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institutions provide principal mortgages, while SHIP loans are generally structured as soft second mortgages. Since SHIP is a state funded program,the SHIP program fiscal year(FY)is concurrent with the state fiscal year and runs from July 1 to June 30. Because SHIP funds provided in one fiscal year can be spent over a three fiscal year period,the county often has two or more years of SHIP funding active. For example, the county is currently expending both FY 11/12 and FY 12/13 funds. For each fiscal year (FY), SHIP funds consist of state allocations and program income. Program income consists of SHIP loan repayments and interest earned. Since close-out of the county's Hurricane Housing Recovery (HHR) Program, all of the HHR loan repayments and HHR accrued interest have been deposited into the SHIP trust fund. In terms of state SHIP funding,there was no allocation for FY 2010-11. Consequently,the only funds added to the SHIP account for that fiscal year (FY) came from SHIP/HHR loan repayments as well as interest earned on SHIP/HHR funds. As of this time, all funds for FY 2010-11 have been expended. Attachment#1 shows historic SHIP fund information. That includes the number of loans provided to eligible applicants by fiscal year and by income category. According to SHIP Program requirements,the county must submit an annual report for each fiscal year for which SHIP funds were expended. Those reports must be signed by the Chairman of the Board of County Commissioners or his designee. For all previous fiscal years,closeout reports were previously submitted to and approved by the state. Attached to this staff report are the county's SHIP Program FY 2010-11, FY 2011-12, and FY 2012-13 annual reports. The SHIP annual report for 2010-2011 is a closeout report. Those reports must be submitted to the state by September 15, 2013. ANALYSIS According to state regulations, SHIP funds must be utilized in such a manner that all state requirements and all requirements of the county's Local Housing Assistance Program are met. Among the State Housing Initiatives Partnership Program (SHIP) requirements are the following: At least 30% of funds must be utilized by very low income (VLI)households • At least 30% of funds must be utilized by low income (LI) households At least 65% of funds must be utilized for homeownership • At least 75% of funds must be utilized for construction, rehabilitation or emergency repair Not more than 10% of funds may be utilized for administration costs In administering the SHIP program,the county has met all of those requirements as well as all local requirements for homeownership, credit, employment, assets, and others. Copies of the attached annual reports have been distributed to members of the county's Affordable Housing Advisory Committee, Affordable Housing Partnership Group, municipalities, and other interested persons for their review and comment. Also,a notice of the availability of the reports was posted on the county website. 2 47