Current through 2024-38, September 18, 2024
a. MaineHousing may recapture State Credit in
accordance with this section if any one or more of the following occurs:
i. For a Qualified Maine Project, failure to
comply with any one or more of the following as determined in accordance with
Section 42(g) of the Code;
1. The applicable
income limitation on any of the Credit Units;
2. The next available unit rule; or
3. The rent restriction on any of the Credit
Units
ii. For a Qualified
Rural Development Preservation Project, a notice of violation or default of the
Rural Development financing or rental assistance contract for the project that
is not cured within any cure period specified by Rural Development in the
notice, as may be extended by Rural Development;
iii. Failure to maintain the project in a
safe, decent, sanitary condition and in good repair in accordance with
UPCS;
iv. Disposition of the project
through sale, foreclosure, deed-in-lieu of foreclosure, or otherwise unless the
project continues to be a Credit-qualified Affordable Housing
Project;
v. Failure to comply with
the minimum election made by Owner pursuant Section 42(g)(1) of the Code or the
project otherwise fails to qualify as an Affordable Housing Project, as
determined by MaineHousing;
vi. Loss
of the project, any of the Credit Units, or any required amenities included in
the eligible basis of the project that MaineHousing determines are essential to
the operation of the project through damage, destruction, eminent domain,
condemnation, or other action or event;
vii. Dissolution, liquidation, termination of
existence, insolvency, or business failure of or assignment for the benefit of
creditors by Owner;
viii. Any
bankruptcy, receivership, reorganization, arrangement, insolvency, dissolution,
or liquidation proceeding, or any other proceedings for the relief of debtors,
under the U.S. Bankruptcy Code or any similar law, state or federal, whether
now or hereafter existing, is instituted by or against Owner; or
ix. Any other action or event that results in
the project no longer being maintained as a Credit-qualified Affordable Housing
Project.
The event of noncompliance in the above clause iv. of this
subsection if the project will not continue to be a Credit-qualified Affordable
Housing Project and the events of noncompliance in the above clauses v. through
ix. of this subsection are considered egregious noncompliance for purposes of
this section.
b.
MaineHousing will not recapture State Credit for any noncompliance that is
corrected by Owner before MaineHousing discovers the noncompliance.
c. MaineHousing will give Owner written
notice of noncompliance and a reasonable period of time established by
MaineHousing to correct the noncompliance. The notice will specify each event
of noncompliance and the period of time for correcting the noncompliance, which
may be different for each event. The period of time for correcting an event of
noncompliance may be extended by MaineHousing. Any extension will be written
and provide the reason for the extension.
d. If all of the events of noncompliance
specified in the notice are corrected within their respective correction
periods, MaineHousing will not recapture State Credit.
e. If any of the events of noncompliance
specified in the notice are not corrected within the respective period for
correcting the noncompliance, MaineHousing will recapture State Credit. Except
for egregious noncompliance set forth in subsection a. above, MaineHousing will
defer recapture of the State Credit until the earliest of:
i. The end of the Compliance
Period;
ii. Disposition of the
project through sale, foreclosure, deed-in-lieu of foreclosure, or
otherwise;
iii. Transfer of any
interest in Owner that must be approved by MaineHousing pursuant to the
MaineHousing Transfers of Ownership Interests Rule;
iv. MaineHousing determines there is a
pattern of uncorrected noncompliance by the Owner; or
v. Any egregious noncompliance set forth in
subsection a. above.
f.
The amount of the recapture of State Credit will be calculated when it is
collected as follows:
i. The amount of
recapture is the difference between (a) the total State Credit allocated to the
project and (b) an amount equal to the product of the total State Credit
allocated to the project multiplied by a fraction, the numerator of which is
the number of months the project remained a Credit-qualified Affordable Housing
Project since the project was placed in service and the denominator of which is
180, which difference is then prorated in proportion to the number of Credit
Units that do not remain in compliance.
ii. The number of months in which the project
has remained a Credit-qualified Affordable Housing Project is the Compliance
Period less the period of noncompliance. The period of noncompliance is the
period of time from the first day of the month in which the noncompliance first
occurred, not when it was discovered, to the last day of the month in which the
noncompliance is corrected. If there are multiple events of noncompliance, the
period of noncompliance is the first day of the first month in which any event
of noncompliance, not corrected within the applicable correction period, began
to the last date of the month in which all noncompliance is corrected. If
recapture is collected before the end of the Compliance Period for any
egregious noncompliance or other reason that results in the project no longer
being maintained as a Credit-qualified Affordable Housing Project, the period
of noncompliance will also include the period beginning on the first day of the
month in which MaineHousing notifies Owner that recapture is due and ending on
the last day of the Compliance Period.
g. MaineHousing will give Owner written
notice of the recapture amount and how the recapture amount was calculated.
Owner must pay the recapture amount within the period of time set forth in the
notice, which will not be less than 30 days and may be extended in writing by
MaineHousing. If Owner does not pay the full amount of the recapture within the
required period of time, MaineHousing may lien the project for the recapture
amount plus accrued interest at the pre-judgment interest rate, in effect on
the date of the lien as calculated in accordance with
14 M.R.S.
§1602-B, until the lien is paid in full
as set forth in the State Low Income Housing Tax Credit Law.
h. All notices to Owner will be sent by
registered mail or certified mail, return receipt requested, to Owner's last
known address and will be deemed received within three (3) business days of
being mailed.
