4860978 Housing Finance Agency - Notice of Final Rulemaking - Amending Agency's bylaws and rules to conform with current practices and regulations

DISTRICT OF COLUMBIA HOUSING FINANCE AGENCY

 

NOTICE OF FINAL RULEMAKING

 

The Board of Directors of the District of Columbia Housing Finance Agency (Agency), pursuant to Section 306 of the District of Columbia Housing Finance Agency Act of 1979, effective March 3, 1979, (D.C. Law 2-135; D.C. Official Code § 42-2703.06 (2012 Repl.)) (Act), and 10-B DCMR § 3508.1, hereby gives notice of its adoption of the following amendments to Chapter 35 (Housing Finance Agency), Chapter 36 (HFA: Financing and Loan Program), Chapter 37 (HFA: Financing Section 8 Housing), and Chapter 38 (HFA: Single Family Mortgage Purchase Program) of Title 10, Subtitle B (Planning and Development) of the District of Columbia Municipal Regulations (DCMR).

Chapter 35 is amended to change the day and time of the Agency's monthly meeting and to conform with statutory amendments to the Act, including procedures for conducting meetings, the composition of the Board, resolving conflicts of interests, the requirement for an Agency Advisory Commission, and other technical amendments to the Act. 

Chapter 36 is amended to refer exclusively to the financing of multifamily housing projects. Section 3605, Conflicts of Interest, is repealed and added to Chapter 35.  Additionally, the chapter in general is amended to reflect more accurately how the Agency conducts business.

Chapter 37, regarding Section 8 housing, is repealed in its entirety. 

Finally, Chapter 38 is amended to conform with the current operations of the Agency’s single family housing program including the changing of the term participation agreement to origination agreement.  Also, language relating to single family housing which was removed from Chapter 36 was added to Chapter 38. 

A Notice of Proposed Rulemaking was published in the D.C. Register on March 14, 2014 at 61 DCR 2238. No comments were received and no substantive changes were made to the rules as published. The Board of Directors of the Agency adopted these rules as final on November 12, 2013 and they shall become effective upon the date of publication of this notice in the D.C. Register.

 

Title 10-B, PLANNING AND DEVELOPMENT, of the District of Columbia Municipal Regulations is amended as follows:

 

Section 3500, GENERAL PROVISIONS, of Chapter 35, HOUSING FINANCE AGENCY, is amended to read as follows:

 

3500                GENERAL PROVISIONS

 

3500.1             The District of Columbia Housing Finance Agency (also referred to in this chapter as the "Agency") shall have its principal office in the District. Other offices of the Agency shall be in places deemed necessary and appropriate by the Board of Directors or the Executive Director.

3500.2             The corporate seal of the Agency shall be of a design approved and adopted from time to time by the Board of Directors, and may be affixed to any document by impression, by printing, by rubber stamp, or otherwise.

3500.3             The fiscal year of the Agency shall end on the thirtieth (30th) day of September of each year.

 

3500.4             The Board of Directors may authorize the use of facsimile and or electronic signatures instead of manual signatures

 

 

Section 3501 is amended to read as follows:

 

3501                BOARD OF DIRECTORS

 

3501.1             General policies governing the operations of the Agency shall be determined by the Board of Directors.

 

3501.2                          Each member shall hold office for the term for which he or she is appointed, unless he or she is removed in accordance with the law.

 

3501.3                          The Chairperson and Vice-Chairperson may be chosen by the Board at any meeting of the Board from among the members, and their tenure shall commence immediately and continue until the next succeeding annual meeting of the Board or until their successors are chosen, whichever first occurs.

 

3501.4                          The Chairperson, and in his or her absence the Vice-Chairperson, shall be the presiding officer at all meetings of the Board of Directors. The Chairperson shall also have such powers and perform other duties as the Board of Directors may prescribe.

 

3501.5                          In the absence of both the Chairperson and Vice Chairperson, the member of the Board who has the longest tenure of all other members of the Board present at the meeting shall preside.

 

 

Section 3502 is amended to read as follows:

 

3502                MEETINGS OF THE BOARD OF DIRECTORS

 

3502.1             The Board of Directors shall have a regular meeting on the second (2^nd) and fourth (4^th) Tuesday of each month at 5:30 p.m. in the principal office of the Agency.  If the day of the regular meeting falls on a holiday, the meeting shall be held on the next succeeding business day.

 

3502.2             Other meetings of the Board of Directors may be held upon the call of the Chairperson, Secretary, or of a majority of the incumbent members of the Board.

 

3502.3             Special meetings shall be held at the principal office of the Agency, or at such locations as may be established by the Board of Directors.  Notice of each special meeting shall be provided in accordance with the applicable laws of the District of Columbia.

 

3502.4             The annual meeting of the Board shall be held on the second (2^nd) Tuesday of January of each year at 5:30 p.m. at the principal office of the Agency, or at such locations as may be established by the Board of Directors; provided, that if the date falls on a holiday, the annual meeting shall be held on the next succeeding business day.

 

3502.5             Except as provided in Section 3503 of this chapter, each regular and special meeting of the Board shall be open to the public.

 

3502.6             No person or representative of any person or group shall have the right to be heard or to present oral or written evidence at a meeting of the Board without permission of the presiding officer of the meeting. The presiding officer may impose reasonable conditions in granting permission.

 

 

Section 3503 is repealed and replaced with:

 

3503                                            CLOSED SESSIONS

 

3503.1             The Board may hold a closed session at the times and places it determines to be in the interest of the Agency.

 

3503.2             Closed sessions shall not be open to the public.

 

3503.3             Minutes of closed sessions shall be kept and made a part of the Agency's permanent records.

 

 

Section 3504 is amended to read as follows:

 

3504                VOTING

 

3504.1             Members may not be represented by proxy at any meeting of the Board of Directors.

 

 

Section 3505 is amended to read as follows:

 

3505                COMMITTEES OF THE BOARD

 

3505.1             The Board of Directors may by resolution designate from among its members one (1) or more committees, each of which, to the extent provided by resolution of the Board, shall perform the duties and exercise powers specified in the resolution.

Section 3506 is amended to read as follows:

 

3506                OFFICERS, AGENTS AND EMPLOYEES OF THE BOARD

 

3506.1             The principal officers of the Agency shall consist of a Chairperson of the Board of Directors, a Vice-Chairperson, an Executive Director, who shall also act as Secretary, and other principal officers that may be designated by the Board of Directors from time to time.

 

3506.2             There shall also be other officers, agents and employees as deemed necessary by the Board.

 

3506.3             All officers, agents, and employees of the Agency shall have the authority and perform the duties in the management and conduct of the business of the Agency as are provided in this chapter, as may be established by resolution of the Board of Directors not inconsistent with this chapter, or as may be delegated to them in a manner not inconsistent with this chapter.

 

3506.4             The compensation of the officers, agents and employees of the Board shall be fixed, from time to time, by the Board of Directors.

 

3506.5             The principal officers, agents and employees of the Board shall be selected by the Board of Directors.

 

3506.6             Each officer shall hold office until his or her successor is chosen and qualified, or until he or she dies, resigns, retires, or is removed from office, whichever event shall first occur.

 

3506.7             Selection or appointment without express tenure of an officer, agent or employee of the Board shall not itself create contract rights.

 

3506.8             Any officer, agent or employee of the Board may be removed by the Board of Directors.

 

3506.9             Any removal of an officer, agent or employee of the Board shall require an affirmative vote of three (3) members of the Board, and shall be without prejudice to the contract rights, if any, of the person removed.

 

3506.10           Any vacancy in any office shall be filled in the manner prescribed in this chapter for selection or appointment to the office.

 

 

Section 3507 is amended to read as follows:

 

3507                EXECUTIVE DIRECTOR

 

3507.1             The Executive Director shall be the Chief Executive Officer of the Agency and shall have the powers and perform duties prescribed by the Board of Directors.

 

3507.2             The Executive Director shall be the Secretary to the Board of Directors and in that capacity he or she shall have powers in accordance with § 203 of the Act (D.C. Official Code § 42.2703.03(b)) and in general, perform all the duties ordinarily incident to the office of the Secretary.

 

3507.3             The Secretary, and his or her designee, shall be expressly empowered to attest signatures of officers of the Agency and to affix the seal of the Agency to documents.

 

3507.4             The Executive Director and each Board member shall be bonded in accordance with § 205 of the Act (D.C. Official Code § 42.2702.05).

 

 

Section 3508 is amended to read as follows:

 

3508                AMENDMENT OF BYLAWS

 

3508.1             The power to alter, amend, or repeal the provisions of §§ 3500 through 3899 of this chapter (the bylaws of the Agency), or to adopt new bylaws, not inconsistent with this law, is vested in the Board of Directors.

 

3508.2             The affirmative vote of three members of the Board of Directors shall be necessary to effect an amendment of the bylaws or the adoption of new bylaws.

 

 

Section 3509 is inserted to read as follows:

 

3509                CONFLICT OF INTERESTS

 

3509.1             Any member, officer, or employee of the Agency who, either directly or indirectly, has an ownership or other financial interest in, or who is an officer or employee of, any firm or agency interested directly or indirectly in any transaction with the Agency or whose relationship to that firm or agency creates the appearance of a conflict of interest, shall disclose this interest to the Agency.

 

3509.2             For purposes of this section, a "transaction with the Agency" shall include, but shall not be limited to, any loan to any sponsor, builder, or developer.

 

3509.3             Each disclosure shall be set forth in the public record of the Agency.

 

3509.4             The member, officer, or employee having the interest or relationship, as described in § 3509.1 of this chapter, shall not participate on behalf of the Agency in the deliberation, authorization, or implementation of any transaction with the Agency.

 

3509.5             It shall not be considered having a prohibited interest in a firm or agency if the only relationship is one of depositor in a bank or savings and loan or of customer or vendor in an arms length business relationship with the firm or agency.

 

3509.6             At a public session of the Board, the Board may by a two-thirds majority vote of the incumbent Members, on the public record, waive a conflict of interest that a Member or Officer may have in regards to a particular transaction, sponsor, builder, firm, developer, business, corporation, bank, partnership, limited partnership, person, government agency or other legal entity after the conflict has been specifically identified on the public record (i) outlining the relationship of the Officer or Member to the particular transaction, sponsor, builder, firm, developer, business, corporation, bank, partnership, limited partnership, person, government agency or other legal entity, and (ii) stating any benefit, advantage or gain (financial or otherwise), direct or indirect, received by the Officer or Member.

 

3509.7             The Board may waive a conflict of interest by a two-thirds majority vote of the incumbent Members, on the public record, in cases where the Officer or Member is merely an employee of the sponsor, builder, firm, developer, business, corporation, bank, partnership, limited partnership, person, government agency or other legal entity and the Officer or Member has no decision making authority with respect to or influence over the matter presented to the Board for a waiver of conflict.

 

3509.8             Notwithstanding anything to the contrary, the Board may waive a conflict of interest by a two-thirds majority vote of the incumbent Members if the Board determines on the public record that the interest will not adversely affect the Agency.

 

 

Section 3510 is inserted to read as follows:

 

3510                PROCEDURES FOR EVICTIONS AND PROTECTIONS FROM RETALIATORY ACTION

 

3510.1             Tenants of Housing Projects shall be protected from eviction as well as retaliatory action in accordance with 14 DCMR §§ 4300 – 4399, as amended.

 

 

Section 3511 is inserted to read as follows:  

 

3511                CONDITIONS AND PROCEDURES FOR RELOCATION ASSISTANCE

 

3511.1             Tenants displaced from Housing Projects shall be given relocation assistance in accordance with 14 DCMR § 4401, as amended.

 

Section 3513, AGENCY ADVISORY COMMITTEE, is repealed.

 

Section 3514, ADVISORY COMMITTEE SELECTION PROCESS, is repealed.

 

Section 3515, ADVISORY COMMITTEE CONFLICT OF INTERESTS, is repealed.

 

Section 3516, OPERATION OF THE ADVISORY COMMITTEE, is repealed.

 

Section 3517, ANNUAL REPORT OF THE ADVISORY COMMITTEE, is repealed.

 

 

Section 3599 is amended to read as follows as follows:

 

3599                DEFINITIONS

 

3599.1             When used in Chapters 35, 36 and 38 of this title, the following words and phrases shall have the meaning ascribed:

 

Act - the District of Columbia Housing Finance Agency Act, effective March 3, 1979, as amended (D.C. Law 2-135; D.C. Official Code §§ 42-2701.01 et seq.).

 

Agency Housing Program - a program for financing or assisting housing that has been formally adopted by the Agency.

 

Annual income - the anticipated total annual income of eligible persons from all sources for the twelve (12) month period following the date of determination of income. All payments from all sources received by the family head (even if temporarily absent) and each additional member of the household who is not a minor shall be included in the annual income.

 

Applicant - a corporation, partnership, limited partnership, joint venture, trust, firm, association, sponsor, individual, family, public body, or other legal entity or any combination of these applicants, applying to receive Agency monies, assistance, or services under the Act.

 

Application - a request for Agency assistance under the Act made on forms furnished by the Agency and containing information required by the Executive Director.

 

Construction loan - a short term advance of monies authorized for the purpose of constructing or rehabilitating residential housing or housing projects, and which is secured or is to be secured as provided in the Act and in Chapters 35, 36, and 38.

 

Eligible persons - individuals and families who qualify for housing under a given program according to the requirements of the program as established by the Agency.

 

Executive Director - the person and his or her designee, employed by the Agency Board who is the chief executive officer of the Agency and who serves as Secretary to the Board.

 

Feasible housing project - a proposed housing project where the Agency has made a determination that the project can reasonably be expected to be operated in a fiscally sound manner in conformance with the housing goals and policies of the Agency and the requirements of the Act.

 

Housing project - one (1) or more housing units located in the District assisted by the Agency under the provisions of this act including, but not limited to, units acquired, financed, refinanced, constructed, rehabilitated or converted to a condominium or a cooperative with the assistance of the Agency. A Housing project may incorporate ancillary facilities which may include:

 

(a)        Necessary or desirable appurtenances to residential housing such as, but not limited to, streets, sewers, utilities, parks, and stores, as the Agency determines to be appropriate;

 

(b)        Community facilities including, but not limited to, health, welfare, recreational, and educational facilities that the Agency determines to be appropriate; and

 

(c)        Ancillary commercial facilities which the Agency determines to be appropriate; Provided, that the primary use (consistent with the I.R.S. regulations concerning tax exempt financing) of the project shall be for residential housing.

 

Housing unit - living accommodations within a housing project that are intended for occupancy by eligible persons.

 

Low-income persons - eligible persons whose annual income as determined by the Agency does not exceed the low-income limits established by resolution of the Agency, from time to time, in accordance with § 102(1) of the Act (D.C. Official Code § 42.2702.12).

 

Moderate-income persons - persons and families whose annual income as determined by the Agency does not exceed the moderate-income limits established by resolution of the Agency, from time to time, in accordance with § 102(m) of the Act (D.C. Official Code § 42.2702.13).

 

Mortgage finance rate reduction - the differential between prevailing mortgage interest rates and a lower rate which is paid by a sponsor of a project for which financing has been made available, directly by the Agency or through a mortgage lender, from the proceeds of bonds issued by the Agency.

 

Permanent mortgage loan - a mortgage loan that is authorized by resolution of the Agency, or by a mortgage loan commitment issued on behalf of the Agency, and which is made available to a sponsor or eligible person from the proceeds of the sale of the Agency's bonds or any other funds available to the Agency for the purpose of providing long-term financing to develop or purchase housing projects or housing units, the repayment of which is secured or is to be secured as provided in the Act and in this chapter.

 

 

Chapter 36, HFA: FINANCING AND LOAN PROGRAM, is amended to read as follows:

 

Chapter 36     HFA: MULTIFAMILY FINANCING AND LOAN PROGRAM

 

Section 3600 is amended to read as follows:

 

3600                AGENCY HOUSING PROGRAM

 

3600.1             The Board may adopt an Agency housing program or programs which shall set forth, as Agency goals, the number, location, and other characteristics of housing units to be financed by the Agency, specifically those which the Agency desires to be occupied by low- and moderate-income persons. Agency housing programs may be amended from time to time

 

 

Section 3601 is amended to read as follows:

 

3601                SCOPE OF AGENCY FINANCING AUTHORITY

 

3601.1             The agency shall be empowered to make or originate the following:

                       

(a)                Loans to sponsors for the acquisition, construction, equipping, rehabilitation, mezzanine financing, interim financing, or permanent financing of rental projects for Eligible persons;

 

(b)               Funds available for rent subsidy to be utilized by Eligible persons;

 

(c)                Funds available in a loan guarantee fund to be used by the Agency to guarantee or insure loans in accordance with criteria established by the Agency; and

 

(d)               Counseling programs, as part of residential services, available to low-income and moderate-income families who participate in rental projects funded by the Agency.

 

 

Section 3602 is amended to read as follows:

 

3602                FUNDING OF AGENCY PROJECTS

 

3602.1             The undertakings of the Agency as provided in the Act or this chapter may be funded in whole or in part by the issuance of bonds, notes, or other obligations on whatever terms and conditions the Agency determines.

 

3602.2             In addition to proceeds from bonds, notes, or other obligations issued by the Agency, the Agency may receive gifts, grants, loans, appropriations, or other funds, property or other assets, or any other type of financial assistance (including insurance and guarantees) from any federal, District, private, or other source, and may do any and all things necessary to avail itself of that aid.

 

3602.3             Funds or other forms of assistance may be used to finance, or assist the financing of, any of the following activities:

 

(a)        Loans to sponsors for the acquisition, equipping, construction, rehabilitation, mezzanine financing, interim financing, or permanent financing of rental Housing projects for Eligible persons;

 

(b)        Rent subsidy programs to be utilized by Eligible persons;

 

(c)        A loan guarantee fund to be used by the Agency to guarantee or insure loans in accordance with criteria established by the Agency;

 

(d)       Counseling programs for low-income and moderate-income families who participate in rental projects funded by the Agency; and

 

(e)        Any other activities permitted in the Act.

 

3602.4             Agency funds or other forms of assistance may also be used in the furtherance of the exercise of Agency powers as contemplated in the Act with respect to any of the programs permitted in § 3602.3.

 

3602.5             In the furtherance of the Agency's program or programs to finance housing, there may be created by resolution of the Board from time to time, reserve and other funds as may be necessary or appropriate to secure bonds, notes, and other forms of indebtedness issued by the Agency.

 

3602.6             Funds created or set aside under § 3602.5 shall be administered as provided in applicable indentures, resolutions, or other agreements concerning security for bondholders, noteholders, or creditors holding other forms of indebtedness issued by the Agency.

 

 

Section 3605, CONFLICT OF INTERESTS, is repealed.

 

Section 3606 is amended to read as follows

 

3606                EQUAL OPPORTUNITY

 

3606.1             All Housing projects financed or otherwise assisted under the Act shall be open to all persons in accordance with applicable District and federal laws including, but not limited to, the Human Rights Act of 1977, effective December 13, 1977, as amended (D.C. Law 2-38; D.C. Official Code § 2-1401.1 et seq.), and the Equal Opportunity for Local, Small, and Disadvantaged Business Enterprises Act of 2005, effective October 20, 2005, as amended (D.C. Law 16-33; D.C. Official Code § 2-218.01 et seq.).

 

3606.2             All mortgagors, contractors, and subcontractors engaged in the construction, acquisition, equipping, rehabilitation, sale, or rental of housing financed or assisted under the Act shall provide equal opportunity for employment, without discrimination, in accordance with the laws referred to in § 3606.1.

 

 

Section 3610 is repealed and replaced to read as follows:

 

3610                LOANS: GENERAL

 

3610.1             The provisions of Chapters 36 shall implement the provisions of the District of Columbia Housing Finance Agency Act, effective March 3, 1979, as amended (D.C. Law 2-135, D.C. Official Code §§ 42-2701 et seq.) (the "Act").

 

3610.2             Procedures, instructions, guidelines, and appropriate forms for the solicitation, receipt, processing, and evaluation of applications for Agency financing and other assistance and the taking of other actions that may be necessary or desirable for the implementation and administration of all aspects of the Agency's programs may be established and modified from time to time by the Executive Director (or in the absence of the Executive Director, a designee(s) of the Board), with the approval or ratification of the Agency Board.

 

3610.3             Agency procedures, instructions, guidelines, and forms shall be consistent with the requirements of the Act and this chapter.

 

3610.4             The Agency staff may provide technical assistance to applicants seeking to complete applications.

 

3610.5             The Board, by resolution, may waive or vary particular provisions of Chapter 36 to the extent not inconsistent with the Act for the following reasons:

 

(a)        To conform to the requirements of the federal government in connection with any Housing project or housing unit with respect to which federal assistance is sought; or

 

(b)        In exceptional circumstances if, in the determination of the Board, the application of the rule(s) to a specific case or under an emergency situation may result in undue hardship.

 

3610.6             If any clause, sentence, paragraph, section, or part of Chapter 36 is adjudged by any court of competent jurisdiction to be invalid, that judgment shall not affect, impair, or invalidate the remainder of this chapter, but shall be confined in its operation to the clause, sentence, paragraph, section, or part directly involved in the controversy in which the judgment has been rendered.

 

 

Section 3611 is repealed and replaced to read as follows:

 

3611                LOANS: FEDERALLY ASSISTED

 

3611.1             When housing financed by the District of Columbia Housing Finance Agency (the "Agency") loan is, in whole or in part, federally insured or otherwise directly or indirectly assisted by the federal government, the regulations of the federal government program pursuant to which that assistance is provided shall apply to the extent they are not inconsistent with the provisions of the Act and Chapter 36 of this title.

 

 

Section 3612 is repealed and replaced to read as follows:

 

3612                LOANS TO SPONSORS: RENTAL HOUSING

 

3612.1             As set forth in § 302 of the Act (D.C. Official Code § 42-2703.02(a)), the Agency may make or participate in making construction, permanent, mezzanine, and interim loan financing available to sponsors for the development of rental Housing projects for Eligible persons.

 

3612.2             Financing under § 302 of the Act (D.C. Official Code § 42-2703.02(a)) shall be on whatever terms and conditions the Agency determines to be appropriate in the circumstances. The terms and conditions of financing shall be established in the Agency procedures and guidelines.

 

3612.3             The terms and conditions of financing may include, but shall not be limited to the following:

 

(a)        Interest rates;

 

(b)        Repayment terms;

 

(c)        Fees, charges, and other conditions of originating and servicing loans;

 

(d)       Collateral and other security arrangements;

 

(e)        Maximum loan term;

 

(f)        Debt service requirements;

 

(g)        Pre-payment penalties; and

 

(h)        Refinancing terms.

 

 

Section 3613 is repealed and replaced as follows:

 

3613                APPLICATIONS AND PROCESSING OF LOANS

 

3613.1             Specific instructions concerning applications for Agency predevelopment loans, permanent loans, construction loans, mezzanine loans, interim loans, or for other assistance, and the processing, evaluation, and approval of the applications shall be contained in the Agency's processing procedures, instructions, and guidelines promulgated pursuant to § 3610.

 

3613.2             Applications and allocation plans, if any, for Agency financing shall be available to all applicants requesting them from the Agency. Such applications or allocations plans may contain information relating to rent levels, tenant relocation, and underwriting expectations.

 

3613.3             Upon receipt of a completed application, the Agency staff shall, pursuant to agency guidelines and allocation plans, undertake appropriate analyses, investigations, and reviews in order to evaluate the proposed Housing project in accordance with the Agency's requirements, goals, policies, and selection criteria. The staff shall then make recommendations pursuant to Agency guidelines and allocations plans to the Board on the feasibility of the project for Agency financing.

 

3613.4             If the Board preliminarily determines a proposed Housing project to be feasible for financing with an Agency predevelopment, construction, mezzanine, interim, or permanent loan, the Executive Director (or in his or her absence, designee(s) of the Board) shall issue to the sponsor a conditional commitment or financing feasibility letter.

 

3613.5             The financing feasibility or conditional commitment letter may be issued for whatever term the Executive Director determines is appropriate in the circumstances.

 

3613.6             The conditional commitment letter shall constitute the Agency’s intent to fund, as approved by the Board, the Housing project, subject to the completion of the terms and conditions as enumerated in the letter.

 

3613.7             The financing feasibility letter shall not constitute a commitment on behalf of the Agency, but shall constitute a determination by the Agency staff that the proposed Housing project is feasible for financing by the Agency on the basis of preliminary reviews and analyses of the proposed site, market, design, development costs, operating budget, management plan, housing sponsor qualifications, and compliance with legal requirements.

 

3613.8             The financing feasibility or conditional commitment letter shall specify that upon satisfaction of the terms and conditions contained in the letter, and upon submission of a satisfactorily completed final application for Agency financing, or due diligence as may be required, the entire loan application shall be processed.   Loans requiring a financial feasibility letter shall be presented to the Board for action with respect to the authorization of an Agency construction loan, permanent loan, or both.

 

3613.9             The financing feasibility or conditional commitment letter shall establish submission requirements, as determined appropriate by the Executive Director (such as the submission of preliminary designs), prior to submission of final application.

 

3613.10           Upon satisfaction of the terms and conditions contained in the financing feasibility letter and completion of the processing of the final loan application by the Agency staff, the Executive shall present to the Board his or her recommendations with respect to the application together with the Agency's analysis of the completed application.  The Board shall make a determination by resolution whether the proposed Housing project is a feasible housing project and is approved by the Agency for construction or permanent financing or other assistance.

 

3613.11           The Board resolution shall authorize the issuance of an Agency construction or permanent financing commitment, or both, to the sponsor with respect to the proposed Housing project. The commitment may be issued for whatever term the Board determines to be appropriate in the circumstances.

 

3613.12           The resolution may include any conditions that the Agency considers appropriate with respect to the commencement of construction of the proposed Housing project, the marketing and occupancy of the housing development, the use, disbursement and repayment of the construction or permanent loan authorized, and all other matters relating to the acquisition, equipping, development, construction, or rehabilitation and operation of the proposed housing project.

 

Section 3614, TENANT SELECTION PLAN, is repealed.

 

Section 3615, BOARD APPROVAL OF LOAN APPLICATIONS, is repealed.

 

Section 3616 is amended to read as follows:

 

3616                REGULATIONS OF HOUSING SPONSORS

 

3616.1             It shall be the policy of the Agency to ensure the operational stability of Housing projects to the greatest extent possible. To that end, the Agency's processing procedures, instructions, and guidelines may require the submission of any organizational documents necessary to determine the qualification of the applicant as a housing sponsor and desirable recipient of Agency financing.

 

3616.2             As a condition precedent to the closing of an Agency loan, the sponsor may be required to execute a regulatory agreement with the Agency and any other related documents that the Executive Director (or designee(s) of the Board) determines to be necessary or appropriate.

 

3616.3             The regulatory agreement or other documents related to the financing of the proposed housing project shall authorize the Agency to regulate any aspects of the development of the proposed housing project that the Executive Director (or designee(s) of the Board) determines to be necessary or appropriate to protect the interests of the Agency and permit fulfillment of the Agency's duties and responsibilities under the Act, particularly, §§ 302(b)(1)(B) and 306(b)(1), (2), and (3) of the Act (D.C. Official Code § 42.2703.02 and § 42.2703.06).

 

 

Section 3617 is amended to read as follows:

 

3617                COLLATERAL AND SECURITY

 

3617.1             The Executive Director may, from time to time, establish the type and amount of collateral or other security to be provided by borrowers necessary to ensure repayment of permanent loans, repayment of construction loans, or successful completion of the proposed Housing projects.

 

3617.2             Collateral and security may be in the form of letters of credit, guarantees, cash benefit or other insurance, payment bonds, performance bonds, or other types approved by the Executive Director.

 

3617.3             The requirements for collateral and security shall be set forth in the Agency procedures, guidelines, and loan contract forms.

 

 

Section 3618, RENT LEVELS, is repealed.

 

Chapter 37, HFA: FINANCING SECTION 8 HOUSING, is repealed.

 

Chapter 38, HFA: SINGLE FAMILY MORTGAGE PURCHASE PROGRAM, is amended as follows:

 

Chapter 38     HFA: SINGLE FAMILY MORTGAGE PROGRAM

 

Section 3800 is amended to read as follows:

 

3800                GENERAL PROVISIONS

 

3800.1             The provisions of this chapter shall establish the procedures for the administration of the Program.

 

3800.2             In order to generate funds from private and public sources to increase the supply and lower the cost of funds available for residential Mortgages and thereby help alleviate the critical shortage of adequate affordable housing for Low-income and Moderate-income persons in the District, the Agency is authorized under § 303 of the Act (D.C. Official Code § 42-2703.03) to invest in, purchase, make commitments to purchase, and take assignments from Approved Mortgage Lenders of Mortgage loans made to Low and Moderate-income persons for the financing of eligible residential housing that meets the requirements established by the Act and the Agency. 

 

3800.3             The Agency shall be empowered to make or originate the following:

 

(a)        Loans to sponsors for the acquisition, equipping, construction, rehabilitation, or permanent Mortgage financing of home ownership housing projects for Eligible persons;

 

(b)        Loans through Approved Mortgage Lenders for the purchase of owner occupied residential housing by Eligible persons;

 

(c)        Funds available for home ownership Mortgage interest subsidy to be utilized by Eligible persons;

 

(d)       Loans to Eligible persons for the rehabilitation of residential housing;

 

(e)        Funds available to assist eligible prospective home purchasers to meet down payment requirements in order to obtain Mortgage financing;

 

(f)        Funds available in a Mortgage loan guarantee fund to be used by the Agency to guarantee or insure Mortgage loans in accordance with criteria established by the Agency;

 

(g)        Counseling programs available to Low-income and Moderate-income families; and

 

(h)        Loans for the prevention of foreclosures.

 

3800.4             The purchase of Mortgage loans shall be on whatever terms and conditions that the Agency determines to be appropriate in the circumstances.

 

3800.5             Terms and conditions shall be established in the Agency's Program documents.

 

3800.6             The Agency shall fund the purchase or origination of Mortgage loans or Mortgaged-backed securities with the proceeds of its Bonds or other available money.

 

3800.7             The Agency's obligation to purchase or originate Mortgage loans or Mortgaged backed securities shall be contingent on its ability to issue Bonds or acquire funds at a rate and upon other conditions acceptable to the Agency.

 

 

Section 3801 is repealed and replaced to read as follows:

 

3801                ELIGIBLE MORTGAGE LENDERS AND INVITATION TO RESERVE FUNDS

 

3801.1             The Agency may accept as participants in the Program those Approved Mortgage Lenders which have demonstrated to the Agency, among other things, that they have the ability to originate and service Mortgage loans in the District and that they are in compliance with applicable local and federal statutes and regulations.

 

3801.2             The Agency shall invite interested Approved Mortgage Lenders to enter into a Participating Mortgage Lender Single Family Program Agreement in connection with the Program.

 

3801.3             Mortgage lenders may request, from time to time, an allocation of funds expected to be available for the purchase of Mortgage loans. 

 

3801.4             Specific instructions concerning the following shall be contained in the Agency's program documents:

 

(a)        The Agency's availability of funds;

 

(b)        Terms for purchasing qualified Mortgage loans; and

 

(c)        The method of allocating funds.

 

 

Section 3802 is repealed and replaced to read as follows:

 

3802                ALLOCATION OF FUNDS FOR SPECIAL PROGRAMS

 

3802.1             The Agency may from time to time, establish Special Programs on the basis of the following:

 

(a)        The availability of adequate funds;

 

(b)        The effect of the allocation on the marketability of the Agency's Bonds;

 

(c)        The requirements of the Act and the Internal Revenue Code of 1954, as amended, and applicable I.R.S. regulations regarding the use of Bond proceeds;

 

(d)       The effect of the allocation in achieving the Agency's housing goals in the District; and

 

(e)        Other criteria that may be established by the Agency.

 

 

Section 3803 is amended as follows:

 

3803                MORTGAGE LOAN TERMS

 

3803.1             Each Mortgage loan shall be secured by a Mortgage which constitutes a lien on the interest in the Single-family residency encumbered by the mortgage or on the leasehold interest in the Single-family residence having an unexpired term equal to or longer than the term in which the Mortgage loan secured is to be amortized.

 

3803.2             Mortgage loan terms shall be established as the Agency determines to be appropriate in the circumstances.

 

3803.3             Mortgage loan terms shall be specified in the program documents and may include, but not be limited to, the following:

 

(a)        Maximum and minimum terms;

 

(b)        Type of financing (e.g., graduated payment loan, variable rate loan);

 

(c)        Assumption provisions;

 

(d)       Prepayment penalties;

 

(e)        Fee, charges, and other conditions of originating and servicing requirements;

 

(f)        Maximum loan-to-value ratio;

 

(g)        Down payment requirements;

 

(h)        Interest rates; and

 

(i)         Acceleration provisions.

 

3803.4             The Agency shall establish the interest rate to be charged on the Mortgage loans, taking into account the Agency's costs of borrowing the funds required to purchase the Mortgage loans, administrative costs of the Agency, and possible losses due to Mortgage loan defaults.

 

3803.5             The interest rate on Mortgage loans financed with tax-exempt Bond proceeds shall not exceed the maximum permitted by application of the provisions of § 103 and § 141 through 150 of the Internal Revenue Code of 1986, as amended, and applicable Internal Revenue Service (I.R.S.) regulations.

 

 

Section 3804 shall be amended to read as follows:

 

3804                ELIGIBLE SINGLE FAMILY RESIDENCES

 

3804.1             The Agency may finance single family residences located in the District which satisfy the applicable requirements of the Act , I.R.S. regulations, the Department of Housing and Urban Development or other laws, rules, regulations, Program documents and guidelines applicable under the Agency’s financing plan.

 

3804.2             The Program documents for eligible Single-family residences may provide the following:

 

(a)        Types of units to be financed (attached or detached single family, condominiums, cooperatives, new construction, substantial rehabilitation, existing homes);

 

(b)        Maximum purchase price for each type of unit;

 

(c)        Minimum number of occupants for units of different sizes;

 

(d)       In the case of condominium or cooperative units, pre-sale requirements, approval requirements, and maximum number of units to be financed in any building or project; and

 

(e)        Targeted areas.

 

 

Section 3805 is amended to read as follows:

 

3805                DISTRIBUTION OF LENDABLE BOND PROCEEDS

 

3805.1             In order to comply with § 103 and § 141 through 150 of the Internal Revenue Code of 1986, as amended, and applicable I.R.S. regulations, and to carry out the policy for which the Agency was created, the Agency shall provide a mechanism assuring that a necessary or reasonable amount of lendable Bond proceeds are distributed in Targeted areas and to such persons as the Agency determines suffer from a critical shortage of affordable financing, or are otherwise in need of appropriate financing for Single-family residences.

 

 

Section 3806 is amended to read as follows:

 

3806.1             The Agency may purchase or originate Mortgage loans or Mortgage-backed securities made to eligible persons and families who satisfy the requirements of §103 and § 141 through 150 of the Internal Revenue Code of 1986, as amended, applicable I.R.S. regulations, and the Act and who meet certain additional criteria or goals as may, from time to time, be established by the Agency in its Program Documents.

 

 

Section 3807 is amended to read as follows:

 

3807                PROGRAM FEES

 

3807.1             The Agency may charge and collect from an Approved Mortgage Lender a reasonable fee to participate in the Program and to cover the Agency's cost of administering the Program and certain other costs as the Agency determines are necessary to cover cash flow or security deficiencies in connection with the issuance of the Program's Bonds.

 

3807.2             The Agency may also allow Approved Mortgage Lenders to charge the mortgagors or the sellers of Single-family residences reasonable fees to participate in the Program and defray the costs of originating and servicing the Mortgage loans to the extent permitted by applicable law.

 

 

Section 3808 is amended to read as follows:

 

3800                LOAN PROCESSING AND PROGRAM DOCUMENTS

 

3808.1             Mortgage loans to be purchased under the Program shall be originated by Approved Mortgage Lenders and serviced by Approved Mortgage Lenders or a Master servicer.

 

3808.2             Each Approved Mortgage Lender shall originate all Mortgage loans in accordance with the lender's then current standard underwriting policies, the standards of FNMA, FHA or FHLMC (or their respective successors), as applicable, and of the Agency or its designee.

 

3808.3             Each Approved Mortgage Lender or Master servicer shall service all Mortgage loans in accordance with the standards set by the Program documents.

 

3808.4             The standards for originating and servicing Mortgage loans may be modified from time to time by the Agency.

 

3808.5             The implementation of the Program may include the production and execution of certain Program documents, including, but not limited to, the following:

 

(a)        Participating Mortgage Lender Single Family Program Agreement;

 

(b)        Invitation to reserve funds; and

 

(c)        Lender's manual.

 

3808.6             The Program documents shall be provided by the Agency and may be amended by the Agency from time to time. The Program documents shall be consulted in conjunction with the applicable provisions of this chapter to fully describe the Program and its procedures.

 

 

Section 3809 is amended to read as follows:

 

3809                AFFIRMATIVE MARKETING GOALS

 

3809.1             The Agency may establish a monitoring system to ensure that Approved Mortgage Lenders do the following:

                                   

(a)        Conduct outreach efforts and inform members of the community of the availability of the Agency's funding or Mortgage loans, particularly those groups identified by the Agency as having a need for increased housing opportunities; and

 

(b)        Make Mortgage loans to Eligible persons and families on a nondiscriminatory basis.

 

 

Section 3810 is inserted to read as follows:

 

3810                MORTGAGE LOANS:  FEDERALLY ASSISTED

 

3810.1             When housing financed by a District of Columbia Housing Finance Agency (the "Agency") Mortgage loan is, in whole or in part, federally insured or otherwise directly or indirectly assisted by the federal government, the regulations of the federal government program pursuant to which that assistance is provided shall apply.

 

 

Section 3899 is amended to read as follows:

 

3899                DEFINITIONS

 

3899.1             When used in this chapter, unless defined herein, words and phrases shall have their common industry meaning ascribed:

 

Approved Mortgage Lender:

 

(a)        The Agency, any bank, Mortgage banking company, trust company, savings bank, savings and loan association, credit union, national banking association, federal savings and loan or federal credit union which maintains an office in the District, an FHA approved lender; or meets other requirements as set forth by the Board of Directors of the Agency; and

 

(b)        Any insurance company that is authorized to do business in the District and meets the financial stability and sufficient net worth criteria established, from time to time, by the Agency.

 

Bonds - the bonds or other evidences of financial obligations of the Agency used to finance Mortgage loans.

           

Eligible person or family - one (1) or more persons or a family determined by the Agency to be of Low or Moderate-income who qualify for housing under the Program according to the requirements of the Program documents as established by the Agency and whose Gross income does not exceed the percentages, set forth in the Act, of the median family income, as revised from time to time, for the SMSA in which the District is located.

 

Gross income - the income shown on the last filed federal income tax return(s) which reflects gross income (total income including deductions) as well as verification of current income by the lender.

 

Master Servicer – the servicer designated, by and on behalf of the Agency, to service Mortgage loans originated by the Agency, Approved Mortgage Lenders or the Master Servicer in accordance with the provisions of the Agency’s Participating Mortgage Lender Single Family Program Agreement, servicing agreement, and the Program documents.

 

Mortgage - a Mortgage or deed of trust or any other owner-financing instrument as defined in § 102(n) of the Act, encumbering a Single-family residence located in the District and securing a Mortgage loan in the form and containing terms and provisions required in the applicable program documents and approved by the Agency pursuant to this Part.

 

Mortgage-backed securities - are asset-backed securities that represent a claim on the cash flows from Mortgage loans through a process known as securitization.

 

Mortgage loan - a loan to an Eligible person or family for the purposes of financing residential housing, committed by an Approved Mortgage Lender, pursuant to the applicable Program documents, which is evidenced by a Mortgage note secured by the related Mortgage and which the Agency purchases pursuant to a Participating Mortgage Lender Single Family Program Agreement with the Approved Mortgage Lender.

 

Mortgage note - a promissory note evidencing a Mortgage loan and secured by the related Mortgage in the form and containing terms required in the applicable Program documents and approved by the Agency.

 

Participating Mortgage Lender Single Family Program Agreement - an agreement between the Agency and an Approved Mortgage Lender, except where the Agency originates the loan, pursuant to which the Approved Mortgage Lender becomes a participant in the Program and in accordance with which Mortgage loans are originated, securitized, or purchased by the Agency, and serviced by the Approved Mortgage Lender or Master Servicer and which sets forth the requirements of the Act and this  Participating Mortgage Lender Single Family Program Agreement .

 

Program - the Agency's single family mortgage program pursuant to which the Agency originates or purchases Mortgage loans, or Mortgage-backed securities from Approved Mortgage Lenders, including, but not limited to, refinancing loans and acquisition rehabilitation loans.

 

Program documents - any and all documents required by the Agency setting forth the terms and conditions under which the Agency shall originate or purchase Mortgage Loans from Approved Mortgage Lenders, or purchase Mortgage-backed securities from other entities.

 

Single-family residence - an owner-occupied single family residence, including a condominium and cooperative unit, that is located in the District and satisfies all the requirements of the Program documents.

 

SMSA - a Standard Metropolitan Statistical Area as defined by the United States Office of Management and Budget.

 

Special Programs - means programs that the DCHFA may establish from time to time to set aside Mortgage loan capacity for specific purposes or specific borrowers.

 

Targeted area - a qualified census tract or an area of chronic economic distress located in the District within the meaning of Section 143(j) of the Internal Revenue Code of 1986, as amended, and applicable I.R.S. regulations, and any other areas that the Agency may, from time to time, designate.