SPECIAL CONDITIONS. Sub-recipient: Contract Number: APPLICABLE TO ALL LONG TERM WORKFORCE HOUSING PROJECTS

Transcription

1 Special Conditions

2 SPECIAL CONDITIONS Sub-recipient: Contract Number: APPLICABLE TO ALL LONG TERM WORKFORCE HOUSING PROJECTS I. CONDITIONS THAT REQUIRE WRITTEN CLEARANCE FROM THE DISASTER RECOVERY DIVISION (DRD), MISSISSIPPI DEVELOPMENT AUTHORITY (MDA). A. Start-Up The Sub-recipient shall submit to DRD written assurances that LTWH activities will begin within six (6) months of contract execution date. Note: Failure to comply with this condition may cause LTWH contract to be withdrawn. B. Policies, Procedures and Guidelines The sub-recipient shall submit for approval its policies, procedures and guidelines prior to the release of funds other than application preparation requests. C. Project Completion Schedule The sub-recipient shall submit for approval a Project Completion Schedule to DRD that will outline events, objectives and project completion. Note: Failure to adhere to the schedule as submitted may cause LTWH contract to be withdrawn. D. Program Income Program Income, as the term is used in the context of HUD regulations, is the income derived as a result of the use of LTWH program funds provided under this contract. DRD shall be informed of any program income generated or anticipated from LTWH projects. Upon the approval of DRD, the sub-recipient may retain any program income derived from the use of LTWH funds. All program income, if any, shall be used to defray the expenses incurred in the implementation of this contract, before requesting disbursement of additional LTWH funds. E. Environmental Clearance Notwithstanding any provision of this agreement, the parties hereto agree and acknowledge that this agreement does not constitute a commitment of funds or site approval, and that such commitment of funds or approval may occur only upon satisfactory completion of environmental review and receipt by recipient of a release of funds from the Mississippi Development Authority under 24 CFR Part 58. The parties further agree that the provision of any funds to the project is conditioned on LTWH Special Conditions, 4.1

3 the recipient s determination to proceed with, modify or cancel the project based on the results of a subsequent environmental review. Any expenses incurred prior to environmental clearance will be ineligible costs under the grant agreement. LTWH Special Conditions, 4.2

4 SPECIAL CONDITIONS Sub-recipient: Contract Number: APPLICABLE TO HOMEBUYER ASSISTANCE PROGRAMS II. OTHER SPECIAL CONDITIONS TO BE MET PRIOR TO DRAWDOWN OF FUNDS A. Leverage Funds Adequate documentation to verify leveraged funds, equal to the amount as stated in the application, must be submitted to and approved by DRD. B. Proforma Revisions If there should be revision in the financial commitments or site as presented in the application, the recipient must notify DRD and submit a revised proforma, which discloses any changes to debt service projections. C. Homebuyer Approval and Verification Prior to the release of LTWH funds for homebuyer assistance, written documentation must be submitted to DRD that ensures each homebuyer is qualified and approved by a lending institution for a home mortgage. This documentation should include: Copy of the executed sales contract Verification of income Uniform Residential Appraisal Report (pages 1 & 2) Mortgage Loan commitment After the mortgage closing, sub-recipient must submit the following documentation verifying the home purchase and homebuyer assistance provided: Copy of Mortgage Deed of Trust Warranty Deed HUD-1 Settlement Statement LTWH Special Conditions, 4.3

5 SPECIAL CONDITIONS Sub-recipient: Contract Number: APPLICABLE TO NEW CONSTRUCTION PROJECTS II. OTHER SPECIAL CONDITIONS TO BE MET PRIOR TO DRAWDOWN OF FUNDS D. Irrevocable Letter of Credits and Personal Endorsement The contractor must have an Irrevocable Letter of Credit of five percent (5%) of the contract amount and the contractor s personal endorsement of the construction loan: or ten percent (10%) of the contract amount and no endorsement. E. Leverage Funds Adequate documentation to verify leveraged funds, equal to the amount as stated in the application, must be submitted to and approved by DRD. F. Performance Revisions If there should be revision in the financial commitments or site as presented in the application, the recipient must notify DRD and submit a revised performance, which discloses any changes to debt service projections. G. Plans and Specifications Prior to the drawdown of construction funds, the sub-recipient must provide: 1. Finalized site and building plans and construction specifications for review and approval by DRD when the project involves the creation of subdivision or a multifamily housing development. 2. House plans and specifications for in-fill construction activities. 3. Work write-ups and drawings to describe all work proposed under New Construction activities. LTWH Special Conditions, 4.4

6 H. Mississippi Department of Health Approval Prior to the release of funds for construction, written documentation must be submitted to DRD that plans and specifications have been approved by the Department of Health, Division of Water Supply. I. Mississippi Department of Environmental Quality Approval Prior to the release of LTWH funds for construction, written documentation must be submitted to DRD that plans and specifications have been approved by the Department of Environmental Quality, Office of Pollution Control. III. CONDITIONS PRIOR TO CONSTRUCTION A. Title Opinions Title opinions evidencing clear ownership of all land submitted for construction activities in the application must be submitted to DRD for written clearance of this special condition before funds may be obligated or expended for construction of any unit, other than legal costs. IV. CONDITIONS FOR HOME SALE A. Prior to Home Sale Prior to selling a home that was built with LTWH funds, written documentation must be submitted to DRD that ensures each homebuyer is qualified and approved by a lending institution for a home mortgage, and that there is compliance with the level and period of affordability. This documentation should include: Copy of Executed sales contract Verification of income Uniform Residential appraisal Report Mortgage loan commitment B. After Mortgage Closing After the mortgage closing, the sub-recipient must submit the following documentation verifying the home purchase and deed restrictions: Copy of Mortgage Deed of Trust Warranty Deed with deed restriction (Period of Affordability) HUD-1 Settlement Statement LTWH Special Conditions, 4.5

7 V. CONDITIONS FOR RENTAL LEASING A. Upon rental property leasing Upon renting units that were built with LTWH funds, written documentation must be submitted to DRD that ensures each tenant placed in a low/mod unit is eligible, and that the rental amount is within the market rent rate limits. This documentation should include: Verification of tenant income Copy of executed tenant lease LTWH Special Conditions, 4.6

8 SPECIAL CONDITIONS Sub-recipient: Contract Number: APPLICABLE TO REHABILITATION PROJECTS II. OTHER SPECIAL CONDITIONS TO BE MET PRIOR TO DRAWDOWN OF FUNDS J. Leverage Funds Adequate documentation to verify leveraged funds, equal to the amount as stated in the application, must be submitted to and approved by DRD. K. Proforma Revisions If there should be revision in the financial commitments or site as presented in the application, the recipient must notify DRD and submit a revised proforma, which discloses any changes to debt service projections. L. Plans and Specifications Prior to the drawdown of construction funds, the sub-recipient must provide: 4. Finalized site and building plans and construction specifications for review and approval by DRD when the project involves the creation of subdivision or a multifamily housing development. 5. House plans and specifications for reconstruction activities. 6. Work write-ups and drawings to describe all work proposed under Rehabilitation and Reconstruction activities. III. CONDITIONS PRIOR TO CONSTRUCTION B. Title Opinions Title opinions evidencing clear ownership of all units submitted for rehabilitation in the application must be submitted to DRD for written clearance of this special condition before funds may be obligated or expended for rehabilitation of any unit, other than legal costs. Replacement units for households must also provide the same evidence of ownership prior to obligation or expenditure of funds for those entities. LTWH Special Conditions, 4.7

9 C. Household Income Verification If houses to be rehabilitated are owner-occupied or otherwise owner-retained, the income of each household must be verified. Verification of income documentation for each home must be submitted to DRD. IV. UPON COMPLETION OF UNITS A. Rental Property Upon renting units that were rehabilitated/reconstructed with LTWH funds, written documentation must be submitted to DRD that ensures each tenant placed in a low/mod unit is eligible, and that the rental amount is within the market rent rate limits. This documentation should include: Verification of tenant income Copy of executed tenant lease B. Not less than fifty percent (50%) of the family occupied rental housing constructed with LTWH funds must be families whose annual incomes do not exceed 80% of the area median income. The balance of funds may be used to assist families, which have incomes not in excess of 120% of the area median income. C. For Sale Units C. Prior to Home Sale Prior to selling a home that was rehabilitated/reconstructed with LTWH funds, written documentation must be submitted to DRD that ensures each homebuyer is qualified and approved by a lending institution for a home mortgage, and that there is compliance with the level and period of affordability. This documentation should include: Copy of Executed sales contract Verification of income Uniform Residential appraisal Report Mortgage loan commitment D. After Mortgage Closing After the mortgage closing, the sub-recipient must submit the following documentation verifying the home purchase and deed restrictions: Copy of Mortgage Deed of Trust Warranty Deed with deed restriction (Period of Affordability) HUD-1 Settlement Statement LTWH Special Conditions, 4.8

10 SPECIAL CONDITIONS Sub-recipient: Contract Number: APPLICABLE TO TENANT-BASED RENTAL ASSISTANCE PROGRAMS II. OTHER SPECIAL CONDITIONS TO BE MET PRIOR TO DRAWDOWN OF FUNDS M. Leverage Funds Adequate documentation to verify leveraged funds, equal to the amount as stated in the application, must be submitted to and approved by DRD. N. Proforma Revisions If there should be revision in the financial commitments or site as presented in the application, the recipient must notify DRD and submit a revised proforma, which discloses any changes to debt service projections. O. Tenant Verification Prior to the release of LTWH funds for tenant-based rental assistance, written documentation must be submitted to DRD that ensures each beneficiary is eligible for the program, and verifying the rental assistance to be provided. This documentation should include: Copy of executed tenant lease Verification of income Executed Rental Assistance agreement P. Program Funds Rule 100% of the families receiving tenant based rental assistance must be families whose annual incomes do not exceed 80% of the area median income. Q. Rental Controls Rents must have the lesser of: 1) The Section 8 Fair Market Rents (FMRS) or area wide exception rents for existing housing minus tenant paid utilities, or 2) Rents which are 30% of adjusted income for households LTWH Special Conditions, 4.9

11 R. Tenant Eligibility must be determined by the Public Housing Authority at the time of occupancy and must be re-examined at least annually. LTWH Special Conditions, 4.10

12 SPECIAL CONDITIONS Sub-recipient: Contract Number: APPLICABLE TO CONSTRUCTION LOAN PROGRAMS II. OTHER SPECIAL CONDITIONS TO BE MET PRIOR TO DRAWDOWN OF FUNDS S. Leverage Funds Adequate documentation to verify leveraged funds, equal to the amount as stated in the application, must be submitted to and approved by DRD. T. Proforma Revisions If there should be revision in the financial commitments or site as presented in the application, the recipient must notify DRD and submit a revised proforma, which discloses any changes to debt service projections. III. CONDITIONS PERTAINING TO LOAN ORIGINATIONS A. Prior to any loan originations, written documentation must be submitted to DRD that ensures each applicant is qualified/eligible. This documentation should include: Borrower Information o Loan application o References, if commercial o Resume, if commercial o Financial documents of business or verification of income if homeowner Loan Documentation o Loan approval sheet o Evidence of site control o Appraisal report o Builder s risk insurance policy declaration page(s), if commercial o Environmental review documents for MDA clearance, if commercial B. After the loan closing, the sub-recipient must submit the following documentation verifying the loan term and/or the affordability compliance. o Loan note o Affordability agreement, if commercial LTWH Special Conditions, 4.11