Code of Massachusetts Regulations › 760 CMR - HOUSING AND LIVABLE COMMUNITIES, EXECUTIVE OFFICE OF › Title 760 CMR 19.00 - Facilities Consolidation Fund Program › Section 19.04 - Types of Loans and Grants and Their Terms and Conditions

Current through Register 1525, July 5, 2024
(1)
Loan Types
. Eligible
			 Projects may receive FCF assistance in three areas: acquisition loans,
			 construction/rehabilitation loans, and permanent loans. All FCF loans are structured
			 as Deferred Payment Loans (DPL). Developers shall complete the Application process
			 in accordance with the FCF Guidelines.
(2)
Loan Terms
. All loans
			 under the FCF program shall be made upon the following terms and such other terms as
			 are included in the FCF Guidelines and/or DHCD's loan documents:
(a)
Loan Proceeds
. The
			 proceeds of the loan shall be used solely for the development of the Eligible
			 Project permitted under the applicable FCF Legislation and approved by
			 DHCD.
(b)
Loan
			 Amount
. The amount of any FCF loan granted under the Original FCF
			 Legislation shall not exceed 30% of the Total Development Cost of the Project, and
			 the amount of any FCF loan granted under the FCF 2, FCF 3, FCF 4, FCF 5, or FCF 6
			 Legislation shall not exceed 50% of the Total Development Cost of the Project;
			 provided, however, that DHCD may establish per-unit and per-Project dollar limits in
			 the FCF Guidelines to which the loan would also be subject.
(c)
Loan Period
. The
			 original term of the loan shall be up to 30 years. At the maturity date, the term
			 may be extended for additional periods of up to ten years each at the discretion of
			 DHCD, with the consent of the owner, if the Project continues to meet the FCF
			 requirements and the requirements for an extension under the FCF Legislation, the
			 FCF Guidelines, and the loan documents for such loan have been satisfied (including,
			 with respect to loans granted under the FCF 2, FCF 3, FCF 4, FCF 5, or FCF 6
			 Legislation, DHCD's determination, in consultation with EOHHS, that there still
			 exists a need for the Community-based Housing, or with respect to loans granted
			 under the FCF 5 or FCF 6 Legislation, Supportive Housing, and that there is
			 continued funding available for the provision of services to the Project, and the
			 continuing applicability of the Land Use Restriction for the duration of the loan
			 term, as so extended).
(d)
Interest Rate
. The interest rate shall be set by DHCD in
			 consultation with the Treasurer of the Commonwealth. To the extent required under
			 applicable versions of the FCF Legislation, the interest rate shall be equal to the
			 rate anticipated to be paid by the Commonwealth for bonds issued pursuant to the
			 applicable FCF Legislation.
(e)
Loan Payments
. Because all FCF loans are structured as
			 DPLs, payments of principal and interest (if any) will be deferred for the loan
			 period unless:
1. a Project defaults on the terms
			 of the loan; or
2. except with respect
			 to loans granted under the FCF 5 Legislation or FCF 6 Legislation, a Project has
			 Gross Cash Receipts for a fiscal year exceeding Gross Cash Expenditures by 105% or
			 more, in which event within 45 days after the end of each Project's fiscal year, the
			 owner shall supply DHCD or the Financial Intermediary with the necessary financial
			 statements needed to determine the amount of payment necessary for the period.
All amounts paid pursuant to 760 CMR 19.04(2)(e) shall be applied
				first to the payment of interest and costs, and then to
				principal
(f)
Land Use Restriction
. The Developer/owner of the Project
			 shall execute and record at the appropriate Registry of Deeds or Registry District
			 of the Land Court a Land Use Restriction. The Land Use Restriction shall only be
			 released:
1. upon payment in full of all amounts
			 due under the FCF loan (provided, however, that no prepayment shall be allowed under
			 the loan prior to the maturity date as defined in the promissory note for such loan,
			 as such maturity date may be extended from time to time); and if applicable, the
			 written determination by the Secretary of EOHHS, the Secretary of Administration and
			 Finance, and the Commissioner of DDS or DMH, as appropriate, that there is no longer
			 a need to maintain the Project's use as Community-based Housing or Supportive
			 Housing, as applicable, for Individuals with Mental Illness or Individuals with
			 Intellectual Disabilities; or
2. upon
			 foreclosure of the subject Project by the holder of a
bona fide
first-priority mortgage; or, with DHCD's consent, a
bona fide
mortgage that was senior to the lien of the FCF mortgage loan at the time of loan
			 closing, or to which the FCF mortgage loan has been duly subordinated; and if
			 applicable, a certification by the Secretary of EOHHS as to the inability of EOHHS
			 to locate a purchaser or manager for the Project who can maintain the Eligible Use
			 of the Project. The failure of the Secretary of EOHHS to locate such a purchaser or
			 manager and notify the foreclosing mortgagee of the identity of the buyer or
			 manager, within 60 days prior to such foreclosure sale by the foreclosing mortgagee,
			 shall be deemed to be a certification as described in the preceding sentence. The
			 recording of a sworn affidavit by the foreclosing mortgagee certifying as to the
			 failure to meet this deadline will release the Land Use Restriction, provided that
			 the foreclosure deed is recorded not more than six months after the receipt by the
			 Secretary of EOHHS of the foreclosure notice.
(g)
Mortgage Lien
. The
			 loan shall be secured by a mortgage lien against the Project, which may be junior
			 only to such senior mortgage liens permitted by DHCD.
(h)
Refinancing of FCF
			 Loans
. An FCF loan may be refinanced during the term of the loan only
			 subject to the prior written approval of DHCD.
(i)
Title Transfer
			 Agreement
. A Title Transfer Agreement shall be required for each FCF
			 loan funded under the Original FCF and FCF 2 Legislation, unless one or more of the
			 following shall apply:
1. mortgage amortization
			 expenses for the Project are not paid directly or indirectly through reimbursements
			 or rates paid by the Commonwealth on behalf of Individuals with Mental Illness or
			 Individuals with Intellectual Disabilities who are residential clients of DDS or
			 DMH; or
2. where income for the Project
			 is from an agreement between the owner of the Project and DCAM, DDS or DMH, and the
			 agreement is:
a. for a term not to exceed five
			 years;
b. consistent with law governing
			 contracting for Community-based Housing services; and
c. consistent with the provisions of the FCF
			 Legislation.
A Land Use Restriction shall be duly recorded and/or registered, as
				described in 760 CMR 19.04(2)(f), regardless of whether or not the Property is
				subject to a Title Transfer Agreement, or qualifies for one of the foregoing
				exceptions. When DCAM exercises the Commonwealth's right to take title to a Project
				under a Title Transfer Agreement and the title is transferred, the Undersecretary of
				DHCD may determine that the FCF loan has been satisfied in full, provided that the
				loan is not in default.
(j)
Facilities Consolidation
			 Plan
. All loans must be in accordance with the Facilities Consolidation
			 Plan.
(k)
EOAF
			 Approval
. The Secretary of the Executive Office of Administration and
			 Finance must approve, in advance, all expenditures under the FCF
			 program.