P.R. Laws tit. 17, § 892
For the purposes of this chapter, the following terms shall have the meaning expressed hereinbelow:
(a) Program Administrator.— Means the Secretary of Housing of Puerto Rico, who shall have the responsibility of implementing the operating phase of this chapter.
(b) Agency.— Means any department, administration, bureau, office, instrumentality or public corporation of the Government of the Commonwealth of Puerto Rico, except the Land Authority.
(c) Owner.— Means any natural or juridical person who is the absolute owner of a housing project to be sold or rented to low or moderate income families or of a housing project to be sold to middle class families.
(d) Middle-class family or person.— Means any family or person who does not own a home and whose annual income exceeds the income established for low or moderate-income families by the affordable housing programs of the Government of the Commonwealth of Puerto Rico or the Government of the United States of America, up to sixty percent (60%) of the maximum amount insurable by the Federal Housing Administration (FHA) for the area.
(e) Low or moderate-income family.— Means any person who does not own a dwelling and whose annual income does not exceed that established for low or moderate-income families by the affordable housing programs of the Government of the Commonwealth of Puerto Rico or the Government of the United States of America, up to forty percent (40%) of the maximum amount insurable by FHA for the area.
(f) Multifamily project.— Means any building or group of buildings that has no less than ten (10) housing units, independent from each other, but owned by the same owner.
(g) Middle class housing.— Means any housing unit whose total selling price exceeds the maximum price of affordable housing units, as it varies from time to time, but that does not exceed eighty percent (80%) of the maximum insurable by the Federal Housing Administration (FHA) for the area.
(h) Affordable housing.— Means, in the event of a sale, those units whose maximum price does not exceed the sum of the Adjusted Maximum Loan Qualification by Household (AMLQH) and the following incremental elements or factors that may apply, as the case may be:
(1) Multi-Family Housing Units shall be added five percent (5%) of the Adjusted Maximum Loan Qualification by Household (AMLQH);
(2) Housing units located on urban plots other than urban centers shall be added fifteen percent (15%) of the MLQH;
(3) Housing units located in urban centers shall be added thirty percent (30%) of the MLQH; and
(4) Housing units located in island-municipalities or higher population density municipalities shall be added ten percent (10%) of the MLQH.
The factors indicated above would be applied as follows:
(1) Single-family housing units located on rustic plots in lower population density municipalities-up to 85% of the Maximum Loan Qualification by Household.
(2) Multi-family housing units located on rustic plots in lower population density municipalities-up to 90% of the Maximum Loan Qualification by Household.
(3) Single-family housing units located on urban plots other than urban centers in lower population density municipalities-up to 100% of the Maximum Loan Qualification by Household.
(4) Multi-family housing units located on urban plots other than urban centers in lower population density municipalities-up to 105% of the Maximum Loan Qualification by Household.
(5) Single-family housing units located in urban centers in lower population density municipalities-up to 115% of the Maximum Loan Qualification by Household.
(6) Multi-family housing units located in urban centers in lower population density municipalities-up to 120% of the Maximum Loan Qualification by Household.
(7) Single-family housing units located on rustic plots in island- municipalities or higher population density municipalities-up to 95% of the Maximum Loan Qualification by Household.
(8) Multi-family housing units located on rustic plots in island- municipalities or higher population density municipalities-up to 100% of the Maximum Loan Qualification by Household.
(9) Single-family housing units located on urban plots other than urban centers in island-municipalities or higher population density municipalities-up to 110% of the Maximum Loan Qualification by Household.
(10) Multi-family housing units located on urban plots other than urban centers in island-municipalities or higher population density municipalities-up to 115% of the Maximum Loan Qualification by Household.
(11) Single-family housing units located in urban centers in island-municipalities or higher population density municipalities-up to 125% of the Maximum Loan Qualification by Household.
(12) Multi-family housing units located in urban centers in island-municipalities or higher population density municipalities-up to 130% of the Maximum Loan Qualification by Household.
After making the pertinent computation, the resulting number should be rounded up to the next thousand. The same operation shall be made when computing the maximum amount of the administrative adjustment.
Administrative adjustment mechanism.— The Department of Housing may grant regular dispensations of up to fifteen percent (15%) of the additional MLQH to establish a maximum sales price on any specific affordable housing project, and up to twenty-five percent (25%) of the additional MLQH to establish a maximum sales price on a specific middle-class affordable housing project, whenever it is proven that its development implies substantial indispensable extraordinary costs such as: the installation of cisterns, water heaters, solar energy plants, and conditioning under Green Building standards and/or intelligent housing; unforeseen extraordinary changes in ground settlement or the special application of impact fees or requirements for works outside city limits by any government entity, including municipalities and public corporations; and whenever the housing project is subject to the horizontal property regime under the parameters of §§ 1291 et seq. of Title 31, better known as the “Condominiums Act”. If the housing project is developed as a reconstruction of a building for which substantial demolition, removal, and reconditioning is required, the Secretary may grant a special adjustment or dispensation of up to ten percent (10%) of the additional MLQH to establish a maximum sales price for both affordable and middle-class housing projects. This special dispensation is applicable in excess of the regular dispensation. The Secretary shall adopt a uniform procedure to request, consider, and reasonably adjudicate these dispensations proportional to the exceptional cost margin, and in strict and faithful compliance with the public policy set forth in this chapter.
Update, determination, and publication of prices.— Likewise, the maximum sales price of the basic unit per municipality shall be updated and determined every three (3) years considering its location; the behavior of economic indicators, such as the consumer price index, the producer price index, the price of cement, and the maximum mortgage amount insurable by the Federal Housing Administration (FHA); and the generally accepted rules and standards of the construction industry. However, the maximum sales price of basic units shall not be increased in a proportion greater than the net change accrued in the average personal income, as certified by the Planning Board in its Economic Reports to the Governor. The Department of Housing shall publish the update of the affordable housing unit price cap corresponding to each category and municipality in two newspapers of general circulation within the first three (3) months of each calendar year.
Municipality classification.— To classify municipalities as lower or higher population density municipalities, the average population density in Puerto Rico shall be used. Those municipalities whose population density exceeds Puerto Rico’s average density shall be classified as higher population density municipalities, whereas municipalities whose population density is below Puerto Rico’s population density shall be classified as lower population density municipalities. The municipalities of Vieques and Culebra shall also be classified as island-municipalities. This classification related to population density shall be reviewed by the Planning Board or by the Department of Housing for the following one hundred eighty (180) days after the official publication of the decennial census.
For purposes of this definition and this chapter, the classification of land plots made by the following government entities shall be considered:
(1) Rustic plot.— Planning Board and/or municipalities (when the Land Use Plan is in effect).
(2) Urban plot.— Planning Board and/or municipalities (when the Land Use Plan is in effect).
(3) Urban Center.— Urbanism Directorate of the State Department of Transportation and Public Works
Urban expansion areas in municipalities whose Land Use Plan has not yet been approved by the Planning Board shall be deemed to be urban plots for the purposes of this chapter, considering that those classified as urban centers by the Urbanism Directorate of the Commonwealth’s Department of Transportation and Public Works are located within areas classified as urban plots and that these areas shall be zoned or classified as intermediate residential or high density residential zones. For purposes of this chapter, under no circumstance shall it be construed that this chapter allows the use of rustic nonresidential plots, especially those reserved for agricultural use or environmental conservation. In the event that there is no classification for a specific plot pursuant to the provisions of this subsection, the Department of Housing shall establish an exclusive classification to determine the price cap that shall apply to the same.
The formula to compute the Adjusted Maximum Loan Qualification by Household (AMLQH) shall be the following:
(1) The value that, as of the date of beginning the buying process, is provided for the Federal Minimum Wage shall be multiplied by 40, which is the number of hours worked at a full-time job, then multiplied by 52, which is the number of weeks a year, to obtain the yearly income per person (FMW x 40 x 52 = YIP).
(2) The yearly income per person shall be multiplied by 2, which is the number of adults who would be hypothetically providing family sustenance, and this number shall then be divided by 12, which is the number of months in one year, in order to obtain the monthly household income (YIP x 2 / 12 = MHI).
(3) The monthly household income shall be multiplied by 29 percent, which is the highest percent allowed in the banking market to be set aside from income for mortgage payment, in order to obtain the maximum paying ability on a mortgage loan (MHI x 29% = MPAML).
(4) The maximum paying ability on a mortgage loan shall be divided by the factor of the principal plus interest of a mortgage loan at seven percent (7%) for 30 years, in order to obtain the Maximum Loan qualification by household (MPAML /.006653 = MLQH).
(5) The Maximum Loan qualification by household shall be adjusted by subtracting fifteen percent (15%) in seeking to foresee an approximate factor of excessive indebtedness of mortgage debtors in Puerto Rico to protect rural areas, to reduce urban sprawl, and to ensure affordable prices, in order to obtain the adjusted Maximum Loan qualification by household (MLQH — 15% MLQH = AMLQH).
This formula shall be reviewed by the Planning Board every time the Federal Minimum Wage changes, as of its effective date; the remaining factors may only vary as set forth by law. Any project submitted to the Planning Board before the effective date of this act shall have the option to remain under the application of the price cap that previously covered such project.
For these purposes, the specifications and prices of the basic affordable housing unit shall be established by regulations, pursuant to the provisions of this chapter. In the case of multi-family housing projects for rent, “affordable housing” shall mean the simple structure, in rows, pedestrian-accessible and multileveled, destined to housing for middle, moderate, and low-income families, when such projects are fostered or developed by the private sector, the Department of Housing, or its operational entities. Projects developed by the Department of Housing or by private enterprises for middle, moderate, and low-income families shall also be included when such families benefit, whether directly or indirectly, from financial assistance programs of the state or the federal governments.
(hh) It is hereby provided that single-family and multi-family units may have from one (1) up to four (4) bedrooms, insofar as the corresponding maximum sales prices under subsection (h) of this section are proportionally adjusted. This provision entails the following adjustment in the maximum sales price corresponding to such units:
(1) In the case of one (1)-bedroom units, the adjusted maximum sales price shall be equal to eighty percent (80%) of the corresponding maximum sales price under subsection (h) of this section 2; or
(2) in the case of two (2)-bedroom units, the adjusted maximum sales price shall be equal to ninety percent (90%) of the corresponding maximum sales price under subsection (h) of this section 2; or
(3) in the case of three (3) bedroom units, the adjusted maximum sales price shall be equal to the corresponding maximum sales price under subsection (h) of this section 2, or
(4) in the case of four (4)-bedroom units, the adjusted maximum sales price shall be equal to one hundred fifteen percent (115%) of the corresponding maximum sales price under subsection (h) of this section 2.
(i) Housing unit.— Means every structure fit for family cohabitation which meets the construction requirements for adequate housing, whose construction or rehabilitation must have all the endorsements, approvals and permits required by the applicable laws and regulations.
History —June 26, 1987, No. 47, p. 159, § 2; Dec. 29, 1989, No. 2, p. 643, § 1; May 11, 1992, No. 9, § 1; Dec. 10, 1993, No. 121, § 1; Aug. 28, 1997, No. 105, § 1; Dec. 31, 1999, No. 369, § 1; Aug. 17, 2001, No. 118, § 1; May 11, 2004, No. 114, § 1; Dec. 14, 2007, No. 198, § 1; July 23, 2009, No. 42, § 1; June 24, 2010, No. 66, § 1; June 5, 2011, No. 84, § 1; Aug. 10, 2011, No. 171, § 1, retroactive to July 1, 2011.