South Carolina Code of Regulations › Chapter 19 - STATE BUDGET AND CONTROL BOARD › Article 1 - OFFICE OF EXECUTIVE DIRECTOR › Section 19-104.01 - Securing Approval; Documents Required

Current through Register Vol. 48, No. 6, June 28, 2024
To secure approval of the issue and sale of bonds or notes
				(hereafter bonds) by a city, county or regional housing authority (hereafter
				local housing authority) to finance multifamily housing projects, as provided
				in Act 369 of 1986, the following must be submitted to the Budget and Control
				Board (Board):
A. An executed original
			 and a copy of the petition of the local housing authority governing body
			 describing a proposed project, requesting Board approval of the issue and sale
			 of a specified amount of bonds to finance the project and, including, if
			 appropriate, a request for an allocation of a portion of the State Ceiling to
			 the bonds and the project;
B. Two
			 executed copies of the resolution or ordinance of the local housing authority
			 governing body authorizing the petition to the Board;
C. Two sets of the documents providing for
			 the issuance and securing of the bonds or drafts thereof in substantially final
			 form;
D. Two sets of audited
			 financial statements of the entity obligated to pay the bonds covering at least
			 the three prior fiscal years except that, in any case where the bonds are to be
			 sold privately, a representation from the person or institution purchasing the
			 bonds that satisfactory financial information has been provided by that entity
			 and that the bonds are being purchased for investment rather than resale
			 purposes may be submitted in lieu of audited financial statements;
E. The original of a resolution approving the
			 bond issue proposed by the local housing authority governing body for adoption
			 by the Board and copies of that resolution to be certified by the Board
			 Secretary;
F. Two copies of
			 statements disclosing:
(1) the results of any
			 market study or other analysis of the multifamily housing needs in the proposed
			 project area which was the basis upon which a determination was made by the
			 local housing authority to issue the bonds to finance the project together with
			 a complete description of the project;
(2) the principal amount of the bonds
			 proposed to be issued;
(3) the
			 purpose or purposes for which the proceeds of such bonds are to be
			 expended;
(4) the maturity schedule
			 of the bonds proposed to be issued;
(5) the rate of interest expected on the
			 bonds proposed to be issued;
(6) a
			 schedule showing (a) the annual debt service requirements of all outstanding
			 bonds of the local housing authority proposing the bonds; (b) the annual debt
			 service requirements of the proposed bonds; and (c) the aggregate annual debt
			 service requirements of the outstanding and proposed bonds;
(7) a schedule showing the amount and source
			 of revenues available annually for the payment of the annual debt service
			 requirements established by the schedule required by (6), above;
(8) the method to be employed in selling the
			 proposed bonds;
(9) evidence of
			 compliance with applicable provisions of State and federal law prior to the
			 issuance of the bonds;
(10)
			 evidence that the project or projects financed by the bonds will be managed and
			 operated in compliance with applicable provisions of State and federal law
			 including, in those instances determined by the Board, subjecting the project
			 to restrictive covenants to ensure such compliance;
(11) evidence that each bond financing
			 proposed is structured to protect the interests of prospective bondholders and
			 the local housing authority by meeting the following requirements, as a
			 minimum:
(a) With respect to bonds to be
			 offered at public sale:
(1) the issue must be
			 rated no less than "investment grade" by one of the national rating agencies;
			 and
(2) in addition, one or more of
			 the following conditions must be met:
(aa)
			 There must be in effect for the bonds to be issued a federal program which
			 provides assistance in the payment of the principal and interest when due to
			 bondholders.
(bb) The lendable
			 proceeds of the bond sale must be used to acquire either federally-insured
			 mortgages or mortgages insured by a private mortgage insurance company
			 authorized to do business in South Carolina.
(cc) The payment of principal and interest
			 when due to bond purchasers and bondholders must be insured by the maintenance
			 of adequate reserves or by insurance or by a guaranty by a responsible
			 entity.
(b)
			 With respect to bonds sold or placed as "Mortgage bonds sold as a unit" or in
			 "Transactions with banks, institutional buyers, etc. . . .", as provided in
			 Code Section
			 35-1-320,
			 the documents pursuant to which bonds are issued must permit the local housing
			 authority to avoid any default by it by completing an assignment of or
			 foregoing its rights with respect to any collateral or security pledged to
			 secure the bonds.
(c) With respect
			 to any bonds offered for sale upon the representation that the interest paid
			 thereon by the issuer is exempt from federal income taxation, the documents
			 pursuant to which bonds are issued must require the mandatory redemption of the
			 bonds at par value if the interest paid thereon is determined to be subject to
			 federal income taxation.
(12) evidence that every official statement,
			 preliminary official statement, and any other document used in the sale of any
			 bond issued by a local housing authority includes the following disclaimer:
No representation is made by or on behalf of the State of South
				Carolina or the State Budget and Control Board as to the creditworthiness of
				the securities hereby offered. Neither the State of South Carolina nor any of
				its agencies is obligated for the payment of any principal or interest due or
				to become due on the securities hereby offered for sale.
(13) the local housing authority's agreement
			 that the management agent for any project approved by the Budget and Control
			 Board must also be approved by the Board.