Subpart 1.
Scope.
The terms defined in the act, known as the Minnesota housing
finance agency law of 1971, have the same meanings when used in these rules as
are ascribed to them in the act.
Subp.
2.
Act.
"Act" means the Minnesota Housing Finance Agency Law of 1971 in
Minnesota Statutes 1971, chapter 462A, as now in effect and as from time to
time amended.
Subp. 3.
Adjusted income.
"Adjusted income" means the gross annual income, from all
sources and before taxes or withholding, of all residents age 18 and over, of a
housing unit, after deducting the following:
A. an amount equal to $1,000 for each
resident of the housing unit; and
B. extraordinary medical or other expenses as
the commissioner approves for exclusion.
Subp. 4.
Administering entity.
"Administering entity" means a nonprofit or governmental
entity, including but not limited to an incorporated county or municipality, a
housing redevelopment authority, and a community action organization, which
enters into a contract with the agency for the local administration of the home
improvement grant or rehabilitation loan program pursuant to parts
4900.0610 to
4900.0700.
Subp. 5.
Approved mortgagee.
"Approved mortgagee" means an individual, partnership,
corporation, or other business entity that has been approved by the United
States Department of Housing and Urban Development.
Subp. 6.
Builder.
"Builder" means a person or entity engaged in the business of
housing construction who meets all licensing and other requirements of
applicable laws, ordinances, and regulations; who possesses satisfactory
experience and credit worthiness; and who will enter into an agreement
satisfactory to the agency to sell or rent the residential housing constructed
in whole or in part from the proceeds of an agency loan to persons and families
of low and moderate income.
Subp.
7.
Capital contribution of the investors.
A. "Capital contribution of the investors"
means the excess of the value of the project at the times and in the manner
determined by the agency, whether or not paid in cash, over the then current
principal amount of the agency's loan:
(1)
for those developments that:
(a) have
adequate reserves as determined by the agency;
(b) all needed maintenance, as determined by
the agency, has either been performed or is scheduled to be
performed;
(c) during the next
12-month period will require no major repairs or replacements, as determined by
the agency, the payment of which would reduce the reserve accounts below an
amount determined by the agency;
(d) the operating expenses are paid in
full;
(e) have operating account
balances equal to or greater than one month's total operating
expenses;
(f) have sustained an
average occupancy by rent paying tenants of 95 percent or more for the prior 24
months;
(g) have a current waiting
list equal to at least 1-1/2 times the annual turnover for the prior 24 months,
but the requirements of this unit are not applicable to developments that have
reserves equal to or exceeding the sum that is the greater of $5,000 per
dwelling unit or 30 percent of the outstanding principal balance of the
mortgage;
(h) the mortgage has not
been delinquent during the prior 24 months;
(i) the owner agrees to limit future rent
increases to the amount needed to pay for increases in annual operating
expenses which includes return on equity and the maintenance of adequate
reserves as determined by the agency;
(j) the owner agrees to maintain the
development as Section 8 or Section 236 assisted housing for a minimum of 20
years from the effective date of the Housing Assistance Payments Contract or
Agreement for Interest Reduction Payments, if one exists, and the minimum
20-year term has not yet expired and in excess of five years remain prior to
its expiry date; and
(k) the owner
agrees to execute any documents that the agency deems necessary and appropriate
to effectuate the intent of this definition;
(2) for those developments that:
(a) meet the requirements of subitem (1),
units (a) to (e), (h), and (i);
(b)
have a current waiting list equal to at least 1-1/2 times the annual turnover
for the prior 24 months, but the requirements of this unit are not applicable
to developments that:
have sustained an average occupancy of rent paying tenants of
95 percent or more for the prior 24 months, and have reserves equal to or
exceeding the sum that is the greater of $5,000 per dwelling unit or 30 percent
of the outstanding principal balance of the mortgage; or
have reserves equal to or exceeding the sum that is the greater
of 40 percent of the outstanding principal balance of the mortgage or $5,000
per unit;
(c) have
sustained an average occupancy of rent-paying tenants of 95 percent or more for
the prior 24 months, but the requirements of this unit are not applicable to
developments that have reserves equal to or exceeding the sum that is the
greater of 40 percent of the outstanding principal balance of the mortgage or
$5,000 per unit;
(d) the owner
agrees to maintain the development as Section 8 or Section 236 assisted housing
according to the following:
as to Section 8 assisted housing, to the date which is the
later of:
(i) ten years from the date
of execution of legal documents which meet the requirements of this subitem, or
(ii) the date of the end of the
five-year optional renewal term of any Section 8 Housing Assistance Payments
Contract benefiting the development existent at the date of expiration of the
ten-year term identified in clause (i); and as to Section 236 assisted housing,
the owner agrees to maintain the development as Section 236 assisted housing
until the date which is ten years after the date of execution of legal
documents for developments which meet the requirements of this subitem.
(e) as to both Section
8 and Section 236 assisted housing, the owner agrees not to prepay its mortgage
with the agency for ten years from the date of execution of legal documents for
developments which meet the requirements of this subitem; and
(f) the owner agrees to execute any documents
that the agency deems necessary and appropriate to effectuate the intent of
this subitem, which shall include an agreement by the agency that the owner
shall be entitled to cumulative dividends; or
(3) for those developments that:
(a) are subject to an agency-financed first
mortgage but do not receive federal assistance pursuant to a project-based
Section 8 or Section 236 contract;
(b) meet the requirements of subitem (1),
units (a) to (e), (h), (i), and (k);
(c) the owner agrees not to prepay its
mortgage with the agency for ten years from the date of execution of legal
documents for developments which meet the requirements of this subitem;
and
(d) have sustained an average
occupancy of rent-paying tenants of 95 percent or more for the prior 24 months,
but the requirements of this unit are not applicable to developments that have
reserves equal to or exceeding the sum that is the greater of 40 percent of the
outstanding principal balance of the mortgage or $5,000 per unit.
B. "Capital
contribution of the investors" means the excess of the total development cost
of the project as determined by the agency, whether or not paid in cash, over
the original principal amount of the agency's loan for developments not meeting
the requirements of item A, subitem (1) or (2).
Subp. 7a.
Commissioner.
"Commissioner" means the commissioner employed by the agency,
who is the chief administrative officer of the agency.
Subp. 8.
Cooperative housing
corporation.
"Cooperative housing corporation" means and refers to those
corporations which qualify as cooperative housing corporations pursuant to
section 216 of the Internal Revenue Code of 1954, as amended.
Subp. 9.
Development cost loan.
"Development cost loan" means a loan, or participation in a
loan, with or without interest in the discretion of the members, authorized by
resolution of the members and made or to be made to a housing sponsor from the
housing development fund created by the act, for the purpose of defraying
development costs, commonly referred to as a "seed money loan."
Subp. 10.
Developmentally
disabled.
"Developmentally disabled" means an individual who has a
severe, chronic disability which:
A.
is attributable to a mental or physical impairment or a combination of mental
and physical impairments;
B. is
manifested before the person attains the age of 22;
C. is likely to continue
indefinitely;
D. results in
substantial functional limitations in three or more of the following areas of
major life activity: self-care, receptive and expressive language, learning,
mobility, self-direction, capacity for independent living, and economic
sufficiency;
E. reflects the
person's need for a combination and sequence of special interdisciplinary or
generic care, treatment, or other services which are of lifelong or extended
duration.
Subp. 11.
[Repealed by amendment, L 1987 c 187 s 15]
Subp.
11a.
Federally subsidized mortgages.
"Federally subsidized mortgages" means loans funded or acquired
with the proceeds of bonds or notes the income from which is exempt from
taxation under federal law except, where applicable, for federal alternative
minimum tax laws, including federally insured mortgages, and loans that are
benefited by payments under interest reduction, rental assistance, housing
assistance, or other similar programs from agencies or instrumentalities of the
federal government to assist persons and families of low and moderate income in
obtaining decent, safe, and sanitary housing.
Subp. 12.
Gross annual income from
self-employment.
"Gross annual income from self-employment" shall be deemed to
be the net profit from said self-employment as declared by the applicant in
Schedule C, F, or E, Part III, as appropriate, of the United States Internal
Revenue Service Form 1040, or such other schedule as may be hereafter
promulgated, but including as income all depreciation.
Subp. 12a.
HUD.
"HUD" means the United States Department of Housing and Urban
Development.
Subp. 13.
Housing sponsor.
"Housing sponsor" means an individual, a nonprofit entity, a
limited dividend entity, or a cooperative housing corporation engaged in
sponsoring a housing project for occupancy by persons and families of low and
moderate income.
Subp. 14.
Limited dividend or limited dividend entity.
"Limited dividend" or "limited dividend entity" means and
refers to those individuals, partnerships, joint ventures, and corporations:
which, by their organizational documents or by agreement or otherwise, comply
with limitations established by the agency or by other governmental agencies,
on the rate of return which such individuals, partnerships, joint ventures, or
corporations may realize on investments in proposed housing projects; and
which, in the case of corporations, are in compliance with all the provisions
of Minnesota Statutes, chapter 301 or 303, whichever is applicable.
Subp. 15.
Limited-unit
development.
"Limited-unit development" means a loan or grant to a person or
family of low or moderate income for new or existing residential housing
intended for occupancy by such person or family and by not more than five other
families.
Subp. 16.
Local community.
"Local community" means and refers to a city, village, or
borough, however organized, in the state of Minnesota, and any housing and
redevelopment authority created pursuant to the provisions of Minnesota
Statutes, sections
469.001 to
469.047.
Subp. 17. [Repealed, 24 SR
1332]
Subp. 18.
Members.
"Members" means those persons appointed to the agency pursuant
to section 4 of the act.
Subp.
19.
Mortgage loan.
"Mortgage loan" means a loan authorized by resolution of the
members and made or to be made to a housing sponsor, or to a person or family
of low or moderate income, or to a low income purchaser, from the proceeds of
sale of the agency's bonds or notes, or from appropriations, for the purpose of
providing construction financing, long-term financing, or both, for residential
housing, and the payment of which is secured or to be secured.
Subp. 20.
Multiunit
development.
"Multiunit development" means a loan or grant for new or
existing residential housing which is intended for occupancy by more than one
family, and the mortgagor of which is a nonprofit or limited dividend
entity.
Subp. 21.
Nonprofit or nonprofit entity.
"Nonprofit" or "nonprofit entity" means and refers to: housing
and redevelopment authorities established under and pursuant to the provisions
of Minnesota Statutes, sections
469.001 to
469.047;
and those partnerships, joint ventures, corporations, and associations which
are established for a purpose not involving pecuniary gain to the members,
partners, or shareholders thereof, pay no dividends or other pecuniary
remuneration, directly or indirectly, to the members, partners, or shareholders
thereof, and in the case of private, nonprofit corporations, are established
under and pursuant to Minnesota Statutes, chapter 317A and are in compliance
with all the provisions thereof; provided, however, that in no event shall a
limited dividend entity be deemed a nonprofit entity.
Subp. 22.
Planning grant.
"Planning grant" means a grant authorized by resolution of the
members and made or to be made to a local community from the housing
development fund, for the purpose of providing funds to assist the local
community in planning for land and building acquisition, improvements, renewal,
relocation, or conservation on specific sites upon which housing is or will be
situated, for occupancy by persons and families of low and moderate
income.
Subp. 23.
Persons and families of low and moderate income.
"Persons and families of low and moderate income" means:
A. With respect to limited-unit mortgage
loans pursuant to parts
4900.0310 to
4900.0350, except for development
cost loans pursuant to parts
4900.0210 to
4900.0240, planning grants
pursuant to parts
4900.0410 and
4900.0420, and American Indian
housing loans pursuant to parts
4900.0900 to
4900.1080, which loans and grants
are intended for a limited-unit development, or a dwelling unit in a planned
unit development or a condominium, those persons and families whose adjusted
income does not exceed the amounts set forth in the following tables or such
lower amount as shall be required to assure that the interest on obligations of
the agency will be exempt from federal income taxation.
(1) Maximum adjusted income for loans for new
construction:
(a) in the counties of Anoka,
Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Washington, and
Wright:
| Mortgage Interest Rate |
Maximum Adjusted Income |
| 0 - 10.00% |
$37,500 |
| 10.01 - 10.50% |
$38,500 |
| 10.51 - 11.00% |
$39,500 |
| 11.01 - 11.50% |
$40,500 |
| 11.51% and over |
$41,500 |
(b) in
the counties of Clay, Nicollet, and Olmsted:
| Mortgage Interest Rate |
Maximum Adjusted Income |
| 0 - 10.00% |
$32,000 |
| 10.01 - 10.50% |
$33,000 |
| 10.51 - 11.00% |
$34,000 |
| 11.01 - 11.50% |
$35,000 |
| 11.51% and over |
$36,000 |
(c) in
the counties of Benton, Blue Earth, St. Louis, Sherburne, and Stearns:
| Mortgage Interest Rate |
Maximum Adjusted Income |
| 0 - 10.00% |
$28,000 |
| 10.01 - 10.50% |
$29,000 |
| 10.51 - 11.00% |
$30,000 |
| 11.01 - 11.50% |
$31,000 |
| 11.51% and over |
$32,000 |
(d) in
all other counties:
| Mortgage Interest Rate |
Maximum Adjusted Income |
| 0 - 10.00% |
$28,000 |
| 10.01 - 10.50% |
$29,000 |
| 10.51 - 11.00% |
$30,000 |
| 11.01 - 11.50% |
$31,000 |
| 11.51% and over |
$32,000 |
(2) Maximum adjusted income for loans for
existing construction:
(a) in the counties of
Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Washington,
and Wright:
| Mortgage Interest Rate |
Maximum Adjusted Income |
| 0 - 10.00% |
$33,000 |
| 10.01 - 10.50% |
$34,000 |
| 10.51 - 11.00% |
$35,000 |
| 11.01 - 11.50% |
$36,000 |
| 11.51% and over |
$37,000 |
(b) in
the counties of Clay, Nicollet, and Olmsted:
| Mortgage Interest Rate |
Maximum Adjusted Income |
| 0 - 10.00% |
$26,000 |
| 10.01 - 10.50% |
$27,000 |
| 10.51 - 11.00% |
$28,000 |
| 11.01 - 11.50% |
$29,000 |
| 11.51% and over |
$30,000 |
(c) in
the counties of Benton, Blue Earth, St. Louis, Sherburne, and Stearns:
| Mortgage Interest Rate |
Maximum Adjusted Income |
| 0 - 10.00% |
$24,000 |
| 10.01 - 10.50% |
$25,000 |
| 10.51 - 11.00% |
$26,000 |
| 11.01 - 11.50% |
$27,000 |
| 11.51% and over |
$28,000 |
(d) in
all other counties:
| Mortgage Interest Rate |
Maximum Adjusted Income |
| 0 - 10.00% |
$22,000 |
| 10.01 - 10.50% |
$23,000 |
| 10.51 - 11.00% |
$24,000 |
| 11.01 - 11.50% |
$25,000 |
| 11.51% and over |
$26,000 |
B. [Repealed, 10 SR 1557]
C. With respect to multiunit mortgage loans
pursuant to parts
4900.0310 to
4900.0350, development cost loans
pursuant to parts
4900.0210 to
4900.0240, planning grants
pursuant to parts
4900.0410 and
4900.0420, and American Indian
housing loans pursuant to parts
4900.0900 to
4900.1080, which loans or grants
are intended for a multiunit development, those persons and families whose
adjusted income at initial occupancy does not exceed:
(1)
(a) 50
percent of area median income as determined by HUD, adjusted for family size,
for at least 20 percent of the units in the development; or
(b) 60 percent of area median income as
determined by HUD, adjusted for family size, for at least 40 percent of the
units in the development; and
(2) the greater of area or statewide median
income for a four-person household, as determined by HUD, and who pay no more
than 30 percent of their income for housing, for at least 75 percent of the
units in the development.
In addition to the requirements in subitems (1) and (2),
assuming occupancy of at least 1.5 persons per bedroom:
(a) the rents for at least 20 percent of the
units in the development must be affordable to persons and families whose
adjusted income is 50 percent of area median income as determined by HUD and
who pay no more than 30 percent of their income for housing; or
(b) the rents for at least 40 percent of the
units in the development must be affordable to persons and families whose
adjusted income is 60 percent of area median income as determined by HUD and
who pay no more than 30 percent of their income for housing.
The members may allow higher rents for units in a structure if
the members determine that higher rents are necessary because of prevailing
levels of construction costs, unusually high or low family incomes, or similar
factors relating to income available for housing or housing costs.
D. With
respect to home improvement grants and rehabilitation loans pursuant to parts
4900.0610 to
4900.0700 and accessibility loans
pursuant to parts
4900.0750 to
4900.0780 to be made by the
agency, those persons and families whose assets do not exceed $25,000, and with
respect to rehabilitation loans defined in part
4900.0610 as revolving loans and
accessibility loans defined in part
4900.0770 as deferred loans, those
persons and families whose adjusted incomes do not exceed the limit stated in
part
4900.0630, subpart
3.
E. With respect to home improvement loans and
accessibility improvement assistance, pursuant to parts
4900.0510 and
4900.0710, respectively, those
persons and families whose gross income does not exceed the limits established
by the agency pursuant to part
4900.0070 in conformity with the
requirements of the United States Department of the Treasury or other agency of
the federal government for federally subsidized mortgages for low- and
moderate-income families.
F. With
respect to parts
4900.2900 to
4900.2907, those persons whose
income is at or below 50 percent of the median income adjusted for family size
of the standard metropolitan statistical area.
Subp. 24.
Section 8.
"Section 8" means Section 8 of the United States Housing Act of
1937, codified at United States Code, title 42, section 1437f.
Subp. 25.
Section
236.
"Section 236" means Section 236 of the National Housing Act,
codified at United States Code, title 12, section 1715z-1.
