| (a) Good Cause Extensions. The Executive Director or
authorized designee may approve extensions of up to 12 months under
10 TAC §13.11(c)(7) - (8) or (14)(L) of this chapter (relating
to Post-Award Requirements) based on documentation that there is good
cause for the extension and cause the Department to violate or be
at risk of violating a federal requirement or deadline.
(b) Amendments to MFDL Awards. Except in cases of Force
Majeure, changes to terms of awards subject to mandatory HUD reporting
requirements will only be processed after the Construction Completion
is reported to the federal oversight entity as completed, and the
last of the MFDL funds have been drawn.
(c) Executive Amendments. The Executive Director or
authorized designee may approve amendments to loan terms post-closing
as described in paragraphs (1) - (3) of this subsection. Board approval
is necessary for any other changes post-closing.
(1) Changes in Terms. Changes to the amortization or
maturity date to accommodate the requirements of other lenders or
maintain parity of term may be approved post-closing, provided the
changes result in the Direct Loan continuing to meet the requirements
of 10 TAC §13.8(c)(1) and (3) of this chapter (relating to Loan
Structure and Underwriting Requirements), and NOFA requirements.
(2) Post-Closing Subordinations or Re-subordinations
of MFDL Liens. Re-subordination of the Direct Loan in conjunction
with refinancing may be approved post-closing, provided the conditions
in subparagraphs (A) - (E) of this paragraph are met:
(A) The Borrower is current with loan payments to the
Department, and no notice has been given of any Event of Default on
any MFDL loan. Histories of late or non-payment on any other MFDL
loan may result in denial of the request;
(B) The refinance does not propose payment to any of
the Development Owner or Developer parties (including the Limited
Partners);
(C) A proposal for partial repayment of the MFDL lien
is made with the request;
(D) The new superior lien is in an amount that is equal
to or less than the original senior lien and does not negatively affect
the financial feasibility of the Development.
(i) For purposes of this section, a negative effect
on the financial feasibility of the Development shall mean a reduction
in the total Debt Coverage Ratio (DCR) of more than 0.05, or if the
DCR no longer meets the requirements of 10 TAC §11.302 of this
title; and
(ii) Changes to accommodate refinancing with a new
superior lien that is in an amount that exceeds the original senior
lien and which will be directly applied to property improvements,
as evidenced by the loan or security agreements (exclusive of fees
associated with the refinance and any required reserves), will be
considered on a case by case basis; and
(E) The subordination or re-subordination request does
not include a request to subordinate or resubordinate any MFDL LURA,
with the exception of partial subordination or re-subordination of
receivership rights (subject to the prosed receiver entity or Affiliate
not having been Debarred by the Department or on the Federal Suspended
or Debarred Listing).
(3) Workout Arrangements. Changes required to the Department's
loan terms or amounts that are part of an approved Asset Management
Division work out arrangement may be approved after Construction Completion.
(d) Contract Assignments and Assumptions of MFDL Liens.
The Executive Director or authorized designee may approve the Contract
Assignment and Assumption of MFDL Liens following approval of an Ownership
Transfer request if the conditions in paragraphs (1) - (3) of this
subsection are met:
(1) The assignment or assumption is not prohibited
by the Contract, Loan Documents, or regulations;
(2) The assignment or assumption request is based on
either subparagraph (A) or (B) of this paragraph:
(A) There are insufficient funds available in the transaction
to fully repay the Direct Loan at the time of acquisition, for which
Deferred Developer Fee, Development Owner or Affiliate Contributions,
or other similar liabilities will not be considered in determining
whether the Direct Loan could be repaid at the time of acquisition;
or
(B) The new superior lien will be directly applied
to property improvements as evidenced by the loan or security agreements,
exclusive of fees association with the new financing and any required
reserves; and
(3) The corresponding Ownership Transfer has been approved
in accordance with all requirements in 10 TAC §10.406 of this
title (relating to Ownership Transfers), and no prospective Owner
including person, or affiliate, as those terms are defined in 2 CFR
Part 180 and 2 CFR Part 2424, Subpart I, has been subject to state
Debarment or are on the Federal Suspended or Debarred Listing. This
includes Board Members and Limited Partners.
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