Small Cities Community Development Block Grant Loan Guarantee Program; Section 108 loan guarantees.

(1) The Small Cities Community Development Block Grant Loan Guarantee Program is created. The department shall administer the loan guarantee program pursuant to Section 108 of Title I of the Housing and Community Development Act of 1974, as amended, and as further amended by s. 910 of the Cranston-Gonzalez National Affordable Housing Act. The purpose of the Small Cities Community Development Block Grant Loan Guarantee Program is to guarantee, or to make commitments to guarantee, notes or other obligations issued by public entities for the purposes of financing activities enumerated in 24 C.F.R. s. 570.703.

(2) Activities assisted under the loan guarantee program must meet the requirements contained in 24 C.F.R. ss. 570.700-570.710 and may not otherwise be financed in whole or in part from the Florida Small Cities Community Development Block Grant Program.

(3) The department may pledge existing revenues on deposit or future revenues projected to be available for deposit in the Florida Small Cities Community Development Block Grant Program in order to guarantee the payment of principal and interest on a Section 108 loan.

(4) An applicant approved by the United States Department of Housing and Urban Development to receive a Section 108 loan shall enter into an agreement with the Department of Commerce which requires the applicant to pledge half of the amount necessary to guarantee the loan in the event of default.

(5) The department shall review all Section 108 loan applications that it receives from local governments. The department shall review the applications in the order received, subject to a determination by the department that each application meets all eligibility requirements contained in 24 C.F.R. ss. 570.700-570.710 and has been deemed financially feasible by a loan underwriter approved by the department. If the statewide maximum available for loan guarantee commitments established in subsection (6) has not been committed, the department may submit the Section 108 loan application to the United States Department of Housing and Urban Development with a recommendation that the loan be approved, with or without conditions, or be denied.

(6) The maximum amount of an individual loan guarantee commitment that an eligible local government may receive is limited to $5 million, and the maximum amount of loan guarantee commitments statewide may not exceed an amount equal to two times the amount of the most recent grant received by the department under the Florida Small Cities Community Development Block Grant Program. The $5 million loan guarantee limit does not apply to loans guaranteed prior to July 1, 2013, that may be refinanced.

(7) Section 108 loans guaranteed by the Small Cities Community Development Block Grant Program must be repaid within 20 years.

(8) Section 108 loan applicants must demonstrate to the department that the applicant investigated alternative financing services and the services were unavailable or insufficient to meet the financing needs of the proposed activity.

(9) If a local government defaults on a Section 108 loan received from the United States Department of Housing and Urban Development and guaranteed through the Florida Small Cities Community Development Block Grant Program, thereby requiring the department to reduce its annual grant award in order to pay the annual debt service on the loan, any future community development block grants that the local government receives must be reduced in an amount equal to the amount of the state’s grant award used in payment of debt service on the loan.

(10) If a local government receives a Section 108 loan guaranteed through the Florida Small Cities Community Development Block Grant Program and is granted entitlement community status as defined in subpart D of 24 C.F.R. part 570 by the United States Department of Housing and Urban Development before paying the loan in full, the local government must pledge its community development block grant entitlement allocation as a guarantee of its previous loan and request that the United States Department of Housing and Urban Development release the department as guarantor of the loan.