February 19, 2008, Introduced by Senator RICHARDVILLE and referred to the Committee on Banking and Financial Institutions.
A bill to amend 1966 PA 346, entitled
"State housing development authority act of 1966,"
by amending section 44 (MCL 125.1444), as amended by 2004 PA 549.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 44. (1)(a) The authority may make loans to a nonprofit
housing corporation, consumer housing cooperative, limited dividend
housing corporation, limited dividend housing association, mobile
home park corporation, or mobile home park association or to a
public body or agency for the construction or rehabilitation, and
for the long-term financing, of the following:
(i) Housing for low income or moderate income persons.
(ii) For the period of time beginning May 1, 1984, and ending
November 1, 1987, housing projects in which not less than 20% of
the dwelling units are allotted to individuals of low or moderate
income within the meaning of former section 103(b)(4)(A) of the
internal revenue code of 1954; not less than 60% of the dwelling
units are available to persons and families whose gross household
income does not exceed 125% of the higher of either the median
income for a family in this state or the median income for a family
within the nonmetropolitan county or metropolitan statistical area
in which the housing project is located, as determined by the
authority; and not more than 20% of the dwelling units are
available for occupancy without regard to income. The enactment of
this subparagraph or the expiration of the authority granted by it
does not affect rules in effect before July 10, 1984, or
promulgated after July 9, 1984, to define low or moderate income
persons.
(iii) For the period of time beginning May 1, 1984, and ending
November 1, 1987, housing projects in eligible distressed areas in
which housing projects not less than 20% of the dwelling units are
allotted to individuals of low or moderate income within the
meaning of former section 103(b)(4)(A) of the internal revenue code
of 1954; not less than 60% of the dwelling units are available to
persons and families whose gross household income does not exceed
150% of the higher of either the median income for a family in this
state or the median income for a family within the nonmetropolitan
county or metropolitan statistical area in which the housing
project is located, as determined by the authority, and not more
than 20% of the dwelling units are available for occupancy without
regard to income.
(iv) Beginning November 1, 1987, multifamily housing projects
that meet the 20-50 or 40-60 test established in section 142 of the
internal revenue code, 26 USC 142, and, in addition, in which the
remaining dwelling units are available for occupancy without regard
to income.
(v) Social, recreational, commercial, or communal facilities
necessary to serve and improve the residential area in which an
authority-financed housing project is located or is planned to be
located thereby enhancing the viability of the housing.
(b) Notwithstanding the provisions of this section, the
authority may establish by resolution higher income limits that it
considers necessary to achieve sustained occupancy of a housing
project financed under subsection (1)(a)(i), (ii), (iii), (iv), or (v)
if the authority determines both of the following:
(i) The owner of the housing project exercised reasonable
efforts to rent the dwelling units to persons and families whose
incomes did not exceed the income limitations originally
applicable.
(ii) For an annual period after the first tenant has occupied
the housing project, the owner of the housing project has been
unable to attain and sustain at least a 95% occupancy level at the
housing project.
(c) A loan under this section may be in an amount not to
exceed 90% of the project cost as approved by the authority. For
purposes of this section, the term "project cost" includes all
items included in the definition of a project cost in section 11
and also includes a builder's fee equal to an amount up to 5% of
the amount of the construction contract, developer overhead
allowance and fee of 5% of the amount of the project cost, the cost
of furnishings, and a sponsor's risk allowance equal to 10% of the
project cost. A loan shall not be made under this section unless a
market analysis has been conducted that demonstrates a sufficient
market exists for the housing project.
(d) After November 1, 1987, the authority may continue to
finance multifamily housing projects for families or persons whose
incomes do not exceed the limits provided in subsection (1)(a)(ii)
or (iii) or (1)(b), until funds derived from the proceeds of bonds or
notes issued before November 2, 1987, for that purpose, including
the proceeds of prepayments or recovery payments with respect to
these multifamily housing projects, have been expended. Multifamily
housing projects or single family housing units in an eligible
distressed area that are financed by proceeds of notes or bonds
issued before June 30, 1984, and that the authority has designated
for occupancy by persons and families without regard to income
pursuant to this act shall remain eligible for occupancy by
families and persons without regard to income until the authority's
mortgage loan issued with respect to these multifamily housing
projects is fully repaid.
(e) Notwithstanding the expiration of lending authority under
subsection (1)(a)(ii), (iii), (iv), or (v), multifamily housing
projects financed under those subparagraphs may continue to remain
eligible for occupancy by persons and families whose incomes do not
exceed the limits provided in those subparagraphs or subsection
(1)(b).
(f) For purposes of this subsection:
(i) "Gross household income" means gross income of a household
as those terms are defined in rules of the authority.
(ii) "Median income for a family in this state" and "median
income for a family within the nonmetropolitan county or
metropolitan statistical area" mean those income levels as
determined by the authority.
(2)(a) The authority may make loans to a nonprofit housing
corporation, limited dividend housing corporation, mobile home park
corporation, or mobile home park association for the construction
or rehabilitation of housing units, including residential
condominium units as defined in section 4 of the condominium act,
1978 PA 59, MCL 559.104, for sale to individual purchasers of low
or moderate income or to individual purchasers without regard to
income when the housing units are located in an eligible distressed
area. A loan under this section may be in an amount not to exceed
100% of the project cost as approved by the authority in the case
of a nonprofit housing corporation or individual purchaser, and in
an amount not to exceed 90% of the project cost as approved by the
authority in the case of a limited dividend housing corporation,
mobile home park corporation, or mobile home park association.
(b) While a loan under this subsection is outstanding, a sale
by a nonprofit housing corporation or limited dividend housing
corporation or a subsequent resale is subject to approval by the
authority. The authority may provide in its rules concerning these
sales and resales that the price of the housing unit sold, the
method of making payments after the sale, the security afforded,
and the interest rate, fees, and charges to be paid shall at all
times be sufficient to permit the authority to make the payments on
its bonds and notes and to meet administrative or other costs of
the authority in connection with the transactions. Housing units
shall be sold under terms that provide for monthly payments
including principal, interest, taxes, and insurance.
(c) While a loan under this subsection is outstanding, the
authority, before the approval of sale by a nonprofit housing
corporation, limited dividend housing corporation, mobile home park
corporation, or mobile home park association, shall satisfy itself
that the sale is to persons of low or moderate income if the
housing unit is not located in an eligible distressed area, or to
persons without regard to income if the housing unit is located in
an eligible distressed area.
(3) The authority may make, purchase, or participate in loans
made to individual purchasers for acquisition and long-term
financing or refinancing of newly rehabilitated, newly constructed,
or existing 1- to 4-unit housing units, including a residential
condominium unit as defined in section 4 of the condominium act,
1978 PA 59, MCL 559.104. To qualify, all of the following apply:
(a)
The borrower's family income shall not exceed the
following:
$108,000.00.
(i) For eligible distressed areas, $69,800.00 until
June 1,
2006,
$72,250.00 until November 1,
2007, and $74,750.00 on and
after
November 1, 2007.
(ii) For any other area, $60,700.00 until June 1, 2006,
$62,800.00
until November 1, 2007, and $65,000.00 on and after
November 1, 2007.
(b) The purchase price or, in the case of refinancing, the
appraised value does not exceed the following:
(i) With respect to a 1- or 2-family unit, 3 times
the income
limit,
as established pursuant to subdivision (a) $224,500.00.
(ii) With respect to a 3-family unit, 3-1/2 times
the income
limit,
as established pursuant to subdivision (a) $261,625.00.
(iii) With respect to a 4-family unit, 4 times the
income limit,
as
established pursuant to subdivision (a) $299,000.00.
(c) For unexpected cost increases during construction or
improvements to adapt new or existing property for use by disabled
individuals, the authority may increase the purchase price limit by
an amount sufficient to cover these cost increases, but not to
exceed $3,500.00.
(d) If an income or purchase price limit prescribed by this
subsection
exceeds an application applicable
limit prescribed by
the internal revenue code, the internal revenue code limit applies
if the loan will be financed with the proceeds of a tax-exempt
bond.
(e) Except with respect to newly constructed housing units,
the authority may by resolution establish, for a length of time the
authority considers appropriate, maximum borrower income or
purchase price limits more restrictive than those maximum
limitations set forth in this section. The authority shall advise
the appropriate house and senate standing committees 5 days prior
to adopting a resolution establishing more restrictive maximum
borrower income or purchase price limits.
(f) Before making a loan under this section, authority staff
shall determine that the borrower has the ability to repay the
loan.
(g) A loan made or purchased to finance the acquisition of an
existing housing unit may include funds for rehabilitation.
(4) A loan shall be secured in a manner and be repaid in a
period, not exceeding 50 years, as may be determined by the
authority. A loan shall bear interest at a rate determined by the
authority.
(5) A person who, for purposes of securing a loan under this
act, misrepresents his or her income, including taking a leave of
absence from his or her employment for purposes of diminishing his
or her income, is not to be eligible for a loan under this act.