Virginia Administrative Code › Title 13 - HOUSING › Agency 10 - VIRGINIA HOUSING DEVELOPMENT AUTHORITY › Chapter 130 - RULES AND REGULATIONS FOR MULTI-FAMILY HOUSING DEVELOPMENTS FOR MENTALLY DISABLED PERSONS › Section 13VAC10-130-130 - Transfers of ownership

Current through Register Vol. 40, No. 24, July 15, 2024
A. It
				is the authority's policy to evaluate requests for transfers of ownership on a
				case-by-case basis. The primary goal of the authority is the continued
				existence of low and moderate income rental housing stock maintained in a
				financially sound manner and in safe and sanitary condition. Any changes which
				would, in the opinion of the authority, detrimentally affect this goal will not
				be approved.
The provisions set forth in this section shall apply only to
				  transfers of ownership to be made subject to the authority's deed of
				  trust.
For the purposes hereof, the terms "transfer of ownership"
				  and "transfer" shall include any direct or indirect transfer of a partnership
				  or other ownership interest (including, without limitation, the withdrawal or
				  substitution of any general partner) or any sale, conveyance or other direct or
				  indirect transfer of the M/D development or any interest therein; provided,
				  however, that if the owner is not then in default under the deed of trust or
				  regulatory agreement, such terms shall not include (i) any sale, transfer,
				  assignment or substitution of limited partnership interests prior to final
				  closing of the M/D loan or, (ii) any sale, transfer, assignment or substitution
				  of limited partnership interests which in any 12-month period constitute in the
				  aggregate 50% or less of the partnership interests in the owner. The term
				  "proposed ownership entity," as used herein, shall mean (i) in the case of a
				  transfer of a partnership interest, the owner of the M/D development as
				  proposed to be restructured by such transfer, and (ii) in the case of a
				  transfer of the M/D development, the entity which proposes to acquire the M/D
				  development.
B. The
				proposed ownership entity requesting approval of a transfer of ownership must
				initially submit a written request to the authority. This request should
				contain, to the extent applicable or requested by the authority, (i) a detailed
				description of the terms of the transfer, (ii) all documentation to be executed
				in connection with the transfer, (iii) information regarding the legal,
				business and financial status and experience of the proposed ownership entity
				and of the principals therein, including current financial statements (which
				shall be audited in the case of a business entity), (iv) an analysis of the
				current physical and financial condition of the M/D development, including a
				current audited financial report for the M/D development, (v) information
				regarding the experience and ability of any proposed management agent, and (vi)
				any other information and documents relating to the transfer. The request will
				be reviewed and evaluated in accordance with the following criteria:
1. The proposed ownership entity and the
				principals therein must have the experience, ability and financial capacity
				necessary to own, operate and manage the M/D development in a manner
				satisfactory to the authority.
2.
				The M/D development's physical and financial condition shall be acceptable to
				the authority as of the date of transfer or such later date as the authority
				may approve. In order to assure compliance with this criteria, the authority
				may require any of the following:
a. The
				performance of any necessary repairs and the correction of any deferred or
				anticipated maintenance work;
b.
				The addition of any improvements to the M/D development which, in the judgment
				of the authority, will be necessary or desirable for the successful marketing
				of the M/D development, will reduce the costs of operating or maintaining the
				M/D development, will benefit the residents or otherwise improve the
				liveability of the M/D development, or will improve the financial strength and
				stability of the M/D development;
c. The establishment of escrows to assure the
				completion of any required repairs, maintenance work, or
				improvements;
d. The establishment
				of such new reserves and/or such additional funding of existing reserves as may
				be deemed necessary by the authority to ensure or preserve the financial
				strength and stability or the proper operation and maintenance of the M/D
				development; and
e. The funding of
				debt service payments, accounts payable and reserve requirements such that the
				foregoing are current at the time of any transfer of ownership.
3. The management agent, if any,
				to be selected by the proposed ownership entity to manage the M/D development
				on its behalf must have the experience and ability necessary to manage the M/D
				development in a manner satisfactory to the authority. The management agent
				must satisfy the qualifications established by the authority for approval
				thereof.