Bill Text: MI HB4580 | 2017-2018 | 99th Legislature | Engrossed
Bill Title: Housing; housing development authority; refinancing option; allow. Amends sec. 44 of 1966 PA 346 (MCL 125.1444).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2017-10-18 - Assigned Pa 127'17 With Immediate Effect [HB4580 Detail]
Download: Michigan-2017-HB4580-Engrossed.html
HB-4580, As Passed House, May 31, 2017
HOUSE BILL No. 4580
May 3, 2017, Introduced by Rep. Farrington and referred to the Committee on Financial Services.
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 2012 PA 326.
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 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 other provisions of this subsection,
the authority may establish by resolution higher income limits that
it considers necessary to achieve sustained occupancy of a housing
project financed under subdivision (a) 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 subsection shall not 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, a 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 condominium unit is 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
subsection shall not exceed 100% of the project cost as approved by
the authority in the case of a nonprofit housing corporation or
individual purchaser, and shall not 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 determine 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 condominium unit is defined in section 4 of the
condominium act, 1978 PA 59, MCL 559.104. All of the following
apply to making, purchasing, or participating in a loan under this
subsection:
(a)
The borrower's family income shall not exceed The the
income requirements established in section 143 of the internal
revenue code, 26 USC 143. If those income requirements are
repealed, the borrower's family income shall not exceed the income
requirements that were in effect immediately before the repeal.
(b) The purchase price or, in the case of a refinancing, the
appraised value shall not exceed the following:
(i) With respect to a 1- or 2-family unit, $224,500.00.
(ii) With respect to a 3-family unit, $261,625.00.
(iii) With respect to a 4-family unit, $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 a purchase price limit prescribed by this subsection
exceeds an 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 subsection. 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 the authority makes 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.
(h)
If the loan made is a loan for refinancing of a 1- to 4-
unit housing unit, including a residential condominium unit as
condominium unit is defined in section 4 of the condominium act,
1978 PA 59, MCL 559.104, the authority shall determine that 1 of
the units is occupied by the borrower.
(4) A loan under this section 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 eligible for a loan under this act.
(6)
With regard to refinancing, the authority shall not make,
purchase,
or commence participation in loans to individual
purchasers
pursuant to subsection (3) after April 3, 2011.
(6)(a) (7)(a) The authority may
make, purchase, or participate
in a loan 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
condominium unit is defined in section 4 of the condominium act,
1978 PA 59, MCL 559.104, if all of the following requirements are
met:
(i) The loan is made to an individual purchaser or purchasers,
whose income does not exceed the income requirements established in
section 143 of the internal revenue code, 26 USC 143. If those
income requirements are repealed, the borrower's family income
shall not exceed the income requirements that were in effect
immediately before the repeal.
(ii) The purchase price of the housing unit does not exceed
the greatest of purchase price limits established for similar
housing units by Fannie Mae, Freddie Mac, and Ginnie Mae.
(iii) At least 1 of the dwelling units is owned and occupied
by the individual purchaser or purchasers to whom the loan is made.
(iv) Authority staff determine that the individual purchaser
or purchasers receiving the loan have the ability to repay the
loan.
(b) If the authority makes, purchases, or participates in a
loan under this subsection, the loan may be securitized by the
authority and may either be sold to investors or held by the
authority.
(c) For purposes of this subsection:
(i) "Fannie Mae" means the federal
national mortgage
association
Federal National Mortgage
Association established under
authority of the federal national mortgage association charter act,
12
USC 1716 to 1723i.1749aaa-5.
(ii) "Freddie Mac" means the federal home
loan mortgage
corporation
Federal Home Loan Mortgage
Corporation established
under authority of the federal home loan mortgage corporation act,
12
USC 1451 to 1459.title III of
Public Law 91-351.
(iii) "Ginnie Mae" means the government
national mortgage
association
Government National Mortgage
Association established
under authority of the federal national mortgage association
charter
act, 12 USC 1716 to 1723i.1749aaa-5.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
