History and Purpose. | |
Definitions. | |
Program Regulations. | |
Amount and Use of Program Funds. | |
Loan Terms. | |
Preservation of Housing. | |
Lending Criteria. | |
Contracting Requirements. | |
Loan Application Process. | |
Loan Committee Decisions. | |
Loan Disbursements, Monitoring. | |
Loan Servicing. | |
Prevailing Wages. | |
Property/Liability Insurance. | |
Monitoring for Compliance with Declaration of Restrictions and Other Documents. | |
Program Management. | |
Validation. | |
(a) The purpose of this Chapter 66 is to authorize and implement a Seismic Safety Retrofit and Affordable Housing Loan Program (“Program” as defined below) for the City and County of San Francisco (“City” as defined below).
(b) On November 3, 1992, the City’s voters approved Proposition A, a ballot measure authorizing the issuance of up to $350 million of general obligation bonds to establish a Seismic Safety Loan Program (“SSLP”) to provide loans for the seismic strengthening of unreinforced masonry buildings (“Proposition A”); as of 2016, less than $100 million of such issuance authority had been utilized. On November 8, 2016, voters approved Proposition C, a ballot measure expanding the permitted uses for which SSLP funds could be loaned (“Proposition C”). Among other changes, Proposition C authorized loans to “finance the costs to acquire, improve, and rehabilitate and to convert at-risk multi-unit residential buildings to permanent affordable housing.”
(c) Consequently, the purpose of this Chapter 66 is to authorize and implement the program created by Proposition A, as amended by Proposition C, by describing the conditions under which the City may lend general obligation bond proceeds to building owners to finance the seismic retrofit of unreinforced masonry buildings, or to finance the acquisition, improvement and/or rehabilitation of “at risk” multi-unit residential buildings, subject to the conditions and provisions herein. The City’s Board of Supervisors (the “Board”) intends that the Program be used to protect buildings that are at-risk due to their physical condition and need for seismic and other life safety improvements, or for which there is a risk of loss of affordability or a risk of loss of the opportunity to create permanent housing affordability, due to vacancy decontrol or market speculation. The Board further intends that Program funds, particularly those funds used to make Below Market Rate Loans (as defined below), be prioritized for use in supporting the conversion of residential buildings to permanent rent-restricted affordable housing.
(d) In addition to the requirements of this Chapter 66, the Program shall be subject to all federal, state and local laws applicable to the issuance of bonds related to the Program, the making of loans, specific seismic retrofit standards, fire, health and safety upgrades and any other applicable requirements.
(Added by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
(Former Sec. 66.1 added by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated as Sec. 66.2 and amended by Ord. 270-18
, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
Unless otherwise indicated by the context, the following definitions shall govern construction of terms in this Chapter 66:
“Act” means collectively the provisions of a measure entitled “Earthquake Safety Loan Bonds,” adopted by the voters as Proposition A on November 3, 1992, as amended by a measure entitled “Loans to Finance Acquisition and Rehabilitation of Affordable Housing,” adopted by the voters as Proposition C on November 8, 2016, as same may be amended.
“Applicant” means an applicant for a Loan or any successor in interest.
“Application” means an application for a Loan.
“Below Market Rate Loan” means a Loan made, the interest of which yields at least one-third of the City Cost of Funds.
“Board” means the Board of Supervisors of the City.
“Bond Proceeds” means the proceeds of general obligation bonds to be issued by the City to provide funds for the Program, including interest on such proceeds of such general obligation bonds.
“Borrower” means a recipient of a Loan.
“Building Code” means the San Francisco Building Code, as such code may be amended from time to time.
“City” means the City and County of San Francisco.
“City Cost of Funds” means the true interest cost applicable to City Bond Proceeds funding Loans made hereunder.
“Declaration of Restrictions” means an agreement to be executed by the Borrower and recorded against the Property as a condition to the receipt of a Loan hereunder in order to restrict use of the Property, as further described in this Chapter 66.
“Deferred Loan” means a Below Market Rate Loan, for which the repayment of principal and interest thereof is deferred until the sooner to occur of (1) 55 years after such Loan is made, or (2) the borrower transfers title to, or the beneficial ownership of, the building whose improvements were financed with such Loan proceeds, unless such transfer is permitted by the rules and regulations established by the Director.
“Director” means the Director of the Mayor’s Office of Housing and Community Development, or the Director’s designee.
“Fund” means the Seismic Strengthening and Affordable Housing Loan Fund established pursuant to Administrative Code Section 10.100.315,1
or such other fund that the Director establishes with the Office of the Controller to administer the Program.
“Loan” means a loan made pursuant to this Chapter 66, and includes Below Market Rate Loans, Deferred Loans, and Market Rate Loans.
“Loan Committee” means the Citywide Affordable Housing Loan Committee, an internal Loan review committee of the Mayor’s Office of Housing and Community Development.
“Market Rate Loan” means a loan which bears a rate of interest that, when coupled with the annual administrative fee charged by the City, yields a total return to the City that equals the City Cost of Funds for the series of bonds providing funding for such loan, plus 100 basis points.
“MOHCD” shall mean the Mayor’s Office of Housing and Community Development, or any such successor department of the City assuming the responsibilities for administration and management of the Program.
“Program” shall mean the seismic safety retrofit and affordable housing loan program funded by the Bond Proceeds authorized by the Act.
“Program Regulations” means the rules and regulations regarding the Program to be published by the Director, which will be designed to carry out and implement the purposes set forth in the Act and this Chapter 66.
“Property” means any legal parcel(s) of real property eligible for a Loan under the Program, and subject to a Declaration of Restrictions, as provided hereunder.
All terms used herein but not otherwise defined shall be as defined under the Act.
(Added as Sec. 66.1 by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
(Former Sec. 66.2 added by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; redesignated as Sec. 66.3 and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
CODIFICATION NOTE
The Director shall publish from time to time Program Regulations for the Program that are necessary and appropriate to effectively and efficiently implement the Program, as authorized by the Act and in accordance with this Chapter 66. The Director shall publish such Program Regulations on the website of MOHCD and in such other public places as the Director shall deem appropriate, and provide the Program Regulations to persons requesting a written copy thereof. The Program Regulations shall address matters including, but not limited to, Program and Fund administration, underwriting criteria, loan processing and documentation, and loan enforcement. The Program Regulations shall also cover the use of Loan proceeds for the costs of the acquisition, improvement, and/or rehabilitation of “at risk” multi-unit residential buildings, as further provided herein. Such Program Regulations and any material amendments thereto shall be subject to review and approval by the Loan Committee, and shall be reported to the General Obligation Bond Oversight Committee at the first meeting of that committee following the effective date of such Program Regulations or amendments.
(Added as Sec. 66.2 by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; redesignated and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
(Former Sec. 66.3 added by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated as Sec. 66.4 and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
(a) The Program and the issuance of general obligation bonds by the City to fund such Program in accordance with the Act are hereby authorized. A maximum of $350,000,000 will be raised for the Program through the issuance and sale of general obligation bonds of the City for deposit into the Fund for use in the Program and for payment of certain bond issuance costs, and such general obligation bonds shall be allocated as provided below. Loans made under the Program for multi-unit properties may be used for costs associated with:
(1) the acquisition, improvement, and/or rehabilitation of “at-risk” multi-unit residential buildings;
(2) the conversion of such buildings to permanent affordable housing; and
(3) financing the cost of needed seismic, fire, health and safety upgrades, or other major rehabilitation for habitability of such structures. Notwithstanding the foregoing, proceeds of the Program shall not be used to finance new construction of permanent affordable housing units, or the acquisition of multi-unit residential buildings without improvement and/or rehabilitation of such buildings.
(b) A maximum of $150,000,000 of general obligation bonds shall be issued for the purpose of originating Below Market Rate Loans under the Program in accordance with Program Regulations.
(d) A maximum of $200,000,000 of general obligation bonds shall be made available to originate Market Rate Loans.
(e) Fees for Services, Indemnification. To the extent permitted by law, MOHCD may charge reasonable fees, including Loan origination and monitoring fees, and such other necessary fees of consultants and agents retained to administer the Program. MOHCD may use Bond Proceeds to pay such fees or may charge such fees to Applicants and Borrowers. MOHCD may also require Applicants and Borrowers to defend and indemnify the City against future claims, liabilities, and losses related to its administration of the Program as a condition precedent to making a Loan.
(f) Combining Loans. MOHCD may issue to a particular Property any number of Below Market Rate Loans, Market Rate Loans, and Deferred Loans in any combination thereof that the Director deems appropriate 1
(Added as Sec. 66.3 by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
(Former Sec. 66.4 added by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated as Sec. 66.5 and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
CODIFICATION NOTE
SEC. 66.4. LOAN.1
All loans made under the Program shall be fully repaid over such periods as set forth in the Program Regulations but in no event for a term greater than 55 years, on such terms as the Director shall establish and deem appropriate, including but not limited to, loans the principal and/or interest of which are repaid in a single lump sum at the maturity of such loan. Principal and interest Loan repayments will be deposited into the Fund pursuant to the terms of the Program Regulations. All payments of principal and interest collected in connection with Below Market Rate Loans shall be remitted to the Controller’s office to be applied toward repayment of the Bonds associated with such Loans. All payments of principal, and the amount of interest equal to the City Cost of Funds, collected in connection with Market Rate Loans shall be remitted to the Controller’s Office to be applied toward repayment of the Bonds associated with such Loans. At the discretion of the Director, payments of interest in excess of the City Cost of Funds collected in connection with Market Rate Loans may be deposited into the Fund.
(Added as Sec. 66.4 by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
(Former Sec. 66.5 added by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated as Sec. 66.6 and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
CODIFICATION NOTE
(a) Any Below Market Rate Loan made under the Program shall be subject to a Declaration of Restrictions. The term of the Declaration of Restrictions shall be sufficient to ensure that units acquired, improved, or rehabilitated remain affordable for as long as all or any portion of the buildings financed with the Loan operate as multi-family residential facilities.
(b) Market Rate Loans made under the Program shall be subject to a Declaration of Restrictions only to the extent set forth in the Program Regulations. The repayment liability for funds from any Market Rate Loan used for rehabilitation of a residential building shall not be passed through to tenants as a capital improvements rent increase or otherwise.
(Added as Sec. 66.5 by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
(Former Sec. 66.6 added by Ord. 1-93, App. 1/7/93; amended by Ord. 287-96, App. 7/12/96; repealed by Ord. 1-01, File No. 001968, App. 1/12/2001)
Applicants must satisfy the underwriting criteria set forth in the Program Regulations, including but not limited to, appropriate loan-to-value and debt service coverage ratios, reserve requirements, credit worthiness, scope of work, experience, and such other factors as the Director deems appropriate.
(Added by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
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