The State Housing Initiatives Partnership (SHIP) program, founded in 1993, provides funds to eligible local governments as an incentive to create partnerships that produce and preserve affordable homeownership and multifamily housing. The program was designed to serve very low-, low- and moderate-income families.
SHIP funds are distributed on an entitlement basis to all 67 counties and 52 Community Development Block Grant (CDBG) entitlement cities in Florida. SHIP dollars may be used to fund emergency repairs, new construction, rehabilitation (meeting the standards of Chapter 553, Florida Statutes), down payment and closing cost assistance, impact fees, construction and gap financing, mortgage buy-downs, short-term acquisition of property for affordable housing, matching dollars for Federal housing grants and programs, homeownership counseling and other activities as required by legislative action.
Funds are allocated on a population-based formula. The minimum allocation is $350,000 per county and, when available, funds are disbursed at least quarterly to eligible communities as documentary stamp revenues are deposited into the Local Government Housing Trust Fund.
The targeted populations for program service are households with Area Median Incomes (AMI) that are categorized as
* Very-low (at or below 50% AMI);
- Low (at or below 80% AMI); and
- Moderate (at or below 120% AMI)
For initial participation in the SHIP Program, a Local Government must:
a. Establish a Local Housing Assistance Plan (LHAP) by ordinance.
b. Submit the LHAP to Florida Housing Finance Corporation (FHFC) and receive approval.
c. Within 12 months, an amendment to the LHAP must be adopted to incorporate Local Housing Incentive Strategies. The Local Housing Incentive Strategies must be recommended by the Affordable Housing Advisory Committee.
d. Within 24 months of adopting the Local Housing Incentive Strategies, amend the land development regulations or establish local policies and procedures, as needed, to implement the incentive strategies.
e. Encourage the involvement of appropriate public and private sector partners to form a partnership in order to combine resources to reduce housing costs.
In order to meet compliance of disbursement of funds, municipalities must meet the following targeting requirement of Funds:
a. A minimum of 65% of the allocation, plus recaptured funds, must be spent on eligible homeownership activities.
b. A minimum of 75% of the allocation, plus recaptured funds, must be spent on eligible construction/rehab activities.
c. At least 30% of funds from all SHIP sources must be reserved for very low-income households (up to 50% of median income).
d. An additional 30% of funds from all SHIP sources may be reserved for low-income households (up to 80% of median income).
e. The remaining funds may be reserved for households up to140% of median income.
f. No more than 5% of SHIP funds may be used for administrative expenses.
Funding cycles for the SHIP Program begin July 1 and run through June 30. Entitlement communities must follow the Housing Strategies listed in their respective LHAP, utilize the incentive strategies and meet the income distribution ratios.
The City of Miami Beach is currently expending allocated funds for FY14/15, FY15/16 and FY16/17. The program is administered by staff in the Office of Housing and Community Services (HCS). The current LHAP for the funding cycle FY14/15 and FY 15/16 delineates the following strategies:
• Owner-Occupied Rehabilitation
• Disaster Mitigation Recovery
• New Construction
• Down Payment/Closing Costs and Rehabilitation
• Rental Housing Development
Each of these categories have maximum award amounts that are tiered by income limits or reflect the local housing market demand. The strategies mentioned above currently have the following maximum awards:
- Owner-Occupied Rehabilitation - $40,000
- Disaster Mitigation Recovery - $40,000
- New Construction - $40,000
- Down Payment/Closing Costs and Rehabilitation- $60,000 for Very Low and Low-Income Persons and $40,000 for Moderate Income Persons
- Rental Housing Development - $40,000
The LHAP for FY16/17,17/18 and 18/19 increased the maximum award amounts in every category, as approved by FHFC and this was also adopted by City resolution 2016-29663. The current maximum award amounts for the housing strategies are the following:
• Owner-Occupied Rehabilitation- maximum award $70,000
• Disaster Mitigation Recovery- maximum award $40,000
• New Construction- maximum award $40,000
• Down Payment/Closing Costs and Rehabilitation
$50,000 for Moderate-Income;
100,000 for Low- and Very Low-Income; $150,000 for Extremely Low-Income
• Rental Housing Development- $40,000 per unit
After having difficulty expending funds in the rehabilitation and purchase assistance strategies, HCS staff determined it was necessary to increase the amounts to create greater opportunities for timely expenditure and incentivize the purchase of homes in the fluctuating housing market.
The City requested an extension for September 30, 2017 to assure that the pending cases for rehabilitation assistance were fully completed. The State granted the extension. The City also requested to increase award limits to $50,000 per moderate-income household, $100,000 per low-income and very low-income household and $150,000 per extremely low-income households for FY13/14, FY14/15 and FY 15/16. These technical revisions were also approved by the State. The deadline for encumbrance of FY 14/15 funds is June 30, 2017. With the increased award amounts, the City will ensure that all remaining funds, including for FY 16/17, are fully expended before the expenditure deadline of June 30, 2018.
The City also requested technical assistance with a plan to meet expenditure deadlines. It was determined that the increased award amounts would be beneficial for the beneficiaries and would ensure that the City meets its expenditure deadlines of September 2017 and June 2018.
During the technical assistance appointment, it was also determined that the LHAP for FY14/15 and 15/16 needed further clarification language within the following strategies:
- Rental Development- the maximum award amount is currently $40,000 but does not clarify whether the award amount is per total project or per unit. If this is not clarified, it can result in a finding with FHFC. As such, we are clarifying that funds are per unit.
- Purchase Assistance- The terms of the loan need to be clarified, whereas the City will not be in a third or fourth position, and will only be subordinate to the primary lender. Currently, this action is not delineated.
- Owner-Occupied Rehabilitation- The terms of the loan need to be clarified to stipulate that the City will be subordinate to existing loans only as long as the Owner demonstrates the ability to make timely payments.
With these changes to the LHAP, the City avoids ambiguity that can lead to audit findings and the possible inability to meet timely expenditure deadlines. It also reinforces the program's intention to assist as many income-eligible households meeting program requirements. With increased maximum awards, the eligible applicants can make substantial, needed repairs and focus on acquiring affordable property that they can sustain over time.