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Agenda 12/09/2025 Item #16K14 (Plan of financing involving the issuance by the Authority of single-family mortgage revenue bonds)12/9/2025 Item # 16.K.18 ID# 2025-8431 Executive Summary Request by the Housing Finance Authority of Collier County for approval of a Resolution approving a plan of financing involving the issuance by the Authority of single-family mortgage revenue bonds in an amount not to exceed $50 million or, in the alternative, to use volume cap allocation for mortgage credit certificate programs or for multifamily housing for persons of low or moderate income. OBJECTIVE: To accomplish the necessary approval to authorize a proposed revenue bond issue by the Housing Finance Authority of Collier County (the “Authority”) to be used for either single family or multifamily affordable housing programs. CONSIDERATIONS: Introduction This request is a duplicate of requests submitted by the Authority in 2022 through 2025 and all previous requests have been approved by the BCC by Resolutions 2022-106, 2023-98, 2024-252 and 2025-86 respectively. It is also the second request for 2025, as the Authority was awarded an allocation based on Resolution 2025-86, but is still permitted to apply for allocation on January 2, 2026. Background-Private Activity Bond Volume Cap Requirements Federal law limits the amount of tax-exempt private activity bonds that can be issued in each state each year (referred to as the "volume cap"). For an agency such as the Housing Finance Authority of Collier County to issue tax-exempt bonds for affordable housing, it must receive an allocation of the state volume cap from the Florida Division of Bond Finance. In the past several years, changing economic conditions have created a situation where the state-wide allocation requests far exceed volume cap available, and receiving an allocation has become almost a lottery. To partially offset these risks, most authorities have gone to a system of approving a single-family mortgage revenue bond issue under a plan of finance which also allows the authority to use volume cap allocation for either single family or multifamily financing, rather than requesting allocation for a specific project, as has been the traditional method. Under this strategy, the Authority can apply for a volume cap allocation of $50 million, which can be used either for single family mortgage revenue bonds or a sharing of allocation with another authority that would issue such bonds for several counties (more likely). Other options would be the sharing of allocation in a multicounty mortgage credit certificate program, or to use the allocation for a multifamily project. The Internal Revenue Code also allows the Authority to carry forward any unused volume cap allocation received for up to three years. Restrictions on the use of an allocation in the year granted make use of the allocation in the year granted often infeasible, but at the end of the year a three year carry forward can be obtained, which gives the local authority a three-year window within which it can fund projects using that allocation. The Authority's bond counsel has reviewed and advised this strategy. As an example of the success of this strategy, the recently-approved Wave at Rose project, a 230-unit affordable housing apartment complex in Immokalee, will be financed by bonds issued under the allocation granted in January, 2023 as a result of Resolution 2022-106 referred to above. As a result of the allocations received in 2024 and the two in 2025, the Authority now has a "bank" of allocations which can be used in future years; however, since unused allocations expire after three years, it is important to keep replenishing the "bank". Process for obtaining Volume Cap Allocation Volume cap allocations are granted by the State Division of Bond Finance pursuant to formulas set by state statute. Applications for allocations must be made on or after January 2, of each year, and in practice all available allocations for local HFAs are committed, and no further allocations will be available until the following January. This requires certain hearings and approvals to be done in 2025 so the application is ready to be filed on Jan. 2, 2026. As the first step to implement this strategy, the Authority held a publicly advertised hearing on November 20, 2025, at which members of the public could comment on the proposal. No members of the public attended the hearing either in person or remotely, and there were no public comments either before or at the hearing. At the conclusion of the hearing the Authority adopted Resolution 2025-06 (the "Authority Resolution") approving the plan of finance and directing appropriate Page 7179 of 9661 12/9/2025 Item # 16.K.18 ID# 2025-8431 officers of the Authority to seek approval of the issuance of bonds pursuant to such plan from the Board of County Commissioners, as is required by the Internal Revenue Code. A copy of the Authority Resolution is attached as Exhibit A to the County Resolution, as described below. The second step in the process is the Internal Revenue Code requirement that bonds of this type be approved by the "local elected representative", which, in the case of Collier County, is the Board of County Commissioners. This approval is signified by the adoption of a resolution (the "County Resolution") approving the issuance of bonds by the Authority. By statute, any bonds issued by the Authority can only be revenue bonds, payable only from revenues associated with the project, and are not obligations of the County, the state, or any other political subdivision. There is no pledge of any taxes, nor a pledge of any other revenues except the revenues of the project for which the bonds are issued. Neither the County, the Board, nor any employee or officer of the County is liable for their payment. Further, the County Resolution provides that this approval by the Board does not abrogate any County regulations, including land use regulations. The Board’s role in approval of financing authority bond issues Unlike County bonds, which are issued for public projects, the County-created financing authorities (Housing Finance, Industrial Development, Health Facilities, and Educational Facilities Authorities) issue private activity bonds, which are bonds issued on behalf of a private user for a legislatively declared public purpose such as healthcare facilities, private educational facilities, qualifying manufacturing facilities, low/moderate income housing facilities, pollution control facilities, etc. The Internal Revenue Code ("Code") requires two types of approval for the issuance of private activity bonds: Issuer Approval and Host Government Approval. Issuer Approval is the approval of the issuer of the bonds and is initially evidenced by the adoption of a resolution such as the Authority Resolution as attached to the County Resolution. The Board grants Host Government Approval when it adopts a resolution approving the issuance of the bonds by the Issuer (called the "County Resolution" in this Executive Summary). Host Government Approval is the approval of the governmental unit with geographic jurisdiction over the location of the project. The primary requirement of Host Government Approval is that the bonds have been considered at a public hearing at which members of the public have had an opportunity to express their views on the project and the issuance of the bonds. The Code contains very specific requirements for the public notice of the hearing, and a copy of the public notice, which has been reviewed by the Authority Bond Counsel and determined to be Code-compliant is attached to the Authority Resolution. The Code does not require that the Board itself conduct the public hearing, only that Host Approval may not be given until the public hearing has been conducted. In practice, both in Collier County and around the state, the public hearing itself is conducted by the local financing authority and Host Approval is given after the Board receives the report and recommendations of the financing authority in the form of the Authority Resolution. Here, the public hearing was held as described above, and no members of the public expressed any views in opposition to the project or the bonds. Effect of Board Approval Board Approval of an authority bond issue does not cause the bond to become a county bond or an obligation of the County. By statute, bonds of this type are payable only from revenues related to the project, and no public monies of any kind are pledged. Bonds of this type are treated as Component Unit Debt on the County's annual audit. Board approval is necessary for the Authority to apply for volume cap allocation. FISCAL IMPACT: This program does not require any contribution from the Board of County Commissioners or any other County agency. As stated above, the bonds are not liabilities of the County, and the County is not liable for payment in any way. The Authority is a self-funding agency, and no County monies are contributed to its operation. Page 7180 of 9661 12/9/2025 Item # 16.K.18 ID# 2025-8431 GROWTH MANAGEMENT IMPACT: The adoption of the attached resolution will have no adverse growth management consequences. The Authority requires that any specific project be consistent with the LDC as a prerequisite to consideration of an application for financing. LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney. Review of these and similar bonds by the Governing Body is a statutory requirement and serves as a safeguard against the issuance of inappropriate bonds, which appears not to be the case here. The County has no liability, contingent or otherwise, with respect to these bonds. With that noted, this item is approved as to form and legality and requires majority vote for Board approval. - JAK RECOMMENDATION(S): The Board of County Commissioners adopt the attached Resolution. PREPARED BY: Donald A. Pickworth, Counsel Collier County Housing Finance Authority ATTACHMENTS: 1. Resolution - HFA 2. Authority Resolution Plan of Finance 11-20-25 Page 7181 of 9661 Page 7182 of 9661 Page 7183 of 9661 Page 7184 of 9661 Page 7185 of 9661 Page 7186 of 9661 Page 7187 of 9661 Page 7188 of 9661 Page 7189 of 9661 Page 7190 of 9661 Page 7191 of 9661