ACT NO. 189
Vermont Housing Finance Agency; affordable housing
This act makes the following amendments to the authority and functions of the Vermont Housing Finance Agency.
Sec. 1. Amends the following definitions in 10 VSA § 601:
(7) "housing sponsor," to clarify that a housing sponsor may be a
for-profit entity so long as the entity agrees to limitations of rents, profits and fees approved by the VHFA.
(8) "mortgage," to provide that it may be on leasehold property so long as the leasehold does not expire prior to the maturity date of the mortgage.
(9) "mortgage lender," to include any mortgage company approved by any government sponsored agency - not solely the federal national mortgage association (FNMA).
(10) "mortgage loan," to include zero-interest loans.
(14) "residential housing," to allow the inclusion of some commercial enterprises and government functions if that is part of a community development plan.
(19) "equity loan," to allow the inclusion of the value of additional collateral in the loan-to-value.
Sec. 2. Amends 10 V.S.A. § 621(1), (4), (5), (18), and (19) to:
(1) allow the VHFA to contract with "other qualified entities" to service mortgages made by the agency, not just defined "mortgage lenders."
(4) allow VHFA to contract with private contractors acceptable to the agency to process any aspect of financing under this chapter.
(5) insert a missing verb: "make".
(18) allow VHFA to make unsecured loans for predevelopment activities.
(19) clarify that VHFA mortgage loans are for acquisition, construction, rehabilitation, operation, or maintenance of residential housing.
Sec. 3. Amends 10 V.S.A. § 622(3) and (7) relating to:
(3) eliminate mortgage insurance requirement and reference to Vermont Home Mortgage Guarantee Board which was dissolved several years ago.
(7) Remove the anti-competition limitation ( i.e., no private lenders available) on VHFA rehabilitation loans.
Sec. 4. Amends 10 V.S.A. § 623(h)(2) to add the Federal Home Loan Mortgage Corporation (Freddie Mac) to the list of those federal agencies whose obligations may be collateral security when required by VHFA.
Sec. 5. Amends 10 V.S.A. § 624(a)(1) to allow VHFA to make loans, grants and advances to housing sponsors - whether or not in "anticipation" of mortgage loans.
Sec. 6. Amends 10 V.S.A. § 624(b)(2) and (5) relating to rules for terms and conditions in order to:
(2) allow the amount of a VHFA mortgage loan to exceed the amount of the value of the property by the amount of additional collateral as determined by the agency.
(5) allow the VHFA to limit sales prices as well rentals and other charges charged by housing sponsors to include single family developments.
Sec. 7. Amends 10 V.S.A. § 625(1), qualification for financing residential housing, to require that the type of residential housing must be eligible for federally tax-exempt financing or at least 20% of the units are for "occupancy by persons and families of low and moderate income." However, Sec. 7a repeals this requirement on July 1, 2008 following a report from VHFA to legislative committees on January 1, 2008 on projects financed under this requirement.
Sec. 8. Amends 10 V.S.A. § 625(3), qualification for financing residential housing, to remove the anti-competition requirement that private enterprise and investment are unavailable.
Sec. 9. Amends 10 V.S.A. § 631:
(a)(4) to remove the state ceiling limitation on mortgage bonds pursuant to the federal Internal Revenue Code which is no longer required.
(b) to remove the requirement of annual installment payments on serial bonds.
(b)(1) to clarify that the interest rate limitations refer to interest rates prevailing at the time the agency's bonds or notes are sold.
Sec. 10. corrects gender-specific language in 10 V.S.A. § 632(d).
Sec. 11. Requires the joint fiscal office and the legislative council to catalogue and summarize information relating to affordable housing incentives in current Vermont law and report by January 15, 2007 to committees of jurisdiction of the legislature.
Sec. 12. Requires the commissioner of housing and community affairs to create a Vermont housing budget to assure efficient expenditure of state funds appropriated for housing development and to report annually to the General Assembly on or before January 15.
Effective Date: July 1, 2006
The Vermont General Assembly
115 State Street