obligations, including housing.
36
The percentage of the applicant's housing payments (mortgage, insurance, taxes
and homeowner association dues) as compared to income should not be more than
thirty percent (30%). And the percentage of the applicant's total monthly
obligations (housing payment and all other debts) as compared to income must
not be more than forty-five percent (45%).
This percentage may be higher if the first mortgage lender is willing to make
loans at higher ratios. However, such first mortgage must meet Fannie Mae,
Freddie Mac or FHA standards. Under no conditions will a loan be made at
higher ratios when the first mortgage is a sub-prime loan.
6.10 COLLATERAL
T'he value of the property cannot be more than the maacimum purchase price ~
as established by Florida Housing Finance Corporation and
adopted by the City in the Housing Policy for the Community Development
Department. (See Section 3)
In addition, the Combined Loan to Value ratio (CLT~, percentage of all existing
mortgages on the property as compared to the value of the property, cannot be
more than 105%.
G.11 ASSETS
The interest from all interest eaming assets must be added to the income of the
household. The total liquid assets of applicants, with the exception of funds in a
retirement account cannot be more than $10,000. T'he City will expect applicants
with liquid assets in excess of $10,000 to use the excess liquid asset as down
payment. Any shortfall will then be covered using funds from the program.
6.12 INCOME
Income must be derived for the household according to SHIP and HUD guidelines
as enumerated in Section 2.
Applicants must establish long-term, stable income from employment or other
sources. The loan officer must verify the applicant's employment for two full
years that preceded the loan application using W-2s. If the applicant has an
employment history of less than two years and was previously in school or the
military, the loan officer must obtain a copy of his or her diploma transcripts or
discharge papers.
6.13 PROCESSING
The City of Miami Gardens expects that all Homeownership applications will be
received from a lending institution or a non-profit organization. However, any
application received in the Department, whatever the source, must be processed
37
and a letter sent to the borrower and all interested parties as to the disposition of
the application.
6.13.1. REVIEW FOR COMPLETENESS
a. Review the City of Miami Gardens Homeownership Application
(Appendix 6A) to ensure that the property is in the City of Miami Gardens
and the income denoted on the application is within the income limits.
b. Make sure that the homebuyer application is signed by the applicant.
c. Review all the documents submitted to ensure that you have all the correct
documents.
d. Prepare a missing documents letter, if applicable (Appendix 4G) with
copies to applicant, first mortgage lender and non-profit organization, if
applicable.
C).13.2. INPUT OF LOAN DATA
a. Input the loan information into the designated loan system after the
review.
b. Ensure that all the pertinent information is complete.
c. Do not forget to complete the tracking form.
6.13.3. REVIEW ALL DOCUMENTS - PROCESSING AND UNDERWRITING
a. Review all documents presented. Check to ensure that the addresses on
the various documents presented are the same and reflects the property
address.
b. Check to ensure that all the documents were dated within the last 90 days.
c. Calculate income per pay stub or available income documents as per
HUD/SHIP guidelines
d. Send out Verifications as per HUD/SHIP guidelines including for other
non-applicant members of the household.
6.13.4. ASSiGN Loarr N[nv~Ex
Loan Number will include digits such as follows:
a. Program Year
b. Funding Source (CDBG, SHIP, HOME)
c. Program (Rehabilitation, Replacements, Homeownership, Disaster,
and Emergency.)
d. Sequential Number from start of program
38
G.13.5. PREPARE LOAN APPROVAL RECOMIvtENDATION MEMO
Loan Approval Recommendation Memo will be prepared by the Loan
Program Manager and the for the Director's signature. (Appendix 4K)
a. Use the lesser of the amount of request from the lending institution, tt~e
maximum possible down payment amount necessary to achieve a 30%
housing ratio or the ma~cimum loan amount.
b. The Loan Approval Recommendation Memo must be completed only after
receipt of all verifications and re-calculation of the household income.
Use HUD's Income Determination website and print the findings for the
file. (Appendix 4L) HUD Income Calculator
c. All parts of the Loan Approval Recommendation Memo must be
completely filled out.
6.14 REQUEST HUD ENVIItONMENTAL REVIEW
Request Environmental by completing the Project information sheet (Appendix 4
Nii) with the following attachments:
a. Property Information from County Appraiser's website
b. Signed Application for assistance (FNMA Form 1003, Appendix 4E)
c. Office Work Write-Up (Appendix 4B)
d. Proof of flood insurance (if property is in a flood zone)
e. First two pages of the property appraisal's report. If available, include the
first two pages of the property appraisaPs report.
6.15 PREPARE SHIP CERTIFICATTON (Appendix 4P) and AWARD LETTER (Appendix
4Q), if applicable.
6.15. L This takes place after receipt of bids from the inspection unit
6.15.2. Use the selected bid amount and add all closing cost as the loan
amount.
6.153. Ask applicant to come and sign SHIP Income certification or mail
income certification to applicant with a self-addressed stamped
envelope. All mailed income certifications must be notarized.
6.15.4. Upon receipt of SHIP income certification, submit to SHIP
Administrator for signature.
6.15.5. Print Commitment letter (or use award letter) and mail to applicant
and all interested parties.
6.1 G. REQUEST CLOSING DOCUMENTS FROM LENDER OR TITLE COMPANY
39
The following documents must be requested:
i. Title Commitment
ii. Loan Closing Protection Letter from Closing Agents
iii. Insurance Endorsed to City of Miami Gardens (Hazard, Flood,
Windstorm, if applicable)
iv. Certificate of Occupancy (if new consttuction)
v. Preliminary HUD-1 Form
G.17 REQUEST CHECK
Loan Program Manager will send the Finance Department a Direct Payment
Request Form seeking the loan closing check to be made payable to the Title
Company. Attach:
i. A copy of the signed Loan Approval Recommendation Memo
ii. The IDIS number
iii. A copy of the Environmental Clearance.
iv. W-9 Form, if this is a new vendor
G.l H PREPARE CLOSING PAPERS
6.18.1. Contact the lending institution and/or the non-profit organization for a
closing date.
6.18.2. Prepare closing documents using closing checklist (Appendix 4R) to
ensure that all required documents are printed
6.18.3. Review the documents to ensure that (i) name, (ii) address of the
property, (iii) closing date, and (iv) terms are correct with no spelling
errors.
6.18.4. Put signature tabs to all pages requiring applicant and co-applicant
signatures.
6.18.5. Include the Loan Closing Instruction Sheet (Appendix 6C) ~
6.19. POST-CLOSING REVIEW
a. Ensure that the applicant and co-applicant signed all required pages.
b. Ensure that no disbursement went to t1~e homebuyer on the HUD-1 and
that it was signed by the homebuyer.
SECTION 7: EMERGENCY REHABILITATION PROGRAM
40
7.1 PROGRAM OBJECTIVES
The objectives of the program are as follows:
7.1.1. To provide immediate assistance to homeowners to prevent further
Deterioration of the property
7.1.2. To provide a safe and decent housing to residents of the
community by rehabilitating owner-occupied single unit
properties.
7.2 MAXIMUM ASSISTANCE
a. The Loan Amount for the applicant will be determined by the sum of the
cost of the rehabilitation, a 10% contingency and all loan related costs
paid to third parties.
b. The Loan Amount, as determined in 4.2(a) above, cannot be more than the
m~imum loan amount for the program as established by the Housing
Policy in effect for the applicable year. ($15,000 for 2005-2006)
7.3 ELIGIBLE REHABILITATION
The following are the repairs that will be eligible for this program:
A. Plumbing:
i. No running cold or hot water in the entire building.
ii. Sewage accumulation.
iii. Dangerously broken plumbing.
iv. House sewer obstructed.
v. Supply line obstructed.
B. Central Heating and Cooling Systems
C. Boiler defective and inoperative, missing.
D. Gas burner defective and inoperative.
E. Central AC defective and inoperable (when AC is medically necessary)
F. Plastering:
Loose, bulging and in unkempt condition, in imminent danger of collapse
G. Egress:
i. Doors and/or bulkheads broken and not secure.
ii. Stairs at entrance broken and causing hazard.
H. Electrical:
i. Electricity not provided for entire building or visibly hazardous
electrical defects.
41
ii. Water leakage affecting electrical fixtures, creating fire hazard.
I. Roofmg:
i. Cornice defective and in danger of falling.
ii. Parapet walls leaning or bulging, in danger of falling.
iii. Rain leaders and gutters defective causing water to enter premises.
iv. Roof leaking or open to elements.
J. Glazing:
Windows and skylights broken and missing, permitting the elements to
enter premises, (windows must be out, not just cracked) "heating season
only."
K. Other Hazardous Conditions:
Any documented unsafe condition
7.4 DECLARING EMERGENCY SITUATION
An Emergency Situation is declared by the Inspection Supervisor through a memo
to the Loan Program Manager, showing the nature of the emergency and the cost
to repair it.
7.5 COMPETITIVE BIDS
For an emergency loan, only one bid will be required. However, the Community
Development Director will ensure that the bid is responsible and within 5% of the
office estimate.
7.6 UNDERWRITING
~.C.1 REOUIRED DOCUMENTATION
Since this is an emergency situation, attempts must be made to collect just the
minimum documents to decide on program eligibility. All other documents can
be collected during the construction or at a later stage.
At a minimum all files must have the following documents:
a. City of Miami Gardens Pre-Application (Appendix 4A)
b. Scope of Work Write-Up with office estimate (Appendix 4B)
c. Appraisal Report (if required), or Property Value from Appraiser's web
site (Appendix 4C)
d. Income Certification
e. Credit Report
f. Proof of ownership (Deed)
g. Proof of payment of property taaces
42
h. Copies of identification cards for all applicants
i. Copies of birth certificates for all dependents
j. Additional documentation may be required based on the employment
situation or property type or apparent environmental hazard.
Credit documents must be no more than 90 days old on the date the loan is closed.
7.7 PROCESSING
7.7.1. Pt~-~rrT~
7.7.1.1. Review Pre-application (Appendix 4A) to ensure that the
property is in the City of Miami Gardens, no ta~ces are owed and
the income denoted on the pre-application is within the income
limits. Use the property information as obtained from the
propert,~~praiser's website. {Appendix 4C)
7.71.2 Complete a denial letter if applicant does not qualify based on the
above. (Appendix 4D)
7.7.1.3 Schedule intake within 24 hours. Allocate not more than one and
half hours for an intake and do not schedule more than 2 intakes in
a day since you will have to input all the information in the
Genesis program that day and will have to generate any missing
information letters that same day.
7.7.2 IrrrnicE
7.7.2.1. Complete a Fannie Mae 1003 Application (Appendix 4E) Denote
as N/A if information does not pertain to the applicant.
7.7.2.2. Make sure that the applicant signs the application.
7.7.23 Loan Program Manager must sign the application after the
applicant signs.
7.7.2.4. Collect all documents from applicant checking off tt~e documents
received from the checklist (Appendix 4F).
7.7.2.5 Review all the documents while the applicant is with you to
ensure that you have the correct documents.
7.7.2.6 Prepare a missing documents letter (Appendix 4G) for the
applicant and keep a copy in the applicant's file.
7.7.3 INPUT TO LOAN SYSTEM
7.73.1. Input the information into the designated loan systems after the
intake.
7.73.2. Ensure that all the pertinent information is completed.
7.733. Complete the tracking form.
43
7.7.4 REViEw A~,r. Docu~rrrs
7.7.4.1. Review all documents presented. Ensure that the applicant has
ownership interest in the property. Check to ensure that the
addresses on the various documents presented are the same and
reflects the property address.
7.7.4.2. Calculate income per pay stub or available income documents as
per HUD/SHIP guidelines.
7.7.43 Send out Verifications as per HUD/SHIP guidelines including all
other non-applicant members of the household.
7.7.5 ASSIGN LOAN NUMBER
Loan Number will include digits such as follows:
a. Program Year
b. Funding Source (CDBG, SHIP, HOME)
c. Program (Rehabilitation, Replacements, Homeownership, Disaster,
and Emergency.)
d. Sequential Number from start of program
7.8 REQuES'r IrrsrEC'rtoN (if this has not been done)
7.8.1 Complete the request for Inspection Form. (Appendix 4J)
7.8.2 Make sure that the amount stipulated on the request is the maximum
amount less the closing cost.
7.83 Attach a copy of the property information from the county
appraiser's web site.
7.I COMPLETE LOAN APPROVAL RECOMMENDATION MEMO
Loan Program Manager will prepare the Loan Approval Recommendation
Memo for Director's signature. Final loan approval is to be done by the City
Manager.
Loan Approval Recommendation Memo should be prepared with the
maatimum possible loan amount if the rehabilitation estimate is not available.
Otherwise use the rehabilitation estimate and add all applicable closing costs.
Loan Approval Recommendation Memo must be completed only after receipt
of all verifications and re-calculation of the household income. Use HCTD's
Income Determination website and print the fmdings for the file. (Appendix
4L) HUD Income Calculator
All parts of the Loan Approval Recommendation Memo must be completed.
44
7.11 PREPARE SHIP CERTIFICATION (Appendix 4P) and AWARD LETTER (Appendix
4Q), if applicable.
a. This takes place after receipt of bids from the City's Building Inspection
Unit
b. Use the selected bid amount and add all closing cost as the loan amount.
c. Applicant must sign the SHIP Income certification or the income
certification should be mailed to the applicant with a self-addressed
stamped envelope. All mailed income certifications must be returned
notarized.
d. Upon receipt of the SHIP income certification, submit to SHIP
Administrator (Loan Program Manager) for signature.
e. Prepare and print Commitment letter (or use award letter) and send it to
applicant and copies to all interested parties.
7.12 PREPARE CLOSING PAPERS
a. Contact the applicant and Inspector to schedule closing
b. Prepare closing papers using closing checklist (Appendix 4R) to ensure
that all required documents are printed
c. Review the documents to ensure that (i) name, (ii) address of the property,
(iii) closing date, and (iv) term, are correct with no spelling errors.
d. Put signature tabs on all pages requiring applicant and co-applicant
signatures.
7.13 CLOSE LOAN
a. Ensure that the applicant and co-applicant signs all required pages.
b. Request check from Finance for Recording Fees and Taxes.
c. Record Mortgage at the County Recorder's Office.
d. The Mortgage must be recorded prior to any payments being made other
than the initial closing costs.
e. Mortgage should be taken to County Recorder's office with a pre-stamped
envelope for return of the Recorded Document.
f. After the 3 Day Right of Rescission period has elapsed, have contractor
sign the Contractor-Homeowner Agreement and the Notice of
Commencement.
7.14 POST CLOSING
45
a. Create tickler file to track for the retum of the original mortgage from
Miami-Dade County Recorder's office.
b. Original Note and Mortgage should be kept separate from loan file,
preferably in a first proof cabinet.
c. Copy of the Note and Mortgage should be kept in the loan file for review
and audit purposes.
d. Loan File will be kept in the office until:
1. the loan is paid off in its entirety
2. the loan has matured and the mortgage is satisfied.
3. the original recarded satisfaction is received back from the County
Recorder's Office.
i. Original Satisfaction and Mortgage should be sent back to the
borrower marked paid.
ii. Copy of Satisfaction should be placed in the file and sent to
storage.
46
SECTION 9: APPENDIX
LIST OF APPENDICES
NUMBER DOCUMENT
2A Florida Statutes Chapter 420.9071
2B Determining Annual Income as provided by SHIP
4A City of Miami Gardens Pre-Application
4B Scope of Work Write-Up
4C Property Information from Property Appraiser's Website
4D Denial Letter
4E Blank Residential Loan Application (FNMA Form 1003)
4F Document Checklist
4G Missing Documents Letter
4H Verification of Employment
4I Finance Tracking Sheet
4J Request for Inspection Form
4K Loan Approval Recommendation Memo
4L HLJD's Income Calculator
4M 2006 Income Limits Per Household Size
4Nii Environmental Project Information Sheet
40 Email Template for Title Request
4P SHIP Income Certification Form
4Q Award Letter and SHIP Award Letter
4R Loan Closing Checklist
4S Contractor Payment Request Form (Pending)
6A City of Miami Gardens Homebuyer Application (Pending)
6C Loan Closing Instruction Sheet (Pending)
47
Appendix 2A
420.9071 Definitions.--As used in ss. 420.907-420.9079, the term:
(1) "Adjusted for family size" means adjusted in a manner that results in an
income eligibility level that is lower for households having fewer than four people,
or higher for households having more than four people, than the base income
eligibility determined as provided in subsection (19), subsection (20), or
subsection (28), based upon a formula established by the United States
Department of Housing and Urban Development.
(2) "Affordable" means that monthly rents or monthly mortgage payments
including taxes and insurance do not exceed 30 percent of that amount which
represents the percentage of the median annual gross income for the
households as indicated in subsection (19), subsection (20), or subsection (28).
However, it is not the intent to limit an individual household's ability to devote
more than 3U percent of its income for housing, and housing for which a
household devotes more than 30 percent of its income shall be deemed
affordable if the first institutional mortgage lender is satisfied that the household
can afford mortgage payments in excess of the 30 percent benchmark.
(3) "Affordable housing advisory committee" means the committee appointed by
the governing body of a county or eligible municipality for the purpose of
recommending specific initiatives and incentives to encourage or facilitate
affordable housing as provided in s.
420.9076.
(4) "Annual gross income" means annual income as defined under the Section 8
housing assistance payments programs in 24 C.F.R. part 5; annual income as
reported under the census long form for the recent available decennial census; or
adjusted gross income as defined for purposes of reporting under Internal
Revenue Service Form 1040 for individual federal annual income tax purposes.
Counties and eligible municipalities shall calculate income by annualizing verified
sources of income for the household as the amount of income to be received in a
household during the 12 months following the effective date of the
determination..
(5) "Award" means a loan, grant, or subsidy funded wholly or partially by the local
housing assistance trust fund.
(6) "Community-based organization" means a nonprofit organization that has
among its purposes the provision of affordable housing to persons who have
special needs or have very low income, low income, or moderate income within a
designated area, which may include a municipality, a county, or more than one
municipality or county, and maintains, through a minimum of one-third
representation on the organization's governing board, accountability to housing
48
program beneficiaries and residents of the designated area. A community
housing development organization established pursuant to 24 C.F.R. part 92.2
and a community development corporation created pursuant to chapter 290 are
examples of community-based organizations.
(7) "Corporation" means the Florida Housing Finance Corporation.
(8) "Eligible housing" means any real and persorral property located within the
county or the eligible municipality which is designed and intended for the primary
purpose of providing decent, safe, and sanitary residential units that are
designed to meet the standards of chapter 553 for home ownership or rental for
eligible persons as designated by each county or eligible municipality
participating in the State Housing Initiatives Partnership Program.
(9) "Eligible municipality" means a municipality that is eligible for federal
community development block grant entitlement moneys as an entitlement
community identified in 24 C.F.R. s. 570, subpart D, Entitlement Grants, or a
non-entitlement municipality that is receiving local housing distribution funds
under an inter local agreement that provides for possession and administrative
control of funds to be transferred to the non-entitlement municipality. An eligible
municipality that defers its participation in community development block grants
does not affect its eligibility for participation in the State Housing Initiatives
Partnership Program.
(10) "Eligible person" or "eligible household" means one or more natural persons
or a family determined by the county or eligible municipality to be of very low
income, low income, or moderate income according to the income limits adjusted
to family size published annually by the United States Department of Housing
and Urban Development based upon the annual gross income of the household.
(11) "Eligible sponsor" means a person or a private or public for-profit or not-for-
profit entity that applies for an award under the local housing assistance plan for
the purpose of providing eligible housing for eligible persons.
(12) "Grant" means an award from the local housing assistance trust fund to an
eligible sponsor or eligible person to partially assist in the construction,
rehabilitation, or financing of eligible housing or to provide the cost of tenant or
ownership qualifications without requirement for repayment as long as the
condition of award is maintained.
(13) "Loan" means an award from the local housing assistance trust fund to an
eligible sponsor or eligible person to partially finance the acquisition,
construction, or rehabilitation of eligible housing with requirement for repayment
or provision for forgiveness of repayment if the condition of the award is
maintained.
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(14) "Local housing assistance plan" means a concise description of the local
housing assistance strategies and local housing incentive strategies adopted by
local government resolution with an explanation of the way in which the program
meets the requirements of ss. 420.907-420.9079 and corporation rule.
(15) "Local housing assistance strategies" means the housing construction,
rehabilitation, repair, or finance program implemented by a participating county or
eligible municipality with the local housing distribution or other funds deposited
into the local housing assistance trust fund.
(16) "Local housing incentive strategies" means local regulatory reform or
incentive programs to encourage or facilitate affordable housing production,
which include at a minimum, assurance that permits as defined in s. 163.3164(7)
and (8) for affordable housing projects are expedited to a greater degree than
other projects; an ongoing process for review of local policies, ordinances,
regulations, and plan provisions that increase the cost of housing prior to their
adoption; and a schedule for implementing the incentive strategies. Local
housing incentive strategies may also include other regulatory reforms, such as
those enumerated in s. 420.9076 and adopted by the local governing body.
(17) "Local housing distributions" means the proceeds of the taxes collected
under chapter 201 deposited into the Local Government Housing Trust Fund and
distributed to counties and eligible municipalities participating in the State
Housing Initiatives Partnership Program pursuant to s. 420.9073.
(18) "Local housing partnership" means the implementation of the local housing
assistance plan in a manner that involves the applicable county or eligible
municipality, lending institutions, housing builders and developers, real estate
professionals, advocates for low-income persons, community-based housing and
service organizations, and providers of professional services relating to
affordable housing. The term includes initiatives to provide support services for
housing program beneficiaries such as training to prepare persons for the
responsibility of homeownership, counseling of tenants, and the establishing of
support services such as day care, health care, and transportation.
(19) "Low-income person" or "!ow-income household" means one or more natural
persons or a family that has a total annual gross household income that does not
exceed 80 percent of the median annual income adjusted for family size for
households within the metropolitan statistical area, the county, or the
nonmetropolitan median for the state, whichever amount is greatest. With respect
to rental units, the low-income household's annual income at the time of initial
occupancy may not exceed 80 percent of the area's median income adjusted for
family size. While occupying the rental unit, a low-income household's annual
income may increase to an amount not to exceed 140 percent of 80 percent of
the area's median income adjusted for family size..
50
(20) "Moderate-income person" or "moderate-income household" means one or
more natural persons or a family that has a total annual gross household income
that does not exceed 120 percent of the median annual income adjusted for
family size for households within the metropolitan statistical area, the county, or
the nonmetropolitan median for the state, whichever is greatest. With respect to
rental units, the moderate-income household's annual income at the time of initial
occupancy may not exceed 120 percent of the area's median income adjusted for
family size. While occupying the rental unit, a moderate income household's
annual income may increase to an amount not to exceed 140 percent of 120
percent of the area's median income adjusted for family size.
(21) "Personal property" means major appliances, including a freestanding
refrigerator or stove, to be identified on the encumbering documents.
(22) "Plan amendment " means the addition or deletion of a local housing
assistance strategy or local housing incentive strategy. Plan amendments must
at all times maintain consistency with program requirements and must be
submitted to the corporation for review pursuant to s. 420.9072(3). Technical or
clarifying revisions may not be considered plan amendments but must be
transmitted to the corporation for purposes of notification.
(23) "Population" means the latest official state estimate of population certified
pursuant to s. 186.901 prior to the beginning of the state fiscal year.
(24) "Program income" means the proceeds derived from interest earned on or
investment of the local housing distribution and other funds deposited into the
local housing assistance trust fund, proceeds from loan repayments, recycled
funds, and all other income derived from use of funds deposited in the local
housing assistance trust fund. It does not include recaptured funds as defined in
subsection (25).
(25) "Recaptured funds" means funds that are recouped by a county or eligible
municipality in accordance with the recapture provisions of its local housing
assistance plan pursuant to s. 420.9075(4)(g) from eligible persons or eligible
sponsors who default on the terms of a grant award or loan award.
(26) "Rent subsidies" means ongoing monthly rental assistance. The term does
not include initial assistance to tenants, such as grants or loans for security and
utility deposits.
(27) "Sales price" or "value" means, in the case of acquisition of an existing or
newly constructed unit, the amount on the executed sales contract. For eligible
persons who are building a unit on land that they own, the sales price is
determined by an appraisal performed by a state-certified appraiser. The
appraisal must include the value of the land and the improvements using the
after-construction value of the property and must be dated within 12 months of
51
the date construction is to commence. The sales price of any unit must include
the value of the land in order to qualify as eligible housing as defined in
subsection (8). In the case of rehabilitation or emergency repair of an existing
unit that does not create additional living space, sales price or value means the
value of the real property, as determined by an appraisal performed by a state-
certified appraiser and dated within 12 months of the date.construction is to
commence or the assessed value of the real property as determined by the
county property appraiser. In the case of rehabilitation of an existing unit that
includes the addition of new living space, sales price or value means the value of
the real property, as determined by an appraisal performed by a state-certified
appraiser and dated within 12 months of the date construction is to commence or
the assessed value of the real property as determined by the county property
appraiser, plus the cost of the improvements in either case.
(28) "Very-low-income person" or "very-low-income household" means one or
more natural persons or a family that has a total annual gross household income
that does not e~ceed 50 percent of the median annual income adjusted for family
size for households within the metropolitan statistical area, the county, or the
nonmetropolitan median for the state, whichever is greatest. With respect to
rental units, the very-low-income household's annual income at the time of initial
occupancy may not exceed 50 percent of the area's median income adjusted for
family size. While occupying the rental unit, a very-low-income household's
annual income may increase to an amount not to exceed 140 percent of 50
percent of the area's median income adjusted for family size.
History.--s. 32, ch. 92-317; s. 12, ch. 93-181; s. 3, ch. 96-332; s. 1046, ch. 97-
103; s. 34, ch. 97-167; s. 14, ch. 98-56; s. 14, ch. 2000-353.