Summary:
On March 6, 2006, the City of Orlando entered into a SHIP Loan Agreement with ONIC-Hollowbrook, LLC for State Housing Initiatives Partnership Program (“SHIP”) funding in the amount of Three Hundred Forty Nine Thousand Eight Hundred and Eighty Nine Dollars ($349,889.00). These SHIP funds were used to rehabilitate 25 apartment units in a 144 unit apartment complex generally described as the Hollowbrook Apartments located at 5465 Curry Ford Road, Orlando. A Restrictive Covenant dated March 6, 2006 has an affordability period which extends to 4/15/2023. In addition, on October 30, 2006, the City of Orlando entered into a HOME Loan Agreement with ONIC-Hollowbrook, LLC for HOME funding in the amount of Three Hundred Eighty Six Thousand Two Hundred and Thirty Nine Dollars ($386,239.00). These HOME funds were used to rehabilitate 20 units in Hollowbrook Apartments. A Restrictive Covenant dated October 30, 2006 has an affordability period which extends to 10/25/2017.
ONIC-Hollowbrook, LLC has received a funding commitment from Greystone Funding Corporation for a HUD 223(f) Loan to refinance their existing FNMA loan that balloons on April 1, 2016. The refinancing will also allow ONIC-Hollowbrook, LLC to take advantage of available lower interest rates. The new mortgage amount will be $7,384,000 at a 3.75% rate with a 35 year term. The City is currently in third position under the existing loan and will move to second position under the proposed HUD 223(f) loan. The property is appraised at $10,160,000.
Under terms of the HUD 223(f) loan, a minimum of 40% of the units (58 units) must be set aside for a period of 15 years for families whose household incomes do not exceed 60% of the area median income. This requirement will increase the City’s affordable housing inventory by 13 units. The City is not obligated to extend our existing affordability periods imposed under our SHIP and HOME agreements or incur any additional monitoring responsibilities as a result of ONIC-Hollowbrook’s refinancing. No changes will be made to our existing SHIP and HOME Restrictive Covenants which remain in effect until 4/15/2023 and 10/25/2017 respectively. The City’s approval of the HUD 223(f) loan and subordination request will be contingent upon receiving final written confirmation of the HUD -2 waiver removing the City’s obligation to extend our existing loans to coincide with the new loan term of 35 years.
City staff requests City Council’s approval of ONIC-Hollowbrook, LLC subordination request, the new restrictive covenant increasing the number of affordable units to fifty-eight (58) with no additional City responsibilities, and authorization for the mayor to execute all related documents. |