Florida Administrative Code › 67 - FLORIDA HOUSING FINANCE CORPORATION › 67 - Departmental › Chapter 67-21 - NON-COMPETITIVE AFFORDABLE MULTIFAMILY RENTAL HOUSING PROGRAMS (MMRB/HC) › Part III - HOUSING CREDIT PROGRAM › Section 67-21.026 - HC Credit Underwriting Procedures

Current through Reg. 50, No. 138; July 16, 2024
Credit Underwriting is a de novo review of all information
					 supplied, received or discovered during or after any application scoring
					 process, prior to the closing on funding, including the issuance of IRS Forms
					 8609 for Housing Credits. The success of an Applicant in being selected for
					 funding is not an indication that the Applicant will receive a positive
					 recommendation from the Credit Underwriter or that the Development team's
					 experience, past performance or financial capacity is satisfactory. The Credit
					 Underwriting review shall include a comprehensive analysis of the Applicant,
					 the real estate, the economics of the Development, the ability of the Applicant
					 and the Development team to proceed, the evidence of need for affordable
					 housing in order to determine that the Development meets the program
					 requirements and determine a recommended Housing Credit Allocation amount, if
					 any; and for any Development that has rehabilitation with or without
					 acquisition, a capital needs assessment ('CNA') prepared in accordance with
					 generally accepted industry investment grade standards shall be ordered by the
					 Credit Underwriter, and its findings shall be used to determine rehabilitation
					 that will be carried out and to set replacement reserves as outlined in
					 paragraph (11)(b), below. Corporation funding will be based on appraisals of
					 comparable developments, cost benefit analysis, and other documents evidencing
					 justification of costs. As part of the Credit Underwriting review, the Credit
					 Underwriter will consider the applicable provisions of this rule
					 chapter.
(1) Within 10 business days
				  after the Non-Competitive Application is deemed complete, the Corporation shall
				  offer Applicants that pass threshold an invitation to enter Credit
				  Underwriting. If the Non-Competitive Housing Credits are awarded as a result of
				  a competitive solicitation, the invitation to enter Credit Underwriting for the
				  Non-Competitive Housing Credits will be in conjunction with the invitation for
				  the other Corporation funding. The Corporation shall select the Credit
				  Underwriter for each Development.
(2) A response to the invitation to enter
				  Credit Underwriting must be received by the Corporation and the Credit
				  Underwriter not later than seven (7) Calendar Days after the date of the
				  invitation. Failure to accept the invitation to enter Credit Underwriting
				  within this time frame shall result in withdrawal of the invitation.
(3) If the invitation to enter Credit
				  Underwriting is accepted, all Applicants shall submit the Credit Underwriting
				  fee to the Credit Underwriter within seven (7) Calendar Days of the date of the
				  invitation to enter Credit Underwriting. The Credit Underwriting fee shall be
				  determined pursuant to a contract between the Corporation and the Credit
				  Underwriter.
(4) The Credit
				  Underwriter shall review all information in the Application, including
				  information relative to the Applicant, Developer, Housing Credit Syndicator,
				  General Contractor, and, if an assisted living facility, the service
				  provider(s), as well as other members of the Development team based on
				  information provided to the Credit Underwriter. The Credit Underwriter shall
				  also request and review such other information as it deems appropriate to
				  determine whether or not to provide a positive recommendation in connection
				  with a proposed Development.
(5) In
				  determining whether or not to provide a positive recommendation in connection
				  with a proposed Development, the Credit Underwriter will consider the prior and
				  recent performance history of the Applicant, Developer, and any Financial
				  Beneficiary of the Applicant or Developer in connection with any other
				  affordable housing development. The performance history shall consider
				  instances involving a foreclosure, deed in lieu of foreclosure, financial
				  arrearage, or other event of material default in connection with any affordable
				  housing development or the documents governing financing or operation of any
				  such development.
(a) Unless the Credit
				  Underwriter determines that mitigating factors exist, or that underwriting
				  conditions can be imposed, sufficient to mitigate or offset the risk, the
				  existence of the following shall result in a negative recommendation of the
				  proposed Development by the Credit Underwriter:
1. Considering all affordable housing
				  developments in which any party named above has been involved, if:
a. During the period prior to August 1, 2010,
				  5 percent or more of that party's developments have been the subject of a
				  foreclosure or deed in lieu of foreclosure, or in financial arrearage or other
				  material default and such arrearage or material default remained uncured for a
				  period of 60 days or more, or
b.
				  During the period beginning on or after August 1, 2010, any of that party's
				  developments have been the subject of a foreclosure or deed in lieu of
				  foreclosure, or in financial arrearage or other material default and such
				  arrearage or material default is uncured at the present or, if cured, remained
				  uncured for a period of 60 days or more.