(1) Pursuant to
M.G.L. c. 121B, § 31 an LHA or a controlled affiliate may submit to the
Department an application for a new affordable housing development utilizing private
or mixed public and private financing on land which is or has been subject to a
contract for financial assistance for or in connection with a state-aided housing
project between the LHA and the Department. The form and contents of such an
application shall be prescribed by the Department and shall include the plans and
description of the new affordable housing development, the estimated cost thereof,
the proposed method of financing, and a detailed estimate of the expenses and
revenue thereof. Within 60 days of receipt of a complete application the Department
shall approve such application provided that it shall have made the following
findings:
(a) The land is surplus to the needs of
any existing state-aided housing project and to any planned state-aided housing
project on the site.
(b) Excepting any
market-rate housing, the housing to be constructed will be deed restricted to
occupancy by low or moderate income households at affordable rents or sales prices.
Any deed restriction shall specify the term for which the housing shall be
affordable. The term may be perpetual or for a lesser number of years provided that
the term shall be a minimum of 40 years or such other term as may be approved by the
Department in a waiver of the 40-year minimum term. The purpose of the deed
restriction shall be to ensure affordability of the housing during the
term.
(c) Adequate provision has been
made so that the tenant share of the rent for an affordable rental housing unit will
be no more than the greater of the following amounts:
1. no more than the percentage of monthly net
household income which is specified in
760 CMR 6.04(1)(b)
with net household income of the tenant household
determined in the manner specified in
760 CMR
6.05: Determination of Gross Household
Income and Net Household Income; or
2. an amount not to exceed 30% of 75% of area
median household income adjusted for household size as determined by HUD except as
the Department may otherwise approve; or
3. the amount allowed as the tenant share of rent
by a state or federal affordable housing program which has provided financing for or
has otherwise subsidized the housing unit.
(d) Alternatively, adequate provision has been
made so that the sales price of an affordable homeownership housing unit shall not
exceed:
1. the amount which a low or moderate
income household of appropriate size could afford using reasonable assumptions
determined by the Department with respect to financing, household assets, and
percentage of income available for housing costs; or
2. a sales price allowed as the sales price of the
housing unit by a state or federal affordable housing program which has provided
financing for or has otherwise subsidized the housing unit.
(e) The affordable housing to be constructed shall
have a similar purpose as that of any housing project on such land or, if the land
is vacant, with the purposes of the contract for financial assistance respecting
such land.
(f) Adequate provision has
been made so that the lot or lots of land on which the additional housing will be
constructed will be suitably subdivided from the remaining land or a suitable
condominium will be created at such time as homeownership housing units are
constructed on such lot or lots or at such earlier time as financing is secured by a
mortgage on such lot or lots. Any such mortgage shall contain provisions requiring
notice to the Department and a reasonable opportunity for it to cure in the event of
foreclosure for breach of the terms of such mortgage. Any such mortgage shall also
contain such commercially reasonable protections against loss of affordability as
are permitted by mortgagee.
(g) Adequate
provision has been made so that a state or federal affordable housing program or the
Department will approve the plans and description of the new or rehabilitated
housing, its estimated construction costs, and its financing and will ensure that
proper standards of health, sanitation, and safety are met by such housing. When
approval is given by a state or federal affordable housing program, copies of the
approval, the approved plans, description and other information must be provided to
the Department.
(h) Any market-rate
housing units specified in the application appear to be reasonably necessary for the
economic feasibility of the construction or operation of the affordable housing
units and comprise no more than 25% of the total affordable housing and market-rate
housing units, unless the Department shall find that a greater percentage of
market-rate housing units is reasonably financially necessary for the economic
feasibility of the construction or operation of the affordable housing units.
(i) There is a requirement that public
construction and prevailing wage requirements, insofar as applicable, will be
complied with in the construction of the housing.
(j) There is a requirement that tenant or
homeowner selection procedures including any preferences will be fair and reasonable
and will not contravene any applicable state or federal anti-discrimination laws or
any state or federal fair housing laws.
(2) The Department shall notify the LHA or its
controlled affiliate in writing whether an application is incomplete or whether it
has been approved, approved with conditions, or denied within 60 days from the date
of the Department's receipt of the application. Housing approved by the Department
under 760 CMR 4.11 shall not be subject to any contract for financial assistance
between the LHA and the Department for or in connection with a state-aided housing
project under M.G.L. c. 121B shall not be a housing project eligible for subsidy
under M.G.L. c. 121B, § 32, and shall not be subject to regulation by the
Department as such. With respect to housing approved under 760 CMR 4.11, the LHA
shall not be obligated to repay any state bond funds received pursuant to a CFA for
relevant acquisition, development or modernization. Implementation of any
application for an affordable housing development approved by the Department under
760 CMR 4.11 shall be subject to receipt by the LHA or its controlled affiliate of a
building permit under applicable zoning or under a comprehensive permit and subject
to the approval of any necessary subdivision plan, within 24 months of the
Department's approval or such further time as may be approved by the
Department.
