Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This rule provides regulatory control by the
Missouri Housing Development Commission (commission) over approved mortgagors.
It requires approved mortgagors to furnish reports and financial information,
allows the commission to perform on-site inspections of developments, and
restricts the ability of approved mortgagors to change rents or ownership
without the consent of the commission.
(1) All developments financed in whole or in
part by the Missouri Housing Development Commission (commission) must remain
available to low- and moderate-income persons at the lowest possible costs
throughout the life of the loan, or until such later time as the commission may
require. To help insure the achievement of these goals, for all developments
financed by the commission, the following procedures shall be established to
monitor compliance with the requirements of the state housing act, these
regulations, and the requirements of any regulatory agreement or land use
restriction agreement governing the use of the development:
(A) Within ninety (90) days following the end
of each fiscal year, all approved mortgagors operating developments consisting
of twenty-four (24) or more units shall furnish the commission with a complete
annual financial report based upon an examination of the books and records of
the development prepared in accordance with the requirements of the commission
by a certified public accountant or other person acceptable to the commission
and certified by an authorized agent of the mortgagor. For any development
containing less than twenty-four (24) units, the commission may, where deemed
appropriate to protect the interests of the state of Missouri, require approved
mortgagors of such developments to provide the commission with similar annual
financial reports;
(B) The staff of
the commission shall perform an annual performance audit of each development
unless other applicable federal or state laws or regulations require more
restrictive audit rules, in which case the more restrictive rules shall dictate
the frequency with which audits are performed. Notwithstanding the previous
sentence, the commission staff may, in the absence of more restrictive federal
or state laws or regulations, perform such audits less frequently than once per
year for developments meeting such criteria as the commission staff may
establish from time-to-time;
(C)
The staff of the commission shall perform an annual on-site inspection of each
development unless other applicable federal or state laws or regulations
require more restrictive inspection rules, in which case the more restrictive
rules shall dictate the frequency with which inspections are performed.
Notwithstanding the previous sentence, the commission staff may, in the absence
of more restrictive federal or state laws or regulations, perform such on-site
inspections less frequently than once per year for developments meeting such
criteria as the commission staff may establish from time-to-time;
(D) The approved mortgagor for each
development shall, on an annual basis, provide the commission staff with a
verification of income of each of the tenants in its development. This
requirement shall apply to all tenants, regardless of whether they occupy a
market rate unit or a unit for which reduced affordable housing rents are being
charged. For developments not receiving financing from the commission, the only
initial verification of income for each tenant will be required unless any
other federal or state laws applicable to the development shall require more
frequent income verification of tenants, in which case the more restrictive
requirements shall prevail; and
(E)
Upon the request of the commission, its agents, employees, or attorneys,
approved mortgagors shall submit monthly occupancy reports to the commission
staff, as well as give specific answers to questions upon which information is
desired from time-to-time relative to the operation and condition of any
development.
(2) No
rents or charges to tenants in any development financed by the commission shall
be increased without the prior written approval of the commission
staff.
(3) Transfer of Ownership.
The basic documents of the commission severely restrict the transfer of legal
or beneficial interest in any development, and no such transfer may occur
without the prior written consent of the commission. No monies paid for either
the legal or beneficial interest of a development financed by the commission
shall be deemed to increase the equity for the purposes of determining
allowable distribution of dividends, except for those funds approved as
development costs.
(A) Any intent to utilize
secondary financing secured by the development shall be specifically
identified.
(B) The consent of the
U.S. Department of Housing and Urban Development (HUD) shall not be deemed
adequate for commission approval of transfer of ownership.
(4) The approved mortgagor shall provide the
commission with the following information:
(A)
In the case of an individual approved mortgagor, the name and address of the
mortgagor;
(B) In the case of an
approved mortgagor that is a partnership, the names and addresses of all
persons or entities having an ownership interest in the partnership;
and
(C) In the case of an approved
mortgagor that is a corporation, the names and addresses of the officers,
directors, and shareholders and any amendments or substitutions which may occur
from time-to-time in the organization of the approved mortgagor.
(5) Until the later of i) the
repayment of the commission's loan on the development, ii) the expiration of
any applicable compliance period set forth in the commission's loan documents,
or iii) any longer period otherwise prescribed by the commission, an approved
mortgagor shall notify the commission regarding any of the following changes:
(A) Any change in the approved mortgagor's
address;
(B) Any change in the
management agent managing the development;
(C) Any amendments or substitutions in the
organization of the approved mortgagor (which notice shall also be provided to
the management agent of the development); and
(D) Any other events for which notice may be
required under the commission's loan documents.
*Original authority: 215.030, RSMo 1969, amended 1974,
1982, 1985, 1989, 1993, 1995, 1998.
