§ 42-55-9 Terms and conditions of loans.– Mortgage and other loans made by the corporation to housing sponsors ofmulti-family residential housing units or health care facilities shall besubject to the following terms and conditions:
(1) No application for a loan for a housing development orhealth care facility shall be processed unless the applicant is a housingsponsor or health care facility sponsor as defined in § 42-55-3;
(2) The ratio of loan to total housing development or healthcare facility cost and the amortization period of loans made under this chapterwhich are insured by any agency or instrumentality of the United Statesgovernment shall be governed by the mortgage insurance commitment for eachhousing development or health care facility; but in no event shall theamortization period exceed fifty (50) years; in the case of a mortgage loan notinsured by an agency or instrumentality of the United States government, theamount of the loan to: (1) nonprofit housing sponsors shall not exceed onehundred percent (100%) of the total housing development cost as determined bythe corporation; and (2) other housing sponsors and health care sponsors shallnot exceed ninety-five percent (95%) of the total development cost asdetermined by the corporation, and the amortization period of the loan shall bedetermined in accordance with regulations formulated and published by thecorporation, but in no event shall the amortization period exceed fifty (50)years;
(3) A loan made under this chapter may be prepaid to maturityafter a period of years as determined by the rules and regulations of thecorporation, provided the corporation finds that the prepayment of the loanwill not result in a material escalation of rents charged to the persons andfamilies of low and moderate income occupying the housing development orcharges to the persons using the health care facilities;
(4) The corporation shall have authority to set from time totime the interest rates at which it shall make loans and commitments. Theinterest rates shall be established by the corporation at the lowest levelconsistent with the corporation's cost of operation and its responsibilities tothe holders of its bonds, bond anticipation notes and other obligations. Inaddition to these interest charges, the corporation may make and collect thosefees and charges, including, but not limited to, reimbursement of thecorporation's financing costs, service charges, insurance premiums, andmortgage insurance premiums, that the corporation determines to be reasonable;
(5) In considering any application for a loan to finance ahousing development or housing project, the corporation shall determine thatthe housing developments will be well planned and well designed; and shall alsogive consideration to:
(i) The comparative need for housing for persons and familiesof low and moderate income in the area to be served by the proposed development;
(ii) The ability of the applicant sponsor to construct,operate, manage, and maintain the proposed housing development;
(iii) The existence of zoning or other regulations toadequately protect the proposed housing development against detrimental futureuses which could cause undue depreciation in the value of the development;
(iv) The existence of federal and statewide housing, landuse, and pollution abatement plans and programs;
(v) A detailed plan of security proposed for the safety ofthe inhabitants of any development hereinafter constructed within the city ofProvidence;
(6) In considering any application for a loan to financehealth care facilities, the corporation shall give consideration to:
(i) The availability of health care facilities presentlylocated or to locate in the area;
(ii) The ability of the sponsor to meet the health needs ofthe inhabitants of the area and to operate, manage, and maintain the proposedhealth care facilities;
(iii) The regulations of the state to standards ofconstruction and design and equipment of health care facilities of the typeproposed to be financed;
(7) Each mortgage loan shall contain the terms and provisionsand be in a form approved by the corporation. The corporation may require thehousing sponsor or health care sponsor receiving a loan or its contractor toexecute any other assurances and guarantees that the corporation may deemnecessary, including without limitation, payment and performance bonds, andletters of credit;
(8) Each loan shall be subject to an agreement between thecorporation and the housing sponsor which will subject the sponsor and itsprincipals or stockholders, if any, to limitations established by thecorporation as to rentals and other charges, builders' and developers' profitsand fees, and the disposition of its property and franchise to the extent morerestrictive limitations are not provided by the law under which the borrower isincorporated or organized or by this chapter;
(9) As a condition of the loan, the corporation shall havethe power at all times during the construction or rehabilitation of a housingdevelopment or housing project by a housing sponsor or of health carefacilities by a health care sponsor and the operation thereof:
(i) To enter upon and inspect any housing development orhousing project or health care facility, including all parts thereof, for thepurpose of investigating the physical and financial condition thereof, and itsconstruction, rehabilitation, operation, management, and maintenance, and toexamine all books and records of the housing sponsor or health care sponsorwith respect to capitalization, income and other related matters and to makeany charges that may be required to cover the cost of those inspections andexaminations;
(ii) To order any alterations, changes or repairs that may benecessary to protect the security of its investment in a housing development,housing project, or health care facility or the health, safety, and welfare ofthe occupants or users thereof and to insure that the housing development orhealth care facility is, or has been, constructed or rehabilitated inconformity with all applicable federal, state, and local building codes;
(iii) To order any managing agent, housing development orhealth care facility manager, or owner of a housing development or health carefacility, or sponsors of these, to do those acts that may be necessary tocomply with the provisions of all applicable laws, ordinances, or buildingcodes or any rule or regulation of the corporation or the terms of anyagreement concerning the development or facilities or to refrain from doing anyacts in violation thereof, and in this regard the corporation shall be a properparty to file a complaint and to prosecute any violations of law, ordinances,or building codes as set forth herein;
(iv) A housing sponsor may not make distributions of incomeor earnings from a housing development or housing project financed by thecorporation in any one year in excess of six percent (6%) (or a higher or lowerpercent as shall be prescribed by the rules and regulations of the corporation)of the housing sponsor's equity in the development, nor shall any of theprincipals or stockholders of the housing sponsor at any time earn, accept orreceive a return greater than six percent (6%) per annum (or a higher or lowerpercent as shall be prescribed by the rules and regulations of the corporation)of his or her investment in any housing development financed by thecorporation. The sponsor's equity in a housing development shall consist of thedifference between the corporation assisted mortgage loan and the total housingdevelopment cost. With respect to every housing development assisted by theprovisions of this chapter the corporation shall, pursuant to regulationsadopted by it, establish the sponsor's equity at the time of the making of thefinal mortgage advance and, for the purposes of this subdivision, that figureshall remain constant during the life of the corporation's mortgage on thedevelopment;
Notwithstanding the above, the corporation shall allowexisting project owners to withdraw a rate of return on redefined equityprovided the corporation finds that the project is "stable and financiallysecure". Properties meeting this definition would have healthy finances andreserves and be in good condition, as determined by the corporation; provided,however, no project owner of a housing development financed by the corporationmay apply for redefinition until fifteen (15) years from the date of financing.In addition, the following requirements must occur:
(A) There is no deferred maintenance as determined by thecorporation.
(B) There are no major repairs or replacements (threethousand dollars ($3,000) or more) anticipated or required for the coming yearwhich would reduce the reserve accounts below required levels.
(C) All operating expenses have been paid within thirty (30)days of their due date.
(D) Operating account balance equals one month's totaloperating expenses.
(E) The development has sustained ninety-five percent (95%)or greater economic occupancy for the prior twenty-four (24) consecutive monthsand has a current waiting list equal to at least one and one-half (1 1/2) timesthe annual turnover for the two (2) preceding years.
(F) The mortgage has not been delinquent for the precedingtwenty-four (24) months.
(G) Reasonable reserve account balances.
(H) The owner agrees to limit future rent increases to theamount needed to pay all annual operating expenses including return on equityand maintaining reserves at five thousand dollars ($5,000) per unit or twentypercent (20%) of the outstanding mortgage.
(I) The owner agrees to maintain the housing affordable topersons of low and moderate income for (a) a minimum of twenty (20) years fromthe date that owner could prepay a mortgage securing a development, as thatterm is defined in § 34-45-4, or could elect not to renew a Section 8assistance contract under § 34-45-5 or (b) twenty (20) years from thematurity date of a note evidencing indebtedness to the corporation which issecured by a housing development.
Not-for-profit sponsors shall be eligible to receiveunlimited annual cash flow, subject to the above criteria, up to the cumulativeamount of their initial equity investment. Subsequent annual cash flow may bedistributed provided the distributions are restricted to low and moderateincome housing related expenditures.
Equity would be redefined by either capitalizing the annualcash flow using corporation-approved appraisal practices or by the differencebetween the fair market value of the housing project using corporation approvedappraisal practices less the unpaid principal balance of any outstandingmortgage loans, whichever is greater.
Equity would be subject to recalculation every five (5)years, or more frequently at the corporation's discretion.
The corporation shall receive a one-time fee equal toone-half percent (1/2%) of the outstanding mortgage for redefining equity. Thiswill be an eligible operating expense. The fee may be waived by the corporationin whole or in part.
(v) Whenever any housing sponsor accumulates an earnedsurplus, in addition to the reserves the corporation may require formaintenance, operation, and replacement, in excess of ten percent (10%) of theinitial annual rent roll for the housing development, rents in the housingdevelopment shall be reduced to the extent necessary to lower the earnedsurplus accumulation to that ten percent (10%) figure in the following fiscalyear. Every five (5) years the housing sponsor may seek the approval of thecorporation for increases in those reserves. To the extent warranted thecorporation may grant that approval if in its judgment there have beenincreased price levels or unusual maintenance and repayment requirements;
(vi) The corporation may provide by rules and regulations forthe terms and conditions of mortgage loans to housing sponsors of single familyresidential housing units or health care facilities and the supervision ofhousing sponsors or health care sponsors.
§ 42-55-9 Terms and conditions of loans.– Mortgage and other loans made by the corporation to housing sponsors ofmulti-family residential housing units or health care facilities shall besubject to the following terms and conditions:
(1) No application for a loan for a housing development orhealth care facility shall be processed unless the applicant is a housingsponsor or health care facility sponsor as defined in § 42-55-3;
(2) The ratio of loan to total housing development or healthcare facility cost and the amortization period of loans made under this chapterwhich are insured by any agency or instrumentality of the United Statesgovernment shall be governed by the mortgage insurance commitment for eachhousing development or health care facility; but in no event shall theamortization period exceed fifty (50) years; in the case of a mortgage loan notinsured by an agency or instrumentality of the United States government, theamount of the loan to: (1) nonprofit housing sponsors shall not exceed onehundred percent (100%) of the total housing development cost as determined bythe corporation; and (2) other housing sponsors and health care sponsors shallnot exceed ninety-five percent (95%) of the total development cost asdetermined by the corporation, and the amortization period of the loan shall bedetermined in accordance with regulations formulated and published by thecorporation, but in no event shall the amortization period exceed fifty (50)years;
(3) A loan made under this chapter may be prepaid to maturityafter a period of years as determined by the rules and regulations of thecorporation, provided the corporation finds that the prepayment of the loanwill not result in a material escalation of rents charged to the persons andfamilies of low and moderate income occupying the housing development orcharges to the persons using the health care facilities;
(4) The corporation shall have authority to set from time totime the interest rates at which it shall make loans and commitments. Theinterest rates shall be established by the corporation at the lowest levelconsistent with the corporation's cost of operation and its responsibilities tothe holders of its bonds, bond anticipation notes and other obligations. Inaddition to these interest charges, the corporation may make and collect thosefees and charges, including, but not limited to, reimbursement of thecorporation's financing costs, service charges, insurance premiums, andmortgage insurance premiums, that the corporation determines to be reasonable;
(5) In considering any application for a loan to finance ahousing development or housing project, the corporation shall determine thatthe housing developments will be well planned and well designed; and shall alsogive consideration to:
(i) The comparative need for housing for persons and familiesof low and moderate income in the area to be served by the proposed development;
(ii) The ability of the applicant sponsor to construct,operate, manage, and maintain the proposed housing development;
(iii) The existence of zoning or other regulations toadequately protect the proposed housing development against detrimental futureuses which could cause undue depreciation in the value of the development;
(iv) The existence of federal and statewide housing, landuse, and pollution abatement plans and programs;
(v) A detailed plan of security proposed for the safety ofthe inhabitants of any development hereinafter constructed within the city ofProvidence;
(6) In considering any application for a loan to financehealth care facilities, the corporation shall give consideration to:
(i) The availability of health care facilities presentlylocated or to locate in the area;
(ii) The ability of the sponsor to meet the health needs ofthe inhabitants of the area and to operate, manage, and maintain the proposedhealth care facilities;
(iii) The regulations of the state to standards ofconstruction and design and equipment of health care facilities of the typeproposed to be financed;
(7) Each mortgage loan shall contain the terms and provisionsand be in a form approved by the corporation. The corporation may require thehousing sponsor or health care sponsor receiving a loan or its contractor toexecute any other assurances and guarantees that the corporation may deemnecessary, including without limitation, payment and performance bonds, andletters of credit;
(8) Each loan shall be subject to an agreement between thecorporation and the housing sponsor which will subject the sponsor and itsprincipals or stockholders, if any, to limitations established by thecorporation as to rentals and other charges, builders' and developers' profitsand fees, and the disposition of its property and franchise to the extent morerestrictive limitations are not provided by the law under which the borrower isincorporated or organized or by this chapter;
(9) As a condition of the loan, the corporation shall havethe power at all times during the construction or rehabilitation of a housingdevelopment or housing project by a housing sponsor or of health carefacilities by a health care sponsor and the operation thereof:
(i) To enter upon and inspect any housing development orhousing project or health care facility, including all parts thereof, for thepurpose of investigating the physical and financial condition thereof, and itsconstruction, rehabilitation, operation, management, and maintenance, and toexamine all books and records of the housing sponsor or health care sponsorwith respect to capitalization, income and other related matters and to makeany charges that may be required to cover the cost of those inspections andexaminations;
(ii) To order any alterations, changes or repairs that may benecessary to protect the security of its investment in a housing development,housing project, or health care facility or the health, safety, and welfare ofthe occupants or users thereof and to insure that the housing development orhealth care facility is, or has been, constructed or rehabilitated inconformity with all applicable federal, state, and local building codes;
(iii) To order any managing agent, housing development orhealth care facility manager, or owner of a housing development or health carefacility, or sponsors of these, to do those acts that may be necessary tocomply with the provisions of all applicable laws, ordinances, or buildingcodes or any rule or regulation of the corporation or the terms of anyagreement concerning the development or facilities or to refrain from doing anyacts in violation thereof, and in this regard the corporation shall be a properparty to file a complaint and to prosecute any violations of law, ordinances,or building codes as set forth herein;
(iv) A housing sponsor may not make distributions of incomeor earnings from a housing development or housing project financed by thecorporation in any one year in excess of six percent (6%) (or a higher or lowerpercent as shall be prescribed by the rules and regulations of the corporation)of the housing sponsor's equity in the development, nor shall any of theprincipals or stockholders of the housing sponsor at any time earn, accept orreceive a return greater than six percent (6%) per annum (or a higher or lowerpercent as shall be prescribed by the rules and regulations of the corporation)of his or her investment in any housing development financed by thecorporation. The sponsor's equity in a housing development shall consist of thedifference between the corporation assisted mortgage loan and the total housingdevelopment cost. With respect to every housing development assisted by theprovisions of this chapter the corporation shall, pursuant to regulationsadopted by it, establish the sponsor's equity at the time of the making of thefinal mortgage advance and, for the purposes of this subdivision, that figureshall remain constant during the life of the corporation's mortgage on thedevelopment;
Notwithstanding the above, the corporation shall allowexisting project owners to withdraw a rate of return on redefined equityprovided the corporation finds that the project is "stable and financiallysecure". Properties meeting this definition would have healthy finances andreserves and be in good condition, as determined by the corporation; provided,however, no project owner of a housing development financed by the corporationmay apply for redefinition until fifteen (15) years from the date of financing.In addition, the following requirements must occur:
(A) There is no deferred maintenance as determined by thecorporation.
(B) There are no major repairs or replacements (threethousand dollars ($3,000) or more) anticipated or required for the coming yearwhich would reduce the reserve accounts below required levels.
(C) All operating expenses have been paid within thirty (30)days of their due date.
(D) Operating account balance equals one month's totaloperating expenses.
(E) The development has sustained ninety-five percent (95%)or greater economic occupancy for the prior twenty-four (24) consecutive monthsand has a current waiting list equal to at least one and one-half (1 1/2) timesthe annual turnover for the two (2) preceding years.
(F) The mortgage has not been delinquent for the precedingtwenty-four (24) months.
(G) Reasonable reserve account balances.
(H) The owner agrees to limit future rent increases to theamount needed to pay all annual operating expenses including return on equityand maintaining reserves at five thousand dollars ($5,000) per unit or twentypercent (20%) of the outstanding mortgage.
(I) The owner agrees to maintain the housing affordable topersons of low and moderate income for (a) a minimum of twenty (20) years fromthe date that owner could prepay a mortgage securing a development, as thatterm is defined in § 34-45-4, or could elect not to renew a Section 8assistance contract under § 34-45-5 or (b) twenty (20) years from thematurity date of a note evidencing indebtedness to the corporation which issecured by a housing development.
Not-for-profit sponsors shall be eligible to receiveunlimited annual cash flow, subject to the above criteria, up to the cumulativeamount of their initial equity investment. Subsequent annual cash flow may bedistributed provided the distributions are restricted to low and moderateincome housing related expenditures.
Equity would be redefined by either capitalizing the annualcash flow using corporation-approved appraisal practices or by the differencebetween the fair market value of the housing project using corporation approvedappraisal practices less the unpaid principal balance of any outstandingmortgage loans, whichever is greater.
Equity would be subject to recalculation every five (5)years, or more frequently at the corporation's discretion.
The corporation shall receive a one-time fee equal toone-half percent (1/2%) of the outstanding mortgage for redefining equity. Thiswill be an eligible operating expense. The fee may be waived by the corporationin whole or in part.
(v) Whenever any housing sponsor accumulates an earnedsurplus, in addition to the reserves the corporation may require formaintenance, operation, and replacement, in excess of ten percent (10%) of theinitial annual rent roll for the housing development, rents in the housingdevelopment shall be reduced to the extent necessary to lower the earnedsurplus accumulation to that ten percent (10%) figure in the following fiscalyear. Every five (5) years the housing sponsor may seek the approval of thecorporation for increases in those reserves. To the extent warranted thecorporation may grant that approval if in its judgment there have beenincreased price levels or unusual maintenance and repayment requirements;
(vi) The corporation may provide by rules and regulations forthe terms and conditions of mortgage loans to housing sponsors of single familyresidential housing units or health care facilities and the supervision ofhousing sponsors or health care sponsors.
§ 42-55-9 Terms and conditions of loans.– Mortgage and other loans made by the corporation to housing sponsors ofmulti-family residential housing units or health care facilities shall besubject to the following terms and conditions:
(1) No application for a loan for a housing development orhealth care facility shall be processed unless the applicant is a housingsponsor or health care facility sponsor as defined in § 42-55-3;
(2) The ratio of loan to total housing development or healthcare facility cost and the amortization period of loans made under this chapterwhich are insured by any agency or instrumentality of the United Statesgovernment shall be governed by the mortgage insurance commitment for eachhousing development or health care facility; but in no event shall theamortization period exceed fifty (50) years; in the case of a mortgage loan notinsured by an agency or instrumentality of the United States government, theamount of the loan to: (1) nonprofit housing sponsors shall not exceed onehundred percent (100%) of the total housing development cost as determined bythe corporation; and (2) other housing sponsors and health care sponsors shallnot exceed ninety-five percent (95%) of the total development cost asdetermined by the corporation, and the amortization period of the loan shall bedetermined in accordance with regulations formulated and published by thecorporation, but in no event shall the amortization period exceed fifty (50)years;
(3) A loan made under this chapter may be prepaid to maturityafter a period of years as determined by the rules and regulations of thecorporation, provided the corporation finds that the prepayment of the loanwill not result in a material escalation of rents charged to the persons andfamilies of low and moderate income occupying the housing development orcharges to the persons using the health care facilities;
(4) The corporation shall have authority to set from time totime the interest rates at which it shall make loans and commitments. Theinterest rates shall be established by the corporation at the lowest levelconsistent with the corporation's cost of operation and its responsibilities tothe holders of its bonds, bond anticipation notes and other obligations. Inaddition to these interest charges, the corporation may make and collect thosefees and charges, including, but not limited to, reimbursement of thecorporation's financing costs, service charges, insurance premiums, andmortgage insurance premiums, that the corporation determines to be reasonable;
(5) In considering any application for a loan to finance ahousing development or housing project, the corporation shall determine thatthe housing developments will be well planned and well designed; and shall alsogive consideration to:
(i) The comparative need for housing for persons and familiesof low and moderate income in the area to be served by the proposed development;
(ii) The ability of the applicant sponsor to construct,operate, manage, and maintain the proposed housing development;
(iii) The existence of zoning or other regulations toadequately protect the proposed housing development against detrimental futureuses which could cause undue depreciation in the value of the development;
(iv) The existence of federal and statewide housing, landuse, and pollution abatement plans and programs;
(v) A detailed plan of security proposed for the safety ofthe inhabitants of any development hereinafter constructed within the city ofProvidence;
(6) In considering any application for a loan to financehealth care facilities, the corporation shall give consideration to:
(i) The availability of health care facilities presentlylocated or to locate in the area;
(ii) The ability of the sponsor to meet the health needs ofthe inhabitants of the area and to operate, manage, and maintain the proposedhealth care facilities;
(iii) The regulations of the state to standards ofconstruction and design and equipment of health care facilities of the typeproposed to be financed;
(7) Each mortgage loan shall contain the terms and provisionsand be in a form approved by the corporation. The corporation may require thehousing sponsor or health care sponsor receiving a loan or its contractor toexecute any other assurances and guarantees that the corporation may deemnecessary, including without limitation, payment and performance bonds, andletters of credit;
(8) Each loan shall be subject to an agreement between thecorporation and the housing sponsor which will subject the sponsor and itsprincipals or stockholders, if any, to limitations established by thecorporation as to rentals and other charges, builders' and developers' profitsand fees, and the disposition of its property and franchise to the extent morerestrictive limitations are not provided by the law under which the borrower isincorporated or organized or by this chapter;
(9) As a condition of the loan, the corporation shall havethe power at all times during the construction or rehabilitation of a housingdevelopment or housing project by a housing sponsor or of health carefacilities by a health care sponsor and the operation thereof:
(i) To enter upon and inspect any housing development orhousing project or health care facility, including all parts thereof, for thepurpose of investigating the physical and financial condition thereof, and itsconstruction, rehabilitation, operation, management, and maintenance, and toexamine all books and records of the housing sponsor or health care sponsorwith respect to capitalization, income and other related matters and to makeany charges that may be required to cover the cost of those inspections andexaminations;
(ii) To order any alterations, changes or repairs that may benecessary to protect the security of its investment in a housing development,housing project, or health care facility or the health, safety, and welfare ofthe occupants or users thereof and to insure that the housing development orhealth care facility is, or has been, constructed or rehabilitated inconformity with all applicable federal, state, and local building codes;
(iii) To order any managing agent, housing development orhealth care facility manager, or owner of a housing development or health carefacility, or sponsors of these, to do those acts that may be necessary tocomply with the provisions of all applicable laws, ordinances, or buildingcodes or any rule or regulation of the corporation or the terms of anyagreement concerning the development or facilities or to refrain from doing anyacts in violation thereof, and in this regard the corporation shall be a properparty to file a complaint and to prosecute any violations of law, ordinances,or building codes as set forth herein;
(iv) A housing sponsor may not make distributions of incomeor earnings from a housing development or housing project financed by thecorporation in any one year in excess of six percent (6%) (or a higher or lowerpercent as shall be prescribed by the rules and regulations of the corporation)of the housing sponsor's equity in the development, nor shall any of theprincipals or stockholders of the housing sponsor at any time earn, accept orreceive a return greater than six percent (6%) per annum (or a higher or lowerpercent as shall be prescribed by the rules and regulations of the corporation)of his or her investment in any housing development financed by thecorporation. The sponsor's equity in a housing development shall consist of thedifference between the corporation assisted mortgage loan and the total housingdevelopment cost. With respect to every housing development assisted by theprovisions of this chapter the corporation shall, pursuant to regulationsadopted by it, establish the sponsor's equity at the time of the making of thefinal mortgage advance and, for the purposes of this subdivision, that figureshall remain constant during the life of the corporation's mortgage on thedevelopment;
Notwithstanding the above, the corporation shall allowexisting project owners to withdraw a rate of return on redefined equityprovided the corporation finds that the project is "stable and financiallysecure". Properties meeting this definition would have healthy finances andreserves and be in good condition, as determined by the corporation; provided,however, no project owner of a housing development financed by the corporationmay apply for redefinition until fifteen (15) years from the date of financing.In addition, the following requirements must occur:
(A) There is no deferred maintenance as determined by thecorporation.
(B) There are no major repairs or replacements (threethousand dollars ($3,000) or more) anticipated or required for the coming yearwhich would reduce the reserve accounts below required levels.
(C) All operating expenses have been paid within thirty (30)days of their due date.
(D) Operating account balance equals one month's totaloperating expenses.
(E) The development has sustained ninety-five percent (95%)or greater economic occupancy for the prior twenty-four (24) consecutive monthsand has a current waiting list equal to at least one and one-half (1 1/2) timesthe annual turnover for the two (2) preceding years.
(F) The mortgage has not been delinquent for the precedingtwenty-four (24) months.
(G) Reasonable reserve account balances.
(H) The owner agrees to limit future rent increases to theamount needed to pay all annual operating expenses including return on equityand maintaining reserves at five thousand dollars ($5,000) per unit or twentypercent (20%) of the outstanding mortgage.
(I) The owner agrees to maintain the housing affordable topersons of low and moderate income for (a) a minimum of twenty (20) years fromthe date that owner could prepay a mortgage securing a development, as thatterm is defined in § 34-45-4, or could elect not to renew a Section 8assistance contract under § 34-45-5 or (b) twenty (20) years from thematurity date of a note evidencing indebtedness to the corporation which issecured by a housing development.
Not-for-profit sponsors shall be eligible to receiveunlimited annual cash flow, subject to the above criteria, up to the cumulativeamount of their initial equity investment. Subsequent annual cash flow may bedistributed provided the distributions are restricted to low and moderateincome housing related expenditures.
Equity would be redefined by either capitalizing the annualcash flow using corporation-approved appraisal practices or by the differencebetween the fair market value of the housing project using corporation approvedappraisal practices less the unpaid principal balance of any outstandingmortgage loans, whichever is greater.
Equity would be subject to recalculation every five (5)years, or more frequently at the corporation's discretion.
The corporation shall receive a one-time fee equal toone-half percent (1/2%) of the outstanding mortgage for redefining equity. Thiswill be an eligible operating expense. The fee may be waived by the corporationin whole or in part.
(v) Whenever any housing sponsor accumulates an earnedsurplus, in addition to the reserves the corporation may require formaintenance, operation, and replacement, in excess of ten percent (10%) of theinitial annual rent roll for the housing development, rents in the housingdevelopment shall be reduced to the extent necessary to lower the earnedsurplus accumulation to that ten percent (10%) figure in the following fiscalyear. Every five (5) years the housing sponsor may seek the approval of thecorporation for increases in those reserves. To the extent warranted thecorporation may grant that approval if in its judgment there have beenincreased price levels or unusual maintenance and repayment requirements;
(vi) The corporation may provide by rules and regulations forthe terms and conditions of mortgage loans to housing sponsors of single familyresidential housing units or health care facilities and the supervision ofhousing sponsors or health care sponsors.
