(1) The Department may
make HSF loans, grants, and, additional, in the case of funding under M.G.L. c.
121F, subsidies, credit enhancements and other financial assistance for alternative
forms of rental and ownership housing:
(a) to
acquire, preserve, rehabilitate, and construct affordable rental and ownership
housing, including foreclosed and distressed properties and other
properties;
(b) to demolish
privately-owned buildings as provided in the HSF I, HSF II, HSF III, HSF IV
Legislation or M.G.L. c. 121F, and, in connection with such demolition, to
undertake, pursuant to a Neighborhood Revitalization Plan pursuant to
760 CMR
24.06, new construction of housing for Low or
Moderate Income Families in the area in which such demolition took place, to the
extent authorized in the HSF II, HSF III, HSF IV Legislation or M.G.L. c.
121F;
(c) to qualify as matching
contributions under § 220 of the HOME Investment Partnership Act, Title II of
the Cranston Gonzalez National Affordable Housing Act;
(d) if funded pursuant to the HSF I, HSF II, or
HSF IV Legislation, for Soft Second Mortgage Loans as described in the HSF I, HSF II
or HSF IV Legislation, and if funded pursuant to M.G.L. c. 121F, to write down
interest rates and related costs for a program for low-income and moderate-income
first-time homebuyers administered by MHP;
(e) if funded pursuant to the HSF II, HSF III or
HSF IV Legislation or M.G.L. c. 121F for the rehabilitation of one to four-family
properties owned and occupied by persons of low or moderate income, and for the
acquisition and rehabilitation of one to four-family properties by persons of low
and moderate income, provided that the Department finds that such a project relies
to the greatest extent possible on bank financing and other taxable financing for
acquisition and rehabilitation. Funding under M.G.L. c. 121F may include, with out
limitation, direct loans, loan guarantees and loan loss reserves. Projects funded
under M.G.L. c. 121F shall be subject to the Department's findings that the Project
includes the following additional objectives:
1.
coordinating the delivery of the financing and related rehabilitation services with
cities and towns that provide such assistance using federal community development
block grants, federal HOME funds and other resources;
2. expediting and simplifying the process by which
home buyers may obtain financial and technical assistance for acquisitions and
rehabilitation; and
3. ensuring that
adequate provisions are in place to assure that rehabilitation is completed in a
timely and professional manner and to protect homeowners from excessive acquisition
and rehabilitation costs.
(f)
if funded pursuant to the HSF II Legislation, to preserve the affordability of
existing privately-owned housing subject to a state or federally-assisted
Massachusetts Housing Finance Agency mortgage where the prepayment of that mortgage
would lead or has led to the termination of a use agreement for low-income housing.
HSF funds may be used for a capital access reserve to provide loan guarantees to
facilitate the purchase of such housing, and the Department may contract with the
Massachusetts Housing Finance Agency to administer such a program of loan
guarantees;
(g) if funded pursuant to
the HSF III or HSF IV Legislation or M.G.L. c. 121F, for second mortgage loans for
the acquisition and rehabilitation, and in the case of funding pursuant to HSF IV,
or M.G.L. c. 121F, new construction, of small multifamily rental properties
receiving primary financing from the MHP Permanent Plus Program. Such loans shall be
administered through contracts with MHP. All housing acquired, rehabilitated and
newly constructed pursuant to 760 CMR 24.04(1)(g) shall meet one of the following
minimum requirements:
1. at least 20% of the total
units shall be rented to individuals or families whose income is less than 50% of
the Area Median Income, or
2. at least
40% of the total units shall be rented to individuals or families whose income is
less than 60% of the Area Median Income, or
3. at least 50% of the total units shall be rented
to Low or Moderate Income Persons or Families.
(h) if funded pursuant to the HSF IV Legislation
or M.G.L. c. 121F, to preserve or restore the affordability of housing that is or
was subject to the prepayment of a state or federally assisted mortgage, or is
receiving project-based rental assistance under § 8 of the United States
Housing Act of 1937 (
42 U.S.C.
1437f) that is expiring, or has received other
project-based federal or state subsidies that are terminating or have terminated,
including the expiration of federal low-income housing tax credits, where such
mortgage prepayment or expiration of federal or state assistance would lead or has
led to the termination of a use agreement for low-income housing. The Department
will consult with nonprofit housing organizations, MassHousing and CEDAC, and, if
funded pursuant to M.G.L. c. 121F, MHP, to identify those projects at greatest risk
of prepayment or payment of state or federal subsidy loans, termination of subsidies
and use restrictions, or non-renewal of rental assistance. The Department will give
priority to projects based on the following at-risk criteria:
1. Housing at risk of losing affordability
restrictions due to the potential for the prepayment of its mortgage;
2. Housing in which a project-based rental
assistance contract has expired or is expiring; and
3. Occupied projects with substantial capital
needs.
(i) if funded pursuant
to M.G.L. c. 121F, to stabilize and promote reinvestment in cities and towns
including, but not limited to acquisition, rehabilitation and preservation of
foreclosed and distressed properties and any other techniques to achieve
reinvestment.
(j) for any other purpose
permissible under the HSF I, HSF II, HSF III or HSF IV Legislation or M.G.L. c.
121F.
(2) The Department
shall fund a revolving loan fund in such amount or amounts as it shall determine
reasonable and prudent under all the circumstances, including the availability of
funding for other HSF needs; repayments of loans from this revolving loan fund shall
be retained by the Department and lent to other qualifying borrowers. The Department
may make HSF loans from this revolving loan fund for the repair and maintenance of
privately owned residential buildings for which a nonprofit receiver has been
appointed by a court pursuant to M.G.L. c. 111, § 127I if:
(a) the housing is abandoned or severely
distressed;
(b) the housing is located
in a primarily low or moderate-income neighborhood;
(c) the HSF loan is necessary to make repairs
required for the housing to comply with the state sanitary code and to maintain its
habitability;
(d) the court that has
appointed the receiver enters an order:
1.
authorizing the receiver to borrow HSF funds up to the amount of the proposed HSF
loan, on the anticipated terms, and to assign its priority lien to the lender to
secure the HSF loan;
2. stating that the
lender, upon the borrower's breach of the conditions of the HSF loan, may foreclose
on its interest under the lien and setting forth an adequate process for such a
foreclosure; and
3. requiring the
receiver of the housing to repay any balance of the HSF loan in full upon
termination of the receivership, unless the receiver shall have previously repaid
the HSF loan in full;
In the case of funding under M.G.L. c. 121F, the project may include
activities necessary to maintain habitability of the housing units to prevent
abandonment and deterioration of the housing in primarily low and moderate income
neighborhoods pursuant to the HSF Guidelines. For funding under M.G.L. c. 121F, the
Department may administer HSF loans from this revolving fund through contracts with
CEDAC and MHP, which may enter into subcontracts to administer the contracts with
other for-profit or nonprofit organizations.
(3) For loans or grants made pursuant to the HSF I
Legislation, at least 30% of the HSF funds expended in any year shall be used to
provide homeownership opportunities to Low or Moderate Income Persons or
Families.
(4) The Department shall
provide funds pursuant to the HSF III and HSF IV Legislation and M.G.L. c. 121F for
loans to nonprofit developers for predevelopment assistance to Eligible Projects
including loans for acquisition, financing or other holding costs, and capitalized
carrying costs in accordance with the HSF Guidelines or to secure other financing
obtained by CEDAC to support such costs. Such predevelopment assistance shall be
administered by the Department through contracts with CEDAC.
(5) For HSF III Projects and Projects funded under
M.G.L. c. 121F receiving such predevelopment assistance, at least 50% of the total
housing units in the Project shall be deemed HSF-assisted and shall meet the
requirements of
760 CMR
24.05(2) as follows:
(a) For the first 40 years after the HSF loan is
provided, at least 50% of the units in the Project shall be rented to or owned by
Low or Moderate Income Persons or Families, and of such 50% of housing units at
least 50% (that is, 25% of the total housing units) shall be rented to or owned by
Extremely Low Income Persons or Families.
(b) After the first 40 years, 50% of the units in
the project shall meet the affordability requirements of
760 CMR
24.05(2)(b).
(6) For HSF IV Projects receiving such
predevelopment assistance, at least 50% of the total housing units in the Project
shall be deemed HSF-assisted and shall meet the requirements of
760 CMR
24.05(3) as follows: for a
minimum of 50 years after the HSF loan is provided, at least 50% of the units in the
Project shall be rented to or owned by Low or Moderate Income Persons or Families,
and of such 50% of housing units at least 50% (that is, 25% of the total housing
units) shall be rented to or owned by Extremely Low Income Persons or
Families.
(7) The Department shall
provide funds pursuant to the HSF III and HSF IV Legislation and M.G.L. c. 121F in
the amount of at least $5 million in the aggregate (for each of HSF III, HSF IV and
M.G.L. c. 121F) for the production or preservation of housing for persons 60 years
of age and older, which may include housing developed pursuant to
12 U.S.C.
1701q (Supportive Housing for the Elderly
("Section 202")).
(8) The Department may
provide funds pursuant to M.G.L. c. 121F in an amount not to exceed $10 million to
stabilize and promote reinvestment, through homeownership, in areas in which the
Department has found that a Weak Market exists and has identified the boundaries of
the particular Weak Market and the information supporting the finding in accordance
with the HSF Guidelines. For such a Weak Market, the Undersecretary of the
Department may waive provisions of
760 CMR 24.00, HSF V, HSV VI, and
M.G.L. c. 121F. The Undersecretary of the Department, for such a Weak Market, may
also subsidize the purchase price, borrowing costs, or costs of renovation or new
construction, of a one to six unit residential building, provided that a restriction
is recorded with the registry of deeds or registry district of the land court
providing that the owner receiving such subsidy shall occupy a portion of the
property as the owner's primary residence for at least five years from the date of
purchase, and that if such owner sells any interest in the property after five
years, but before ten years after the date of purchase, the new owner shall occupy a
unit in the property as a principal residence for the difference between the first
owner's period of occupancy and ten years. If the owner receiving such subsidy fails
to own and so occupy a portion of the property for at least five years, the entire
subsidy shall be repaid to the Department. Further, ten years after the first owner
takes ownership of the property pursuant to this section, all restrictions on the
property established by 760 CMR 24.04(8) shall be void. In connection with a Weak
Market, the Department may otherwise take action pursuant to
760 CMR
24.09(2).
(9) The Department shall provide funds pursuant to
M.G.L. c. 121F for projects to stabilize and promote reinvestment in cities and
towns including, but not limited to, acquisition, rehabilitation and preservation of
foreclosed and distressed properties and any other techniques necessary to achieve
reinvestment.
(10) In reviewing
applications for HSF IV and M.G.L. c. 121F funding, the Department will give
consideration to the needs of urban, suburban, and rural areas for affordable
housing with an emphasis on local and regional needs for such
housing.
