Sec. 114-91. - Introduction.

In April of 1993, the Local Housing Assistance Program, (Collier County Ordinance No. 93-19, as amended by Ordinance No. 93-33) was adopted by the Collier County Board of Commissioners. This plan was designed for the purpose of establishing local administration of the State Housing Initiatives Partnership Program. (S.H.I.P.)

The primary goal of this legislation is to increase the availability of affordable housing to very low and low-income persons and families in the county.

Very low and low income persons are defined in Collier County Ordinance No. 93-19, and further amended by Collier County Ordinance No. 93-31 as follows:

(1)

Low-income person means one or more natural persons or a family, not including; students, that has a total adjusted gross household income that does not exceed 80 percent of the median annual adjusted gross income for households within the state or 80 percent of the median adjusted gross income for households within the metropolitan statistical area or, if not within a metropolitan statistical area, within the county, whichever is greater.

(2)

Very-low income person means one or more natural persons or a family, not including students, that has a total adjusted gross household income that does not exceed 50 percent of the median adjusted gross annual income for households within the state or 50 percent of the median annual adjusted gross income for households within the metropolitan statistical area or, if not within a metropolitan statistical area, within the county, whichever is greater.

Income data for the Naples Metropolitan Statistical Area is supplied by the United States Department of Housing and Urban Development (HUD), applicable to all of Collier County, and updated annually. The definition for "annual income" is found in 24 CFR, Section 813.106.

Section II of the Local Housing Assistance Program states that several different strategies will be employed for the administration and disbursement of S.H.I.P. funds. Strategy A. found on page 6 stipulates that a portion of the funds be distributed through a down payment/closing cost assistance program for very low and low income first time homebuyers. This strategy is more particularly described in Section II, paragraph A. The Collier County S.H.I.P. Down Payment/Closing Cost Assistance Program has been designed using this strategy as a framework, and conforms to all rules and guidelines governing the distribution of these funds.

Assistance provided in conjunction with this program will be awarded to qualified applicants in the form of a zero percent interest, deferred payment loans of up to $50,000.00 for the purpose of down payment/closing cost expenses and rehabilitation or emergency repairs to the subject dwelling unit. The funds will be distributed as follows: Purchasers of new homes which have had a certificate of occupancy for less than 12 months at time of application will not qualify for the rehabilitation/emergency repair under this program, but will be eligible for down payment/closing cost assistance of $50,000.00. Purchasers of existing homes with a certificate of occupancy over 12 months at time of application will qualify for the rehabilitation/emergency repair of $2,500.00 under this program along with the down payment/closing cost assistance of $47,500.00. The note, with a total of up to $50,000.00 will be secured by a second mortgage payable to the Affordable Housing Trust Fund, payable upon the sale of the dwelling unit, refinance, or loss of homestead tax exempt status.

(Ord. No. 94-59, § 3; Ord. No. 00-69, § I(I), 10-24-00; Ord. No. 01-64, § 1, 11-13-01; Ord. No. 04-55, § 3; Ord. No. 2005-70, § 1)

Sec. 114-92. - Marketing; outreach.

(a)

At least 30 days prior to the beginning of the application period, the county will advertise this program in both newspapers of general circulation and periodicals serving ethnic and diverse neighborhoods. It is anticipated that the vast majority of referrals for this program will be generated by non-profit organizations such as the Collier County Banking Partnership, or through local banks and mortgage brokers.

(b)

In order to comply with the Community Reinvestment Act, local area lending institutions are actively seeking ways in which to address the credit needs of the entire community. Ownership programs such as this serve as an appropriate vehicle for lenders to demonstrate their commitment to this legislation. As some participating institutions may exercise more flexible lending requirements than others, it is also possible for the partnership to act as an internal referral source, affording the potential borrower multiple opportunities at obtaining a first mortgage loan.

(Ord. No. 94-59, § 3; Ord. No. 00-69, § I(II), 10-24-00; Ord. No. 2005-70, § 1)

Sec. 114-93. - Eligibility criteria; down payment/closing cost assistance.

(a)

Applicants will be recommended for this program through participating members of the Collier County Banking Partnership, banks, mortgage brokers, and other non-profit organizations committed to meeting the credit and housing needs of the entire community. Additionally, S.H.I.P. guidelines stipulate that the program and availability of funds be advertised in both newspapers of general circulation and periodicals serving ethnic and diverse backgrounds.

(b)

Applicants will be pre-screened by participating lenders in regards to total annual household income, credit history, and capacity to repay. Applicants will be asked to sign appropriate releases enabling the financial institution to provide such mortgage related information to the Collier County Department of Operational Support and Housing, hereinafter referred to as "program administrator".

(c)

Applicant eligibility. Applicants will be required to disclose the number of occupants expected to reside in the subsequent dwelling unit, as well as their anticipated gross annual incomes. Eligibility will be based on the following set limits for gross annual income based on median figures established in March of 2006, provided by the U.S. Department of Housing and Urban Development (HUD):

1 person .....$39,100.00

2 persons .....44,700.00

3 persons .....50,250.00

4 persons .....55,850.00

5 persons .....60,300.00

6 persons .....64,800.00

7 persons .....69,250.00

8 persons .....73,700.00

The above limits are reflective of the maximum income allowed; adjusted for family size, under the designation of low income household. These limits are subject to change on an annual basis.

(d)

Dwelling unit restrictions. This program is designed to assist in the purchase of single-family houses, duplexes, townhouses, attached villas, or condominium units only. The maximum sales price allowable will be the amount indicated in the Collier County LHAP, or as amended by the State of Florida S.H.I.P. regulations. Beneficiaries must claim the subject dwelling unit as their homestead.

(e)

First time homebuyer status. In order to qualify for the program, applicant(s) must not have owned a home for a minimum of the most recent three consecutive years. Verification of first time homebuyer status will be documented in the participant(s) permanent file.

(Ord. No. 94-59, § 3; Ord. No. 00-69, § I(III), 10-24-00; Ord. No. 01-64, § 2, 11-13-01; Ord. No. 04-55, § 3; Ord. No. 2005-70, § 1; Ord. No. 2006-45, § 1)

Sec. 114-94. - Administration of down payment/closing cost assistance and rehabilitation/emergency repair.

(a)

The program administrator director shall have the authority to sign all reports, transmittals, mortgage loan documents, and certifications regarding this program.

(b)

The program administrator will be responsible for the following administrative duties:

(1)

Advertisement in a publication of general circulation announcing the program and availability of funds.

(2)

Accepting applications and all supporting documentation.

(3)

Verification of eligibility requirements for the program, and approval of applicants.

(4)

The maintaining of all required documentation and records of correspondence for each beneficiary in a permanent file.

(5)

The preparation of financial reports detailing S.H.I.P funds used, remaining availability of funds, and participating local financial institutions.

(6)

The coordination of efforts with the county's, purchasing and finance departments, with the goal of being timely and efficient processing of all loan documentation and payments.

(Ord. No. 94-59, § 3; Ord. No. 00-69, § I(IV), 10-24-00; Ord. No. 04-55, § 3; Ord. No. 2006-45, § 1)

Sec. 114-95. - Required documentation for down payment/closing cost assistance.

(a)

The following documentation will be required of all beneficiaries of this program. Documentation required for rehabilitation emergency repair assistance will be detailed in the following section. Packets will be available through the program administrator and at local lending institutions.

(1)

Sales contract. A copy of the fully executed sales contract and loan application will be required from the applicant(s). The sales contract will verify the listed seller, sales price, and proposed closing date. The application will establish borrower information that will be further verified by other supporting loan documentation. A copy of the sales contract and application will be maintained in the borrower's permanent file.

(2)

Reservation form. Requests for reservation of funds will be made by the first mortgage lender through the use of this document. Information contained in the form relates to the borrower(s), financial institution and subject dwelling unit. It will be the responsibility of the first mortgage lender to provide a completed copy of this form to the program administrator in order to initiate the qualification process. A copy of the reservation form will be maintained in the borrower's permanent file.

(3)

Certification of financial institution. The officer of the financial institution underwriting the first mortgage loan will be required to execute this combined form before a notary public. The following information will be verified through the use of this form:

a.

That all information regarding the applicant is true and correct.

b.

The loan will conform to lending parameters as stated in the certification of participant form.

c.

That all loan funds will be applied to the required down payment/closing cost or rehabilitation repair, and that the borrower not receive any loan funds in cash.

A copy of the combined certification of participant/certification of financial institution will be maintained in the borrower's permanent file.

(4)

Mortgagor's certification and past residence. Applicant(s) must not have owned any home for a minimum of three consecutive years in order to qualify as first time homebuyers. This document can be used as verification of residence for the past three years, as well as providing information regarding current amount of rent, and current landlord. A copy of the mortgagor's certification and past residence will be maintained in the borrower's permanent file.

(5)

S.H.I.P. income certification. This form is required documentation for any program utilizing the S.H.I.P. monies as a funding source. Information contained herein relates to anticipated household income, assets, and household data. A copy of the S.H.I.P. income certification form will be maintained in the borrower's permanent file.

(6)

S.H.I.P. Homebuyer Education certificate. Each applicant must attend a S.H.I.P. four hour homebuyer education class prior to closing. A copy of the S.H.I.P. homebuyer education certificate will be maintained in the borrower's permanent file.

(7)

Promissory note. The promissory note will detail the loan agreement established between the borrower and the affordable housing trust fund, relating to the funds for down payment/closing cost assistance and rehabilitation/emergency repair. The note will include details of the loan including, but not limited to:

a.

Borrower's promise to pay;

b.

Interest and payments;

c.

Borrower's right to repay;

d.

Charges;

e.

Subordination;

f.

Borrower's failure to pay as requested;

g.

Obligation of persons under this note;

h.

Waivers;

i.

Uniform secured note.

The original promissory note is to be maintained in the borrower's permanent file by the program administrator, and a copy will be maintained on file in the county's finance department.

(8)

Second mortgage. The second mortgage will be used as the security instrument for the promissory note, and will be recorded by the Collier County Clerk of the Circuit Court. The original recorded second mortgage will be maintained in the borrower's permanent file by the program administrator. Payment of fees associated with the recording of this document will be the responsibility of the borrower.

(9)

Third party verification. Third party verification of income will be necessary whenever the applicant states that any part of the household income is derived from public assistance, a government agency, or for formal verification of employment. The following sources of income will require formal third party verification by the financial institution underwriting the first mortgage loan:

Including but not limited to, military payment, social security benefits, public assistance, pension and annuities, unemployment benefits, Veterans Administration benefits, educational assistance, income from business, recurring cash contributions, child support, and assets on deposit.

This income verification information may be represented on either Collier County S.H.I.P. forms or other documentation supplied by the lender used for underwriting purposes. While formal, written third party verification is always preferable, a memorandum to the file documenting the conversation with the third party will be acceptable. In such a case it is extremely important to specify the date, contact person, phone number, and address of the third party the conversation is conducted with.

(10)

Home inspection. Purchasers of existing homes with a certificate of occupancy over 12 months old at the time of application will be required to have a home inspections completed by a licensed home inspection company. A copy of the home inspection will be maintained in the borrower's permanent file.

(Ord. No. 94-59, § 3; Ord. No. 00-69, § I(V), 10-24-00; Ord. No. 01-64, § 3, 11-13-01; Ord. No. 04-55, § 3; Ord. No. 2005-70, § 1; Ord. No. 2006-45, § 1)

Sec. 114-96. - Rehabilitation/emergency repair; eligibility criteria.

(a)

In order to be considered, applicants must meet the eligibility criteria for the down payment/closing cost assistance portion of this program.

(b)

Only construction, rehabilitation or emergency repair of affordable housing which is a permanent improvement to the home, including but not limited to: repairs or improvements which are needed for safe sanitary habitation, correction of substantial code violations, and installation, repair, or replacement of any major goods, particularly appliances will qualify under this program. Items deemed necessary on the home inspection report shall be completed prior to any additional repairs.

(c)

Purchasers of homes which have had a certificate of occupancy for less than 12 months at time of application will not qualify for rehabilitation/emergency repair under this program, but will be eligible for down payment/closing cost assistance loans of up to $50,000.00.

(d)

Rehabilitation/emergency repair loans will be limited to $2,500.00 per borrower.

(Ord. No. 94-59, § 3; Ord. No. 00-69, § I(VI), 10-24-00; Ord. No. 04-55, § 3; Ord. No. 2005-70, § 1; Ord. No. 2006-45, § 1)

Sec. 114-97. - Monitoring of rehabilitation/emergency repair work including goods purchases.

(a)

Information regarding the nature of the rehabilitation/emergency repair work to be performed or goods to be purchased will be compiled by the homebuyer. Abatement or correction of health and safety housing code violations are to be given priority over any rehabilitation work or goods purchase.

(b)

For goods identified to be purchased, the borrower must submit a price quote to the program administrator for approval prior to purchase. This estimate is to be approved by the borrower and a representative of the program administrator prior to purchase or delivery. Thereafter, the program administrator may inspect the borrower's home for the approved goods to provide reasonable assurance that the approved goods were delivered and are in good working order. No funds will be disbursed prior to verification by the program administrator and inclusion of an itemized delivery slip or invoice from the approved goods supplier.

(c)

Rehabilitation/emergency repair work.

(1)

For rehabilitation/emergency repair work not requiring a building permit, the borrower has the option to either perform the rehabilitation work as an owner/builder, or to contract with a tradesman holding a certificate of a competency in Collier County in the specific trade corresponding to the type(s) of rehabilitation work be to performed.

(2)

For work requiring a building permit the borrower will be responsible for the selection of a Collier County or state licensed contractor who must perform the rehabilitation/emergency repair work.

The contractor or tradesman who is selected must supply a detailed written estimate to the borrower

(3)

Borrowers performing their own rehabilitation repair work must also submit a detailed cost estimate of materials to be purchased which must be approved by the county's department of operational support and housing prior to commencement of rehabilitation work.

(4)

A copy of the approved estimate will be maintained in the borrower's permanent file. Monitoring of the work to be performed by a tradesman or contractor will be the responsibility of the borrower. Contractual agreements made will be between the borrower and tradesman contractor. The program administrator will be provided with a copy of the signed contract and approved estimate for rehabilitation/emergency repair work, which will be maintained in the borrower's permanent file.

(5)

Upon completion, any work requiring a building permit to be performed will be inspected by the county permitting and review department. All work performed not requiring a building permit and not requiring an inspection by the county permitting and review department may be inspected by the program administrator to provide reasonable assurance that such work has been satisfactorily completed.

(6)

No funds will be disbursed prior to verification of satisfactory completion of rehabilitation/emergency repair work by the county's building and review department or program administrator and inclusion of final invoice from a material or goods supplier and/or contractor or tradesman submitted to the county's operational support and housing department.

(Ord. No. 94-59, § 3; Ord. No. 00-69, § I(VII), 10-24-00; Ord. No. 01-64, § 4, 11-13-01; Ord. No. 04-55, § 3; Ord. No. 2005-70, § 1; Ord. No. 2006-45, § 1)

Sec. 114-98. - Required documentation for rehabilitation/emergency repair including goods purchases.

(a)

The following documentation will be required of all participants eligible, for rehabilitation/emergency repair loans:

(1)

Contractor/tradesman's, or materials, or goods purchase estimate. All work that is to be performed must be listed. A copy of the approved estimate will be maintained in the borrower's permanent file. This form must be delivered to the program administrator prior to the commencement of any rehabilitation/emergency repair work. Rehabilitation/emergency repair loans under this program will be made up to a maximum of $2,500.00.

(2)

Physical inspection. A copy of all required physical inspections conducted by the county permitting and review department, or program administrator will be maintained in the borrower's permanent file.

(3)

Second mortgage. As described in the section detailing documentation required for down payment/closing cost assistance, the second mortgage will be used to secure the promissory notes. The second mortgage will be recorded by the Collier County Clerk of the Circuit Court. The original recorded second mortgage or evidence the second mortgage was recorded will be maintained in the borrower's permanent file. Fees associated with the recording of this document are to be paid by the borrower.

(Ord. No. 94-59, § 3; Ord. No. 00-69, § I(VIII), 10-24-00; Ord. No. 01-64, § 5, 11-13-01; Ord. No. 04-55, § 3; Ord. No. 2005-70, § 1; Ord. No. 2006-45, § 1)

Sec. 114-99. - Procedure of loan closings and the disbursement of funds.

(a)

The lender underwriting the first mortgage will make a formal request for the reservation of S.H.I.P. funds by contacting the program administrator. Reservation requests should be made a minimum of 30 days prior to the contract closing date, and substantiated through the use of the S.H.I.P. application. At this point, funds will be reserved, and the applicant will be assigned a file number. It will be asked that all completed program documentation be provided for the purposes of verifying the applicant's eligibility, and to initiate the disbursement process.

(b)

The program administrator will be notified of the request for funds through a requisition, and a separate purchase order will be issued for each borrower or a direct pay check request. Loan funds for down payment/closing cost assistance will be issued in the form of a two payee check, payable to the borrower/closing agent. Receipt of these funds will be verified by the closing agent, and further evidenced on the formal settlement statement, a copy of which will be maintained in the borrower's permanent file. Copies of all down payment assistance checks issued are to be kept in the borrower's permanent file.

Funds disbursed for rehabilitation/emergency repair will be disbursed to the contractor, tradesman or business establishment through a separate purchase order or a direct pay request only after submission of the invoice and a satisfactory inspection report, if required.

(c)

A representative of the program administrator will be present at loan closings whenever possible. The representative will verify that all mortgage and supporting documents have been executed properly, and that the second mortgage be recorded by the Collier County Clerk of the Circuit Court. The recorded second mortgage or evidence of recording will then be kept on file by the program administrator. The completed borrower's file will contain copies of all documentation received from the first mortgage lender in addition to the S.H.I.P. funds provided by this program, for the purposes of establishing a complete audit trail.

(Ord. No. 94-59, § 3; Ord. No. 00-69, § I(IX), 10-24-00; Ord. No. 01-64, § 6, 11-13-01; Ord. No. 04-55, § 3; Ord. No. 2006-45, § 1)