1. HFA of Palm Beach County - Surplus Funds Loan Program Topics to be covered include:  Statutory and ordinance authority  HFA Policy, Procedures and Process  Loan Terms and Documentation  Loan History

2. Statutory authority and local HFA ordinance (if applicable)  Chapter 159.608 (10)(a): To make loans or grant surplus funds to corporations that qualify as not-for-profit corporations under s. 501(c)(3) of the IRS Code of 1986, as amended, and under the laws of this state, for the development of affordable housing.  AGO 2000-14 and 2009-17 concluded that HFA’s may lend surplus funds to private individuals to finance a for-profit apartment complex, and that HFA’s may loan funds to for- profit developers for the development of qualifying housing or the construction, purchase, reconstruction, or rehabilitation of qualifying housing.  HFA of PBC creating ordinance requires that policy and programs of the HFA must be approved by the Board of County Commissioners.

3. Policies, procedures and process for loan applications  Permitted types of loans: to i) lending institutions, ii) directly to individuals and families, and iii) to not-for-profit, for-profit and governmental entities for the development of qualified housing.  Lending institutions: most likely structure is a loan participation for a project that the loan size is greater than either/both the lender or HFA could or would want to fund. Also could blend down the interest rate.  Home buyers: first mortgage origination as well as Down Payment Assistance second mortgages.  Developers: to date short term (36 months or less) acquisition and vertical construction (rehab and new), infrastructure, grant reimbursement/bridge loan.  Maximum household income of home buyers or tenants is 150% of area median income.

4. Loan application and considerations  Application submittal reviewed by staff prior to HFA board consideration.  Readiness to proceed.  Proposed loan terms: amount, term, interest rate, repayment source(s), collateral/security, leveraging, geographic location, neighborhood impact.  Following preliminary approval borrower and HFA enter into Memorandum of Agreement with $10K “good faith” deposit; borrower engages third party credit underwriting if deemed necessary.

5. Loan application and considerations (continued)  Credit Underwriting Report required when i) project feasibility or applicants development capacity/capability needs to be quantified.  No CUR is recommended when source of loan repayment is verifiable (grant agreement in place, firm commitment for permanent financing, home buyer loan pre-approval, covenant to budget and appropriate future tax receipts).  If no CUR is required a preliminary loan term sheet is agreed to by the parties.  Loan documents are then drafted (loan agreement, note and security instrument).

6. Loan terms, draws and repayment  Typical terms for revolving construction loans: i) term of less than 24 months; ii) secured by first mortgage on project site; iii) interest rates have been from 1%-4% payable monthly or upon repayment of each draw from a grant reimbursement.  Draws funded upon i) grant provider (NSP, CDBG, HOME) reimbursement pre-approval; or ii) AIA draw request from borrower also executed by architect or third party project manager with contractor invoice(s) together with lien releases for current (post NOC filing) or prior draw.  Repayment of draws from grant reimbursement, home sale, close of permanent loan, receipt of tax revenue.

7. Loan history  Grant reimbursement loans: 1. Palm Beach County CLT – Davis Landing MF 2. NOAH Development – Covenant Villas MF rehab 3. WPBHA – MF project rehab 4. PBCHA – South Bay Villas rehab  Single family new construction or acquisition rehab: 1. Habitat for Humanity PBC – infrastructure 2. Habitat for Humanity SPBC – rehab  Westgate Belvedere CRA – scattered sites rehab  Loan requests not funded

8. Surplus Funds Project Loans

9. Palm Beach County Community Land Trust – Davis Landings Apartments  New construction of 25-unit garden style apartment complex including administrative offices funded in total with a Neighborhood Stabilization Project 2 grant from Palm Beach County.  $500K revolving loan at 3% interest secured by second mortgage behind PBC first to fund certain pre-construction and soft costs reimbursable from NSP2 grant funds.  Construction started October 2011 and completed March 2013. Total of 28 draw requests totaling $1.098M.

10. Palm Beach County Community Land Trust

11. NOAH Development Corp. – Covenant Villas Apartments  Major interior rehabilitation of approximately 20 units of an existing 155-unit garden style apartment complex owned and operated by a not-for-profit in Belle Glade. Permanent funding provided by $500K HOME loan from Palm Beach County.  $200K revolving loan at 1% interest. Unsecured loan as existing PBC first and third party subordinate liens exceed the appraised value of the project but due to high risk of borrower the rehab cost reimbursable checks are to be endorsed to the HFA.  HFA provided $45K of grant funds for NOAH to renew property insurance including windstorm coverage.

12. NOAH Development Corp.

13. West Palm Beach Housing Authority – Newton Woods and Colony Oaks Apartments  Hurricane window and door replacement and grounds repairs for two apartment complexes owned and operated by sole purpose entities of the West Palm Beach Housing Authority. Permanent funding provided by $1.4M Disaster Recovery Initiative Program grant through Palm Beach County.  $250K revolving loan at 1% interest. Unsecured loan due to less than one year loan term and relatively low bankruptcy risk of the PHA. Repayment of loan from reimbursement payments from DRI grant.  All draws are released only upon pre-approval by PBC.

14. Palm Beach County Housing Authority – South Bay Villas Apartments  Substantial rehabilitation of 16 units of an existing 65 unit apartment projected owned the Palm Beach County Housing Authority. Permanent funding provided by $384K of CDBG grant funds through Palm Beach County and $532K of loan proceeds to be released from the refinancing of another apartment project owned by an entity of the PBCHA.  $550K construction/bridge loan at 1% interest. Secured by a first mortgage on the South Bay Villas Apartments. Also a covenant pledge of the release of cash-out proceeds from the refinancing of the other PBCHA owned project.  PBCHA has firm commitment for 223(f) insurance and permanent mortgage loan funding commitment for HUD lender on the other project.

15. Palm Beach County Housing Authority

16. Habitat for Humanity of Palm Beach County – Kennedy Estate II subdivision  Development of 19 home residential subdivision on a site purchased by HFHPBC with $750K of grant funds from Palm Beach County that were applied as a reduction in the sales price to home buyers. HFHPBC’s total development cost was average of $152K per home which was sold to home buyers at 80% AMI or less for an average of $90K which HFHPBC financed for 30 years at 0% interest.  $450K infrastructure construction loan at 1% interest. Secured by a first mortgage on the KEII site (PBC subordinated their original first lien) improvements completed with 6 draws.  Infrastructure work began June 2011 and final homes completed June 2014.

17. Habitat for Humanity of Palm Beach County

18. Habitat for Humanity of South Palm Beach County – scattered sites new construction and acquisition /rehab  Acquisition/rehabilitation and/or new construction of homes on scattered sites owned by HFHSPBC. First project was three new construction homes - lots were donated by Boynton Beach CRA to HFHSPBC’s community land trust along with $45K per home of down payment assistance. CLT can sell to buyers at 120% AMI who obtain conventional first mortgage financing. Homes completed in June 2014.  $500K revolving loan at 4% interest with term of 36 months that provides 100% funding of actual direct costs. Secured by a first mortgage on each lot.  Second phase will be for up to $60K per home rehab to be repaid from reimbursement through state HFH receipt of up to $20M of AG bank settlement monies.

19. Habitat for Humanity of South Palm Beach County

20. Westgate -Belvedere Community Redevelopment Agency – scattered sites acquisition /rehab  Acquisition/rehabilitation and/or new construction of homes on scattered sites acquired by W-BCRA. Permanent funding provided in total for a Neighborhood Stabilization Project 2 grant from Palm Beach County.  $300K revolving loan at 3% interest with a term of 30 months. Secured by a pledge of and lien on W-BCRA tax increment revenues.  A total of 13 homes were purchased and rehabbed with half sold to buyers at 50% AMI or less and half to 120% AMI. Project started fall of 2012 and completed in 2013.

21. Westgate -Belvedere Community Redevelopment Agency

22. Other requests for funding  A total of 5 never got beyond initial staff discussion  Another 2 were presented the HFA board and denied  Another 5 approved that did not reach a loan closing