2015-29081 Reso RESOLUTION NO. 2015-29081
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING
A TECHNICAL REVISION TO THE CITY'S LOCAL HOUSING
ASSISTANCE PLAN (LHAP), RAISING THE MAXIMUM DOWN
PAYMENT ASSISTANCE FOR VERY LOW INCOME HOUSEHOLDS
SERVED THROUGH THE FIRST-TIME HOMEBUYER ASSISTANCE
PROGRAM TO $100,000, FOR THOSE HOUSEHOLDS SERVED WITH
STATE HOUSING INITIATIVES PARTNERSHIP PROGRAM (SHIP)
FUNDS THAT EXPIRE SEPTEMBER 30, 2015; AUTHORIZING THE
CITY MANAGER TO EXECUTE ALL APPLICABLE DOCUMENTS AND
SUBMIT THE TECHNICAL REVISION TO FLORIDA HOUSING
FINANCE CORPORATION; AND FURTHER AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE AGREEMENTS WITH
ELIGIBLE SHIP RECIPIENTS.
WHEREAS, the State of Florida enacted the William E. Sadowski Affordable Housing Act,
Chapter 92-317 of Florida Sessions Laws, allocating a portion of documentary stamp taxes on
deeds to local governments for the development and maintenance of affordable housing; and
WHEREAS, the State Housing Initiatives Partnership (SHIP) Act, ss. 420.907-420.9079,
Florida Statutes (1992), and Rule Chapter 67-37, Florida Administrative Code, requires local
governments to develop a one to three-year Local Housing Assistance Plan outlining how funds
will be used; and
WHEREAS, on April 17, 2013, pursuant to Resolution No. 2013-28178, the Mayor and City
Commission approved and adopted a City of Miami Beach LHAP for Fiscal Years 2013/2014,
2014/2015 and 2015/2016, pursuant to the requirements of the Act and the SHIP Program Rule,
issued by the Florida Housing Finance Corporation (FHFC); and
WHEREAS, the SHIP Act requires local governments to establish the maximum SHIP funds
allowable for each strategy; and
WHEREAS, the City of Miami Beach LHAP strategy for providing homebuyer down payment
assistance is limited to a maximum of$60,000 per individual household assisted; and
WHEREAS, housing market conditions have caused home purchase prices to increase to a
level that precludes very low-income individuals and families from purchasing properties; and
WHEREAS, in order to be program compliant, the SHIP Program requires the City to
provide at least 30% of its program funds allocation to assist very low-income participants; and
WHEREAS, the City wishes to raise the maximum amount of assistance for eligible very low-
income program participants to $100,000.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby approve and
authorize a technical revision to the City's Local Housing Assistance Plan (LHAP), raising the
maximum down payment assistance for very low-income households served through the first-
time homebuyer assistance program to $100,000, for those households served with State
Housing Initiatives Partnership Program (SHIP) funds that expire September 30, 2015;
authorize the City Manager to execute all applicable documents and submit the technical
revision to Florida Housing Finance Corporation; and further authorize the Mayor and City Clerk
to execute agreements with eligible SHIP recipients.
Passed and adopted this 7 day of J!/� / , 2015.
Aii,
Philip Lev'
ATTEST:
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T:IAGENDA120151JuIy 81SHIPHomebuyer AwardlncreaseRESO
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution adopting a technical revision to the City's Local Housing Assistance Plan (LHAP)
increasing down payment assistance to very low income households to $100,000; authorizing the City
Manager to submit the revision to Florida Housing Finance Corporation; and authorizing the execution of
, agreements with eligible SHIP recipients
Key Intended Outcome Supported:
N/A
Supporting Data: Community Satisfaction Survey: N/A
Item Summary/Recommendation:
The City receives State Housing Initiatives Partnership (SHIP) Program funds. SHIP funds have very
specific expenditure rules including that at least 65 percent of funds must enable home ownership for
eligible persons residing in very low-and low-income households.
While our Local Housing Assistance Plan (LHAP) provides up to $60,000 in down payment and
rehabilitation assistance to first-time homebuyers, current market conditions have made it difficult to
match very low- and low-income households with units. While most qualified households are obtaining
mortgage approvals valued at around $50,000, the marketplace is asking in excess of $100,000 for
studio units. Staff has been working with local area mortgage companies, lenders and development
corporations to leverage resources and serve the prerequisite households seeking homeownership.
While purchase assistance of$100,000 is significant, it is necessary if the City is going to satisfy SHIP's
regulatory requirements. Based on current income limits, a very low-income, two-person household
cannot have income exceeding $27,100, and a low-income household cannot have income exceeding
$43,350. Without the proposed assistance, these targeted households could not make a home
purchase and, subsequently, the City would not comply with expenditure and program outcome goals.
Staff will monitor applications to provide only the necessary assistance to bridge the gap between the
maximum bank mortgage and the remaining amount of down payment required to complete the
acquisition. Furthermore, once the City reaches its September 30'2015 compliance requirement for the
expenditure of funds, this strategy can be re-evaluated to determine if it should remain in place based
on market conditions and program rules.
Financial Information:
Source # Grant Name/Project Approx. Approximate
of Award Match
Funds Amount Amount/
Source
SHIP Account- 152.5721.000349 $251,576 N/A
Financial Impact Summary: N/A
City Clerk's Office Legislative Tracking:
Maria L. Ruiz, Department Director, Office of Housing and Community Services, Extension 6491
Sign-Offs:
Department Director Assistant City Manager City Manager
Al
MIAMI BEACH AGENDA ITEM R; H
DATE 3 8 l S
MIAMI B EAC H
City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members the City C•;r'emission
FROM: Jimmy L. Morales, City Manager _
DATE: July 8, 2015
SUBJECT: A RESOLUTION OF THE MA OR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ADOPTING A TECHNICAL REVISION TO THE
CITY'S LOCAL HOUSING ASISTANCE PLAN (LHAP) RAISING THE MAXIMUM
DOWN PAYMENT ASSISTANCE FOR VERY LOW INCOME HOUSEHOLDS
SERVED THROUGH THE FIRST-TIME HOMEBUYER ASSISTANCE PROGRAM
TO $100,000 FOR THOSE HOUSEHOLDS SERVED WITH STATE HOUSING
INITIATIVES PARTNERSHIP PROGRAM (SHIP) FUNDS THAT EXPIRE
SEPTEMBER 30, 2015; AUTHORIZING THE CITY MANAGER TO EXECUTE ALL
APPLICABLE DOCUMENTS AND SUBMIT THE TECHNICAL REVISION TO
FLORIDA HOUSING FINANCE CORPORATION; AND FURTHER AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE AGREEMENTS WITH ELIGIBLE
SHIP RECIPIENTS.
ADMINISTRATION RECOMMENDATION
Approve the resolution.
BACKGROUND
The City is a recipient of State Housing Initiatives Partnership (SHIP) Program funds. SHIP funds were
created via the William E. Sadowski Affordable Housing Act on July 7, 1992 as a means of stimulating
the production of affordable housing. Funds are derived from documentary stamp taxes on deeds and
then allocated to local governments.
SHIP funds have very specific expenditure rules including:
• At least 75 percent of the funds made available to each municipality must be reserved for
construction, rehabilitation, or emergency repair of affordable, eligible housing.
• At least 30 percent of the funds must be reserved to benefit very low-income households.
• At least 65 percent of funds made available to each municipality must be reserved for home
ownership for eligible persons residing in very low- and low-income households.
Please note that the percentage thresholds are overlapping and equal greater than 100 percent.
The City is required to submit its Local Housing Assistance Plan (LHAP) to the State every three
years. The LHAP establishes the strategies employed by the City to properly expend SHIP funds. The
City's latest LHAP was amended by the City Commission via Resolution 2014-28824 and includes the
following expenditure strategies:
City Commissioner Memorandum—SHIP Homebuyer Award Increase
July 8,2015
Page 2
• Housing rehabilitation of single family, owner-occupied housing
• Disaster Mitigation Recovery (a strategy that allows the use of SHIP funds for home repair in
the event of a disaster declaration)
• New construction of home ownership opportunities
• Down payment and closing cost assistance with rehabilitation (providing first-time homebuyers
with cash assistance for acquisition and rehabilitation of acquired homes)
• Rental housing development (acquisition and rehabilitation of multi-family affordable housing)
While the City has had relatively little or no SHIP funds for several years, the revitalized real estate
market appears to be trending upwards and the City expects to receive increasing allocations. SHIP
funds must be expended within two years of receipt. SHIP administration funds were recently capped
at three (3) percent of award requiring the leverage of other resources for program administration.
ANALYSIS
The SHIP program has very specific expenditure guidelines that have posed challenges in our
community. While our LHAP provides up to $60,000 in down payment and rehabilitation assistance to
first-time homebuyers, the SHIP program's threshold of expending 65 percent of funds on very low-
and low-income households has made it difficult to match eligible households with current market
units. While most qualified households are obtaining mortgage approvals valued at around $50,000,
the marketplace is asking in excess of $100,000 for studio units. Staff has been working with local
area mortgage companies, lenders and development corporations to leverage resources and serve the
prerequisite households seeking homeownership.
While purchase assistance in the amount of $100,000 is significant, it is necessary if the City is going
to satisfy SHIP's regulatory requirements. Based on current income limits, a very low-income, two-
person household (the maximum number likely to purchase an efficiency or 1-bedroom unit), cannot
have income exceeding $27,100, and a low-income household cannot have income exceeding
$43,350. Based on the industry standard of a monthly mortgage payment not exceeding thirty (30)
percent of income, the monthly payments for these households would be $678 and $1,084,
respectively. Without the proposed assistance, these targeted households could not make a home
purchase and, subsequently, the City would not comply with expenditure and program outcome goals.
Even though the proposed assistance would allow as much as $100,000 in financing support, not all
applicants would receive this amount. Staff will monitor applications to provide only the necessary
assistance to bridge the gap between the maximum bank mortgage and the remaining amount of
down payment required to complete the acquisition. As a reminder, the City will secure its contribution
via mortgage. Furthermore, once the City reaches its September compliance requirement for the
expenditure of funds, this strategy can be re-evaluated to determine if it should remain in place long
term based on market conditions and program rules.
CONCLUSION
The proposed adjustment to the City's SHIP purchase assistance strategy (purchase acquisition and
rehabilitation) is necessary in order for the City to satisfy regulatory requirements or potentially face
recapture of the funds by the State. Therefore, approval of this technical revision to the City's SHIP
Program Local Housing Assistance Plan is recommended.
JLM/KGB/MLR
T:WGENDA\2015\July\HOUSING&COMMUNITY SERVICES/SHIP Homebuyer Award Increase Memo