Current through Register Vol. 48, No. 9, September 27, 2024
To secure approval of the issue and sale of bonds or notes
(hereafter bonds) by a city, county or regional housing authority (hereafter
local housing authority) to finance multifamily housing projects, as provided
in Act 369 of 1986, the following must be submitted to the Budget and Control
Board (Board):
A. An executed original
and a copy of the petition of the local housing authority governing body
describing a proposed project, requesting Board approval of the issue and sale
of a specified amount of bonds to finance the project and, including, if
appropriate, a request for an allocation of a portion of the State Ceiling to
the bonds and the project;
B. Two
executed copies of the resolution or ordinance of the local housing authority
governing body authorizing the petition to the Board;
C. Two sets of the documents providing for
the issuance and securing of the bonds or drafts thereof in substantially final
form;
D. Two sets of audited
financial statements of the entity obligated to pay the bonds covering at least
the three prior fiscal years except that, in any case where the bonds are to be
sold privately, a representation from the person or institution purchasing the
bonds that satisfactory financial information has been provided by that entity
and that the bonds are being purchased for investment rather than resale
purposes may be submitted in lieu of audited financial statements;
E. The original of a resolution approving the
bond issue proposed by the local housing authority governing body for adoption
by the Board and copies of that resolution to be certified by the Board
Secretary;
F. Two copies of
statements disclosing:
(1) the results of any
market study or other analysis of the multifamily housing needs in the proposed
project area which was the basis upon which a determination was made by the
local housing authority to issue the bonds to finance the project together with
a complete description of the project;
(2) the principal amount of the bonds
proposed to be issued;
(3) the
purpose or purposes for which the proceeds of such bonds are to be
expended;
(4) the maturity schedule
of the bonds proposed to be issued;
(5) the rate of interest expected on the
bonds proposed to be issued;
(6) a
schedule showing (a) the annual debt service requirements of all outstanding
bonds of the local housing authority proposing the bonds; (b) the annual debt
service requirements of the proposed bonds; and (c) the aggregate annual debt
service requirements of the outstanding and proposed bonds;
(7) a schedule showing the amount and source
of revenues available annually for the payment of the annual debt service
requirements established by the schedule required by (6), above;
(8) the method to be employed in selling the
proposed bonds;
(9) evidence of
compliance with applicable provisions of State and federal law prior to the
issuance of the bonds;
(10)
evidence that the project or projects financed by the bonds will be managed and
operated in compliance with applicable provisions of State and federal law
including, in those instances determined by the Board, subjecting the project
to restrictive covenants to ensure such compliance;
(11) evidence that each bond financing
proposed is structured to protect the interests of prospective bondholders and
the local housing authority by meeting the following requirements, as a
minimum:
(a) With respect to bonds to be
offered at public sale:
(1) the issue must be
rated no less than "investment grade" by one of the national rating agencies;
and
(2) in addition, one or more of
the following conditions must be met:
(aa)
There must be in effect for the bonds to be issued a federal program which
provides assistance in the payment of the principal and interest when due to
bondholders.
(bb) The lendable
proceeds of the bond sale must be used to acquire either federally-insured
mortgages or mortgages insured by a private mortgage insurance company
authorized to do business in South Carolina.
(cc) The payment of principal and interest
when due to bond purchasers and bondholders must be insured by the maintenance
of adequate reserves or by insurance or by a guaranty by a responsible
entity.
(b)
With respect to bonds sold or placed as "Mortgage bonds sold as a unit" or in
"Transactions with banks, institutional buyers, etc. . . .", as provided in
Code Section
35-1-320,
the documents pursuant to which bonds are issued must permit the local housing
authority to avoid any default by it by completing an assignment of or
foregoing its rights with respect to any collateral or security pledged to
secure the bonds.
(c) With respect
to any bonds offered for sale upon the representation that the interest paid
thereon by the issuer is exempt from federal income taxation, the documents
pursuant to which bonds are issued must require the mandatory redemption of the
bonds at par value if the interest paid thereon is determined to be subject to
federal income taxation.
(12) evidence that every official statement,
preliminary official statement, and any other document used in the sale of any
bond issued by a local housing authority includes the following disclaimer:
No representation is made by or on behalf of the State of South
Carolina or the State Budget and Control Board as to the creditworthiness of
the securities hereby offered. Neither the State of South Carolina nor any of
its agencies is obligated for the payment of any principal or interest due or
to become due on the securities hereby offered for sale.
(13) the local housing authority's agreement
that the management agent for any project approved by the Budget and Control
Board must also be approved by the Board.
