S.C. Code Regs. § § 19-104.01

Current through Register Vol. 48, No. 11, November 22, 2024

Section 19-104.01 - Securing Approval; Documents Required

To secure approval of the issue and sale of bonds or notes (hereafter bonds) by a city, county or regional housing authority (hereafter local housing authority) to finance multifamily housing projects, as provided in Act 369 of 1986, the following must be submitted to the Budget and Control Board (Board):

A. An executed original and a copy of the petition of the local housing authority governing body describing a proposed project, requesting Board approval of the issue and sale of a specified amount of bonds to finance the project and, including, if appropriate, a request for an allocation of a portion of the State Ceiling to the bonds and the project;

B. Two executed copies of the resolution or ordinance of the local housing authority governing body authorizing the petition to the Board;

C. Two sets of the documents providing for the issuance and securing of the bonds or drafts thereof in substantially final form;

D. Two sets of audited financial statements of the entity obligated to pay the bonds covering at least the three prior fiscal years except that, in any case where the bonds are to be sold privately, a representation from the person or institution purchasing the bonds that satisfactory financial information has been provided by that entity and that the bonds are being purchased for investment rather than resale purposes may be submitted in lieu of audited financial statements;

E. The original of a resolution approving the bond issue proposed by the local housing authority governing body for adoption by the Board and copies of that resolution to be certified by the Board Secretary;

F. Two copies of statements disclosing:

(1) the results of any market study or other analysis of the multifamily housing needs in the proposed project area which was the basis upon which a determination was made by the local housing authority to issue the bonds to finance the project together with a complete description of the project;

(2) the principal amount of the bonds proposed to be issued;

(3) the purpose or purposes for which the proceeds of such bonds are to be expended;

(4) the maturity schedule of the bonds proposed to be issued;

(5) the rate of interest expected on the bonds proposed to be issued;

(6) a schedule showing (a) the annual debt service requirements of all outstanding bonds of the local housing authority proposing the bonds; (b) the annual debt service requirements of the proposed bonds; and (c) the aggregate annual debt service requirements of the outstanding and proposed bonds;

(7) a schedule showing the amount and source of revenues available annually for the payment of the annual debt service requirements established by the schedule required by (6), above;

(8) the method to be employed in selling the proposed bonds;

(9) evidence of compliance with applicable provisions of State and federal law prior to the issuance of the bonds;

(10) evidence that the project or projects financed by the bonds will be managed and operated in compliance with applicable provisions of State and federal law including, in those instances determined by the Board, subjecting the project to restrictive covenants to ensure such compliance;

(11) evidence that each bond financing proposed is structured to protect the interests of prospective bondholders and the local housing authority by meeting the following requirements, as a minimum:

(a) With respect to bonds to be offered at public sale:

(1) the issue must be rated no less than "investment grade" by one of the national rating agencies; and

(2) in addition, one or more of the following conditions must be met:

(aa) There must be in effect for the bonds to be issued a federal program which provides assistance in the payment of the principal and interest when due to bondholders.

(bb) The lendable proceeds of the bond sale must be used to acquire either federally-insured mortgages or mortgages insured by a private mortgage insurance company authorized to do business in South Carolina.

(cc) The payment of principal and interest when due to bond purchasers and bondholders must be insured by the maintenance of adequate reserves or by insurance or by a guaranty by a responsible entity.

(b) With respect to bonds sold or placed as "Mortgage bonds sold as a unit" or in "Transactions with banks, institutional buyers, etc. . . .", as provided in Code Section 35-1-320, the documents pursuant to which bonds are issued must permit the local housing authority to avoid any default by it by completing an assignment of or foregoing its rights with respect to any collateral or security pledged to secure the bonds.

(c) With respect to any bonds offered for sale upon the representation that the interest paid thereon by the issuer is exempt from federal income taxation, the documents pursuant to which bonds are issued must require the mandatory redemption of the bonds at par value if the interest paid thereon is determined to be subject to federal income taxation.

(12) evidence that every official statement, preliminary official statement, and any other document used in the sale of any bond issued by a local housing authority includes the following disclaimer:

No representation is made by or on behalf of the State of South Carolina or the State Budget and Control Board as to the creditworthiness of the securities hereby offered. Neither the State of South Carolina nor any of its agencies is obligated for the payment of any principal or interest due or to become due on the securities hereby offered for sale.

(13) the local housing authority's agreement that the management agent for any project approved by the Budget and Control Board must also be approved by the Board.

S.C. Code Regs. § 19-104.01