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Housing Finance Authority of Pinellas County
OPERATION KICKSTART PROGRAM
The OPERATION KICKSTART PROGRAM is a purchase/rehab and construction loan product designed to provide incentives for builders and developers to produce affordable new homes and upgrade existing housing in specially designated areas of Pinellas County. It is one of a series of incentives designed to expand the supply of affordable housing, encourage home ownership, and enhance neighborhood stability. OPERATION KICKSTART PROGRAM offers two options: loans may be used 1) to construct new housing or 2) to purchase and rehab existing housing for resale. This program offers loans to builders at very favorable terms and rates. By accepting this loan at such favorable terms, the participating builder warrants that all homes built or remodeled under this program will meet a high standard of quality and will be sold to eligible homebuyers. An eligible homebuyer is one whose gross household income does not exceed 120% of area median and who occupies the home as a principal residence.
Due to limited resources, the Housing Finance Authority of Pinellas County makes this loan product available only in Federally designated Targeted Areas, Areas of Special Concern to local governments, and other such specific neighborhoods as periodically identified by the Authority. Currently, five areas only are approved for the program and are listed below under the Eligible Properties heading.
In order to assure that these activities enhance and improve the neighborhood, builders and plans must be pre-approved to access any of the loan products above. (The term “builder” is used in this document to mean, interchangeably, for-profit companies, non-profit corporations, individual licensed contractors, or other housing providers.) Due to administrative requirements of a program such as this, the number of approved builders may be limited. A key component of builder approval is that the proposed design and plans are consistent with neighborhood improvement objectives. Homes built or rehabbed under this program must contribute to upgrading the neighborhood and must not be in conflict with stated design or style preferences of the Authority or the greater community. Additionally, the builder must have a good reputation and offer a top quality product. The builder must also demonstrate a proven history of affirmatively marketing the product being constructed to eligible homebuyers.
Participating builders must warrant that all homebuyers will meet the income eligibility guidelines. Homebuyers must occupy the home as their principal and sole residence. Seasonal homes are not eligible for this program. Homebuyers are not required to be first time homebuyers.
Homebuyers must qualify for private first mortgage financing; the KickStart loan is not assumable by the homebuyer. The first mortgage loan must offer interest rates and closing costs which are typical for Pinellas County at the time of application. Lease-purchase and Agreement-for-Deed sales are not eligible under this program.
Properties may be located only in one of the following areas: The IRS Federal Targeted Area of St. Petersburg; the Greater Ridgecrest Area of Pinellas County; the Union Academy Solutions Area of Tarpon Springs; the North and South Greenwood Area of Clearwater; and the CDBG Targeted Area of Largo. These areas may change from time to time. Area maps are available from the Housing Finance Authority. The sales price of the house cannot exceed $190,000 or the appraised value, whichever is less. The property must be a single-family structure or, if pre-approved, a townhouse or villa. Income producing properties are not eligible under this program. Manufactured homes are not eligible under this program. A homebuyer or builder may rehab an existing home, or construct a new home on a currently vacant lot or demolish and replace an existing house that is not feasible to repair. However, no tenant can be displaced to make a home or property available for this program.
LOAN AMOUNT AND TERMS
The loan is a first mortgage product. The loan amount cannot exceed 80% of the projected sales price or the projected appraised value, whichever is less. The Authority offers construction period financing for twelve months at 0% interest. Loans must be repaid in full at the end of the twelve-month term or whenever the house is sold, whichever is earlier. Builders will be approved and assigned a dollar allocation, which will work like a revolving fund for that developer. As construction loans are repaid, the developer is allowed to reuse the funds to produce additional units. Although the builder is assigned an allocation, each loan must stand-alone with its own security instruments in place. In the instance where a builder has been approved to use a home as a model to sell other homes in the neighborhood, and has demonstrated success in completing sales and construction of other units, the construction loan terms may be extended for up to 9 additional months.
Loan proceeds are dispersed as work is completed or costs incurred. No advance payments will be authorized. Most closing costs can be included in the loan. Closing costs associated with the loan are usually title insurance, appraisal, survey, documentary stamps and recording fees. All costs are disclosed to the builder prior to and at the time of loan closing. The builder/developer may prepay any or all of the outstanding principal balance at any time without incurring prepayment penalties. Since this is a construction loan with specific draw, documentation, tracking, and reporting requirements, the Housing Finance Authority chooses to work only with title agents trained in the process. Any contracts for purchase must contain a contingency which allows that the title agent be from the Housing Finance Authority’s approved list.
OTHER PROGRAM REQUIREMENTS
The Authority may inspect or contract for the inspection of construction quality at any reasonable time during the construction period. This is solely to insure that public funds invested are being used to produce a quality product. Problems found will be discussed first with the builder, but, if this does not result in the correction of problems, inspection information may be shared with others, including the homebuyer, first mortgage lender or building officials. If construction is not performed in accordance with approved plans or does not meet acceptable standards for quality and compliance with all applicable codes, construction draws will be withheld until corrections have been made. No additional loans will be approved for builders who do not produce a quality product or who do not deal fairly and honestly with homebuyers in the sole judgment of the Authority or its inspectors.
This program is administered through the Housing Finance Authority of Pinellas County. The Authority reserves the right to subcontract with other parties for any or all of its administrative functions. To apply, call (727) 464-8210. Not all applications will meet underwriting criteria; some will not be approved for a loan. Applicants who have been denied participation are entitled to know why the application was rejected. Any applicant who has a complaint or inquiry regarding eligibility or any other determinations made by Authority personnel are entitled to have their complaint or inquiry reviewed. If any applicant has not received an adequate response to their complaint or inquiry, please contact the Affordable Housing Manager, at the address and phone number listed below.
For additional information about program requirements or processing, please call or contact:
Housing Finance Authority of Pinellas County
Our goal is to offer the residents of Pinellas County the highest quality service possible. We are always interested in your comments about the quality of our services or suggestions for ways to improve them.
OPERATION KICKSTART PROGRAM
This term sheet is intended as a quick-glance information sheet and processing guide for lenders, builders, and their staff liaisons. Information contained herein is summarized and is not exhaustive.
|Type:||Fixed rate mortgage loans to assist in financing the purchase and rehabilitation or the construction of new single family homes in partnership with private mortgage primary lenders and builders.|
|Eligible properties:||Single family homes (townhouses or villas if pre-approved). Income producing properties are not eligible for this program. Properties must meet all local codes and construction standards prior to occupancy. KickStart offers two options: 1) Loans may be used to construct new housing; or 2) Loans may also be used to purchase and rehab existing housing for resale. All activities are limited to certain designated areas.|
|Security:||Mortgage in favor of the Housing Finance Authority of Pinellas County.|
|Interest Rate:||0% interest rate.|
|Term:||Loans are due and payable upon sale or at the end of 12 months, whichever is sooner. Loans on pre-authorized model homes may be extended an additional nine months.|
|Loan Amount:||Loan amount is limited to 80% of projected sales price or appraised value, whichever is less. The minimum loan amount is $50,000.|
|Maximum Value:||Sales price of the home cannot exceed appraisal value or $190,000 whichever is less.|
|Loan-to-Value:||This loan plus all other encumbrances may not exceed 80% of projected sales price or appraisal value, whichever is less.|
|Costs:||All loans will carry a 1.5% origination fee and a non-refundable application processing fee of $50.00|
|Other:||All entities participating in the program must be approved. All homes built using these loans must have pre-approved plans and meet pre-approved specifications. Only approved title entities may disburse funds under this program.|