99-346 C.M.R. ch. 29, § 5 - Types of Programs

MaineHousing may offer a Program for any of the following, any combination of the following, any subset of the following, or any combination of subsets of the following:

A. Preservation of Affordability. Programs may provide financing to add or preserve low income or use restrictions pertaining to a target population or supportive services in existing housing.

B. New Construction, Rehabilitation, and Creation of Affordability. Programs may finance the creation of rental units for Low-income Persons through acquisition, new construction, rehabilitation, refinancing, or dedication of existing housing as rental units for Low-income Persons.

C. Subsequent Loans. Programs may offer financing for the repair, maintenance or expansion of assets securing existing mortgages in favor of MaineHousing.

D. Tax Credits. Programs may offer financing for use in conjunction with low-income housing tax credits allocated by MaineHousing pursuant to Section 42 of the Code and any applicable rules adopted by MaineHousing pursuant to the Maine Administrative Procedures Act.

E. Construction Loans. Programs may offer construction-period financing for the creation of rental units for Low-income Persons subject to the following limitations.

i. Public Instrumentalities and Nonprofit Corporations. MaineHousing may provide construction-period financing to nonprofit corporations, which are exempt from taxation under Section 501(c)(3) of the Code and are not private foundations pursuant to Section 509(a) of the Code, and municipal housing authorities, which are established pursuant to the Act, for the acquisition, new construction and rehabilitation of housing for Low-income Persons. Upon completion of the new construction or rehabilitation of such housing, the construction loan shall automatically convert to permanent financing.

ii. For-Profit - Participation. If less than 60% of the financing of a Development is required to be tax-exempt bonds from MaineHousing, and the Developer is a for profit entity, then MaineHousing must at a minimum use a financial institution as an escrow agent. MaineHousing may use the proceeds of tax-exempt bonds to purchase a participation in construction loans made by financial institutions in the State for a Development. A financial institution shall not sell any additional participation in a construction loan in which MaineHousing is participating without MaineHousing's prior written consent.

iii. For-Profit - Whole Loans. If a Development's financing requires MaineHousing to participate in the construction loan with tax-exempt financing at a level greater than 60%, MaineHousing may make the whole construction loan without an escrow agent.

iv. Limitation on Interest. MaineHousing and any financial institution making or participating in a construction loan in which MaineHousing is participating may charge interest rates on the construction loan, or its participation in the construction loan, provided that such interest rates are as described in the applicable Program Guide and do not exceed the Wall Street Journal Prime Rate plus two percent (2%).

v. Limitation on Fees and Charges. MaineHousing and any financial institution making or participating in a construction loan in which MaineHousing is participating may charge application fees, commitment fees, origination or financing fees, document preparation fees, legal fees, construction review fees and construction management or escrow fees, late charges, and prepayment charges provided the fees and charges do not exceed the usual and customary fees and charges imposed by financial institutions in the State and are consistent with the applicable Program Guide.

Notes

99-346 C.M.R. ch. 29, § 5