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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)
Each Applicant must comply with all City contracting requirements, including but not limited to health insurance requirements, the Local Business Enterprise and Non-Discrimination in Contracting Program in Administrative Code Section 14B, and the First Source Hiring Program in Administrative Code Section 83. The Director shall ensure that the Program Regulations include compliance with City contracting requirements as a condition of receiving a Loan under the Program.
(Added by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
Application information and forms shall be made available by the Director and published on MOHCD’s website, or such other convenient location as may be determined by the Director. The Application package will indicate procedures for returning a completed Application, and the expected time frame for the processing thereof.
(Added by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
Subject to the limited exceptions set forth in the Program Regulations, all completed Applications shall be submitted to the Loan Committee for evaluation. Even if an Applicant meets all of the eligibility criteria in this Chapter 66, the Loan Committee may, in its discretion, choose not to approve any proposed Loan or choose to approve any Loan for less than the amount requested by the Applicant.
(Added by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)
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