Code of Massachusetts Regulations › 760 CMR - HOUSING AND LIVABLE COMMUNITIES, EXECUTIVE OFFICE OF › Title 760 CMR 23.00 - Housing Innovations Funds › Section 23.04 - Types of Loans, Loan Terms, Loan Conditions, Other Financial Assistance

Current through Register 1525, July 5, 2024
(1)
Loan Types
: Eligible
			 Projects may receive HIF loans in three areas: acquisition loans,
			 construction/rehabilitation loans, and permanent loans. All loans will be structured
			 as Deferred Payment Loans (DPL). Developers shall complete the application process
			 in accordance with the appropriate HIF Program Guidelines.
(2)
Loan Terms
: All loans
			 under the HIF program shall be made upon the following terms and such other terms as
			 are included in the HIF Program 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 approved by DHCD.
(b)
Loan Amount
.
1. the
			 amount of a HIF I loan shall be set by DHCD according to the HIF Program Guidelines;
			 the amount of a HIF II loan shall not exceed 30% of the Total Development Cost of
			 the Project; the amount of a HIF III loan shall not exceed 50% of the Total
			 Development Cost of the Project; and the amount of a HIF IV, or HIF V loan shall not
			 exceed 50% of the Total Development Cost of the Project (except that a HIF IVor HIF
			 V loan for a shelter for survivors of domestic abuse may not exceed the lesser of
			 80% of the Total Development Cost or $2.5 million); 760 CMR 23.04(2)(b)1. shall not
			 apply to M.G.L. c. 121E loans.
2. DHCD
			 may establish a maximum percentage of the Total Development Cost and dollar limits
			 (per unit or per Eligible Project, or both) in the HIF Program Guidelines, to which
			 the loan would also be subject.
(c)
Loan Period
.
1. the original term of a HIF I loan shall be up
			 to 40 years. At the maturity date, the term may be extended at the discretion of
			 DHCD with the consent of the owner if the Project continues to meet the HIF
			 requirements.
2. the original term of a
			 HIF II, HIF III, HIF IV, HIF V, or M.G.L. c. 121E 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 HIF affordability requirements, as applicable, and the
			 requirements for an extension under the applicable HIF Legislation, the HIF Program
			 Guidelines, and the loan documents for such loan have been
			 satisfied.
(d)
Interest Rate
. interest rates for the loans shall be fixed
			 at rates determined by DHCD, in consultation with the Office of the Treasurer of the
			 Commonwealth.
(e)
Loan
			 Payments
. because all HIF loans are structured as DPLs, principal and
			 interest payments will be deferred for the loan period unless any of the following
			 occurs:
1. Projects funded under HIF I have Gross
			 Cash Receipts for a fiscal year exceeding Gross Cash Expenditures by 115%;
			 or
2. Projects funded under HIF II, HIF
			 III, HIF IV, or HIF V have Gross Cash Receipts for a fiscal year exceeding Gross
			 Cash Expenditures by 105%; or
3.
			 Projects funded under any of the HIF Legislation default on the terms of the loan;
			 760 CMR 23.04(2)(e) shall not apply to M.G.L. c. 121E loans.
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 23.04(2)(e) will be applied first to the payment of
				interest 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, or both, a Land Use
			 Restriction. The Land Use Restriction shall only be released:
1. upon payment in full of all amounts due under
			 the HIF 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;
			 or
2. upon foreclosure of the subject
			 Project by the holder of a
bonafide
first-priority mortgage; or,
			 with DHCD's consent, a
bonafide
mortgage that was senior to the
			 lien of the HIF mortgage loan at the time of loan closing, or to which the HIF
			 mortgage loan has been duly subordinated.
(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 as are permitted by DHCD.
(h)
Refinancing
. A HIF
			 loan may be refinanced during the term of the loan only with the prior written
			 approval of DHCD.