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HOUSING AND COMMUNITY SERVICES DEPARTMENT

 

DIVISION 42

HOUSING DEVELOPMENT GRANT PROGRAM

 813-042-0000

Purpose and Objectives

The rules of OAR chapter 813, division 042, are established to administer ORS 456.515 to 456.720 and 458.600 to 458.630, which authorize the Department to establish a program to expand the state's supply of housing for low- and very-low-income families and individuals including, but not limited to, persons more than 65 years of age, disabled persons, farmworkers and Native Americans. These rules describe the Housing Development Grant Program and its objective to provide grants and/or low-interest loans to construct new housing or to acquire and/or rehabilitate existing structures for housing persons of low and/or very-low income.

Stat. Auth.: ORS 456.515 - 456.720, 458.600 - 458.630
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

813-042-0010

Definitions

All terms are used in OAR 813, division 042, as defined in the Act and as provided in 813-005-0005 and herein. As used in these rules, unless the context indicates otherwise:

(1) "Account" means the Housing Development and Guarantee Account.

(2) "Consolidated Plan" means the plan approved by the U.S. Department of Housing and Urban Development (HUD) which describes the needs, resources, priorities and proposed activities to be undertaken with respect to HUD programs.

(3) "Council" means the State Housing Council established in ORS 456.567.

(4) "Department" means Oregon Housing and Community Services Department.

(5) "Disabled Person" means a person who has a physical or mental impairment that substantially limits one or more Major Life Activity.

(6) "In-Kind Contribution" means a supportive project contribution other than cash. In-Kind Contributions include, but are not limited to, office equipment, working space, office supplies, staff time, telephone, support staff time, auto use, donated project materials or labor, and nonBoard volunteer time.

(7) "Affordability Period" means the period during which a project assisted with HDGP funds must remain affordable to Low and Very Low Income residents. The period shall be at least 25 years from the date of the Project Use Agreement.

(8) "Low-Income" means a household with an adjusted annual household income that is more than 50 percent but less than 80 percent of the area median income, as determined by the Council, based on information from the U.S. Department of Housing and Urban Development, with allowances for family size.

(9) "Major Life Activity" includes, but is not limited to, self-care, ambulation, communication, transportation, education, socialization, employment and ability to acquire, rent or maintain property.

(10) "Organization" means a:

(a) Nonprofit corporation established under ORS chapter 65;

(b) Housing authority established under ORS 456.055 to 456.230; or

(c) Local government as defined in ORS 197.015.

(11) "Use Agreement" means the Project Use Agreement, which is a legal agreement between the grantee or borrower receiving Housing Development Grant Program funds and the Department.

(12) "Very-Low Income" means a household with an adjusted annual household income that is less than 50 percent of the area median income, as determined by the Council, based on information from the U.S. Department of Housing and Urban Development (HUD), with allowances for family size.

Stat. Auth.: ORS 456.515 - 456.720, 458.600 - 458.630
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

813-042-0020

Eligibility for Housing Development Grant Program Funds

The Department shall provide grants and/or loans from Account revenue subject to the availability of funds and limitations otherwise prescribed by law for any or all of the following purposes:

(1) To organizations and for-profit business entities to construct new housing or to acquire and/or rehabilitate existing structures for housing low- and/or very-low income households.

(2) To nonprofit organizations, as set forth in ORS 458.210 to 458.240 to provide technical assistance and/or predevelopment costs. Predevelopment costs include, but are not limited to, site acquisition, architectural services and project consultants. Predevelopment costs do not include costs described in subsection (3) of this rule.

(3) For costs to develop, nonprofit organizations that show sufficient evidence of having strong community support and a strong likelihood of producing low- and very-low income housing. No account funds shall be used by an organization for its general operations.

(4) To match public and private moneys available from other sources for the purposes of production of low- and very-low income housing.

Stat. Auth.: ORS 456.515 - 456.720
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

813-042-0030

Distribution of Funds

(1) The Department shall develop a distribution formula which takes into account the relative housing needs of regions in the state, and shall concentrate funds in those areas of the state with the greatest need for low- and very-low income housing as may be evidenced by factors including, but not limited to, the unmet housing need, extent of overcrowding or number of poverty households.

(2) The distribution formula shall provide for a minimum amount of funds to regions of the state. If there are not enough applications submitted from a particular region to use the minimum regional amount, the funds may be distributed to other regions.

Stat. Auth.: ORS 456.515 – 456.720, 458.600 – 458.630
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07; OHCS 12-2010(Temp), f. & cert. ef. 8-24-10 thru 2-18-11; OHCS 2-2011, f. & cert. ef. 2-17-11

813-042-0040

Application Procedure and Requirements

The Department may provide grant and/or loan funds subject to the availability of funds in the Program through a process which may include, but is not limited to, a first-come, first-reviewed or a competitive review process. The applicant shall submit, in an application form and process prescribed by the Department, project information which includes:

(1) A written description of the project including the number of units, unit mix, proposed rents, site location, the proposed program of services to occupants, project amenities, and any other information pertinent to the project;

(2) A statement of project purpose indicating the housing type and residents to be housed, and the length of time the units will be committed available for low- or very-low income households.

(3) A pro forma of project expenses and income;

(4) Requested amount of grant funds, or requested amount of loan funds including proposed terms of repayment.

(5) Total project development costs, including a description of all additional project funding and funding sources;

(6) A description of the sponsor/developer/owner/manager experience in developing and operating housing projects; and

(7) Such other documentation as the Department may require.

Stat. Auth.: ORS 456.515 - 456.720, 458.600 - 458.630
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

813-042-0050

Criteria for Funding

(1) A project grant and/or loan shall be given preference based on:

(a) Providing the greatest number of low- and very-low income housing units for the least amount of Account funds expended or committed toward matching fund from other loans, grants or eligible In-Kind Contributions.

(b) Insuring the longest possible use as low- or very-low income housing units;

(c) Including a program of services for residents of proposed housing including, but not limited to, programs that address home health care, mental health services, alcohol and drug treatment and post-treatment care, child care and case management; and

(d) Other subordinate criteria as determined by the Department including, but not limited to, providing housing for specific populations which have historically faced barriers in finding housing, and which are identified as having a priority in the Consolidated Plan or its successor, or in a state-acknowledged initiative.

(2) Funding to a project shall be conditioned upon the continued use of the project for the targeted tenant group and provision of supportive services for the duration and to the extent indicated in the grant and/or loan application. The Department, at its discretion, may require repayment of the funding if all or part of the commitments to residents, supportive services, or period of use for low- or very-low income housing are withdrawn from the project.

(3) Terms and conditions of the award shall be established in a Project Use Agreement, remain affordable to low and very low income residents during the Affordability Period and be recorded against the property. Loan terms and conditions shall be established in an additional Promissory Note, Loan Agreement and secured by a Trust Deed.

(a) The Use Agreement, Trust Deed, Loan Agreement and Promissory Note must be executed and the Use Agreement with the Trust Deed must be recorded before funds are advanced, in whole or in part, unless the Applicant does not own the property at the time of fund disbursement.

(b) If the applicant does not own the property at the time of fund disbursement, the Applicant will be required to open an escrow account and have the Use Agreement with Trust Deed placed in escrow and recorded immediately upon obtaining title to the property.

(4) Loans disbursed from account investment revenue shall bear an interest rate equal to the interest rate paid on U.S. Treasury long-term obligations in effect on the date the loan is negotiated as identified by the Department.

(5) At least 75 percent of the revenue earned from investment of the principal in the Account in any calendar year shall be used to produce housing for very-low income persons, and no more than 25 percent of the revenue earned from investment of the principal in any calendar year shall be used to produce housing for low-income households.

Stat. Auth.: ORS 456.515 - 456.720, 458.600 - 458.630
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

813-042-0060

Application Review

(1) For applications where the amount requested from the Program does not exceed $100,000, the Department shall consider the application and make application approval, deny application approval, or request additional information within the timeframe set forth in the application materials.

(2) For applications where the amount requested is in excess of $100,000, or for requests or applications that would result in a cumulative award of more than $100,000 to a project, the Department shall consider the proposal and approve, disapprove or request additional information within the timeframe set forth in the application materials. If the Department proposes to award more than $100,000 to a project, it shall submit the proposal to the State Housing Council for review. The Council shall approve or disapprove the application at a public hearing of the Council, pursuant to ORS 456.571(2).

(3) In reviewing applications for assistance, the Department and the Council, as appropriate, may consider, in addition to any special evaluation criteria, the following:

(a) Amount of available funds in the Program;

(b) Ability of the proposed project to meet proposed terms of loan repayment in cases where the awardee has requested funding as a loan;

(c) Availability of other sources of assistance; and

(d) Applicant's efforts to leverage public or private funds.

(4) The Department shall select those applications which, in the judgment of the Department, best achieve the purposes of the Program and any evaluation criteria outlined in the Program application forms and handbooks.

Stat. Auth.: ORS 456.515 - 456.720, 458.600 - 458.630
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

813-042-0070

Charges

(1) The Department may require a non-refundable application charge from any applicant requesting Housing Development Guarantee Account funds through the Consolidated Funding Cycle, or otherwise.

(2) The Department may require a supplemental application charge from applicants requesting additional resources for projects that have already been funded by the Department.

(3) The Department may require a transfer application charge from owners of projects that receive grants, loans, or tax credits through the Department, who request the Department's approval of a change in project ownership. The Department may assess a transfer review charge to project owners and transferees who effect a change in project ownership without prior written Department approval.

Stat. Auth.: ORS 456.515 - 456.720, 458.600 - 458.630
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

813-042-0080

General Administrative and Monitoring Requirements

(1) The Department may perform such reviews or field inspections as it deems necessary to ensure Program compliance. The Department may require that a Recipient take such remedial actions as described in this rule and OAR 813-042-0090.

(2) Financial records, supporting documents, and all other pertinent records shall be retained by a HDGA Recipient for five years after the project is complete, or after any litigation or audit claim is resolved, whichever is later. The Department shall have access to all books, accounts, documents, records and other property belonging to or in use by the Recipient which relate to the use of HDGA funds.

Stat. Auth.: ORS 456.515 - 456.720, 458.600 - 458.630
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

813-042-0090

Remedies for Noncompliance

At any time before the expiration of the Affordability Period, the Department may find that a Recipient is not in compliance with the requirements of the Program for reasons including but not limited to use of funds for activities not approved in the Use Agreement, failure to complete activities in a timely manner, failure to comply with applicable rules or regulations, or the lack of a continued capacity by the Recipient to carry out the approved activities. Remedies for noncompliance may include penalties imposed by the Department, including but not limited to, repayment of HDGA funds.

Stat. Auth.: ORS 456.515 - 456.720, 458.600 - 458.630
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

813-042-0100

Sanctions

(1) The Department may invoke sanctions against a Recipient that fails to comply with the provisions of its Use Agreement. The following circumstances may warrant sanctions:

(a) HDGA funds have not been expended within one year of award by the Department or the Recipient;

(b) Any local or private party funding agreements related to the project are not executed within six months of the award of HDGA funds;

(c) There is a material breach of the Use Agreement;

(d) The Use Agreement was not recorded on the property required by OAR 813-042-0050(3) or as agreed; or

(e) The Department finds that significant corrective actions are necessary to protect the integrity of the project funds, and those corrective actions are not, or will not be, made within a reasonable time (the funds were used for costs not eligible under the HDGA program or the project has not served the population stated in the Use Agreement).

(2) One or more of the following sanctions may be imposed by the Department:

(a) Prohibit a Recipient from applying for future HDGA assistance or other Department assistance;

(b) Revoke an existing HDGA award;

(c) Withhold unexpended HDGA funds;

(d) Require return of HDGA funds that have been disbursed to the Recipient but not expended by the Recipient;

(e) Require repayment of expended HDGA funds; and

(f) Invoke other remedies that may be incorporated into the Use Agreement.

(3) Sanctions will not be imposed by the Department until the Recipient has been notified in writing of its deficiencies and given a reasonable time to respond and correct the deficiencies noted. The sanctions and remedies set forth in this OAR 813-042-0100 are cumulative and not exclusive and are in addition to any other rights and remedies provided by law or under the Use Agreement.

Stat. Auth.: ORS 456.515 - 456.720, 458.600 - 458.630
Stats. Implemented: ORS 456.555
Hist.: OHCS 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

813-042-0110

Waiver

The Director may waive or modify any requirements of these Program rules, 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 14-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 7-2007, f. & cert. ef. 1-11-07

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