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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language


  

                         Laws of Minnesota 1983 

                        CHAPTER 185--H.F.No. 441
           An act relating to the housing finance agency; 
          increasing the maximum permissible return to certain 
          mortgagors; increasing the maximum rehabilitation loan 
          amount; combining certain bonding categories; 
          clarifying other agency duties and powers; modifying 
          certain duties and powers of issuers of local housing 
          revenue bonds; amending Minnesota Statutes 1982, 
          sections 462A.03, subdivision 13; 462A.05, 
          subdivisions 4, 9, 14a and 18, and by adding a 
          subdivision; 462A.06, subdivision 8; 462A.09; 462A.21, 
          subdivision 4b, and by adding a subdivision; 462A.22, 
          subdivisions 1 and 5; 462C.05, subdivision 7; and 
          462C.07, subdivision l; repealing Minnesota Statutes 
          1982, section 462A.22, subdivision 1a. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 462A.03, 
subdivision 13, is amended to read: 
    Subd. 13.  "Eligible mortgagor" means a nonprofit or 
cooperative housing corporation, limited profit entity or a 
builder as defined by the agency in its rules, which sponsors or 
constructs residential housing as defined in subdivision 7, or a 
natural person of low or moderate income, except that the return 
to a limited dividend entity shall not exceed six ten percent of 
the capital contribution of the investors or such lesser 
percentage as the agency shall establish in its rules.  Owners 
of existing residential housing occupied by renters shall be 
eligible for rehabilitation loans, only if, as a condition to 
the issuance of the loan, the owner agrees to conditions 
established by the agency in its rules relating to rental or 
other matters that will insure that the housing will be occupied 
by persons and families of low or moderate income.  The agency 
shall require by rules that the owner give preference to those 
persons of low or moderate income who occupied the residential 
housing at the time of application for the loan. 
    Sec. 2.  Minnesota Statutes 1982, section 462A.05, 
subdivision 4, is amended to read: 
    Subd. 4.  It may purchase and enter into commitments for 
the purchase of eligible securities, certificates of deposit, 
time deposits, or existing mortgage loans from banks, savings 
and loan associations, insurance companies, or other financial 
intermediaries, provided that the agency shall first determine 
that the proceeds of such securities instruments will be 
utilized for the purpose of making loans for residential housing 
for occupancy by persons or families of low and moderate income 
as defined in section 462A.03, subdivision 7. 
    Sec. 3.  Minnesota Statutes 1982, section 462A.05, 
subdivision 9, is amended to read: 
    Subd. 9.  It may invest any funds not required for 
immediate disbursement in direct obligations of the United 
States government or in obligations the principal of and 
interest on which are guaranteed by the United States government 
or an agency thereof accordance with the provisions of section 
462A.18, subdivision 2. 
    Sec. 4.  Minnesota Statutes 1982, section 462A.05, 
subdivision 14a, is amended to read: 
    Subd. 14a.  It may make loans to persons and families of 
low and moderate income to rehabilitate or to assist in 
rehabilitating existing residential housing owned and occupied 
by those persons or families.  No loan shall be made unless the 
agency determines that the loan will be used primarily for 
rehabilitation work necessary for health or safety, essential 
accessibility improvements, or to improve the energy efficiency 
of the dwelling.  No loan for rehabilitation of owner occupied 
residential housing shall be denied solely because the loan will 
not be used for placing the residential housing in full 
compliance with all state, county or municipal building, housing 
maintenance, fire, health or similar codes and standards 
applicable to housing.  The amount of any loan shall not exceed 
the lesser of (a) $6,000 $7,500, or (b) the actual cost of the 
work performed, or (c) that portion of the cost of 
rehabilitation which the agency determines cannot otherwise be 
paid by the person or family without the expenditure of an 
unreasonable portion of the income of the person or family.  In 
making loans, the agency shall determine the circumstances under 
which and the terms and conditions under which all or any 
portion of the loan will be repaid and shall determine the 
appropriate security for the repayment of the loan.  Loans 
pursuant to this subdivision may be made with or without 
interest or periodic payments.  No loan under this subdivision 
shall be denied solely on the basis of the inability of the 
applicant to make periodic loan payments.  Loans made without 
interest or periodic payments need not be repaid by the borrower 
if the property for which the loan is made has not been sold, 
transferred or otherwise conveyed nor has it ceased to be the 
principal place of residence of the borrower, within ten years 
after the date of the loan.  
    Sec. 5.  Minnesota Statutes 1982, section 462A.05, 
subdivision 18, is amended to read: 
    Subd. 18.  It may make loans solely to "nonprofit" sponsors 
as defined by the agency, with or without interest, and with 
such security for repayment, if any, as the agency determines 
reasonably necessary and practicable, solely from the housing 
development fund in accordance with the provisions of section 
462A.21, subdivision 9, to encourage innovations in the 
development or rehabilitation of single and multifamily 
residential housing including the demonstration of new 
techniques for energy efficient construction.  It may make loans 
to for-profit sponsors pursuant to this subdivision, provided 
that the agency shall make the loan with interest at a rate 
determined by the agency.  
    It shall promulgate rules, in accordance with the 
provisions of sections 14.01 to 14.70, relating to the 
administration of the loans authorized by this subdivision.  The 
rules may define types of projects eligible for loans, criteria 
for selecting between eligible loans, terms of the loans 
including interest rates and loan periods, and other 
characteristics that the agency deems necessary to administer 
the program. 
    Sec. 6.  Minnesota Statutes 1982, section 462A.05, is 
amended by adding a subdivision to read: 
    Subd. 22.  It may make or participate in the making and 
enter into commitments for the making of loans to any banking 
institution, savings and loan association, or other lender 
approved by the members, organized under the laws of this or any 
other state or of the United States having an office in this 
state, notwithstanding the provisions of section 462A.03, 
subdivision 13, if it first determines that the proceeds of such 
loans will be utilized for the purpose of making loans to or for 
the benefit of eligible persons and families as provided and in 
accordance with sections 462A.01 to 462A.24.  Loans pursuant to 
this subdivision shall be secured, repaid and bear interest at 
the rate as determined by the members.  
    Sec. 7.  Minnesota Statutes 1982, section 462A.06, 
subdivision 8, is amended to read: 
    Subd. 8.  It may sell, at public or private sale, any note, 
mortgage or other instrument or obligation evidencing or 
securing a loan, including a certificate evidencing an interest 
in one or more loans.  The agency may, in connection with such a 
sale, retain the right or obligation to collect the principal 
and interest on the loan, to enter into commitments for timely 
remittal of the principal and interest, or to provide any other 
services as described in the certificate.  
    Sec. 8.  Minnesota Statutes 1982, section 462A.09, is 
amended to read:  
    462A.09 [BONDS AND NOTES; RESOLUTIONS AUTHORIZING, 
ADDITIONAL TERMS, SALE.] 
    The notes and bonds of the agency shall be authorized by a 
resolution or resolutions adopted by the agency, shall bear such 
date or dates, shall mature at such time or times, shall bear 
interest at such rate or rates, be in such denominations, be in 
such form, carry such registration privileges, be executed in 
such manner, be payable in lawful money of the United States of 
America, at such place or places within or without the state, 
and be subject to such terms of redemption prior to maturity as 
such resolutions or certificates may provide.  If, for any 
reason, whether existing at the date of issue of any bonds or 
notes or at the date of making or purchasing any loan or 
securities from the proceeds or thereafter, the interest on any 
bonds or notes shall be or become subject to federal income 
taxation, this shall not impair or affect the validity or the 
provisions made for the security of the bonds or notes.  The 
agency may make such covenants and take or cause to be taken 
such actions as are in its judgment necessary or desirable to 
comply with conditions established by federal law or regulations 
for the exemption of interest on its obligations.  The agency 
may refrain from compliance with such conditions if in its 
judgment this would serve the purposes and policies set forth in 
this chapter with respect to any particular issue of bonds or 
notes, unless this would violate covenants made by the agency.  
No note shall mature more than ten years from its date or from 
the date of any note refunded thereby.  The maximum maturity of 
any bond, whether or not issued for the purpose of refunding, 
shall be 50 years from its date.  The notes and bonds of the 
agency may be sold at public or private sale, at such price or 
prices as the agency shall determine; provided that in no event 
shall the net proceeds to the agency of any issuance of bonds be 
less than 97.5 percent of the face amount of the bonds.  Prior 
to the sale of notes and bonds, the agency shall consult with 
the executive director of the state board of investment on the 
terms and conditions of the bonds and appropriate underwriting 
fees.  The executive director of the state board of investment 
shall participate in the negotiations for the sale of bonds of 
the agency (i) the aggregate price at which an issue of notes or 
bonds is initially offered by underwriters to investors, as set 
forth in the agency's official statement with respect to the 
offering, shall not exceed by more than three percent the 
aggregate price paid by the underwriters to the agency at the 
time of delivery; (ii) the commission paid by the agency to an 
underwriter or agent for placing an issue of notes or bonds with 
investors shall not exceed three percent of the aggregate price 
at which the issue is offered to investors as set forth in the 
agency's offering statement; and (iii) the spread or commission 
shall be an amount determined by the agency to be reasonable in 
the light of the risk assumed and the expenses of issuance, if 
any, required to be paid by the underwriters or agent. 
    Sec. 9.  Minnesota Statutes 1982, section 462A.21, 
subdivision 4b, is amended to read: 
    Subd. 4b.  It may establish loan funds and may make 
eligible loans from them, at rates of interest and with security 
as the agency deems advisable, if each loan is determined by the 
agency to be necessary to permit the occupant of residential 
housing financed wholly or in part by the loan to meet his 
housing costs without expending an unreasonable portion of his 
income on them.  It may combine loan funds established pursuant 
to legislative appropriations with loan funds established for 
the same or similar purposes pursuant to the sale of its notes 
or bonds, and such combined funds may be deposited with a 
trustee.  Portions of these funds derived from appropriations or 
the sale of its notes or bonds may be set aside as reserves 
against losses on loans to be made from the combined funds.  
Each combined fund, including loan and investment principal and 
income received therefrom, shall be administered, disbursed, and 
collected as provided in the appropriation act and the 
resolution or indenture securing the bonds or notes.  
    Sec. 10.  Minnesota Statutes 1982, section 462A.21, is 
amended by adding a subdivision to read: 
    Subd. 8a.  It may establish a multifamily development 
assistance fund, on terms and conditions it deems advisable, to 
be used in connection with the financing of multifamily 
developments (a) to make loans, with or without interest, 
pursuant to section 462A.05, subdivisions 1 and 3, or (b) to 
make payments into accounts of the agency for the purpose of 
making payments required by a resolution for the issuance of its 
notes or bonds, as permitted by section 462A.10, subdivision 4.  
    Sec. 11.  Minnesota Statutes 1982, section 462A.22, 
subdivision 1, is amended to read: 
    Subdivision 1.  The aggregate principal amount of bonds and 
notes which are outstanding at any time, excluding the principal 
amount of any bonds and notes refunded by the issuance of new 
bonds or notes, shall not exceed the sum of:  
    (a) $225,000,000 issued for the purpose of providing funds 
for rehabilitation loans, or refunding bonds or notes issued for 
this purpose, plus 
    (b) $1,325,000,000 issued for other purposes specified in 
section 462A.08 $1,550,000,000. 
    Sec. 12.  Minnesota Statutes 1982, section 462A.22, 
subdivision 5, is amended to read: 
    Subd. 5.  Moneys in any debt service reserve fund not 
required for immediate use or disbursement may be invested in 
obligations of the state or the United States of America, or 
obligations the principal and interest of which are guaranteed 
by the state or the United States of America.  In computing the 
amount of any debt service reserve fund for the purpose of this 
section, securities in which all or a portion of the fund are 
invested shall be valued at par or, if purchased at less than 
par, at their cost to the agency accordance with the provisions 
of section 462A.18, subdivision 2. 
    Sec. 13.  Minnesota Statutes 1982, section 462C.05, 
subdivision 7, is amended to read: 
    Subd. 7.  A development may consist of a combination of a 
multifamily housing development and a new or existing health 
care facility, as defined by section 474.02, if the following 
conditions are satisfied:  
    (a) The multifamily housing development is designed and 
intended to be used for rental occupancy;  
    (b) The multifamily housing development is designed and 
intended to be used primarily by elderly or physically 
handicapped persons; and 
    (c) Nursing, medical, personal care, and other health 
related assisted living services are available on a 24-hour 
basis in the development to the residents.  
    The limitations of section 462C.04, subdivision 2, clause 
(c), shall not apply to projects defined in this subdivision and 
approved by the Minnesota housing finance agency before July 
October 1, 1983.  The limitations of section 462C.07, 
subdivision 2, shall not apply to bonds issued for projects 
defined in this subdivision.  
    The Minnesota housing finance agency shall provide, in the 
annual report required by section 462C.04, subdivision 2, 
information on the costs incurred for the issuance of bonds for 
projects defined in this subdivision.  The report shall also 
include the Minnesota housing finance agency's recommendations 
for the regulation of costs of issuance for future issues. 
    Sec. 14.  Minnesota Statutes 1982, section 462C.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  To finance programs or developments 
described in any plan the city may, upon approval of the program 
as provided in section 462C.04, subdivision 2, issue and sell 
revenue bonds or obligations which shall be payable exclusively 
from the revenues of the programs or developments.  In the 
purchase or making of single family housing loans and the 
purchase or making of multifamily housing loans and the issuance 
of revenue bonds or other obligations the city may exercise 
within its corporate limits, any of the powers the Minnesota 
housing finance agency may exercise under chapter 462A, without 
limitation under the provisions of chapter 475, and the revenue 
bonds or other obligations may be sold at 97 percent or more of 
their principal amount, notwithstanding the provisions of 
section 462A.09. 
    Sec. 15.  [REPEALER.] 
    Minnesota Statutes 1982, section 462A.22, subdivision 1a, 
is repealed.  
    Sec. 16.  [EFFECTIVE DATE.] 
     This act is effective the day following final enactment. 
    Approved May 19, 1983