A New Direction at Florida Housing: Competitive Process for Multifamily Resources Altered

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The Florida Housing Finance Corporation (FHFC) has drastically modified its competitive process for awarding 9% low-income housing tax credits and other funds for affordable multifamily rental housing projects.

FHFC is moving away from its traditional annual “universal application cycle” for awarding 9% housing credits, federal HOME dollars, and – when available – State Apartment Incentive Loan (SAIL) program monies (soft second mortgages). Instead, it will solicit applications for these and any other multifamily funding resources by issuing requests for proposals (RFPs). Two RFPs have been issued already and more will occur later this year.

“We have many RFPs planned for this year,” says Kevin Tatreau, FHFC Director of Multifamily Development Programs.

 

Simplification Effort

FHFC has revised its competitive process after moving to simplify its program and reaching out to stakeholders for suggestions. In addition, the effort has been influenced by state legislative directives and reinforced by recommendations made in 2012 by a state audit report. The audit report said FHFC’s universal application cycle process was complex and expensive for applicants and the corporation. “And they recommended that we simplify the process,” says Tatreau.

“They were not critical of the openness of the process,” says FHFC spokeswoman Cecka Green. “The issue was the length of time it takes to get through the application process and the expense on both sides, not only for applicants but for Florida Housing.”

FHFC’s 2011 universal application cycle was stalled by a challenge to the corporation’s program rule. This delayed FHFC’s awards of 9% housing credits until June 2012, when it awarded $60.1 million in tax credits from calendar years 2011, 2012, and 2013. Subsequent legal appeals resulted in the award of additional credits.

In addition to switching to a process of multiple RFPs, Tatreau said FHFC has streamlined and shortened its rule governing the LIHTC, HOME, and SAIL programs. Much of the previous language regarding such items as application procedures and eligibility will be shifted to the individual RFPs. FHFC’s board has approved the main program rule for the 2014 multifamily programs as well as a separate rule for the multifamily RFP process. The two rules and a 2014 qualified application plan are expected to become official by late summer.

Tatreau said FHFC has about $44 million in 9% tax credits from calendar 2014 available to award, along with federal HOME funds, $70 million in SAIL funds, and other grant dollars. All will be awarded through RFPs. Of the SAIL funds, $25 million is earmarked for elderly projects, $25 million for projects with units for extremely low-income households, and $10 million for projects that designate some units for persons or households with developmental disabilities or other special needs.

 

Two RFPs Issued So Far

The corporation has already awarded some of these tax credits and gap funds. In June, FHFC’s board approved awards to projects selected through two RFPs previously issued by the corporation for “high priority” multifamily projects. One RFP offered 9% tax credits for public housing revitalization projects and the second offered 9% tax credits and gap funds for projects for persons with special needs.

According to Tatreau, FHFC will issue at least four more RFPs later this year offering 9% housing credits. RFPs will be spread out, with application deadlines probably a couple of weeks apart and the next deadline likely around the beginning of October, he said.

These will include three separate geographic RFPs and one RFP for preservation projects. One geographic RFP will be for projects in small and medium size counties; a second for projects in the three large counties in Southeast Florida (Broward, Miami-Dade, Palm Beach); and a third for projects in four large counties in the state outside South Florida (Duval, Hillsborough, Orange, Pinellas).

Tatreau said FHFC will also be issuing additional RFPs for other multifamily housing funds, such as SAIL, HOME, and some grant dollars. The expectation is that the grant funds will be offered this fall and the SAIL monies offered as gap financing with tax-exempt bonds in early 2014. As of early July, FHFC had not determined the timing of the HOME funds but was finalizing the intended uses.

FHFC will hold workshops or other public meetings in advance of the release of RFPs.

Tatreau anticipated that awards from the three geographic RFPs won’t be approved until this December.

 

State Directive

A new state law (Chapter 2013-83), effective July 1, requires FHFC to reserve up to 5% of its available annual housing tax credits, tax-exempt bonds, and SAIL funds for high-priority affordable housing projects, and 5% for affordable housing projects targeting persons with disabilities and their families. Examples of high-priority projects are developments supporting economic development and job creation initiatives or providing housing for veterans and their families or persons with special needs. The act also requires FHFC to adopt rules establishing a priority for funding affordable housing projects in the Florida Keys.

FHFC’s revised multifamily program structure retains an appeals process. Procedures for FHFC’s 4% housing credit and multifamily tax-exempt bond programs are unchanged. FHFC continues to accept applications year-round for 4% tax credits and tax-exempt bond financing.