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NO. 189.  AN ACT RELATING TO VERMONT HOUSING FINANCE AGENCY.

(S.127)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  10 V.S.A. § 601 (7), (8), (9), (10), (14), and (19) are amended to read:

(7)  “Housing sponsor” or “sponsor” means a person who is organized on a nonprofit or limited profit basis or agrees to appropriate conditions as described in subdivision 624(b)(5) of this title and who is approved by the agency as qualified either to own, construct, acquire, rehabilitate, operate, manage, or maintain residential housing;

(8)  “Mortgage” means a mortgage deed, deed of trust, or other instrument which shall constitute a lien on real property in fee simple or on a leasehold under a lease having a remaining term, at the time such mortgage is acquired, which does not expire for at least that number of years beyond prior to the maturity date of the obligation secured by the mortgage as is equal to the number of years remaining until the maturity date of the obligation or on a cooperative interest or on an interest in a mobile home.  “Mortgage” shall also include any mortgage or obligation guaranteed by the Vermont home mortgage guarantee board or its successor;

(9)  “Mortgage lender” means any bank or trust company, federal national mortgage association approved mortgage banker, mortgage company approved by any government-sponsored entity, savings bank, savings and loan association, industrial bank, credit union, national banking association, federal savings and loan association, federal credit union, or other financial institution or governmental agency or instrumentality which customarily provides or otherwise aids in the financing of mortgage loans on residential housing located in the state;

(10)  “Mortgage loan” means and includes:

(A)  an interest-bearing or noninterest bearing obligation secured by either a mortgage or note or bond other security instrument constituting a lien on land and improvements in the state;

(B)  an interest-bearing or noninterest bearing obligation secured by a pledge of a cooperative interest and a conditional assignment of the proprietary lease incidental thereto;

(C)  an interest-bearing or noninterest bearing obligation secured by the owner-occupant’s interest in a mobile home, provided that:

(i)  the mobile home is to be sited in a manner intended for continuous residential occupancy by the owner on land owned by the owner of the mobile home and shall be secured by a mortgage that shall constitute a first lien on the mobile home and the real property to which it is affixed; or

(ii)  the mobile home is to be sited in a manner intended for continuous residential occupancy on land leased by the owner of the mobile home and shall be secured by a note or otherwise and collateral assignment of a lease of real property that shall constitute a first lien upon the mobile home.  Notwithstanding any other provision of this chapter, the lease of the land upon which the mobile home is sited shall be for a term of at least one year, shall be renewable for periods of at least one year, and shall comply with the requirements of 10 V.S.A. § 6236.  This definition shall not preclude the requirement of security in addition to that specified in this subsection for any mortgage loan.

(14)  “Residential housing” means residential housing units designed primarily to provide principal dwelling accommodations whether on a permanent or temporary basis for persons or families, which may include the land and improvements thereon and such nonhousing facilities or services considered necessary or convenient or part of a community development plan by the agency in connection with the residential housing, including commercial enterprises and government functions within the same building.  “Residential housing” includes, but is not limited to, single or multi-family dwellings, congregate homes, residential care homes as defined in 33 V.S.A. § 7102, nursing homes, transitional housing, emergency shelters for the homeless or displaced, mobile homes, single room occupancy dwellings, and group homes for the mentally ill or developmentally disabled.  “Residential housing” also means cooperative interests, and mobile home parks as defined in section 6201 of this title;

(19)  “Equity loan” means a mortgage loan to a housing sponsor secured by a mortgage on property constituting residential housing in an amount that, when added to the amount of any prior mortgages on the property, does not exceed ninety 90 percent of the value of the property plus the value of additional collateral deemed appropriate and as determined by the agency, provided the agency has made a finding that the effect of such loan will be to maintain or increase the supply of residential housing in the state for persons and families of low and moderate income.

Sec. 2.  10 V.S.A. § 621 is amended to read:

§ 621.  GENERAL POWERS AND DUTIES

The agency shall have all of the powers necessary and convenient to carry out and effectuate the purposes and provisions of this chapter, including without limitation those general powers provided a business corporation by section 1852 of Title 11 and those general powers provided a nonprofit corporation by section 2352 of Title 11 and including, without limiting the generality of the foregoing, the power to:

(1)  Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter, including contracts and instruments which may be made and executed with the state or the United States or any agency or instrumentality of either of them or with private corporations or individuals, including contracts with mortgage lenders or other qualified entities for the servicing of mortgages made or acquired by the agency pursuant to this chapter or for assistance rendered the agency in the location of all eligible mortgagees or to pay the reasonable value of services rendered to the agency pursuant to these contracts;

* * *

(4)  Provide, contract, or arrange for consolidated processing of any aspect of the financing of residential housing under this chapter in order to avoid duplication thereof by either undertaking the processing in whole or in part on behalf of any department, agency, or instrumentality of the United States or of this state, or, in the alternative, to delegate or contract for the processing in whole or in part to any department, agency, or instrumentality of the United States or of this state, or to a private contractor acceptable to the agency;

(5)  Provide advice, technical information, assistance in obtaining federal and state aid, and make such grants, loans, or advances as will assist the planning, construction, rehabilitation, and operation of residential housing primarily for persons of low and moderate income, including but not limited to assistance in community development and organization, advisory services, the formation of cooperative housing corporations and to encourage community organizations to assist in developing same;

* * *

(18)  Make grants and loans or advances secured by a mortgage to housing sponsors for predevelopment activities related to the development of residential housing;

(19)  Make loans or advances secured by a mortgage to housing sponsors for the acquisition, construction, rehabilitation, operation, or maintenance of residential housing;

(19)(20)  Make loans to members of a housing cooperative corporation to finance their cooperative interests in such housing cooperative corporation and make mortgage loans and loans to persons or families to finance mobile homes;

(20)(21)  Use funds received from real estate trust and escrow accounts established under 26 V.S.A. § 2214(c), IORTA funds, for down payment and closing cost assistance with priority given to persons and families at or below 90% 90 percent of median income and to persons and families purchasing perpetually affordable housing.

Sec. 3.  10 V.S.A. § 622(3) and (7) are amended to read:

(3)  To make commitments to purchase, and to purchase, service, and sell federally insured mortgage loans or mortgages guaranteed by the Vermont home mortgage credit agency or its successors and to make loans directly upon the security of any such mortgage, provided the underlying mortgage loans shall have been made and shall be continued to be used solely to finance or refinance the construction, rehabilitation, purchase, or leasing of residential housing in this state;

(7)  To purchase, make, or otherwise participate in the making, to enter into commitments, for the purchase, making, or participation in the making, of eligible loans for rehabilitation to persons and families of low and moderate income, and to owners of existing residential housing for occupancy by those persons and families, for the rehabilitation of existing residential housing owned by them.  The loans may be insured or uninsured and shall be made with such security as the agency considers advisable.  They may be made in amounts sufficient to refinance existing indebtedness secured by the property, if the refinancing is determined by the agency to be necessary to permit the owner to meet his housing costs without expending an unreasonable portion of his income on it.  A loan for rehabilitation shall not be made unless the agency determines that the loan is to be used primarily to make the housing more desirable to live in, to increase the market value of the housing, to comply with building, housing maintenance, fire, health, or similar codes and standards applicable to housing, to accomplish energy conservation related improvements or to insure independent living for persons who are handicapped or elderly.  Rehabilitation loans shall be made only when the agency determines that financing is not otherwise available, in whole or in part, from private lenders upon equivalent terms and conditions.

Sec. 4.  10 V.S.A. § 623(h) is amended to read:

(h)  The agency may require that the loans to mortgage lenders shall be additionally secured as to payment of both principal and interest by a pledge of and lien upon collateral security in such amounts as the agency shall by resolution determine to be necessary to assure the payment of the loans and the interest thereon as they become due.  The collateral security shall consist of:

* * *

(2)  obligations, satisfactory to the agency, issued by any of the following federal agencies:  Bank for Cooperatives, Federal Intermediate Credit Bank, Federal Home Loan Bank System, Federal Land Banks, the Government National Mortgage Association; or issued by Federal National Mortgage Association; or Federal Home Loan Mortgage Corporation;

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Sec. 5.  10 V.S.A. § 624(a)(1) is amended to read:

(1)  Make, undertake commitments to make, purchase, undertake commitments to purchase, and participate with mortgage lenders in the making of mortgage loans, including federally insured mortgage loans and loans guaranteed by the Vermont home mortgage guarantee board and to make temporary grants, loans, and advances in anticipation of mortgage loans to housing sponsors to finance the acquisition, construction or rehabilitation of residential housing; provided, that this subdivision shall not be construed to include equity loans;

Sec. 6.  10 V.S.A. § 624(b)(2) and (5) are amended to read:

(2)  The mortgage loan may be in an amount not to exceed the value of the residential housing as determined by the agency.  The value determined may include the value of additional collateral as deemed appropriate by the agency;

(5)  Each mortgage loan to a housing sponsor for residential housing shall be subject to an agreement between the agency and the housing sponsor which will subject the housing sponsor and its principals or stockholders, if any, to limitations established by the agency as to sale prices, rental, and other charges, builder’s and developer’s profits and fees, and the disposition of its property and franchise to the extent more restrictive limitations are not provided by the law under which the housing sponsor is incorporated or organized or by this chapter; and

Sec. 7.  10 V.S.A. § 625(1) is amended to read:

(1)  The residential housing is primarily for occupancy by persons and families of low and moderate income, or qualifies for financing with proceeds of federally tax-exempt obligations, or at least 20 percent of the units are for occupancy by persons and families of low and moderate income;

Sec. 7a.  EFFECTIVE DATE AND SUNSET

In Sec. 7, the words “, or at least 20 percent of the units are for occupancy by persons and families of low and moderate income” shall take effect upon passage, and shall be repealed July 1, 2008.  The Vermont Housing Finance Agency shall report by January 15, 2008, to the House Committees on Commerce, on General, Housing and Military Affairs and on Ways and Means, and to the Senate Committees on Finance, and on Economic Development, Housing and General Affairs on the projects financed by VHFA using the lower requirement of at least 20 percent of qualified housing units.

Sec. 8.  10 V.S.A. § 625(3) is amended to read:

(3)  The agency determines that there exists, or without the proposed residential housing there will exist, a shortage of decent, safe, and sanitary housing at rentals or prices which persons and families of low or moderate income are able to afford within the general housing market area or there is a shortage of temporary transitional or emergency housing to be served by the proposed residential housing and that private enterprise and investment are unable, without assistance, to provide an adequate supply of the residential housing and sufficient mortgage financing for residential housing for occupancy by the persons or families; and            

Sec. 9.  10 V.S.A. § 631(a) and (b) are amended to read:

(a)(1)  The agency may issue its negotiable notes and bonds in such principal amount as the agency determines to be necessary to provide sufficient funds for achieving any of its corporate purposes, including the payment of interest on notes and bonds of the agency, establishment of reserves to secure the notes and bonds including the reserve funds created under section 632 of this title, and all other expenditures of the agency incident to and necessary or convenient to carry out its corporate purposes and powers.  However, the bonds or notes of the agency outstanding at any one time shall not exceed $900,000,000.00.

(2)  The agency shall have the power, from time to time, to issue notes to renew notes and bonds to pay notes, including the interest thereon and, whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds partly to refund bonds then outstanding and partly for any of its corporate purposes.

(3)  Except as may otherwise be expressly provided by resolution of the agency, every issue of its notes and bonds shall be general obligations of the agency payable out of any revenues or moneys of the agency, subject only to any agreements with the holders of particular notes or bonds pledging any particular revenues.

(4)  Federal aggregate limits. Pursuant to section 103A(g)(6) of the federal Internal Revenue Code, the authority to issue qualified mortgage bonds within the limits of the state ceiling for any calendar year is hereby allocated seventy-five percent to the Vermont housing finance agency.

(b)  The notes and bonds shall be authorized by resolution or resolutions of the agency, shall bear such date or dates and shall mature at such time or times as the resolution or resolutions may provide, except that no bond shall mature more than 42 years from the date of its issue.  The bonds may be issued as serial bonds payable in annual installments or as term bonds or as a combination thereof.  The notes and bonds shall bear interest at such rate or rates, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places within or without the state, and be subject to such terms of redemption as the resolution or resolutions may provide, provided, however, that at the time of the authorization of the issuance of such bonds or notes the agency determines in such resolution:

(1)  that mortgage loans made by or on behalf of the agency, directly or indirectly, with the proceeds of such bonds or notes in accordance with section 621 or 622 of this title can be issued bearing a rate or rates of interest which will be less than the prevailing rate of interest on comparable mortgage loans available in the state without the assistance of the agency at the time the bonds or notes are sold; and

(2)  that the agency will derive receipts, revenues or other income from mortgages purchased or loans made through mortgage lenders with the proceeds of such bonds or notes sufficient to provide, together with all other available receipts, revenues, and income of the agency, for the payment of such bonds or notes and the payment of all costs and expenses incurred by the agency with respect to the program or purpose for which such bonds or notes are issued.  The notes and bonds of the agency may be sold by the agency, at public or private sale, at such price or prices as the agency shall determine.

Sec. 10.  10 V.S.A. § 632(d) is amended to read:

(d)  In order to assure the maintenance of the debt service reserve requirement in each debt service reserve fund established by the agency, there may be appropriated annually and paid to the agency for deposit in each such fund, such sum as shall be certified by the chairman chair of the agency, to the governor or the governor-elect, the president of the senate, and the speaker of the house, as is necessary to restore each such debt service reserve fund to an amount equal to the debt service reserve requirement for such fund.  The chairman chair shall annually, on or about February 1, make and deliver to the governor or the governor-elect, the president of the senate, and the speaker of the house, his or her certificate stating the sum required to restore each such debt service reserve fund to the amount aforesaid, and the sum so certified may be appropriated, and if appropriated, shall be paid to the agency during the then current state fiscal year.  The principal amount of bonds or notes outstanding at any one time and secured in whole or in part by a debt service reserve fund to which state funds may be appropriated pursuant to this subsection shall not exceed $125,000,000.00, provided that the foregoing shall not impair the obligation of any contract or contracts entered into by the agency in contravention of the Constitution of the United States of America.

Sec.  11.  VERMONT AFFORDABLE HOUSING DATA 

(a)  In order to provide a basis for legislative assessment of Vermont’s affordable housing programs, their goals and effectiveness, the Joint Fiscal Office and Legislative Council shall catalogue and summarize information related to affordable housing incentives in current Vermont law, and shall to the extent possible:

(1)  identify the population served by the property transfer tax exemption for buyers with Vermont Housing Finance Agency mortgages and whether they are a subset of similarly-situated home buyers in Vermont, and estimate the cost of expanding the exemption beginning in fiscal year 2008 to the first $140,000.00 of home value for all similarly-situated buyers regardless of mortgagee;        

(2)  identify affordable housing incentives in Vermont law;

(3)  identify state and quasi-public entities in Vermont which administer, allocate or award affordable housing incentives and any discernible overlap in functions of these entities, and identify any amount of state funding for these entities in the most recent state budget;

(4)  determine the definition of “affordable housing” under the incentives identified, including the type and price range of the housing supported and the income level of eligible recipients for the programs;

(5)  estimate the annual cost of each incentive, in total, and per unit of affordable housing supported;

(6)  determine to what extent, if any, affordable housing incentives provide direct support for construction or development of property other than affordable housing;

(7)  identify private-sector sources of support available for affordable housing and other methods of state assistance for affordable housing which could be offered.

(b)  The Joint Fiscal Office and Legislative Council shall report their findings by January 15, 2007, to the House Committees on Ways and Means; General, Housing and Military Affairs; and Commerce; and to the Senate Committees on Finance; and Economic Development, Housing and General Affairs.

Sec. 12.  Subchapter 13 of Chapter 117 of Title 24 is added to read:

Subchapter 13.  Annual Housing Reports

§ 4498.  HOUSING BUDGET AND INVESTMENT REPORTS

The commissioner of housing and community affairs shall:

(1)  Create a Vermont housing budget designed to assure efficient expenditure of state funds appropriated for housing development, to encourage and enhance cooperation among housing organizations, to eliminate overlap and redundancy in housing development efforts, and to ensure appropriate geographic distribution of housing funds.  The Vermont housing budget shall include any state funds of $50,000.00 or more awarded or appropriated for housing.  The Vermont housing budget and appropriation recommendations shall be submitted to the General Assembly annually on or before January 15, and shall include the amounts and purposes of funds appropriated for or awarded to the following:

(A)  The Vermont Housing and Conservation Trust Fund.

(B)  The Agency of Human Services.

(C)  The Agency of Commerce and Community Development.

(D)  Any other entity that fits the funding criteria.

(2)  Annually, develop a Vermont housing investment plan in consultation with the Vermont housing council.  The housing investment plan shall be consistent with the Vermont consolidated plan for housing, in order to coordinate the investment of state, federal and other resources, such as state appropriations, tax credits, rental assistance and mortgage revenue bonds, to increase the availability and improve the quality of Vermont’s housing stock.  The housing investment plan shall be submitted to the General Assembly, annually on January 15, and shall:

(A)  target investments at single-family housing, mobile homes, multifamily housing and housing for homeless persons and people with special needs;

(B)  recommend approaches that maximize the use of available state and federal resources;

(C)  identify areas of the state that face the greatest housing shortages; and

(D)  recommend strategies to improve coordination among state, local and regional offices in order to remedy identified housing shortages.

Approved:  May 25, 2006



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us