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Subsidiaries - Puerto Rico Housing Finance Authority
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Hato
Rey-Office
Arterial Hostos St. 235 • Capital Center Building
North Tower, Suite 1201 • Hato Rey, PR 00918
Telephone (787) 765-7577 • Facsimile (787) 754-1440 |
Río
Piedras-Office
Barbosa Ave. 606 • Juan C. Cordero Bld
Río Piedras, PR 00919-0345
Telephone (787) 765-7577 • Facsimile (787) 764-8680 |
PO
Box 71361 • San Juan, PR • 00936-8461
Contacts |
In 2001, the Commonwealth of Puerto Rico established as a priority the need to restructure the public agencies offering financing for housing in Puerto Rico and, particularly, to merge under a single operation the financing services for low-income housing. This merge was achieved through Act No. 103 of August 11, 2001, as amended.
The Act provided for the dissolution of the Puerto Rico Housing Bank and Finance Agency (HB), as well for the transferal of all its power, faculties and obligations to the Puerto Rico Housing Finance Corporation. The name of the agency, in turn, was changed to the Puerto Rico Housing Financing Authority (PRHFA), which continues to operate as a Government Development Bank for Puerto Rico subsidiary.
By merging the financing operation, Act 103 strengthens the entity, and puts it in a better position to negotiate financial agreements with both the federal government and the private sector. This Act created a financial institution that abides by the public policy set by the Department of Housing in Puerto Rico and designs financing structures for low-income housing projects. It also established a One Stop Center for housing developers and mortgage bankers.
IMPORTANT NOTICES
- March 17, 2008 - Notice of Approved Regulation - New Regulation for the Low Income Housing Subsidy Program.
- June 97, 2007 - Notice of Availability of Draft Regulations: Regulations of the Key to Your Home Program, with the purpose of amending Article 10 of Regulations No. 6318 to allow for more than 20% of the units of certain projects to combine funds of the Key to You Home Program with funds from other federal or local programs
- May 17, 2007 - Notice of Availability of Draft Regulations: Regulations for the program for the Acquistion and Predevelopment of Real Estate Properties to develop Housing Projects for Low and Moderate Income Families
- May 17, 2007 - Notice of Availability of Draft Regulations: Regulations for Real Estate Disposal
- Feb 6, 07 - Notice of Public Hearing on March 21, 2007 on 2007 Qualified Credits Allocation Plan
- Feb 16, 07 - Notice of Availability of Proposed Amendment to Regulations of the Key to Your Home Program to establish a new limit on income for program beneficiaries
- Jan 19, 07 - Notice
of availiability of Regulations Draft - Regulations for the Assignment of Credits and Judgement in favor of PRHFA
- Notice of availiability of Regulations Draft - Regulations for Real Estate Disposal
- Draft Regulations for Real Estate Disposal (Available only in Spanish)
- Regulations
Draft (Available only in Spanish)
- Background and Legal Basis
- Strategic Goals
- Programs
- Subsidy Program for Social Interest
Housing - Act 124
- New Secure Housing Program
- Section 42 of the Internal Revenue
Code
- Tax Credit Program (Act No. 140
of October 4, 2001)
- Key to your Home Program
- Interim Loans for Construction
- Direct Loans
- First Time Home Buyers Trust
(5.4%)
- Subsidy Housing Administration
- Subsidy Contracts Administration
- Loans for Multifamily Housing
Rental
- Santurce Revitalization
Project
Background
and Legal Basis
In 2001, the Commonwealth of Puerto Rico established
as a priority the need to restructure the public agencies offering financing
for housing in Puerto Rico and, particularly, to merge under a single
operation the financing services for low-income housing. This merge was
achieved through Act No. 103 of August 11, 2001, as amended.
The Act provided for the dissolution of the Puerto Rico Housing Bank
and Finance Agency (HB), as well for the transferal of all its power,
faculties and obligations to the Puerto Rico Housing Finance Corporation.
The name of the agency, in turn, was changed to the Puerto Rico Housing
Financing Authority (PRHFA), which continues to operate as a Government
Development Bank for Puerto Rico subsidiary.
By merging the financing operation, Act 103 strengthens
the entity, and puts it in a better position to negotiate financial agreements
with both the federal government and the private sector. This Act created
a financial institution that abides by the public policy set by the Department
of Housing in Puerto Rico and designs financing structures for low-income
housing projects. It also established a One Stop Center for housing developers
and mortgage bankers.
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Strategic Goals
- One of the primary goals of the Puerto Rico Housing Finance Authority
(PRHFA or the Authority) is handle the need for adequate housing as
a matter of social justice. Aware of the fact that the demand is much
greater than the offer, the government has proposed to construct and
rehabilitate 50,000 housing units for low and moderate income families
in a four-year period.
- The rehabilitation of urban centers is another priority for the Authority
and we plan to repopulate them by developing housing projects, communal
areas, parks and recreational facilities.
- Developing new financing mechanisms to increase the offer of available
housing units.
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Programs
of the Puerto Rico Housing Finance Authority
Subsidy Program
for Social Interest Housing - Act 124
Act No. 124 of December 10, 1993, as amended, created
a new subsidy program for low income housing.
- The Department of Housing of the Commonwealth of Puerto Rico approves
the Rules and Regulations for the Program while the PRHFA manages it.
- The subsidy is applicable to new construction of refurbished project
undertaken by private developers.
- PRHFA grants a subsidy directly to eligible buyers, up to a maximum
of 2% of the selling price, to be applied to the down payment and a
subsidy for the monthly payments depending on income or family composition.
- The financing is provided by private banks.
- The selling price of the housing units in between $70,000 and $85,000
- PRHFA contracted the services of a planner and an engineer to work
in the Program
- PRHFA performs the pre-evaluations for the projects that apply to
the Program
- PRHFA follows up on projects submitted to the Puerto Rico Planning
Board for approval
- PRHFA coordinates with other agencies to speed up the permitting
processes of projects.
- The Authority promotes the promptness, uniformity and coherence among
the agencies granting permits.
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New
Secure Housing Program
- Act No. 92 of August 4, 2001 designated the Puerto Rico Housing Finance
Authority as the government entity in charge of managing the financial
assistance granted under this program, previously managed by the Puerto
Rico Infrastructure Financing Authority (PRIFA).
- Provides for the relocation of residents living in flooding areas
or in areas prone to landslides through the consolidation of funds,
using Federal and State Funds.
- Agreements with the private banks to qualify possible residents.
- Identification of new land lots to construct housing developments.
- Reductions in the construction cost of the projects
- The program is in compliance with the timeframe established by FEMA
to qualify possible residents.
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Section 42 of the
Internal Revenue Code:
- Provides financing through the sale of tax credits to United States
investors.
- The product of the sale contributes to create and preserve rental
housing units.
- The Federal Tax Credit Program receives each year nearly $8.2 million,
which generates an investment of approximately $67.7 million in Puerto
Rico’s economy.
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Tax Credit Program
(Act No. 140 of October 4, 2001)
- Offers tax credits for the investment in new construction or in
the substantial rehabilitation of housing units to rent to low-income
families.
- This increases the inventory of social interest housing in the
island.
- This guarantees a rent affordable for low income families.
- This credit serves as a tool to stimulate the substantial rehabilitation
of existing facilities and structures that will help renovate and
repopulate the urban centers of our towns.
- The local Tax Credit Program will have $15 million and it is a new
program managed by the Development and Financing Area.
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Key to your Home
Program
- Created by Act No. 4 of March 29, 2001.
- Offers a new opportunity to our families and low and moderate income
families to own a home.
- The eligible family receives a grant ranging between $3,000.00 and
$15,000.00 applicable to the down payment of their home.
- This program can be used individually or, under special circumstances,
in combination with other programs.
- The applicant cannot own a property suitable be use al living quarters
at the date of applying for this benefit.
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Interim
Loans for Construction
- PRHFA offers financing for construction of housing projects for
sale in which the price per unit does not exceed $75,000.00.
- The Authority will charge a fee for the interim financing of up to
1.5% of the maximum amount approved.
- The fee varies depending on the kind of project (new construction
or rehabilitation), the sale price per unit, the profit percentage
for the developer, on whether the project is FHA insured, and on whether
PRHFA will provide subsidy to the buyer families.
- The Authority will provide financing of up to 90% of the total cost
of the development or of 80% of the total selling cost, whichever is
lower. The amount to be financed shall not exceed 90% of the total
loan to value of the project.
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Direct Loans
- Mortgage loans for construction, improvements, acquisition of land
and construction, and refinancing without remainder balance with the
objective of reducing the interest rate of the loan.
- The Authority grants loans of up to $90,000 at 6.5% interest per
year.
- Applicants can have a gross annual income of up to $45,000.
- Closing expenses are partially subsidized if the applicant qualifies
for the Key to your Home Program.
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First Time
Home Buyers Trust (5.4%)
- A tax-exempt bond issue is sold to generate funds for the refinancing
of mortgage loans for first-time home buyers.
- In August 2001 the Authority sold its most recent bond issue in the
tax-exempt market. This issue generated a total of $77 million that
have already been used to grant mortgage loans at a 30 year term, and
5.4% interest, FHA guaranteed. In addition, $25 million were produced
by a short term Note.
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Subsidy
Housing Administration
The Authority is the housing agency in Puerto Rico
charged with the responsibility of relocating the families who live in
Section 8 Program housing units whose owners chose to discontinue the
unit from participating in the Program. These families receive a Section
8 Housing Voucher that allows them to identify another housing unit for
rent in the private market that complies with federal safety standards
and use them to rent such unit.
The Housing Vouchers that are not assigned to residents
of the Section 8 Program because the families no longer qualify, are
used to assist other qualifying families in Puerto Rico. This has allowed
the Authority to increase the number of Section 8 Vouchers granted to
1,138 units and has permitted us to assist not only families already
in the Section 8 Program, but other families with the same needs for
housing on the Island. As of March 2004, the Authority was managing nearly
2,280 units under the Section 8, Housing Vouchers and Moderate Rehabilitation
Program.
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Subsidy
Contracts Administration
The Authority was chosen by the Federal Department
of Housing and Urban Development (HUD) to manage the subsidy contract
for all Section 8 projects in Puerto Rico. Through this program,
the projects’ managements are monitored to insure the quality
of life of the residents and the adequate use of the federal funds.
In addition, the Authority is responsible of making
the subsidy payments to the project owner, renovating the subsidy contract
for the projects, approving and processing the rent increases, monitoring
that any deficiencies found in the projects during physical inspections
are corrected and carrying out administrative audits of the projects
each year.
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Loans
for Multifamily Rental Housing
The Authority provides interim and permanent financing
for the development of rental housing projects.
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Santurce
Revitalization Project
The Commonwealth of Puerto Rico promotes the
reconstruction of urban centers through the establishment of a public
policy aimed at repopulating and revitalizing urban centers through
housing projects. In addition, it provides for the expropriation of
abandoned structures and land lots to dedicate them to the construction
of housing projects. The Santurce Revitalization Project is an initiative
targeted at furthering the urban rehabilitation of the City of San
Juan. The project established the foundations for a new strategy for
the redevelopment of San Juan. Santurce has been impacted with projects
ranging from improvements to streets, sidewalks, illumination, underground
electric wiring, reforestation, and a program of economic incentives
for small business owners. These improvements have been concentrated
throughout the Ponce de León
Avenue and currently is generating a better quality of life in the
zone. Today, the different projects for the revitalization of Santurce
continue through a collaborative effort between the Department of Housing,
the Land Administration, the Electric Power Authority, the Department
of Transportation and Public Works and the Puerto Rico Housing Finance
Authority.
To supervise these projects, PRHFA contracted the
services of two architects, one accountant, and a secretary. This team,
under the direct supervision of the Executive Director, works directly
in the acquisition of land parcels for development, bidding processes,
evaluation of development proposals and follow-up on the developers.
They work hand in hand with the developers, the banking sector and the
public.
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