D.C. Mun. Regs. tit. 10, r. 10-B4008

Current through Register Vol. 71, No. 44, November 1, 2024

Rule 10-B4008 - DIRECT LOAN ASSISTANCE AND AVAILABILITY OF PUBLIC PROPERTY

4008.1

Pursuant to § 4001.2, DHCD shall provide loans to eligible non-profit applicants in amounts up to one million dollars ($1,000,000) at below market rates to assist in development of housing under the Nehemiah Program. Loans provided by DHCD shall be subject to the requirements of §§ 4008.2 through 4008.9.

4008.2

Loan requests from applicants shall be made in amounts and on terms consistent with the policies expressed in §§ 4001.5, 4003.8 and 4004.2. Consistent with those policies, DHCD shall only consider loan requests which are supplemental to private market loan assistance or are accompanied by adequate documentation, to the satisfaction of DHCD, that sufficient private financing is not available to allow the project to proceed, or that the terms of private financing would jeopardize the feasibility of the project in achieving an affordable range of home prices.

4008.3

Loon requests from the applicant may be for the following (subject any specific activities to other eligibility requirements which may apply depending on DHCD's source of funds for the loan):

(a) The cost of property acquisition, including settlement and recordation fees and other related expenses;

(b) The cost of rehabilitation of buildings and grounds to correct existing and incipient code violations or to render a property appropriate for its proposed use;

(c) The cost of site preparation and site improvements related to the development;

(d) The cost of new construction;

(e) Construction of a model home;

(f) Payment of interest, in past or in whole, on private market loans for construction or acquisition of property;

(g) Creation of a loan guarantee fund or other form of credit enhancement as required to obtain private market loans for construction or acquisition of property; and

(h) Other uses as may be determined appropriate and eligible, in the sole determination of DHCD.

4008.4

Predevelopment costs for consultant or development team expenses shall not be eligible for loans from DHCD. However, credit for such expenses shall be allowed consistent with § 4003.6.

4008.5

Loans made under this section shall be for a short term period generally not to exceed eighteen (18) months, or the time required to accomplish construction, sale and permanent financing take-out of the short term loan.

4008.6

Specific loan terms and conditions shall be established by DHCD in coordination with the underwriting standards of DHCD and of any private market financing involved in the project, and may include, but shall not be limited to, the following:

(a) The principal amount of a loan may bear interest at a rate ranging from one percent (1%) annually up to one percent (1%) below the prevailing private or market annual interest rate for equivalent loans;

(b) Repayment of principal may be deferred for the term of the loan or until permanent financing is obtained;

(c) Interest on the loan may be paid in installments or may accrue and become due when the loan matures;

(d) Construction staging and related pre-sale requirements may be conditions of the loan; and

(e) DHCD shall have discretion to establish timing requirements for release of loan funds which relate to the use of other project development funds obtained from the resources of the applicant and the private sector.

4008.7

Favorable consideration for loan amounts and terms shall be given to applicants proposing high percentages of home affordable to low and moderate income persons.

4008.8

DHCD loans to applicants, when added to any loan secured by the property which is senior or recorded prior to that of DHCD, shall not exceed ninety-five percent (95%) of the post development value of the property as determined by an independent fee appraisal satisfactory to DHCD, or by a DHCD staff appraisal where DHCD, in its sole discretion, elects this option.

4008.9

Each loan shall be secured by a deed of trust on the property, and may be subordinated consistent with this chapter to other existing or new debt also secured by the property.

4008.10

Property of the D.C. Redevelopment Land Agency or other agencies of the District which is uncommitted for other purposes shall be evaluated by DHCD to determine its potential for use under the Nehemiah Program.

4008.11

DHCD shall seek the approval and transfer of property appropriate for the Nehemiah Program from other agencies of the District for disposition by DHCD to non-profit applicants under the Nehemiah Program.

4008.12

When DHCD announces an application period for Nehemiah program assistance, the announcement shall include notice of the availability of property owned by the District and in the jurisdiction of DHCD for Nehemiah use. In these instances, it shall be DHCD's policy to enter into an Exclusive Right Agreement (ERA) to develop the publicly owned property with applicants receiving preliminary approval for Nehemiah program distance pursuant to § 4005.

4008.13

The ERA shall provide for a specific schedule of actions required of the applicant leading up to actual disposition of the property, and DHCD may revoke the ERA if the terms or schedules contained in the agreement are not met.

4008.14

The transfer and disposition of any publicly owned land to a non-profit applicant may be at any value determined by DHCD as appropriate and consistent with the objectives of the approved Nehemiah project, including but not limited to consideration of the following:

(a) The value shall be set at a level, not to exceed fair market value for the use intended, which is consistent with the price of homes required by the approved Nehemiah project and related income requirements for Nehemiah home purchasers; and

(b) Any reimbursement to the District which is required by force of law by the District agency from which the land was obtained.

4008.15

The value of public land (for sale or lease) may be reduced to as low as zero for non-profit applicants demonstrating, to the satisfaction of DHCD, that their pricing of Nehemiah homes to ensure affordability by low and moderate income households is dependent on a reduction of land value.

D.C. Mun. Regs. tit. 10, r. 10-B4008

Final Rulemaking published at 37 DCR 8615, 8626 (December 29, 1989)