Code of Massachusetts Regulations › 760 CMR - HOUSING AND LIVABLE COMMUNITIES, EXECUTIVE OFFICE OF › Title 760 CMR 60.00 - Community-based housing fund program › Section 60.04 - Type of Loans, Loan Terms, Loan Conditions

Current through Register 1525, July 5, 2024
(1)
Loan Types
. Eligible Projects may receive CBH assistance 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 CBH
			 Guidelines.
(2)
Loan
			 Terms
. All loans under the CBH program shall be made upon the following
			 terms and such other terms as are included in the CBH 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 CBH Loan shall be set by DHCD
			 in accordance with the CBH Guidelines. A CBH Loan shall not exceed 50% of the Total
			 Development Cost of the Eligible Project (or the portion of the Eligible Project
			 eligible under the CBH Program);
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 CBH Guidelines, to which the loan
			 would also be subject.
(c)
Loan Period
. The original term of a CBH 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
			 DHCD, in consultation with EOHHS, shall have determined that there still exists a
			 need for such housing, the Project continues to meet the CBH Program requirements
			 and the requirements for an extension under the CBH Legislation,
			 760 CMR 60.00, the CBH Guidelines,
			 and the CBH Loan documents for such loan, including the continuing applicability of
			 the Land Use Restriction for the duration of the loan term, as so
			 extended.
(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 CBH Loans are structured as DPLs, payments of
			 principal and any applicable interest will be deferred for the loan period, unless
			 either of the following occurs:
1. The Project
			 and/or the borrower of the CBH Loan is in default of the terms of the CBH Loan;
			 or
2. Except with respect to loans
			 granted under the CBH 3 or CBH 4 Legislation, the Project supported by the CBH Loan
			 has Gross Cash Receipts in any fiscal year that exceed its Gross Cash Expenditures
			 by 105% or more, in which event within 45 days after the end of each Project's
			 fiscal year, the borrower of the CBH Loan 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 60.04
			 shall be applied to the outstanding principal balance.
(f)
Land Use Restriction
.
			 The Developer of the Eligible Project shall execute and record at the applicable
			 Registry of Deeds (and/or Registry District of the Land Court) a Land Use
			 Restriction. If the Developer is not the owner of the real property on which the
			 Eligible Project is located, the owner shall also execute (or, in the discretion of
			 DHCD or the Financial Intermediary, acknowledge and accept) the Land Use
			 Restriction. The Land Use Restriction shall only be released:
1. upon:
a.
			 payment in full of all amounts due under the CBH 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
b. the written
			 determination by the Secretary of EOHHS that there is no longer a need to maintain
			 the Project's use as Community-based Housing for PCEs; or
2. upon:
a.
			 foreclosure of the 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 CBH mortgage loan at the time of loan closing, or to which the CBH
			 mortgage loan has been duly subordinated; and
b. the written determination 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; provided, however that if the Secretary of EOHHS
			 fails to notify the foreclosing mortgagee of the identity of such purchaser or
			 manager by the later of 30 days after EOHHS has received notice of such foreclosure
			 action, or 60 days prior to such foreclosure sale by the foreclosing mortgagee, the
			 Land Use Restriction shall automatically be released if, within six months after the
			 receipt by the Secretary of EOHHS of the foreclosure notice, the foreclosing
			 mortgagee causes to be recorded in the applicable Registry of Deeds (and/or Registry
			 District of the Land Court) a sworn affidavit by the foreclosing mortgagee
			 certifying as to the Secretary's failure to meet such deadline, and the foreclosure
			 deed to the property on which the Project is located.
(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 CBH
			 Loan may be refinanced during the term of the Loan only subject to the prior written
			 approval of DHCD and/or its Financial Intermediary.