(11) Initial Occupancy. Initial occupancy of all MFDL
assisted Units by eligible households shall occur within six months
of the final Direct Loan draw. Requests to extend the initial occupancy
period must be accompanied by documentation of marketing efforts and
a marketing plan. The marketing plan may be submitted to HUD for final
approval, if required by the MFDL fund source.
(12) Per Unit Repayment. Repayment may be required
on a per Unit basis for Units that have not been rented to eligible
households within 6-18 months of the final Direct Loan draw, depending
on the fund source.
(13) Termination and Repayment for Failure to Complete.
Termination of the Direct Loan award and repayment of all disbursed
funds will be required for any Development that is not completed within
four years of the effective date of a Direct Loan Contract.
(14) Disbursement of Funds. The Borrower must comply
with the requirements in subparagraphs (A) - (K) of this paragraph
in order to receive a disbursement of funds to reimburse eligible
costs incurred. Submission of documentation related to the Borrower's
compliance with these requirements is required with a request for
disbursement:
(A) All requests for disbursement must be submitted
using the MFDL draw workbook or such other format as the Department
may require;
(B) Documentation of the total construction costs incurred
and costs incurred since the last disbursement of funds must be submitted.
Such documentation must be signed by the General Contractor and certified
by the Development architect and is generally in the form of an AIA
Form G702/ G703 or HUD equivalent form;
(C) Disbursement requests must include a down-date
endorsement to the Direct Loan (mortgagee) title policy or Nothing
Further Certificate that includes a title search through the date
of the Architect's signature on AIA form G702 or HUD equivalent form.
For release of retainage, the down-date endorsement to the Direct
Loan title policy or Nothing Further Certificate must be dated at
least 30 calendar days after the date of the completion as certified
on the Certificate of Substantial Completion (AIA Form G704) with
$0 as the work remaining to be completed. If AIA Form G704 or HUD
equivalent form indicates an amount of work remaining to be completed,
the Architect must provide confirmation that all work has been completed.
Disbursement requests for acquisition and closing costs are exempt
from this requirement;
(D) Table Funding (the wiring of Direct Loan funds
to the title company at loan closing) may be permitted at the time
of closing, for disbursement of funds related to eligible acquisition
costs and eligible softs costs incurred, and in an amount not to exceed
50% of the total funds. Table Funding must be requested in writing
at least 30 calendar days prior to the anticipated closing date, and
will not be considered unless the Direct Loan Contract has been executed
and all necessary documentation has been submitted to and accepted
by the Department at least 10 calendar days prior to the anticipated
closing date;
(E) At least 50% of Direct Loan funds (except as otherwise
allowed for Permanent Refinance Loans described in 10 TAC §13.8(e))
will be withheld from the initial disbursement of loan funds to allow
for periodic disbursements;
(F) The initial draw request for the Development (excluding
Table Funding) must be entered into the Department's Housing Contract
System no later than 180 days after loan closing, and may not be submitted
prior to submission of all architectural drawings;
(G) Developer Fee disbursement shall be limited by
subparagraph (I) of this paragraph and is further conditioned upon
clauses (i) - (iii), as applicable:
(i) For Developments in which the loan is secured by
a first lien deed of trust against the Property, 75% shall be disbursed
in accordance with percent of construction completed. 75% of the total
allowable fee will be multiplied by the percent completion, as documented
by the construction contract and as may be verified by an inspection
by the Department. The remaining 25% shall be disbursed at the time
of release of retainage; or
(ii) For Developments in which the loan is not secured
by a first lien deed of trust or the Development is also utilizing
Housing Tax Credits, Developer Fees will not be reimbursed by the
Department, except as follows. If all other lenders and syndicator
in a Housing Tax Credit Development (if applicable) provide written
confirmation that they do not have an existing or planned agreement
to govern the disbursement of Developer Fees and expect that Department
funds shall be used to fund Developer Fees, they shall be reimbursed
in the same manner as described in subparagraph (A) of this paragraph;
and
(iii) The Department may reasonably withhold any disbursement
in accordance with the Loan Documents and if it is determined that
the Development is not progressing as reasonably necessary to meet
the benchmarks for the timely completion of construction of the Development
as set forth in the loan documents, or that cost overruns have put
the Development Owner's ability to repay its Direct Loan or complete
the construction at risk in accordance with the terms of the loan
documents and within budget. If disbursement has been withheld under
this subsection, the Development Owner must provide evidence to the
satisfaction of the Department that the Development will be timely
completed and occupied in order to continue receiving funds. If disbursement
is withheld for any reason, disbursement of any remaining Developer
Fee will be made only after construction of the Development has been
completed, and all requirements for expenditure and occupancy have
been met;
(H) Expenditures must be allowable and reasonable in
accordance with federal and state rules and regulations. The Department
shall review each expenditure requested for reasonableness. The Department
may request the Development Owner make modifications to the disbursement
request and is authorized to modify the disbursement procedures set
forth herein and to establish such additional requirements for payment
of Department funds to Development Owner as may be necessary or advisable
for compliance with all program requirements;
(I) Following 50% construction completion, any funds
will be released in accordance with the percentage of construction
completion as documented on AIA Form G702/703 or HUD equivalent form.
10% of requested Hard Costs will be retained and will not be released
until the final draw request. If the Development is receiving funds
from more than one MFDL source, the retainage requirement will apply
to each fund source individually. All of the items described in clauses
(i) - (viii) of this subparagraph are required in order to approve
the final draw request:
(i) Fully executed Certificate of Substantial Completion
(AIA Form G704) or Form HUD-92485 (for instances in which a federally
insured HUD loan is being utilized) with $0 as the cost estimate of
work that is incomplete. If AIA Form G704 or Form HUD-92485 indicates
an amount of work remaining to be completed, the Architect must provide
confirmation that all work has been completed;
(ii) A down date endorsement to the Direct Loan title
policy or Nothing Further Certificate dated at least 30 calendar days
after the date of completion as certified on the Certificate of Substantial
Completion (AIA Form G704) or Form HUD-92485;
(iii) For Developments not layered with Housing Tax
Credits, a Closed Final Development Inspection Letter from the Department;
(iv) For NHTF Developments layered with HTCs, a separate,
additional cost certification form completed by an independent, licensed,
certified public accountant of all Development costs (including project
costs), subject to the conditions and limitations set forth in the
executed Direct Loan Contract, commonly known as a cost certification;
(v) For Developments subject to the Davis-Bacon Act,
written documentation from the Department that the Department's Notice
to Proceed that serves to lock in the Department of Labor's worker
prevailing wage mandates at the development and authorizes start of
construction was sent and final wage compliance report was received
and approved or confirmation that HUD or other entity maintains Davis-Bacon
oversight;
(vi) Certificate(s) of Occupancy (for New Construction
or Reconstruction Units);
(vii) Development completion reports, which includes,
but is not limited to, documentation of full compliance with the Uniform
Relocation Act/104(d), Match Documentation requirements, and Section
3 of the Housing and Urban Development Act of 1968, as applicable
to the Development, and any other applicable requirement;
(viii) If applicable to the Development, certification
from Architect or a licensed engineer that all HUD environmental mitigation
conditions have been met; and
Cont'd... |