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BEFORE THE HOUSING FINANCE AUTHORITY
ST. LUCIE COUNTY, FLORIDA
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RESOLUTION NO. 85-04
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A RESOLUTION ADOPTING GUIDELINES
AND PROCEDURES FOR THE ISSUANCE OF
MULTI-FAMILY REVENUE BONDS IN ST.
LUCIE COUNTY
WHEREAS, the Housing Finance Authority has made the
following determinations:
1. Part IV, Chapter 159, Florida Statutes authorizes this
Authority to issue mUlti-family revenue bonds for qualified
multi-family housing rental projects.
2. Section 159.608, Florida Statutes directs this Authority
to determine whether the project will assist in alleviating the
shortage of housing and of capital for investment in the area of
its operation.
3. Various federal statutes, including the Federal Tax
Reform Act of 1984, impose further restrictions on the issuance
of mUlti-family revenue bonds that this Authority may issue.
4. On December 10, 1985, after publishing notice in the
Fort Pierce News Tribune on November 13 and December 2, 1985,
this Authority held a public hearing on the proposal to establish
guidelines and procedures for the issuance of multi-family tax
exempt bonds in St. Lucie County.
NOW, THEREFORE, BE IT RESOLVED, by the St. Lucie County
Housing Finance Authority:
A. The
St.
Lucie County Housing
Finance Authority
Guidelines and Procedures for the Issuance of MUlti-Family Tax
Exempt Bonds attached to this resolution be, and they are hereby
adopted.
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B. This resolution shall be effective on the date of
adoption.
After motion and second the vote on this resolution was as
follows:
Chairman Michael McCarty
Aye
Aye
Aye
Aye
Aye
Roosevelt Nelson
Mike Perri, Jr.
Vernon Smith
Frederic A. Stewart
PASSED AND DULY ADOPTED
this 10th day of December, 1985.
ATTEST:
HOUSING FINANCE AUTHORITY
ST. LUCIE , FLORIDA
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By:
APPROVED AS TO FORM AND
CORRECTNESS:
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o::5aL-v{c CU, uJOO~
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ASSISTANT COUNTY ATTORNEY
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HOUSING FINANCE AUTHORITY
OF ST. LUCIE COUNTY
GUIDELINES AND PROCEDURES FOR THE ISSUANCE OF
MULTI-FAMILY TAX EXEMPT BONDS
I. INTRODUCTION
The Housing Finance Author i ty of St. Lucie County
(the "Authority") will consider providing tax-exempt revenue bond
financing for qualified mUlti-family housing projects which meet
the goals of the Authority and comply with applicable federal and
state law. The Authority has adopted the following guidelines to
set forth the general requirements and procedures which apply to
the financing of mUlti-family rental housing projects. The
Authority will issue obligations to provide financing for any
project only if the applicant has satisfied the requirements set
forth in these guidelines. The Authority reserves the right to
impose additional requirements on any particular project.
Compliance with these guidel ines does not and shall not create
any right by an applicant to a commitment or assurance that the
Authority will provide the requested financing.
The Author i ty is author ized under Part IV, Chapter 159,
Florida Statutes, to issue tax-exempt obligations to finance the
acquisition for construction, reconstruction, and rehabilitation.
of qualified mUlti-family rental housing projects. The Authority
sells tax-exempt revenue bonds (the "Bonds") and loans the
proceeds to a qualified financial institution (the "Lender").
The Lender in turn loans the funds to a qualified developer. The
developer must arrange to secure or collateralize the loan from
the Authority, thereby securing the bonds. The Bonds are backed
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by the collateral and by revenues from the project and not by
public revenues. The Authority is merely a conduit and is liable
on the bonds only to the extent of payments received from the
developer or the lender.
From time to time the Author i ty may
approve other financing structures to the extent permitted by
law.
The purpose of such financing is to alleviate the shortage
of rental housing available which many persons and families can
afford and a shortage of capital for investments in such housing
in St. Lucie County, to stimulate economic development and to
create jobs.
ALL PROJECTS ARE SUBJECT TO THE REQUIREMENTS OF THE
AUTHORITY'S RULES AND REGULATIONS AND PROGRAM GUIDELINES.
II. GUIDELINES
A. Use of Bond Proceeds
The use of proceeds realized from the sale of bonds
issued by the Housing Finance Authority of St. Lucie County shall
be governed by the regulations and laws of the State of Florida
and the United States Internal Revenue Code.
B. Financial Structure
1. The legal structure of the proposed financing may
take any form that is permitted by the applicable
federal and state statutes in effect at the time of
the bond issue closing.
C. Fees and Expenses
1. An applicant for mUlti-family bonds will remit with
the application a fee of seven hundred and 0/100
dollars ($700.00) payable to the St. Lucie County
Housing Finance Authority.
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2. The County Attorney shall represent the St. Lucie
County Housing Finance Authority for all multi-
family revenue bonds issued by the Author i ty, and
the applicant shall pay for all expenses incurred
by the County Attorney in providing such
representation.
3. The applicant shall designate bond counsel for the
issue subject to acceptability to the County
Attorney, and shall pay the cost of such services.
4. An administrative fee of 0.1 percent of the first
one million dollars ($1,000,000.00) and 0.05
percent of the remaining amount of the bonds will
be charged at the closing for all issues, but such
administrative fee shall not exceed $15,000.00 for
any single issue.
5. The Applicant shall be responsible for paying all
fees and expenses incurred by any party in
connection with the bond issue on its behalf.
Applicant shall pay all County fees at or prior to
closing and shall make arrangements for payment of
all other fees.
6. The Authority will charge an annual program
compliance fee of 0.04 of 1% of the principal
amount of the bonds as well as any administrative,
legal, or other charges associated with the ongoing
operation of the bond issue.
D. Development Reguirements
The Authority may provide financing for projects which
are in compliance with the provisions of Section 103(b) (4) (A) of
the Internal Revenue Code of 1954, as amended (the "Code") and
the regulations pomulgated thereunder or Section 11 (b) of the
United States Housing Act of 1937, as amended (the "Act").
Florida Statutes require that authorities issuing multi-family
revenue bonds determine that projects financed assist in
alleviating the shortage of housing in the area of the
authority's operation.
In order to qualify for financing, the project must at a
minimum meet the following requirements:
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1. Must provide safe, sanitary and decent multi-family
residential housing for lower, middle, and moderate
income persons or families.
2. The project must be owned, managed, and operated as
a project to provide mUlti-family residential
property compr ised of a building or structure or
several proximate buildings or structures, each
containing one or more dwelling units and
functionally related facilities, in accordance with
Section 103 (b) (4) (A) of the Internal Revenue Code.
3. Substantially all of the development will consist of
similar units, containing facilities for living,
sleeping, eating, cooking, and sanitation for a
single person or family.
4. None of the units in the development will be used on
a transient basis, nor shall they be knowingly
leased for a period of less than 30 days, nor shall
they be used as a hotel, motel, fraternity house,
sorority house, rooming house, hospital, sanitarium,
or rest home.
5. The developer or applicant or an individual related
to the owner has no present plan to convert the
project as such terms are defined by the Code.
6. None of the uni ts will at any time be occupied by
the owner of the project or an individual related to
the owner as such terms are defined by the Code.
7. Commencing on the completion date of the project at
least 20% of the dwelling units (the "Low and
Moderate Income Units" in the project or 15% in the
case of "targeted areas" as defined in the Code)
will be rented to persons or families whose gross
income, as determined in accordance with Section 8
requirements of the Act, does not exceed 80% of the
County median income level most recently publ ished
by the Department of Housing and Urban Development
for the longer of: (a) ten years after the date on
which 50% of the units in such project are occupied,
(b) one-half the term of the bond financing after
the date on which any unit in such project is first
occupied, or (c) the term of any contract pursuant
to Section 8 of the Act which is provided with
respect to such project. All such persons are
hereafter referred to as "Low or Moderate Income
Persons". All dwelling units will only be rented to
eligible persons.
8. After satsifying the requirements set forth in
paragraph 8 above, the remaining units must be
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rented to persons or families, irrespective of race,
creed, national origin, or sex, of moderate, middle,
or lesser income, as determined by the Author i ty.
Unless otherwise provided by Author i ty resolution,
the remaining units in each mUlti-family project
must be rented to persons or families with incomes
equal to or less than 150% of the median income most
recently established by HUD (or by the Authority if
it adopts a different median income standard) for
the County, (such persons or families to be
hereinafter referred to as "Eligible Persons").
9. The annual rent on units which are intended to
qualify as the Low and Moderate Income Units will
not exceed 30% of 80% of the County median income
level. The rent on the remaining units in the
project may not exceed 30% of 150% of the County
median income level.
10. The developer or applicant will obtain and maintain
on file income certifications from such tenant prior
to initial occupancy of a unit and will submit
copies of such income certifications to the
Authority on a monthly basis.
11. The developer or applicant will maintain complete
and accurate records pertaining to the dwelling
units and will permit any duly authorized
representative of the Authority, the
lender/servicer, the trustee, the Department of the
Treasury or the Internal Revenue Service to inspect
such books and records.
12. The developer or applicant will monthly submit to
the Authority and the trustee a certificate and
other tenant related information as may be required
by the Authority stating the percentage of dwelling
units that are:
a. Occupied by lower income tenants.
b. Being held vacant for occupancy by lower income
tenants.
c. Occupied by other eligible tenants.
13. The developer or applicant will not take, permit,
omit to take, or cause to be taken any action which
would adversely affect the exemption from federal
income taxation of the interest on the bonds.
14. The developer or applicant will take such action or
actions as may be necessary, in the opinion of Bond
Counselor the County Attorney, to comply fully with
the Internal Revenue Code or Florida Statutes.
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16. The developer or applicant will execute or cause to
be executed a loan agreement, mortgage and such
guarantee agreement as are necessary to secure the
bonds.
III. PROCEDURES
A. Pre-application Review
Representatives for a potential applicant for the
issuance of mUlti-family revenue bonds may appear at a work
session of the Housing Finance Authority to outline the proposed
capital project and to request a preliminary, informal, and non-
binding indication of whether the proposal might receive
favorable consideration.
No further review or analysis will be
performed by the Housing Finance Authority or Authority staff
until an application is filed.
B. Application
An application for the issuance of multi-family revenue
bonds shall be submitted to the Housing Finance Authority. The
original and 7 copies of the application shall be submitted with
the appropriate application fee to the County Attorney. In order
to be considered at a regular meeting of the Authority the
application must be submitted not less than fifteen working days
(three weeks) prior to the Authority meeting at which the
application is to be considered. The application shall be on the
developer's
letterhead
and
shall
include
the
following
information:
1. Applicant's name, parent company name or names of
principals with 10 percent or more interest in the
applicant, names of applicant's principal operating
officers, names of principals with 10 percent or
more interest in the project, and the applicant's
business address and telephone number.
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2. Approximate total amount of financing being sought.
3. A statement describing the applicant, its history,
its operations, and its prior experience with
mUlti-family development.
4. A statement describing the sources funds for the
project, as follows:
a. Bond proceeds
b. Equity (cash, letter of credit, etc.)
c. Other (fixed assets, etc.)
5. A completed information form concerning all aspects
of the project. Such form is incorporated herein
as Exhibit "A" and shall include:
a. Project location and approximate acreage.
b. A description of the number, type of units, and
square footage and project rental for such
units.
c. Status of site acquisition, zoning, site plan
approval, and all other permits.
d. Total estimated project cost and total cost
breakdown.
e. Amount of project cost expended.
f. Name of lender to participate in project.
g. Market analysis identifying demand for rental
housing or statement evidencing.
h. Project amenities.
i. First year
analysis.
proforma
income
and
expense
j. Project site plan and construction timetable.
6. A statement describing the zoning, land use, and
other laws, ordinances, rules, and regulations
affecting development of the project.
7 · A statement indicating the proposed secur i ty for
and guarantors of the bonds.
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8. A statement describing the proposed method of
selling the bonds.
9. Audited financial statements (including balance
sheet, income statement, statement of changes in
financial condition, and all accompanying notes) of
the applicant, parent company (if any), and bond
guarantors for the preceding three years. If
personal guarantees are required, include a current
balance sheet for each individual guarantor.
Should audited financial statements not be
available, the Board may agree to accept statements
in unaudited form supported by corporate income tax
returns in order to commence processing of the
application.
10. A notarized certificate executed by a principal or
the chief executive or operating officer of the
applicant, as follows:
I hereby certify (a) that I am authorized to submit
to the Housing Finance Authority of St. Lucie
County, Florida, this application for the issuance
of multi-family revenue bonds; (b) that I have
reviewed the Guidelines and Procedures for the
Issuance of MUlti-family Revenue Bonds in St. Lucie
County and have determined that this application
and the project contemplated hereby meet the
requirements set forth in such Guidelines and
Procedures; and (c) that the information contained
in this application is true, correct, and complete
to the best of my knowledge and belief.
11. In conjunction with its application, the applicant
shall be required to execute an Expense and
Indemnity Agreement, in substantially the form
attached hereto as Exhibit nBn, whereby the
applicant agrees to pay all bond issuance expenses,
including, without limitation, the fees and
disbursements of the Authority's Counsel, Bond
Counsel, and any other administrative charges or
out-of-pocket expenses which relate to the issue,
and to indemnify the Authority and its members,
officers, agents, attorneys, and employees against
any and all claims and liability arising out of the
issuance of the bonds.
12. Other information which the appliant considers
relevant to the consideration of the application.
C. Application evaluation criteria
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In considering an application the Authority shall
consider the following:
1. The need for additional rental housing in the area
in which the project is being proposed.
2. Whether the project will be available to persons
and families of low, moderate, and middle income
and promote the general welfare of all County
residents.
3.
The availability
financing and the
sources.
of alternative sources
effect of utilitizing
of
such
4. The credit instrument or guarantee instrument or
other collateral being offered to secure the bonds.
5. The experience and financial condition of the
applicant, the lending institution and any third
party guarantee.
6. Marketability of the Bonds financing such a project
with the guarantee or collateral being offered.
7. The proposed plans for the development.
8. The public purpose served by financing the project.
9. The project compliance with the tax-exemption
provisions of the Internal Revenue Code.
10. The applicant must agree to comply with a minimum
of two of the following six criteria:
a. At least 10 percent of the units in the project
must be three-bedroom units.
b.
At least 30 percent of the units
occupied or reserved for occupancy
moderate income persons or families.
must be
by low-
c.
At least
for the
occupied
moderate
20 percent of each unit size, except
three-bedroom unit size, must be
or reserved for occupancy by low-
income persons or families.
d. The units in the project will have
substantially lower rent rates than comparably
sized new units in the area.
e. The project rehabilitates existing construction
or provides rental opportunities in urban areas
where lower-income housing is needed.
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f. The project will meet or alleviate local
specialized needs in the area where the project
is located which needs have been verified by a
recent rental market study.
11. All of the above will be considered by the
Authority; however, in the event of competing
projects, preference shall be given to projects
meeting the greater number of the criteria set
forth in the section above, and the Authority, in
its discretion, will then adopt or reject the
application.
D. Application review
1. Staff report
The application for multi-family revenue bonds will
be reviewed by the County Administrator, County
Finance Director, County Development Coordinator,
County Planner, and County Attorney. The
designated County staff shall report to the Housing
Finance Authority on the following matters:
a. The accuracy
application.
and
completeness
of
the
b. The financial soundness of the proposed
project, the applicant, and any guarantor.
c. Conformance of the proj ect and the proposed
financing with applicable federal, state, and
local statutes, policies, and guidelines.
2. Authority action
a. Agenda Scheduling
When the staff report is complete, the report
and the application will be presented to the
Housing Finance Authority for consideration at
a regular meeting.
(i) If the Authority accepts the application,
it will authorize publishing notice of a
public hearing to be scheduled in
accordance with the provisions of the
Federal Tax Equity and Fiscal Respons-
ibility Act of 1982 as more fully
described in Subsection c below.
(ii) The Authority may decide, however, that it
requires additional information.
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b. Inducement Resolution
If the application is scheduled for a public
hear ing, the appl icant, through bond counsel,
shall be responsible for preparing the required
notice of public hear ing and submitting the
notice to the County Attorney for review and
publication. In addition, the applicant, again
through bond counsel, shall be responsbile for
preparing the draft of an inducement resolution
as described below and for submitting the draft
to the County Attorney for review and
circulation to the Housing Finance Author i ty.
Following the public hearing, the Authority
will decide whether the project is feasible,
will assist in alleviating a housing shortage
in St. Lucie County, and will meet all other
criteria and requirements of Part Iv, Chapter
159, Florida Statutes.
(i) After deliberation, the Authority may
adopt an inducement resolution authorizing
execution of a memorandum of agreement
between the Authority and the applicant
specifying the terms under which the
Authority will issue mUlti-family revenue
bonds and inducing the appl icant to
proceed with the project.
(ii)
However,
requires
decline
further.
the Authority may decide that it
more information, or it may
to consider the application
(iii) The official action of the Authority shall
not be construed as indicating the
marketability of the bonds or a guarantee
that the bonds will be issued. Rather, it
is an indication that the Authority will
issue its bonds if a willing and suitable
purchaser is found by applicant and all
conditions precedent to issuance occur.
c. TEFRA A~proval
(i) Pursuant to the Tax Equity and Fiscal
Responsibility Act of 1982 ("TEFRAtI) the
County Commission of St. Lucie County,
Florida (the "Commission") must approve
the project and the issuance of the bonds.
A notice setting forth the location of the
project, the principal amount of the
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bonds, the owner of the project, HUD
project number, if any, and other relevant
data about the proposed financing and
citing the date, time, and location of a
TEFRA public hearing must be published at
least 14 days prior to the TEFRA public
hearing. Upon due notice and unless
otherwise provided, the TEFRA public
hearing will be held by the Authority at a
regularly scheduled meeting time. A TEFRA
public hearing will be scheduled, upon the
written request of the applicant, at such
time as the applicant has provided all
materials required in the Application
Form, and has provided evidence that the
Board of County Commissioners and
applicable municipal government has been
advised of the application to the
Authority for tax-exempt bond financing
for the project. At the TEFRA hearing the
applicant will be required to make a brief
presentation of the project, including
site plan and architectual renderings of
the buildings and the public will be
invi ted to be heard with regard to the
project. Other than providing an
opportunity for the public to be heard, no
Official Action is required to be taken at
the TEFRA public hearing.
(ii) Subsequent to the TEFRA public hearing and
the final review of the entire proposed
bond financing, the Authority shall, by
memorandum, recommend to the Board the
adoption of a resolution at a regularly
scheduled meeting of the Commission,
approving the project and issuance of the
Bonds in accordance with TEFRA.
(iii) The individual or entity named in the
TEFRA notice must own the project at
closing on the bonds and thereafter for
such period as specified by the Authority.
This requirement will be deemed complied
with if the individual or entity named in
the TEFRA notice is (i) the same
individual or entity owing the project;
(ii) a general partner of a subsequent
formed partnership owing the project;
(ii i) a related or subsidiary corporat ion
owing the project or (iv) a principal
owner (50% or more) of a corporation
owning the project.
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d. At such time as the applicant has obtained a
binding financing commitment, but not later
than six (6) months from the date of the
inducement resolution, the applicant, lender
and investment banker shall make a presentation
to the Authority setting forth certain details
of the project financing which shall include
but not limited to: (i) terms of the financing
commitment (ii) description of syndication, if
applicable, (iii) structure of the proposed
bond financing including credit facility, and
(iv) a proforma financial statement based upon
the terms of the financing commitment and the
particular bond financing structure. The
Authority shall then, upon such terms as agreed
to between the Author i ty and the appl icant,
authorize Bond Counsel to begin drafting bond
documents for applicant's project.
E. Proposed Method of Sale of Bonds
There are a var iety of bond financing structures and
credit enhancements that may be utilized by the
applicant such as loans-to-lenders, letters of credit,
mortgage insurance, surety bonds, etc.
1. If the obligations are to be publicly sold, whether
by competitive bid or negotiated sale, the bond
issue must be structured so as to receive an
investment grade rating by Standard & Poor's
Corporation and/or Moody's Investors Service. In
such case, the application must indicate the type
and nature of the proposed credit support or surety
and the name and telephone number of a contact
person (if known at time of application) at the
approporate institution. If the project mortgage
is to be insured by the United States Federal
Housing Administration ("FHA"), the applicant must
provide evidence that the applicant has applied for
a conditional commitment from FHA, including United
States Department of Housing and Urban Development
("HUD") Form 2013.
2. If the bonds are to be privately placed, the
Authority may require a different rating or permit
the issuance of the bonds without a rating. In the
case of a private placement transaction, the
applicant, upon delivery of the investor purchasing
the obligations substantially to the effect that:
(1) it is engaged in the business, among others, of
investing in tax-exempt securities or is an
"accredited investor" as defined in Regulation D,
Rule 501 (a) promulgated by the Securities and
Exchange Commission pursuant to the Securities Act
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of 1933; (2) it has made an independent
investigation into the financial position and
business condition of the applicant and therefore
waives any right to receive such information; (3)
it has received copies of the financing and
secur i ties documents pursuant to which such
obligations are issued and secured and has had the
opportunity to review such documents to its
satisfaction; and (4) it is purchasing such
obligations for its own account, with the purpose
of investment and not with a view to the
distribution or resale thereof (subject, however,
to its rights to sell, pledge, transfer or
otherwise dispose of such obligations at some
future date in accordance with the provisions of
this section). A form of such investment letter
will be provided by the Authority.
F. Bond Preparation and Closing
1. Preparation of Bond Documents
a. Prior to prepartion of bond sale documents the
applicant shall execute a commitment agreement
with the Authority including a committment fee
or irrevocable letter of credit of 1/2% of the
pr incipal amount of the bonds. This fee will
be used as a credit against the cost of bond
issuance and is not an additional fee. If the
sale and closing does not take place the fee
will be refunded, less the Authority's out of
pocket expenses and any fees of bond counsel.
Such expenses include but are not limited to
the cost of printing the bonds and official
statement, travel and rating agency fees.
b. Following execution of the inducement agreement
it is applicant's responsibility to contact
Bond Counsel and the Author i ty I S Counsel and
arrange for preparation of the bond documents.
2. Bond Closing
a. After authorization of the issuance by the
Authority, adoption of the approving resolution
by the Commission and expiration of any appeal
period relating to a validation proceeding, the
bond closing may be scheduled at any time and
in any location which is acceptable to Bond
Counsel and to the Authority.
b. A preclosing session and a closing session are
generally scheduled for consecutive days. The
preclosing is designated t? ;:llOW the ~arties
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to review all final documentation and ensure
that all is in order for the transfer of funds.
c. All bond documents shall be submitted for
review by the Authority and the County Attorney
at least seven (7) working days prior to the
meeting at which the Author ity will consider
approval of such documents. The Authority
shall also approve a trustee for each bond
issue.
d. Upon the Authority's approval of the Bond
documents the Authority shall authorize the
bond closing at a time and place mutually
agreed upon by the parties.
3. Bond Validation
The Authority's bonds shall be validated as
required by Section 159.615, Florida Statutes
(1983), and Chapter 75, Florida Statutes, as from
time to time amended and suplemented. Bond Counsel
shall prepare all validation pleadings for filing
in St. Lucie County Circuit Court by the
Authority's Attorney. Bond Counsel shall
participate in such proceedings upon request of the
Authority's attorney.
4. Bonds
The Housing Finance Author i ty generally will
require that prospective bond issues not rated by
Moodys as AA or the Standard and Poor's equivalent
be sold only by private placement or limited public
offering. For purposes of this paragraph, the term
"limited public offering" shall mean an offering
made only to institutional investors of not more
than 35 in number who agree to purchase for
investment for thei r own accounts and who do not
purchase with a view toward distribution. This
limitation is applicable not only to the initial
sale of the bonds, but to resales, if any, in
secondary markets, and shall be incorporated in the
bond sale documents.
5. Disposition of Proceeds of Bond Sale
Following the sale of the bonds, the proceeds will
be deposited with the Trustee in a trust account to
be disbursed for the acquisition and/or
construction of the project and other related
costs. The Authority shall require that the
Trustee and applicant ensure that the proceeds be
used in accordance with applicable state and
federal laws and the bond documents.
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6. Program Compliance Agent
In order to insure compliance with the income
targeting requi red by State and Federal law, the
developer shall retain an independent program
compliance agent approved by the Authority. The
compliance agent must have experiennce in
compliance work with similar bond issues. The
compliance agent shall be responsible for
monitoring the tenant income certification forms
and periodic on site inspections of the project's
records and books in order to insure compliance
with Federal and State requirements.
The Authority reserves the right, upon good cause shown to
waive any of these Guidelines and Procedures except the provision
requiring a public hearing.
.86 J~N -3 P\2 :04
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740482
16
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