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HOUSING AND COMMUNITY SERVICES DEPARTMENT

 

DIVISION 110

OREGON AFFORDABLE HOUSING TAX CREDITS:
AFFORDABLE HOUSING PROJECT CERTIFICATION

813-110-0005

Purpose

OAR chapter 813, division 110, is promulgated to carry out the provisions of ORS 317.097 under which the department certifies affordable multifamily rental housing development projects sponsored by government entities, nonprofit corporations and certain persons (“sponsoring entities or “sponsors”) so as to enable a lending institution to claim Oregon affordable housing tax credits (“OAHTC” or” tax credits”) against Oregon taxes with respect to loans for the construction or acquisition, and rehabilitation of such projects. The purpose of the tax credits is to encourage the creation or preservation of safe, sanitary and affordable housing for lower-income Oregonians. Additional policies and instructions are outlined in the Oregon Affordable Housing Tax Credits (OAHTC) Manual dated June 2, 2014 (the “OAHTC Manual” or “Manual”), incorporated herein by reference. The manual may be accessed online at the department’s website.

Stat. Auth.: ORS 317.097 & 456.555
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.625 & 456.722
Hist.: HSG 1-1990(Temp), f. & cert. ef. 1-5-90; HSG 3-1990(Temp), f. & cert. ef. 3-1-90; HSG 9-1990, f. & cert. ef. 5-11-90; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 6-1991(Temp), f. & cert. ef. 11-5-91; HSG 3-1992, f. & cert. ef. 2-4-92; HSG 2-1994(Temp), f. & cert. ef. 3-25-94; HSG 7-1994, f. & cert. ef. 9-9-94; HSG 2-1995, f. & cert. ef. 9-25-95; OHCS 7-2006, f. & cert. ef. 5-17-06; OHCS 14-2007(Temp), f. & cert. ef. 10-16-07 thru 4-12-08; OHCS 5-2008, f. & cert. ef. 4-11-08; OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13; OHCS 29-2014(Temp), f. & cert. ef. 6-5-14 thru 12-2-14

813-110-0010

Definitions

Certain terms used in this division are defined in ORS chapter 317, the Act, OAR 813-005-0005, and herein. Other terms may be identified in the text of this division (including by incorporation), otherwise in chapter 813, or applicable law.

(1) "Cap" means the maximum amount of tax credits as set by the Legislature in ORS 317.097(6).

(2) "Certification" means the written verification by the department to a lender that a project is a qualified project for which the lending institution may claim a tax credit under the provisions of the Act.

(3) "Firm commitment of financing" means an agreement by a lending institution to make a loan to a specific borrower on a specific property and which will contain all of the terms and conditions that the borrower has to satisfy before said loan can be funded. Payment of a commitment charge by the borrower to the lending institution may be required as a condition precedent to issuance of such an agreement.

(4) "Lending institution" means any insured institution, as defined in ORS 706.008, any mortgage company that maintains an office in this state, or any community development corporation that is organized under the Oregon Nonprofit Corporation Law.

(5) "Preservation project" means housing that was previously developed as affordable housing with a contract for rental assistance from the United States Department of Housing and Urban Development or the United States Department of Agriculture and that is being acquired by a sponsoring entity. The contract for project-based rental assistance must cover at least 25 percent of all units in the project.

(6) "Project," except as defined under "manufactured dwelling park" or "preservation project," means one or more units of housing, that has been acquired, constructed, developed, or rehabilitated, including refinanced housing, which will be rented to or owned by households whose incomes are less than 80 percent of area median income. The use of a project for eligible occupants shall be maintained for the term of the credit, in accordance with the Act, unless terminated at the discretion of the department. If there is a foreclosure, deed-in-lieu, or an involuntary transfer where title transfers to the lending institution, that lending institution may dispose of the property at its sole discretion.

(7) "Rent reduction" means the amount rents are reduced from the rents charged at the market interest rate as a result of the Oregon Affordable Housing Tax Credit (OAHTC) subsidy.

(8) "Rent pass through" means the amount of rent reduction made available to the tenants because of the reduced interest rate attributable to the OAHTC subsidy.

Stat. Auth.: ORS 317.097, 456.555
Stats. Implemented: ORS 317.097, 456.625
Hist.: HSG 1-1990(Temp), f. & cert. ef. 1-5-90; HSG 3-1990(Temp), f. & cert. ef. 3-1-90; HSG 9-1990, f. & cert. ef. 5-11-90; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 6-1991(Temp), f. & cert. ef. 11-5-91; HSG 3-1992, f. & cert. ef. 2-4-92; HSG 2-1994(Temp), f. & cert. ef. 3-25-94; HSG 7-1994, f. & cert. ef. 9-9-94; HSG 2-1995, f. & cert. ef. 9-25-95; OHCS 7-2006, f. & cert. ef. 5-17-06; OHCS 11-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 9-2007, f. & cert. ef. 1-11-07; OHCS 14-2007(Temp), f. & cert. ef. 10-16-07 thru 4-12-08; OHCS 5-2008, f. & cert. ef. 4-11-08; OHCS 1-2009(Temp), f. & cert. ef. 2-9-09 thru 8-7-09; OHCS 2-2009, f. & cert. ef. 8-5-09; OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0013

Loan Requirements

In order to be eligible for the tax credit, the loan shall be:

(1) Made to an individual or individuals who own the dwelling, who participate in an owner-occupied community rehabilitation program, and are certified by the local government or its designated agent as having an income level at the time the loan is made of less than 80 percent of the area median income.

(2) Made to a qualified borrower;

(a) Used to finance construction, development, acquisition, or rehabilitation of housing; and,

(b) Accompanied by a written certification by the department that the:

(A) Housing created by the loan is or will be occupied by households earning less than 80 percent of the area median income; and,

(B) Full amount of the savings, from the reduced interest rate provided by the lending institution, is or will be passed on to the tenants in the form of reduced housing payments, regardless of other subsidies provided to the housing project, or

(3) Made to a qualified borrower;

(a) Used to finance construction, development, acquisition, or acquisition and rehabilitation of housing consisting of a manufactured dwelling park;

(b) The housing created by the loan is or will be occupied by a significant number of households, defined as more than 30% of all households at initial tenant qualification, earning less than 80 percent of the area median income; and,

(c) Accompanied by a written certification by the department that the housing will continue to be operated as a manufactured dwelling park during the period for which the tax credit is allowed, or

(4) Made to a qualified borrower;

(a) Used to finance acquisition, or acquisition and rehabilitation, of housing consisting of a preservation project; and,

(b) Accompanied by a written certification by the department that the housing preserved by the loan:

(A) Is or will be occupied by households earning less than 80 percent of the area median income; and

(B) Has a rent assistance contract with the United States Department of Housing and Urban Development (HUD) or the United States Department of Agriculture that will be maintained by the qualified borrower. The contract must provide rental assistance to households in at least 25% of the project units.

Stat. Auth.: ORS 317.097 & 456.515 - 456.720
Stats. Implemented: ORS 317.097
Hist.: OHCS 14-2007(Temp), f. & cert. ef. 10-16-07 thru 4-12-08; OHCS 5-2008, f. & cert. ef. 4-11-08; Suspended by OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0015

Application Requirements

(1) For the purpose of enabling a lending institution to obtain a reservation of OAHTC under ORS 317.097, a sponsoring entity may apply to the department for certification of a qualified loan for the allocation of OAHTC consistent with OAR Chapter 813 pursuant to relevant solicitation documents issued by the department including, but not limited to a Notice of Funding Availability (“NOFA”), or as otherwise determined by the department. The application shall provide information satisfactory to the department including but not limited to:

(a) The name, address and telephone number of the sponsoring entity;

(b) Proof as required by the department that the sponsoring entity is a qualified borrower;

(c) The relevant background of the qualified borrower and its management agent and their expertise with housing for low-income persons, if applicable;

(d) A firm commitment of financing by the lending institution to the sponsoring entity for the property that is the subject of the tax credits claim containing all of the terms and conditions that the sponsoring entity has to satisfy before the loan will be funded and including an estimated comparable market interest rate for the proposed loan, the estimated reduced interest rate and the estimated amount of savings or a letter of intent for the purpose of a reservation under OAR 813-110-0030;

(e) The name, address and contact person of the lending institution making the loan;

(f) A description of the project, including the type of housing or program involved, the number and type of housing units to be provided, the number of bedrooms, the address where the project is or will be located, and the federal, state and local agencies or organizations involved in financing or managing the project;

(g) A certification that includes, at a minimum, the statement that all information in the application is true, complete and accurately describes the project; and,

(h) An agreement by the sponsoring entity to execute restrictive covenants satisfactory to the department to which covenants will be recorded at the time of loan closing.

(i) A demonstration relating to occupancy of the units in the project, as required by section (2) of this section;

(j) A demonstration that the project meets the minimum requirements of any other department program used by the project, as required by subsection (3) of this section;

(k) Any additional information or actions requested by the department; and

(l) A certification by the sponsoring entity that includes, at a minimum, the statement that all information in the application is true, complete and accurately describes the project.

(2) The following provisions apply to the demonstration relating to occupancy of units that is required in subsection (1) of this section:

(a) A demonstration for a project other than a manufactured dwelling park must show that units constructed or rehabilitated with OAHTC will be occupied by households earning less than 80 percent of adjusted area median income at the time of initial occupancy.

(b) In the case of a preservation project or a manufactured dwelling park awarded after September 27, 2007, pass-through is not required for a certification produced on or after September 27, 2007.

(c) For a project other than a project to which paragraph (b) of this subsection applies, the demonstration must show that at the time the project is initially rented or purchased, and thereafter for the term of the OAHTC or twenty years, whichever is longer, the sponsor will pass the benefits of the project's reduced loan interest rate to tenant or homeowner households whose earnings are less than 80 percent of area median income at the time of initial tenant or homeowner qualification.

(d) A demonstration for a manufactured dwelling park must show that the project meets the occupancy requirements applicable to manufactured dwelling parks in ORS 317.097.

(3) Because the OAHTC Program is intended to lower rents below the level that would obtain after all other subsidies have been applied, a project that uses one or more other department programs must demonstrate that the project meets or will meet the minimum requirements of those other programs before application of the OAHTC subsidy rent reduction. For example, if an applicant has applied for tax credits under the Low Income Housing Tax Credits (LIHTC) program and that application indicated a target of 60 percent of area median income rents, the application under this rule must show the project is feasible at the targeted 60 percent median rents without the OAHTC subsidy. The OAHTC subsidy must be applied to reduce rents below the 60 percent level and must be passed on directly to the OAHTC qualified tenants or homeowners in its entirety although the pass-through need not be distributed evenly among the units. (4) Rental units covered by section 8 project based assistance are not eligible to be used to demonstrate pass-through savings for the OAHTC program because the rent reductions related to the OAHTC subsidy typically would not be on to the tenants in the form of a rent reduction from what the tenants would otherwise pay, and therefore, would not achieve pass-through savings. Projects that are partially covered with project based assistance may qualify to use OAHTC on the remaining units by, inter alia, demonstrating pass-through interest savings that result in appropriate as rent reductions to the OAHTC qualified tenants.

(5) The department may require more extensive and enduring affordability covenants than provided in subsections (2) through (4) as may be reflected in relevant solicitation documents or otherwise.

(6) The department may require a non-refundable application charge and may assess such other charges as it deems reasonable to cover anticipated costs of processing the application, coordinating with other funding or project partners, negotiating and recording required documents or additional administration. Certain other charges are identified later in these rules.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.722
Hist.: HSG 1-1990(Temp), f. & cert. ef. 1-5-90; HSG 3-1990(Temp), f. & cert. ef. 3-1-90; HSG 9-1990, f. & cert. ef. 5-11-90; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 6-1991(Temp), f. & cert. ef. 11-5-91; HSG 3-1992, f. & cert. ef. 2-4-92; HSG 2-1994(Temp), f. & cert. ef. 3-25-94; HSG 7-1994, f. & cert. ef. 9-9-94; HSG 2-1995, f. & cert. ef. 9-25-95; OHCS 7-2006, f. & cert. ef. 5-17-06; OHCS 11-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 9-2007, f. & cert. ef. 1-11-07; OHCS 14-2007(Temp), f. & cert. ef. 10-16-07 thru 4-12-08; OHCS 5-2008, f. & cert. ef. 4-11-08; OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0020

Application Review

(1)(a) Applications for a reservation of OAHTC, or for an OAHTC certification of award if conditions are met as required under OAR 813-110-0015, are subject to department review:

(b) Any resulting reservation or certification of award may include modifications to the application and may be rescinded if conditions subsequent are not satisfied, including but not limited to the requirement to timely acquire a qualified funder who will appropriately use the tax credits.

(2) When a reservation or certification of award is made through a solicitation process, the reservation or certification of award will be subject to conditions identified in the solicitation documents that may differ from or supplement OAR 813-110-0021. When a reservation or certification of award is made outside of a solicitation process, the department may specify additional conditions that may differ from or supplement OAR 813-110-0021.

(3) Criteria that the department may apply in considering an application include but are not limited to the following:

(a) The experience of the sponsoring entity, property management agent and other involved person in providing low-income housing;

(b) Estimated rents that would have to be charged or the purchase price that would be required in order to make the project financially feasible, for the type and location of housing to be provided;

(c) The dollar amount of estimated savings from the reduction in rents from the estimated rents under paragraph (b) of this subsection, or the reduction in purchase price, owing to the OAHTC subsidy;

(d) The estimated rent reduction or purchase price reduction under paragraph (c) of this subsection;

(e) How long the tax credits are needed to meet the sponsoring entity’s goals of long- term safe, sanitary and affordable housing;

(f) Except for manufactured dwelling park or preservation projects awarded after September 27, 2007, the sponsoring entity’s statement that the proposed rent reduction or reduced purchase price will be maintained for or offered to households whose annual incomes are less than 80 percent of area median income;

(g) Restrictive covenants that provide for, but are not limited to, appropriate habitability, income and rent restrictions;

(h) A certifying statement from the agent for the lending institution of a local owner-occupied community rehabilitation program, if applicable;

(j) The target population to be served;

(j) The need for such affordable housing in the area to be served;

(k) Consistency with the comprehensive housing plan for the state or community;

(l) 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 that best serve the residents;

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

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

(o) Compliance with applicable local comprehensive plan and land use regulations, housing codes and other applicable standards;

(p) The experience of the developer, contractors, architects, consultants and management agents in developing, constructing and operating housing projects; and

(q) The department's experience with and the reputation, experience and capacity of the sponsoring entity, project owner and developer and their representatives, employees and contractors.

(4) Applications are subject to review by the department under this rule according to a process that may include, but need not be limited to an invitation only, a first-come first-reviewed or a competitive review process.

(5) The amount of a reservation or certification of award made pursuant to an application under this division, together with the total outstanding tax credits, may not exceed the maximum allowable amount of tax credits for a project established under program requirements including, but not limited to those established in ORS 317.097.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.722
Hist.: HSG 1-1990(Temp), f. & cert. ef. 1-5-90; HSG 3-1990(Temp), f. & cert. ef. 3-1-90; HSG 9-1990, f. & cert. ef. 5-11-90; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 6-1991(Temp), f. & cert. ef. 11-5-91; HSG 3-1992, f. & cert. ef. 2-4-92; HSG 7-1994, f. & cert. ef. 9-9-94; HSG 2-1995, f. & cert. ef. 9-25-95; OHCS 7-2006, f. & cert. ef. 5-17-06; OHCS 14-2007(Temp), f. & cert. ef. 10-16-07 thru 4-12-08; OHCS 5-2008, f. & cert. ef. 4-11-08; OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0021

Reservation in Lieu of Certification

(1) For a reservation granted under OAR 813-110-0020:

(a) Except as provided in subsection (2) of this section, the reservation is valid for 180 days and is subject to extension by the department at its sole discretion; and

(b) Is a confirmed reservation unless the lending institution modifies the original letter of intent or there is a failure to comply with material terms of the reservation.

(2) A reservation for a sponsoring entity that is a local government entity providing a community rehabilitation program or rental project may be made for the period of proposed financing and may be extended at the discretion of the department.

(3) A sponsor that furnishes the department a firm commitment of financing prior to the expiration of a reservation is eligible, subject to other program requirements, for issuance of a certification.

(4) A sponsor to which a reservation has been issued shall notify the department of any change in the lending institution as well as any failure to comply with a material term of the reservation.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.722
Hist.: HSG 6-1991(Temp), f. & cert. ef. 11-5-91; HSG 3-1992, f. & cert. ef. 2-4-92; HSG 7-1994, f. & cert. ef. 9-9-94; HSG 2-1995, f. & cert. ef. 9-25-95; OHCS 7-2006, f. & cert. ef. 5-17-06; OHCS 14-2007(Temp), f. & cert. ef. 10-16-07 thru 4-12-08; OHCS 5-2008, f. & cert. ef. 4-11-08; OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0022

Set-Aside

(1) A portion of the maximum amount of tax credits established in ORS 317.097 is subject to either or both of the following:

(a) A set-aside by the department for projects that meet department identified goals under the OAHTC program.

(b) One or more set-asides established by the department from time to time, when directed by the State Housing Council, to meet housing needs in various economic or geographic regions of the state.

(2) At the department’s direction, a sponsoring entity that does not qualify for a set-aside under subsection (1) of this section may request that the department approve a set-aside on alternate grounds as provided in this subsection. The sponsoring entity must demonstrate to the department that the sponsoring entity meets criteria similar to those used in the needs assessment in Oregon’s plan that is approved by the U.S. Department of Housing and Urban Development (HUD) and that describes the needs, resources, priorities and proposed activities to be undertaken with respect to programs of that department. The department may approve or deny a set-aside on the basis of its consideration of a request under this subsection.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.722
Hist.: HSG 6-1991(Temp), f. & cert. ef. 11-5-91; HSG 3-1992, f. & cert. ef. 2-4-92; HSG 7-1994, f. & cert. ef. 9-9-94; HSG 2-1995, f. & cert. ef. 9-25-95; OHCS 7-2006, f. & cert. ef. 5-17-06; OHCS 14-2007(Temp), f. & cert. ef. 10-16-07 thru 4-12-08; OHCS 5-2008, f. & cert. ef. 4-11-08; OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0025

Certification of Eligible Projects

(1) When the department determines that it may issue a certification to a lending institution as authorized by ORS 317.097, the certification will include, inter alia, the following as applicable:

(a) The proposed borrower is an eligible sponsor;

(b) The proposed borrower has demonstrated that the required benefits will be passed on to households earning less than 80 percent of area median income, except for manufactured dwelling park projects, according to program requirements including, but not limited to those in ORS 317.097 and this division.

(c) The length of the period eligible for tax credits; and

(d) The loan does not exceed the maximum limitation for total loan balances.

(2) A certification is based on information provided by the sponsoring entity in the application and accumulated from the lending institution’s annual reports required by OAR 813-110-0030 and conditioned, inter alia, upon the accuracy of such information.

(3) A certification is valid for the purpose of the tax credit only if the information on which the certification is based, other than estimates based on interest rates and other changes made with the approval of the department, is unchanged when the loan is closed for the project and when funding documents satisfactory to the department including, but not limited to an appropriate declaration of restrictive covenants have been executed and, as required by the department, recorded in the official records of the appropriate counties.

(4) To establish the use of a certificate for a fixed rate term loan, a lending institution shall, inter alia, complete the loan closing information section of the certificate and send the original to the department along with evidence satisfactory to the department that an appropriate declaration of restrictive covenants has been recorded or will be recorded at the close of permanent financing (as required by the department) against the project property.

(5) When the department approves a tax credit for a construction loan, the lending institution shall complete the loan closing information section of the certificate and send the original to the department, and may record the restrictive covenants.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.722
Hist.: HSG 1-1990(Temp), f. & cert. ef. 1-5-90; HSG 3-1990(Temp), f. & cert. ef. 3-1-90; HSG 9-1990, f. & cert. ef. 5-11-90; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 6-1991(Temp), f. & cert. ef. 11-5-91; HSG 3-1992, f. & cert. ef. 2-4-92; HSG 7-1994, f. & cert. ef. 9-9-94; HSG 2-1995, f. & cert. ef. 9-25-95; OHCS 7-2006, f. & cert. ef. 5-17-06; OHCS 14-2007(Temp), f. & cert. ef. 10-16-07 thru 4-12-08; OHCS 5-2008, f. & cert. ef. 4-11-08; OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0026

Reservations, Certifications and Other Commitments Subject to State Housing Council Approval

If the department provides a reservation, certification of award or otherwise commits to an award of OAHTC under this division and if the amount of any related tax credits or any other department funding approved by the department that was considered by the department in setting the amount of the tax credits (“Complementary Funding”) meets or exceeds the threshold amount established in OAR 813-001-0007(1) for review by the State Housing Council, the reservation, certification or other commitment is subject to review and approval by the council of such tax credit assistance and any such complementary funding. The council may approve, deny, modify or further condition funding assistance subject to its review. Based upon any relevant council determination, including with respect to complementary funding, any subject reservation, certification or other commitment may be deemed revoked, be modified or be further conditioned.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.625 and 456.722
Hist.: OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0027

Certification Request by Lending Institution

(1) A sponsor shall submit a separate application for each certification of a sponsoring entity requested under the Oregon Affordable Housing Tax Credits program.

(2) A sponsor shall pay a charge to the department as assessed by the department for each application for a certification.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.722
Hist.: OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0030

Monitoring and Reporting Requirements

(1) A lending institution claiming state tax credits under ORS 317.097 is subject to monitoring by the department. A lending institution shall submit to the department by May 1 of each year a report satisfactory to the department in which the lending institution affirms that the lending institution has met all requirements imposed by law to qualify for the tax credits. The report must be submitted on a form furnished by the department and signed by an officer of the lending institution, and:

(a) May not include any representation as to the performance by the sponsoring entity; and

(b) Shall include, at a minimum, the name and address of the institution, the name and phone number of a contact person, the number of loans for which tax credits will be claimed, the amount of credit claimed, the annual charge payment, the dates the loans were closed, the location of the projects financed by those loans, the amount loaned for each project, the outstanding balances of all loans, and the average annual balance for each loan.

(2) A project receiving OAHTC is subject to reviews and field inspections that the department determines to be necessary or appropriate including, but not limited to ensuring the sponsoring entity’s and project owner’s compliance with program requirements including, but not limited to OAR chapter 813 (including the OAHTC Manual and General Manual), department directives, relevant documents, applicable law or otherwise. The project owner shall cooperate fully with all reviews and field inspections, comply with any resulting correction directives, and shall make all records available for inspection and copying.

(3) A project owner shall retain financial records, supporting documents and all other pertinent records for six years after the project affordability period is complete, or after any litigation or audit claim is resolved, whichever is later.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.722
Hist.: HSG 1-1990(Temp), f. & cert. ef. 1-5-90; HSG 3-1990(Temp), f. & cert. ef. 3-1-90; HSG 9-1990, f. & cert. ef. 5-11-90; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 6-1991(Temp), f. & cert. ef. 11-5-91; HSG 3-1992, f. & cert. ef. 2-4-92; HSG 7-1994, f. & cert. ef. 9-9-94; HSG 2-1995, f. & cert. ef. 9-25-95; OHCS 7-2006, f. & cert. ef. 5-17-06; OHCS 11-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 9-2007, f. & cert. ef. 1-11-07; OHCS 14-2007(Temp), f. & cert. ef. 10-16-07 thru 4-12-08; OHCS 5-2008, f. & cert. ef. 4-11-08; OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0032

Supplemental Application Charge

A sponsoring entity of a project under the OAHTC program shall pay a supplemental application charge, as established by the department from time to time, when the sponsoring entity requests additional resources for a project that has already been funded under the program.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605 and 456.722
Hist.: OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0034

Transfer of Loan, Owner, or Project

(1) An owner of a project that has received OAHTC assistance or recipient of a loan subsidized by such assistance shall not transfer or allow any transfer of any interest in itself, the loan or the project or otherwise encumber the project, or any portion or interest therein, unless the department first approves the transfer or encumbrance in writing. Any such transfer is subject to payment to the department by the borrower or owner, as applicable, of a transfer charge as required by the department. If the borrower or owner effects or allows a transfer without prior written approval by the department, the transfer is voidable and remains subject to the approval or disapproval of the department and the borrower or owner and transferees, jointly and severally, are subject to a transfer review charge by the department.

(2) The department may condition its approval upon such terms and conditions as it, at its sole discretion, may require. Factors the department may consider in determining whether or not to give approval to a transfer include but are not limited to:

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

(b) Preservation of existing housing;

(c) The proposed owner’s ability to maintain and manage the property for the needs of the residents, the integrity of the housing and as security for the loan;

(d) The effect of the transfer upon the financial integrity of the project, repayment of the loan, use of the project for its intended purposes, and continuity of the program; and

(e) Continued compliance with applicable program requirements including, but not limited to terms and conditions of funding documents and state and federal laws, rules and regulations.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.722
Hist.: OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0035

Community Rehabilitation Project Certification

(1) A local government or its designated agent that certifies a participant in a community rehabilitation program shall certify to the department that the tax credits for the community rehabilitation program fall within the maximum amount of tax credits authorized in ORS 317.097.

(2) A participant in a community rehabilitation program includes any individual, nonprofit corporation or unit of local government that re-loans proceeds to an individual participating in the community rehabilitation program.

(3) A local government entity shall certify to the department that the local community rehabilitation standards will be met for all relending of proceeds from a certified loan.

Stat. Auth.: ORS 317.097 & 456.515 - 456.720
Stats. Implemented: ORS 317.097
Hist.: HSG 9-1990, f. & cert. ef. 5-11-90; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 6-1991(Temp), f. & cert. ef. 11-5-91; HSG 3-1992, f. & cert. ef. 2-4-92; OHCS 7-2006, f. & cert. ef. 5-17-06; OHCS 11-2006(Temp), f. & cert. ef. 8-4-06 thru 1-30-07; OHCS 9-2007, f. & cert. ef. 1-11-07; OHCS 14-2007(Temp), f. & cert. ef. 10-16-07 thru 4-12-08; OHCS 5-2008, f. & cert. ef. 4-11-08; OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0037

Use of Project; Transfer of Title

(1) The sponsoring entity and the owner of a project, including any successors, assigns or transferees shall maintain operate and maintain the project in a manner consistent with program requirements including, but not limited to its use for eligible occupants, for the term of the tax credits or twenty years, whichever is longer.

(2) If the title to a project transfers to the lending institution because of a foreclosure, a deed-in-lieu of foreclosure or an involuntary transfer under a bankruptcy proceeding, the lending institution may dispose of the property at its sole discretion.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605 and 456.722
Hist.: OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0040

Monitoring

(1) If the department determines that the owner of a project under the OAHTC program is not complying with any applicable rule, law, document or other OAHTC program requirement, the department may notify the lending institution, the owner and the sponsoring entity. In the notice, the department will describe the matter of noncompliance, the required correction and the date by which correction must be made. The owner and sponsoring entity may comment on the notice within the period specified by the department and submit any accompanying explanation and documentation.

(2) The owner of a project shall correct the noncompliance, if possible, and pay a penalty established by the director for noncompliance under subsection (1) of this section and any further penalties assessed by the department if the noncompliance is not corrected to the satisfaction of the director within the period established by the department. In assessing a penalty under this section, the department shall take into consideration any comments submitted by the owner and sponsoring entity with respect to the noncompliance and their correction efforts, if any.

(3) Penalties assessed under this rule may not exceed three times the amount of the eligible tax credit per year.

(4) Any penalties assessed under this rule are the liability of the owner and not the liability of the lending institution.

Stat. Auth.: ORS 317.097
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605, 456.722
Hist.: HSG 6-1991(Temp), f. & cert. ef. 11-5-91; HSG 3-1992, f. & cert. ef. 2-4-92; HSG 2-1995, f. & cert. ef. 9-25-95; OHCS 7-2006, f. & cert. ef. 5-17-06; OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

813-110-0045

Remedies

(1) If the department determines that there has been any material failure or default with respect to any term, covenant or condition of the applicable solicitation or funding documents, applicable rules, directives, other program requirements, or otherwise, it (or as applicable, the department of Revenue) may exercise any remedy available under OAR chapter 813 (including, but not limited to sanctions provided in OAR 813-110-0040, and remedies available in the OAHTC Manual and General Manual), relevant solicitation or funding documents, or applicable law. Remedies include, but are not limited to corrective orders or directives, sanctions, recapture of OAHTC, recovery for damages, specific performance, injunctive relief, declaratory actions, appointment of a receiver for the project, foreclosure of lien interests, debarment from other department funding, and other remedies available at law.

(2) The remedies set forth in this section are cumulative and not exclusive and are in addition to any other rights and remedies provided in this division, other department rules, the solicitation or funding documents, or otherwise available at law or otherwise. The department may exercise any or all remedies available to it, and in such manner as it, in its sole discretion, determines appropriate.

Stat. Auth.: ORS 314.097, 456.555
Stats. Implemented: ORS 317.097, 456.508, 456.510, 456.513, 456.559, 456.605 and 456.722
Hist.: OHCS 9-2013(Temp), f. & cert. ef. 6-21-13 thru 12-18-13; OHCS 22-2013, f. & cert. ef. 12-18-13

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