Virginia Administrative Code › Title 13 - HOUSING › Agency 10 - VIRGINIA HOUSING DEVELOPMENT AUTHORITY › Chapter 20 - RULES AND REGULATIONS FOR MULTI-FAMILY HOUSING DEVELOPMENTS › Section 13VAC10-20-30 - Terms of mortgage loans

Current through Register Vol. 40, No. 24, July 15, 2024
The authority may make or finance mortgage loans secured by
				  a lien on real property or, subject to certain limitations in the Act, a
				  leasehold estate in order to finance development intended for occupancy by
				  persons and families of low and moderate income. The term of the mortgage loan
				  shall be equal to (i) if the mortgage loan is to finance the construction of
				  the proposed development, the period determined by the executive director to be
				  necessary to:
(1) complete
				construction of the development,
(2) achieve sufficient occupancy to support
				the development and
(3) consummate
				the final closing of the mortgage loan; plus (ii) if the mortgage loan is to
				finance the ownership and operation of the proposed development, an
				amortization period set forth in the mortgage loan commitment but not to exceed
				45 years. The executive director may require that such amortization period not
				extend beyond the termination date of any federal insurance, assistance, or
				subsidy.
Mortgage loans may be made to:
(i) for-profit housing sponsors in original
				principal amounts not to exceed the lesser of the maximum principal amount
				specified in the mortgage loan commitment or such percentage of the housing
				development costs of the development as is established in such commitment, but
				in no event to exceed 95%; and
(ii)
				nonprofit housing sponsors in original principal amounts not to exceed the
				lesser of the minimum principal amount specified in the mortgage loan
				commitment or such percentage of the housing development costs of the
				development as is established in such commitment, but in no event to exceed
				100%.
The maximum principal amount and percentage of housing
				  development costs specified or established in the mortgage loan commitment
				  shall be determined by the authority in such manner and based upon such factors
				  as it deems relevant to the security of the mortgage loan and fulfillment of
				  its public purpose. Such factors may include the fair market value of the
				  proposed development as completed, the economic feasibility and marketability
				  of the proposed development at the rents necessary to pay the debt service on
				  the mortgage loan and the operating expenses of the proposed development, and
				  the income levels of the persons and families who would be able to afford to
				  pay such rents.
The categories of cost which shall be allowable by the
				  authority in the acquisition and construction of a development financed under
				  this chapter shall include the following:
(i) construction costs, including equipment,
				labor and materials furnished by the mortgagor, contractor or subcontractors,
				general requirements for job supervision, an allowance for office overhead of
				the contractor, building permit, bonds and letters of credit to assure
				completion, water, sewer, and other utility fees, and a contractor's profit or
				a profit and risk allowance in lieu thereof;
(ii) architectural and engineering fees;
(iii) interest on the mortgage
				loan;
(iv) real estate taxes,
				hazard insurance premiums, and mortgage insurance premiums;
(v) title and recording expenses;
(vi) surveys;
(vii) test borings;
(viii) the authority's processing fees and
				financing fees;
(ix) legal and
				accounting expenses;
(x) in the
				case of a nonprofit housing sponsor, organization and sponsor expenses,
				consultant fees, and a reserve to make the development operational;
(xi) off-site costs;
(xii) the cost or fair market value of the
				land and any improvements thereon to be used in the development;
(xiii) tenant relocation costs;
(xiv) operating reserves to be funded from
				proceeds of the mortgage loan; and
(xv) such other categories of costs which the
				executive director shall determine to be reasonable and necessary for the
				acquisition and construction of the development. The extent to which costs in
				any of such categories shall be allowable in respect of a specific development
				and includable in the housing development costs thereof as determined by the
				authority at final closing shall be governed by the terms of the authority's
				cost certification guide for mortgagors, contractors and certified public
				accountants (the "cost certification guide"). The executive director is
				authorized to prepare and from time to time revise the cost certification
				guide. Copies of such guide shall be available upon request. Upon completion of
				the acquisition and construction of the development, the total of the housing
				development costs shall be certified to the authority in accordance with this
				chapter and the cost certification guide, subject to the review and
				determination of the authority. In lieu of such certification of housing
				development costs, the executive director may require such other assurances of
				housing development costs as he shall deem necessary to enable the authority to
				determine with reasonable accuracy the actual amount of such housing
				development costs.
The interest rate on the mortgage loan shall be established
				  at the initial closing and may be thereafter adjusted in accordance with the
				  authority's rules and regulations and terms of the deed of trust note. The
				  authority shall charge a processing fee and a financing fee in such amounts as
				  the executive director determines to be reasonable. Such fees shall be payable
				  at such times as required by the executive director.