Florida Regulations 67-39.006: Contractual Provisions of Qualified Obligation Documents
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The Corporation shall require that supporting documents for each Qualified Obligation contain contractual provisions to ensure payment of the Qualified Obligation. Such provisions shall include, unless otherwise approved by the Board:
(1) Rights of foreclosure or other means of obtaining the collateral.
(2) In the case of multifamily Residential Property, guarantees of completion, operating deficits and an environmental indemnity, effective as of the date of closing, and, if deemed necessary by the Credit Underwriter, the Financial Advisor or the Guarantor, a liquidity maintenance agreement. In the event an Obligor or Principal elects to satisfy such guarantees by means of an irrevocable letter of credit from a banking institution, separate letters of credit for each guarantee running co-terminously shall be required.
(3) In the case of multifamily Residential Property, an unconditional 100% performance and payment bond by a provider rated at least “”A-“” by A. M. Best & Co, with a financial size category of at least FSC VI.
(4) In the case of multifamily Residential Property financed through the issuance of tax-exempt bonds, 50% of the tax credit equity necessary for completion of construction being deposited prior to closing with the Qualified Lending Institution or Trustee, and all remaining tax credit equity necessary for completion of construction being paid in through the Trustee or Qualified Lending Institution. All equity required to complete construction must be under the control of the tax credit provider or syndicator as of the date of closing.
(5) In the case of multifamily Residential Property, any single change order in excess of $25,000 and all change orders that in the aggregate are in excess of $50,000 shall be subject to the Servicer’s and Corporation’s approval.
(6) In the case of multifamily Residential Property, a schedule of monthly payments of principal and interest due under the promissory note and a Guarantee premium schedule.
(7) In the case of multifamily Residential Property with respect to Qualified Obligations for which a Guarantee is issued beginning in 2002, other than the Qualified Obligations consisting of a loan of tax-exempt bond proceeds from the Corporation designated in 2001 by the Corporation for funding, a requirement that the amount established as a replacement reserve be automatically increased annually beginning in the seventh year after closing based on changes in the consumer price index, such increase to be subject to waiver or reduction in the event the Obligor provides a physical needs study prepared by an independent third party acceptable to the Guarantor evidencing such increase as excessive or unnecessary.
(8) The right to name and appoint a receiver for the property.
Rulemaking Authority Florida Statutes § 420.507(25), 420.5092(4) FS. Law Implemented Florida Statutes § 420.5092. History-New 4-5-93, Amended 2-16-94, 2-6-97, Formerly 9I-39.006, Amended 10-21-99, 1-8-02.
Terms Used In Florida Regulations 67-39.006
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Trustee: A person or institution holding and administering property in trust.
(2) In the case of multifamily Residential Property, guarantees of completion, operating deficits and an environmental indemnity, effective as of the date of closing, and, if deemed necessary by the Credit Underwriter, the Financial Advisor or the Guarantor, a liquidity maintenance agreement. In the event an Obligor or Principal elects to satisfy such guarantees by means of an irrevocable letter of credit from a banking institution, separate letters of credit for each guarantee running co-terminously shall be required.
(3) In the case of multifamily Residential Property, an unconditional 100% performance and payment bond by a provider rated at least “”A-“” by A. M. Best & Co, with a financial size category of at least FSC VI.
(4) In the case of multifamily Residential Property financed through the issuance of tax-exempt bonds, 50% of the tax credit equity necessary for completion of construction being deposited prior to closing with the Qualified Lending Institution or Trustee, and all remaining tax credit equity necessary for completion of construction being paid in through the Trustee or Qualified Lending Institution. All equity required to complete construction must be under the control of the tax credit provider or syndicator as of the date of closing.
(5) In the case of multifamily Residential Property, any single change order in excess of $25,000 and all change orders that in the aggregate are in excess of $50,000 shall be subject to the Servicer’s and Corporation’s approval.
(6) In the case of multifamily Residential Property, a schedule of monthly payments of principal and interest due under the promissory note and a Guarantee premium schedule.
(7) In the case of multifamily Residential Property with respect to Qualified Obligations for which a Guarantee is issued beginning in 2002, other than the Qualified Obligations consisting of a loan of tax-exempt bond proceeds from the Corporation designated in 2001 by the Corporation for funding, a requirement that the amount established as a replacement reserve be automatically increased annually beginning in the seventh year after closing based on changes in the consumer price index, such increase to be subject to waiver or reduction in the event the Obligor provides a physical needs study prepared by an independent third party acceptable to the Guarantor evidencing such increase as excessive or unnecessary.
(8) The right to name and appoint a receiver for the property.
Rulemaking Authority Florida Statutes § 420.507(25), 420.5092(4) FS. Law Implemented Florida Statutes § 420.5092. History-New 4-5-93, Amended 2-16-94, 2-6-97, Formerly 9I-39.006, Amended 10-21-99, 1-8-02.