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HOUSING AND COMMUNITY SERVICES DEPARTMENT

 

DIVISION 30

ELDERLY HOUSING PROGRAM

813-030-0005

Purpose and Objectives

The rules of OAR chapter 813, division 030, are promulgated to carry out the provisions of ORS 456.515 to 456.720 specifically 456.515 through 456.547, as they pertain to the administration by the Housing and Community Services Department (Department) of the Elderly Housing Program. These rules and the related determinations and orders of the Department constitute the Department's Elderly Housing Program. The purpose of the program is to provide funds to finance the construction, rehabilitation and acquisition of multi-unit housing for elderly households in the State of Oregon, while providing sufficient safeguards to protect the financial interests of the state.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 1-1978(Temp), f. & ef. 7-12-78; 1HD 1-1979, f. & ef. 1-16-79; 1HD 4-1979, f. & ef. 9-11-79; 1HD 1-1983, f. & ef. 5-20-83; 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0010

Definitions

(1) All terms are used in OAR chapter 813, division 030 as defined in the Act and as provided in OAR 813-005-0005 and herein.

(2) As used in these rules unless otherwise indicated by the context:

(a) "Elderly Housing Project" ("Project") means housing containing more than one living unit for elderly households, but not providing continuous nursing care;

(b) "Gross Household Income" means the anticipated total income from all sources received by the family head and by each additional member of the family of 18 years of age and over, including all net income derived from assets for the twelve-month period following the date of certification of income, in accordance wit the U.S. Department of Housing and Urban Development (HUD) in 24 CFR 813;

(c) "Multifamily Housing" means a structure or facility which provides more than one living unit, and may provide spaces for common use by the occupants in social and recreational activities including, but not limited to, individual living units within such structures, manufactured homes and manufactured dwelling parks and residential facilities licensed under ORS 443,400 to 443.455 and other congregate care facilities with or without domiciliary care.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 1-1978(Temp), f. & ef. 7-12-78; 1HD 1-1979, f. & ef. 1-16-79; 1HD 4-1979, f. & ef. 9-11-79; 1HD 6-1980, f. & ef. 3-19-80; 1HD 9-1980, f. & ef. 4-2-80; 1HD l-1980, f. & ef. 12-4-80; 1HD 5-l981, f. & ef. 3-31-81; 1HD 7-1981, f. & ef. 4-7-81; 1HD 8-1983(Temp), f. & ef. 11-7-83; 1HD 3-1984(Temp), f. & ef. 5-25-84; 1HD 5-1984, f. 7-5-84, ef. 7-8-84; 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0020

Form of Loan Assistance

(1) The Department shall make loans to Borrowers under the terms of written Commitments.

(2) Loans shall be made directly with proceeds from the issuance of bonds or other available funds obtained by the Department. The Department may establish charges and interest rates based upon:

(a) The cost of borrowing through bond issuance;

(b) The funds required to carry out the Elderly Housing Program; and

(c) Such other factors as the Department considers appropriate or necessary.

(3) Interest on a loan shall not exceed the rate stated in the Commitment. If the Department is able to charge an interest rate lower than that specified in the Commitment, the Department may provide for the reduction of interest payment on the loan. The Department may require a reduction on the Project rents.

(4) The Department shall not execute a Commitment to an Eligible Borrower for a loan amount that exceeds allowable total Project costs or 85 percent of the appraised value, whichever is less, of the Project.

(5) Each loan shall have a final maturity of not more than 42 years from the date of its making and shall be secured by a first lien deed of trust granted by the Borrower on the property securing the loan.

(6) Loan documents shall be on forms approved by the Department.

(7) Each loan shall provide for the monthly collection of Escrow Payments to the extent provided by law together with the monthly installment of principal and interest. All such payments shall be:

(a) Held for the benefit of the Department in an account with an Approved Servicer; or

(b) Held by the State of Oregon as provided or required by law.

(8) If the Department receives loan applications in an amount greater than the amount of funds available, the Department shall select those applications which, in the judgment of the Department, best achieve purposes of the program rules and the Act.

(9) The Department shall establish prepayment penalties applicable to loans. In setting such penalties, the Department shall take into account the need to protect the ability of the state to provide for the payment of the Bonds. Any prepayment penalties shall be set forth in the trust deed note.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 1-1978(Temp), f. & ef. 7-12-78; 1HD 1-1979, f. & ef. 1-16-79; 1HD 4-1979, f. & ef. 9-11-79; 1HD 15-1980, f. & ef. 12-4-80; 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0025

Loan Security

Notwithstanding any other provision contained in the program rules, the Department shall not disburse funds for a loan until:

(1) The loan is secured by a fully executed trust deed note and first lien trust deed or other evidence of security; and

(2) The Eligible Borrower has satisfied all conditions contained in a Commitment.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 1-1978(Temp), f. & ef. 7-12-78; 1HD 1-1979, f. & ef. 1-16-79; 1HD 4-1979, f. & ef. 9-11-79; 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0030

Eligible Elderly Housing Projects

(1) The Department shall evaluate each Project for consistency with the Department's interpretation of sound architectural design and prudent underwriting standards as established in OAR 813-030-0031.

(2) In order to qualify for a loan, a Project shall:

(a) Be approved by the Department with respect to site; location; market demand; financial feasibility; qualifications of general contractor, management agent and developer; appraisal; financial strength and credit worthiness of the Eligible Borrower ; management plan; final architectural package; Eligible Borrower's organizational documents; American Land Title Association (ALTA) title report; and any other information the Department shall require;

(b) Meet all applicable state and local land use and zoning requirements, housing codes, licensing, and similar requirements;

(c) Be in compliance with federal regulations, state statutes and Program rules;

(d) Be located in the State of Oregon; and

(e) Remain affordable in terms of the loan documents.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 4-1979, f. & ef. 9-11-79; 1HD 15-1980, f. & ef. 12-4-80; 1HD 8-1983(Temp), f. & ef. 11-7-83; 1HD 3-1984(Temp), f. & ef. 5-25-84; 1HD 5-1984, f. 7-5-84, ef. 7-8-84; 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0031

Standard Underwriting Criteria

In approving or disapproving any loan application, the Department and the State Housing Council shall consider, in addition to requirements elsewhere stated in the Program rules, the following criteria:

(1) The location of the Project site, including its proximity to transportation, shopping, social, commercial and recreational facilities, medical services and such other facilities and services as shall best serve the prospective residents;

(2) Financial feasibility of the Project;

(3) Availability of street, sewer, water, utilities and other public services;

(4) Availability of public or private transportation;

(5) Architectural design, including aesthetic quality, soundness of construction, energy efficiency, and suitability to the needs of the residents to be served;

(6) Compliance with applicable local comprehensive plan and land use regulations;

(7) Market demand;

(8) The financial strength, credit reputation and history of the Eligible Borrower; and

(9) The experience of the developer, contractors, architects, consultants and management agent in developing, constructing and operating housing projects.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 1-1983, f. & ef. 5-20-83; 1HD 8-1983(Temp), f. & ef. 11-7-83; 1HD 3-1984(Temp), f. & ef. 5-25-84; 1HD 5-1984, f. 7-5-84, ef. 7-8-84; 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0032

Manufactured Dwelling Park Projects

(1) To qualify as a Manufactured Dwelling Park, the Project shall comply with the following standards and conditions:

(a) Site, design and licensing standards of the local government;

(b) Regulations of the Building Codes Division, State of Oregon, OAR 918-600-0010 to 918-600-0110;

(c) All manufactured dwellings shall have skirting, unless the home is set on a ground level foundation. If the manufactured dwelling is purchased after September 4, 1984, the design, color and texture of the skirting shall appear to be an integral part of the adjacent exterior wall of the manufactured dwelling;

(d) All manufactured dwellings purchased after September 4, 1984, shall have a roof with a non-reflective surface at a minimum slope of two inches in 12 inches (16 percent);

(e) The area occupied by the manufactured dwelling and any accessory buildings (including porches, car-ports, etc.) shall not exceed 40 percent of the lot area; and

(f) All manufactured dwellings shall be installed in compliance with the State of Oregon, Building Codes Division regulations. Installation inspections shall be completed by the Building Codes Division, or by a city or county which has contracted to do the inspections. A copy of the final inspection report shall be submitted to the Department together with a copy of a certificate of occupancy.

(2) The Borrower shall establish rules for the residents of the Project, to be a required part of each resident's lease. The rules and lease shall be submitted for the Department's review and approval as part of the proposal.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 5-1981, f. & ef. 3-31-81; 1HD 7-1981, f. & ef. 4-7-81; 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0034

Interim Loans

(1) The Department may from time to time make available funds for construction, acquisition and/or rehabilitation, or other financing of Elderly Housing Projects, for a term not to exceed two years.

(2) Notwithstanding any other requirements of OAR chapter 813, division 030, the Department may, as funds are available, solicit applications for the use of such funds. Applications shall specify in writing any terms and conditions of the available funds, as well as criteria or priorities the Department shall use to evaluate and select applications for funding.

(3) The Department shall evaluate applications received in accordance with program policies and priorities approved by the State Housing Council, and with applicable requirements of OAR chapter 813, division 30.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0035

Approved Housing Borrowers

(1) To be eligible to receive a loan, an Eligible Borrower shall comply with the terms contained in the Commitment issued by the Department and the conditions of eligibility as set forth in these rules.

(2) Any entity may apply to become an Eligible Borrower.

(3) To help the Department evaluate the financial strength of an Eligible Borrower to develop, own, maintain and manage a Project, the Eligible Borrower shall submit financial statements, credit reports and any other documents requested by the Department in accordance with the provisions of the Equal Credit Opportunity Act as it relates to the Department.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 1-1978(Temp), f. & ef. 7-12-78; 1HD 1-1979, f. & ef. 1-16-79; 1HD 4-1979, f. & ef. 9-11-79; 1HD 6-1980, f. & ef. 3-19-80; 1HD 9-1980, f. & ef. 4-2-80; 1HD 15-1980, f. & ef. 12-4-80; 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0040

Processing Procedures

(1) Before accepting a Project for the application process, the prospective Borrower shall submit an application to the Department on forms acceptable to the Department. If the Project meets the Program requirements, an application conference with the prospective Borrower shall be scheduled. At the conference, the Department may discuss, but is not limited to discussing:

(a) Type of loan requested;

(b) Type and formation of prospective Borrower's company (sole proprietorship, partnership, corporation, nonprofit, etc.) and qualifications;

(c) Requested loan amount, terms and interest rate;

(d) Any time constraints on prospective Borrower or Department;

(e) Charges;

(f) Reserve and equity requirements;

(g) Debt service ratio and other contingency requirements;

(h) Appraisal requirements;

(i) Environmental Surveys;

(j) Contractor's cost estimate and qualifications;

(k) Management and maintenance plans;

(l) Project management requirements, reports, and qualifications;

(m) Loan servicing requirements and procedures;

(n) Design and related requirements;

(o) Document requirements;

(p) Construction procedures;

(q) Department loan processing procedures;

(r) Eligibility requirements under federal and state law and regulations;

(s) Site control;

(t) Reserves and costs for Bond issue; and

(u) Any other items pertinent to the proposed project.

(2) At the conclusion of the application conference, if the prospective Borrower and the Department agree to proceed with the application process, the prospective Borrower shall provide the necessary loan application documentation. .

(3) After receiving a completed loan application package from the prospective Borrower, the Department shall evaluate each Project for consistency with the Department's interpretation of sound architectural and planning principles and prudent underwriting standards.

(4) In order to qualify for a loan, a Project shall:

(a) Be approved by the Department with respect to site; location; market demand; financial feasibility; qualifications of general contractor, management agent and developer; appraisal; financial strength and credit worthiness of the prospective Borrower; management plan; final architectural package; organizational documents; ALTA title report; resident services plan; and any other information the Department shall prescribe;

(b) Meet all applicable state and local land use and zoning requirements, housing codes, and similar requirements;

(c) Be in compliance with federal regulations, state statutes and Program rules;

(d) Be located in the State of Oregon; and

(e) If the loan is for an amount over $100,000, be approved by the State Housing Council prior to the Department's issuance of a loan Commitment:

(A) The Department shall review each application for a loan over $100,000 and prepare a proposal to the State Housing Council for approval or disapproval. The Department will send a copy of its proposal to the prospective Borrower with a notice of the State Housing Council meeting at which the application will be considered. Upon receipt of the notice, the prospective Borrower may request an opportunity to present testimony at the meeting;

(B) After considering the Department's proposal, as well as any other testimony presented, the State Housing Council shall approve or disapprove the application or take other appropriate action;

(C) The prospective Borrower shall promptly be advised in writing of the State Housing Council's decision.

(5) In approving or disapproving any loan application, the Department and the State Housing Council shall consider, in addition to requirements elsewhere stated in the Program rules, the following criteria:

(a) The location of the Project site, including its proximity to transportation, shopping, social, commercial and recreational facilities, medical services and such other facilities and services as shall best serve the residents;

(b) Financial feasibility of the Project;

(c) Availability of street, sewer, water, utilities and other public services;

(d) Availability of public transportation;

(e) Architectural design, including aesthetic quality, soundness of construction, energy efficiency, and suitability to the needs of the residents to be served;

(f) Compliance with applicable local comprehensive plan and land use regulations;

(g) Market demand;

(h) The financial strength, credit reputation and history of the prospective Borrower; and

(i) The experience of the developer, contractors, architects, consultants and management agent in developing, constructing and operating housing projects.

(6) The prospective Borrower may submit a written request for review and appeal of the State Housing Council's decision in accordance with the provisions of ORS Chapter 183. To be considered, a request must be received by the Department within 30 days of the date of the notice of application disapproval.

(7) Upon loan approval the Department shall issue a Commitment, which may be subject to loan funds being available, and may include, but are not limited to:

(a) The amount of the loan;

(b) The maximum rate of interest to be charged on the loan;

(c) The term of the loan;

(d) The amount of the Commitment fee, Rent-Up Reserve Account and Contingency Escrow Account;

(e) When the Commitment fee shall be paid, and when the Rent-Up Reserve Account and Contingency Escrow Account shall be funded;

(f) All other conditions of the commitment, and when they shall be fulfilled;

(g) Provisions concerning construction;

(h) Provisions and conditions of loan disbursement;

(i) Provisions of Loan Closing; and

(j) Conditions of termination of the Commitment.

(8) If the Commitment conditions are not completed by the dates specified in the commitment, the offer for a Commitment shall expire, unless the Department grants an extension in writing.

(9) Construction and Completion:

(a) During the construction of the Project, the Department may conduct random inspections for Borrower's compliance with the plans and specifications previously approved by the Department. The Borrower's architect shall submit regular inspection reports to the Department. Change orders must be signed by the contractor, Project architect and the Borrower before being submitted to the Department for its approval and prior to the changes being made;

(b) Upon completion of construction of the Project, the Department shall perform an inspection to assure the Borrower's compliance with the approved plans and specifications. If some items of construction remain to be completed due to circumstances beyond the control of the Borrower (provided the incomplete items do not detract from livability or safety of the Project), the Department may require the Borrower to escrow as approved by the Department and under Department control, an amount equal to one and one-half times the estimated cost of completion, until the construction item is completed.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 1-1978(Temp), f. & ef. 7-12-78; 1HD 1-1979, f. & ef. 1-16-79; 1HD 4-1979, f. & ef. 9-11-79; 1HD 2-1980(Temp), f. & ef. 2-22-80; 1HD 4-1980, f. & ef. 3-19-80; 1HD 7-1980, f. & ef. 4-2-80; 1HD 11-1980, f. 6-18-80, ef. 6-20-80; 1HD 13-1980, f. & ef. 8-8-80; 1HD 15-1980, f. & ef. 12-14-80; 1HD 16-1980, f. & ef. 12-15-80; 1HD 1-1981, f. & ef. 1-30-81; 1HD 5-1981, f. & ef. 3-31-81; 1HD 7-1981, f. & ef. 4-7-81; 1HD 2-1982, f. & ef. 1-4-82; 1HD 1-1983, f. & ef. 5-20-83; 1HD 9-1983, f. & ef. 12-1-83; 1HD 2-1984(Temp), f. & ef. 2-10-84; 1HD 5-1984, f. 7-5-84, ef. 7-8-84; 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0044

Loan Closing

Before the loan closing takes place, the Department shall provide to the escrow officer written instructions for closing the loan. The Department shall not authorize disbursement of loan funds until all conditions of the commitment are satisfied and the Department has received and approved:

(1) Cost certification;

(2) Certificate or policy of insurance for fire and extended coverage, liability, business income and flood insurance (if applicable), with the appropriate loss deductible. All insurance coverage shall be in the amounts set forth in the Department's Regulatory Agreement and Declaration of Restrictive Covenants;

(3) Contingency Escrow Account;

(4) Certificate of occupancy from the local government, or final inspection report, as required;

(5) Notice of Completion;

(6) Commercial leases (if applicable);

(7) Ground leases (if applicable);

(8) Any other relevant leases;

(9) Tax abatement approval;

(10) American Land Title Association (ALTA) mortgagee's preliminary title insurance report from the title company of the Borrower's choice;

(11) Any licenses required by the state;

(12) For Acquisition Loans:

(a) Certification of completion of work on repairs from the general contractor and owner.

(13) All other reasonable requirements of the Department.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0046

Resident Eligibility and Occupancy

(1) To be eligible to occupy a project, an Elderly Household shall:

(a) Be a Resident of the state;

(b) Be a household whose head is over the age of 58 years;

(c) Have an annualized Gross Household Income which does not exceed the income limits as established by the Department from time to time in compliance with the Act;

(d) The project shall conform to the maximum income requirement of ORS 456.620(4). A maximum of one-third of the units in a housing project, housing development or other residential housing financed by the Department may be rented to households with an income level exceeding 120 percent of the median family income level as determined by the Department;

(e) Relating specifically to acquisition/rehabilitation projects only, where tenants already reside in the project, the Department, at its sole discretion, may allow up to a one (1) year grace period for implementation of the standards identified in subsection (d) above in order to reduce the impact of displacement for over-income residents.

(2) Where the Project has a Regulatory Agreement and Declaration of Restrictive Covenants which was signed after June 16, 1982, have an annualized Gross Household Income, which does not exceed the income limit as established by the Department from time to time in compliance with the Act.

(3) Where the Project will be financed with proceeds of Bonds issued after August 15, 1986, have an annualized Gross Household Income which does not exceed such other income limit as may be required to assure compliance with Section 142(d)(1)of the Internal Revenue Code of 1986, as amended:

(a) If Section 142(d)(1) of the Code so requires, the Borrower shall elect at Commitment to apply either the "20-50" or "40-60" income requirement under Section 142(d)(1) of the Code, as summarized below, to the Project during the qualified Project period;

(b) If the Borrower elects to meet the "20-50" requirement under Section 142(d)(1) of the Code, at all times during the qualified project period at least 20 percent of the completed residential units in the Project shall be rented to and occupied by (or held available for rent by) Persons whose annualized Gross Household Income is 50 percent or less of area median income, adjusted for family size; and,

(c) If the prospective Borrower elects to meet the "40-60" requirement under Section 142(d)(1) of the Code, at all times during the qualified project period at least 40 percent of the completed residential units in the Project shall be rented to and occupied by (or held available for rent by) Persons whose annualized Gross Household Income is 60 percent or less of area median income, adjusted for family size.

(4) The Borrower shall conduct annual income certifications of all residents to assure compliance with Section 142(d) of the Code, and shall, where necessary, hold units vacant and available for occupancy by Persons meeting the income requirements elected pursuant to Section 142(d).

(5) The Department may waive the Department's income limits for a household seeking residence in an Elderly Housing Project if a Person in the household is a Disabled Person requiring special housing provisions to accommodate the impairment and whose disability arises from a physical or mental impairment that substantially limits one or more Major Life Activity; however, no such waiver shall be made of the requirements of Section 142(d) of the Code.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723, 458.210 - 458.650
Stats. Implemented: ORS 456.620, 456.645 & 456.675
Hist.: 1HD 1-1978(Temp), f. & ef. 7-12-78; 1HD 1-1979, f. & ef. 1-16-79; 1HD 4-1979, f. & ef. 9-11-79; 1HD 13-1980, f. & ef. 8-8-80; 1HD 5-1981, f. & ef. 3-31-81; 1HD 7-1981, f. & ef. 4-7-81; 1HD 8-1981, f. & ef. 5-12-81; 1HD 11-1984, f. & ef. 9-4-84; Renumbered from 813-030-0050; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2000(Temp), f. & cert. ef. 9-15-00 thru 3-13-01; OHCS 1-2001, f. & cert. ef. 2-15-01; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0047

Commitment Fee and Other Charges

(1) The Department shall charge a non-refundable Commitment fee up to two percent of the loan.

(2) The Eligible Borrower shall include the fee with the Eligible Borrower's signed acceptance of the Commitment returned to the Department.

(3) The Commitment fee shall not be deducted from the Borrower's equity requirement.

(4) The Department may charge other fees or charges, as needed, to cover the costs and reduce the financial risk to the Department's of issuing bonds.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0060

Loan Servicing

(1) The servicing of loans shall be performed by servicer(s) selected by the Department. Servicing, unless performed by the Department, shall be conducted under the terms and conditions contained in a servicing agreement entered into between the Department and any Approved Servicer. The Department shall prescribe the form of the servicing agreement. The Approved Servicer shall:

(a) Promptly collect all payments due under the Loan Agreement and Regulatory Agreement and Declaration of Restrictive Covenants;

(b) Provide the Department with a monthly accounting of loan payments and disbursements;

(c) Ensure that escrow account balances are maintained at a level sufficient for the payment of the Project's property taxes, insurance premiums and costs of replacement as they become due and payable;

(d) Forward payments to the Department according to the provisions of the servicing agreement;

(e) Forward payments for insurance premiums to the insurance company when due;

(f) Forward payments for property taxes to the county assessor when due;

(g) Assure that all improvements on the mortgaged premises are kept insured against fire and extended coverage, casualty, liability and business income loss in accordance with the Loan Agreement and Regulatory Agreement and Declaration of Restrictive Covenants;

(h) Provide Borrower with regular analyses of servicing accounts; and

(i) Perform such other responsibilities as the Department may prescribe.

(2) If the Department does not act as the Approved Servicer, the Borrower selects the entity to act as Approved Servicer for the Loan. In order to qualify as an Approved Servicer and continue as such, an entity shall demonstrate to the satisfaction of the Department that:

(a) One of its principal functions is the servicing of multi-family or commercial loans secured by real estate;

(b) Such servicing is a customary and regular business activity of the applicant;

(c) It is qualified to engage in the servicing of mortgage loans for specified government agencies or private institutions engaged in the secondary market for mortgage investments;

(d) It deposits funds to accounts in depositories which comply with the requirements of ORS 295.005, 295.015 to 295.018, and 295.025 and which are insured to the full extent legally possible by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, or other similar federal insuring agency; and

(e) It shall maintain servicing facilities adequately staffed with personnel familiar with all regulations and requirements pertaining to or affecting Loans serviced for the Department.

Stat. Auth.: ORS 456.555
Stats. Implemented: ORS 456.555 & 456.625
Hist.: 1HD 4-1979, f. & ef. 9-11-79; 1HD 11-1984, f. & ef. 9-4-84; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 6-1990, f. & cert. ef. 5-2-90; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; HSG 6-1995(Temp), f. & cert. ef. 11-8-95; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0062

Change of Approved Servicers

(1) The servicing agreement may be terminated or amended as provided for in the servicing agreement or these rules.

(2) The Department may direct a change of Approved Servicer at any time consistent with the terms of the servicing agreement and these rules.

Stat. Auth.: ORS 456.555
Stats. Implemented: ORS 456.555 & 456.625
Hist.: 1HD 3-1983, f. & ef. 7-20-83; 1HD 11-1984, f. & ef. 9-4-84; Renumbered from 813-030-0080; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989 (Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; HSG 6-1995(Temp), f. & cert. ef. 11-8-95; HSG 4-1996, f. & cert. ef. 5-15-96; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0066

Transfer of Ownership

(1)(a) A Borrower who has received a loan or commitment from the Department shall not transfer ownership, lease, or otherwise encumber any property which serves or will serve as security for a loan from the Department without prior written approval from the Department;

(b) The Borrower shall be required to submit underwriting documentation as requested by the Department.

(2) A transfer of ownership means a sale, conveyance or other transfer of:

(a) Any interest of a general partner;

(b) Any interest in a joint venture;

(c) More than 25 percent of a limited partner's interest;

(d) More than ten percent of a corporate owner's interest; or

(e) Any individual interest when the ownership is not a limited partnership, general partnership, joint venture or corporation.

(3) The Department may require a transfer application charge from Borrowers of Projects that received loans through the Department, who request the Department's approval of a change in Project ownership. The Department may require a transfer review charge to Project owners and transferees who effect a change in Project ownership without prior written approval from the Department.

(4) A 100-percent transfer of ownership means a sale, conveyance or other transfer of:

(a) All interest of a general partnership;

(b) All interest of a joint venture;

(c) All interest of a corporation;

(d) All general partners' interest in a limited partnership; and

(e) All individual interest of an ownership entity when the ownership entity is not a limited partnership, general partnership, joint venture or corporation.

Stat. Auth.: ORS 90.800 - 90.840, 183, 91.886, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: 1HD 3-1980(Temp), f. & ef. 3-4-80; 1HD 15-1980, f. & ef. 12-4-80; 1HD 11-1984, f. & ef. 9-4-84, Renumbered from 813-030-0070; HSG 3-1987(Temp), f. & ef. 2-5-87; HSG 7-1987, f. & ef. 3-10-87; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0067

Loan Prepayments

(1) It is the general policy of the Department not to accept prepayments. The Department may, however, permit a prepayment if, in its sole discretion, the Department determines that the prepayment is consistent with the best interests of the Department, including its public purpose as defined in ORS 456.550.

(a) The Borrower must submit to the Department a written request for prepayment at least 90 days prior to the Borrower's estimated prepayment date;

(b) The Department may charge the Borrower a prepayment review charge to cover the Department's cost of review and processing the prepayment request.

(2) The Department must give prior written approval of any loan prepayment. In order to be valid, a written approval of prepayment must be signed by an authorized representative of the Department. In making a decision whether or not to allow prepayment of a loan, the Department may consider criteria that include, but are not limited to, the following:

(a) The financial impact of the prepayment on the Department's programs or on an individual program or Bond indenture;

(b) Economic factors, including, but not limited to, portfolio diversification and relative cost of capital;

(c) The cash flow and other relevant financial considerations of the Project loan for which prepayment is requested;

(d) The ability of the Department to use proceeds of the loan prepayment to increase the availability of housing affordable to low-income Oregonians;

(e) The willingness of the Borrower to execute a written agreement or give other assurances that the Project will continue to be used for the purposes(s) originally intended, as specified in the Loan Documents, or for an alternate use consistent with the best interests of the Department, including its public purpose as defined in ORS 456.550. Such continued use will be for a period of time mutually agreed on by the Department and the Borrower;

(f) Tax law consequences; and

(g) Other factors the Department considers appropriate to insure the security for and the ability of the State to repay the Bonds, and to insure the ongoing financial viability and stability of the Department's programs.

(3) If the Department determines that a loan prepayment is consistent with the best interests of the Department, it only shall authorize the prepayment provided that the sum to be prepaid, computed as of the date of prepayment, shall equal the unpaid principal balance of the loan plus accrued interest and all other obligations plus, at the Department's discretion, a penalty or premium for the privilege of prepayment. Such prepayment penalty shall be determined based on terms of the original Loan Documents, and amendments thereto which have been mutually agreed on by the Department and the Borrower. The Department may waive all or a portion of such prepayment penalty if it determines in its sole discretion that such waiver is in the best interests of the Department. In making a decision whether or not to waive any or all of a prepayment penalty, the Department may consider, but is not limited to, the criteria identified in OAR 813-030-0067(2)(a) through (g).

(4) Where Section 8 Housing Assistance contracts or other rent subsidies are in place, the Department may approve a loan prepayment request only if such rent subsidies are not unduly impaired, determined at the sole discretion of the Department.

(5) Failure to make timely submission of a prepayment penalty will cause additional interest to accrue at loan rate or statutory rate, whichever is higher.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.555 & 456.625
Hist.: HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; OHCS 1-1998(Temp), f. & cert. ef. 9-1-98 thru 2-27-99; OHCS 1-1999, f. & cert. ef. 6-1-99; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0068

Disposal of Department-Owned Projects

(1) The Department may transfer ownership of Department-owned Projects through sale, gift or other lawful manner to a person, persons or entity whom the Department determines best meets the requirements of this Program. The Department shall establish written procedures for selling a Project prior to any offering of such Project, as applicable.

(2) The method of transfer of ownership, timing, price, terms and any other factors pertinent to the transfer of ownership shall be effected by the Department in a manner which, in the opinion of the Department, best preserves the integrity and continuity of the Department's rental programs. Factors the Department may consider include, but are not limited to:

(a) The financial investment of the Department in the project;

(b) Preservation of existing rental housing;

(c) Proposed Eligible Borrower's ability to manage, market, maintain and protect property used as security for the loan made by the Department;

(d) Proposed Eligible Borrower's capacity to preserve or improve upon the property's safety, sanitation, durability and livability;

(e) Proposed Eligible Borrower's ability to preserve units which are affordable and suitable to the needs of the Residents;

(f) Continued compliance with state or federal laws, rules or regulations, as applicable to the financing or use of the Project.

Stat. Auth.: ORS 90.800 - 90.840, 91.886, 183, 456.515 - 456.723 & 458.210 - 458.650
Stats. Implemented: ORS 456.515 - 456.720
Hist.: HSG 11-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91; OHCS 2-2007, f. & cert. ef. 1-11-07

813-030-0070

Waiver

The Department may waive or modify any requirements of OAR 813, division 030, unless such waiver or modification would violate applicable federal or state statutes or regulations.

Stat. Auth.: ORS 456.515 - 456.720
Stats. Implemented: ORS 456.555
Hist.: OHCS 2-2007, f. & cert. ef. 1-11-07

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