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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.
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The Department of Housing of the Commonwealth of Puerto Rico approves the Rules and Regulations for the Program while the PRHFA manages it.
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The subsidy is applicable to new construction of refurbished project undertaken by private developers. |
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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. |
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The financing is provided by private banks. |
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The selling price of the housing units in between $70,000 and $85,000 |
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PRHFA contracted the services of a planner and an engineer to work in the Program |
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PRHFA performs the pre-evaluations for the projects that apply to the Program |
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PRHFA follows up on projects submitted to the Puerto Rico Planning Board for approval |
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PRHFA coordinates with other agencies to speed up the permitting processes of projects. |
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The Authority promotes the promptness, uniformity and coherence among the agencies granting permits. |
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New Secure Housing Program
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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).
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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. |
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Agreements with the private banks to qualify possible residents. |
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Identification of new land lots to construct housing developments. |
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Reductions in the construction cost of the projects |
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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:
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Provides financing through the sale of tax credits to United States investors.
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The product of the sale contributes to create and preserve rental housing units. |
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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)
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Offers tax credits for the investment in new construction or in the substantial rehabilitation of housing units to rent to low-income families.
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This increases the inventory of social interest housing in the island. |
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This guarantees a rent affordable for low income families. |
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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. |
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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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Interim Loans for Construction
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PRHFA offers financing for construction of housing projects for sale in which the price per unit does not exceed $75,000.00.
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The Authority will charge a fee for the interim financing of up to 1.5% of the maximum amount approved. |
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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. |
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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
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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.
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The Authority grants loans of up to $90,000 at 6.5% interest per year. |
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Applicants can have a gross annual income of up to $45,000. |
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First Time Home Buyers Trust (5.4%)
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A tax-exempt bond issue is sold to generate funds for the refinancing of mortgage loans for first-time home buyers.
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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.
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| 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.
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| 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.
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| 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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