The Florida Affordable Housing Guarantee Program was created in 1992 by the Florida Legislature to overcome the lack of available credit enhancement for the production of affordable housing in the State of Florida. The Guarantee Program, governed by Chapter 67-39, Florida Administrative Code, works in concert with federal, state and local government financing sources, as well as other qualified lending institutions, to effectively lower the overall cost of borrowing capital for the construction and rehabilitation of affordable multifamily rental housing.

These cost savings are achieved by the Guarantee Program guaranteeing the payment of mortgages that secure multifamily mortgage revenue bonds. When combined with bond insurance, Guarantee Program-enhanced securities typically receive a “AAA” rating, thus lowering the overall cost of borrowing. This reduction in financing costs ultimately allows for a reduction in rents to individuals earning incomes totaling no more than sixty percent of the area median income. While this financing structure minimizes the credit deficiencies inherent in financing affordable rental housing, it also creates security mechanisms that enable the sale of loans within the secondary marketplace.

For developments anticipating funding from Florida Housing Multifamily Mortgage Revenue Bonds, a commitment to provide credit enhancement may be included with the Universal Cycle application for funding. Should you desire consideration of your proposed development for Guarantee Program credit enhancement, please submit a completed and executed application to Guarantee Program staff prior to the deadline identified in the Notice of Guarantee Program Application Process and Instructions.

If the application meets minimum guidelines of the Guarantee Program regarding, among other factors, general location and funding criteria (i.e., maximum 90% LTV & minimum 1:15:1.0 DSCR), then a Conditional Commitment to Guarantee will be presented to the Board of Directors for consideration. A binding Commitment to Guarantee will ultimately be issued only in connection with developments that have received: (1) funding allocation; (2) a successful credit underwriting performed by a third party acceptable to the Guarantee Program; (3) a favorable Risk Assessment Analysis; and (4) Board approval for the issuance of such commitment. Conditional Commitments and Commitments to Guarantee are subject to several factors, including market demand and the availability of adequate Guarantee Program capacity.

Because the Guarantee Program does not issue conditional commitments in connection with Local HFA transactions, developments receiving bond allocation from a local housing finance authority (“Local HFA”) may apply for Guarantee Program credit enhancement at any time. In light of current adverse market conditions, Florida Housing has suspended the issuance of additional guarantees.