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Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1989 

                        CHAPTER 270-S.F.No. 613 
           An act relating to housing; regulating the powers and 
          duties of the housing finance agency; amending 
          Minnesota Statutes 1988, sections 462A.03, subdivision 
          12; 462A.05, subdivisions 4, 14a, 20, 21, and 27, and 
          by adding subdivisions; 462A.07, subdivision 14, and 
          by adding a subdivision; and 462A.21, subdivisions 4c 
          and 12, and by adding a subdivision. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1988, section 462A.03, 
subdivision 12, is amended to read: 
    Subd. 12.  "Eligible security" means any security payable 
from or evidencing an interest in mortgages securing, all or a 
portion of which secure loans to finance financing residential 
housing. 
    Sec. 2.  Minnesota Statutes 1988, 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 all or a portion of the proceeds of such instruments will 
be utilized for the purpose of making to make loans for 
residential housing as defined in section 462A.03, subdivision 
7., or all or a portion of the instruments are backed by or 
otherwise evidence an interest in existing mortgages securing 
mortgage loans to finance residential housing.  In the case of 
eligible securities backed by existing mortgages, the proceeds 
must be used in whole or in part either for making loans for 
residential housing or for preserving the use of existing 
residential housing by persons and families of low and moderate 
income.  
    Sec. 3.  Minnesota Statutes 1988, 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) $7,500 $9,000, 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. 4.  Minnesota Statutes 1988, section 462A.05, 
subdivision 20, is amended to read: 
    Subd. 20.  The agency may make loans or grants solely to 
for profit, limited dividend, or nonprofit sponsors, as defined 
by the agency, for residential housing to be used to provide 
temporary or transitional housing to low and moderate income 
persons and families having an immediate need for temporary or 
transitional housing as a result of natural disaster, 
resettlement, condemnation, displacement, lack of habitable 
housing or other cause defined by the agency.  Loans or grants 
pursuant to this subdivision shall not be used for residential 
care facilities or for facilities that provide housing available 
for occupancy on less than a 24-hour continuous basis.  To the 
extent possible, a nonprofit sponsor shall combine the loan or 
grant with other funds obtained from public and private 
sources.  In making loans or grants, the agency shall determine 
the circumstances under which and the terms and conditions under 
which all or any portion thereof will be repaid and the 
appropriate security should repayment be required.  
    Sec. 5.  Minnesota Statutes 1988, section 462A.05, 
subdivision 21, is amended to read: 
    Subd. 21.  The agency may make or purchase loans to owners 
of rental property that is occupied or intended for occupancy 
primarily by low and moderate income tenants and which does not 
comply with the standards established in section 116J.27, 
subdivision 3, for the purpose of energy improvements necessary 
to bring the property into full or partial compliance with these 
standards.  For property which meets the other requirements of 
this subdivision and, in addition, is at least 15 years old, a 
loan may also be used for moderate rehabilitation of the 
property.  The authority granted in this subdivision is in 
addition to and not in limitation of any other authority granted 
to the agency in this chapter.  The limitations on eligible 
mortgagors contained in section 462A.03, subdivision 13, do not 
apply to loans under this subdivision.  Loans for the 
improvement of rental property pursuant to this subdivision may 
contain provisions that repayment is not required in whole or in 
part subject to terms and conditions determined by the agency to 
be necessary and desirable to encourage owners to maximize 
rehabilitation of properties. 
     Sec. 6.  Minnesota Statutes 1988, section 462A.05, 
subdivision 27, is amended to read: 
    Subd. 27.  The agency, or the corporations referred to in 
subdivision 26, may acquire property or property interests under 
subdivisions 25 and 26 and section 462A.06, subdivision 7, for 
the following purposes:  (1) to protect a loan or grant in which 
the agency or corporation has an interest; or (2) to preserve 
for the use of low- and moderate-income persons or families 
multifamily housing, previously financed by the agency, which 
was (i) previously financed by the agency, or (ii) not financed 
by the agency but is benefited by federal housing assistance 
payments or other rental subsidy or interest reduction 
contracts.  Property or property interests acquired for the 
purpose specified in clause (1) may be acquired by foreclosure, 
deed in lieu of foreclosure, or otherwise. 
    Multifamily property acquired as provided in clause (2) 
must be managed on a fee basis by an entity other than the 
agency or corporation.  The agency or corporation may manage the 
property on a temporary basis until an agreement is entered into 
with another entity to manage the property.  The agency or 
corporation shall make the property available for sale at a 
purchase price and on terms that are mutually agreeable to the 
parties. 
    Sec. 7.  Minnesota Statutes 1988, section 462A.05, is 
amended by adding a subdivision to read: 
     Subd. 30.  It may invest in, purchase, acquire, and take 
assignments of existing notes and mortgages not closed for the 
purpose of sale to the agency, from lenders that are nonprofit 
or nonprofit entities, as defined in the agency's rules, 
provided that:  (1) the notes and mortgages evidence loans for 
the construction, rehabilitation, purchase, improvement, or 
refinancing of residential housing intended for occupancy and 
occupied by low- and moderate-income persons and families; and 
(2) the loan sellers utilize the funds derived from the 
purchases in accordance with the authority contained in section 
462A.07, subdivision 12, for the purposes and objectives of 
sections 462A.02, 462A.03, 462A.05, 462A.07, and 462A.21; and 
(3) the purchases are subject to security and limitations on the 
costs and expenses of the loan sellers incidental to the 
utilization of the purchase proceeds as the agency may 
determine.  The proceeds of the purchases authorized by this 
subdivision shall not be subject to the limitations of section 
462A.21, subdivisions 4k, 6, 9, and 12. 
    Sec. 8.  Minnesota Statutes 1988, section 462A.05, is 
amended by adding a subdivision to read: 
     Subd. 31.  It may agree to purchase, make, or otherwise 
participate in the making and enter into commitments for the 
purchase, making, or participation in the making of loans to 
provide financing for residential housing for occupancy by 
persons and families of low and moderate income that qualifies 
for and will be utilized so as to obtain the benefits of 
low-income housing credits under section 42 of the Internal 
Revenue Code of 1986, as amended through December 31, 1988.  The 
limitations on eligible mortgagors contained in section 462A.03, 
subdivision 13, do not apply to loans under this subdivision, 
and the loans may be insured or uninsured and may be made with 
security, or may be unsecured, as the agency deems advisable.  
    Sec. 9.  Minnesota Statutes 1988, section 462A.05, is 
amended by adding a subdivision to read: 
    Subd. 32.  The agency may obtain the appointment of 
receivers or assignments of rents and profits under sections 
559.17 and 576.01 except that the limitation relating to the 
minimum amounts of the original principal balances of mortgages 
contained in sections 576.01, subdivision 2 and 559.17, 
subdivision 2, clause (2), shall be inapplicable to it. 
    Sec. 10.  Minnesota Statutes 1988, section 462A.05, is 
amended by adding a subdivision to read: 
    Subd. 33.  The agency may establish a fund to coinsure 
loans, with a division of risk as determined by the agency, that 
are made by any banking institution, savings and loan 
association, or other lender approved by the agency, organized 
under the laws of this or any other state or of the United 
States having an office in this state, to low- and 
moderate-income purchasers of residential housing to be occupied 
by them, or to low- and moderate-income persons or families for 
improvements to residential property that they occupy as their 
principal place of residence, provided that loan insurance on 
comparable terms and conditions is not otherwise available in 
the areas where the borrowers' properties are situated.  
    Sec. 11.  Minnesota Statutes 1988, section 462A.07, is 
amended by adding a subdivision to read: 
    Subd. 2a.  It may provide underwriting, loan processing, 
and closing services in behalf of other lenders where those 
services are not otherwise available and the loans relate to 
residential housing for occupancy by low- and moderate-income 
persons and families.  The agency may charge fees for those 
services in amounts determined by the members to be reasonable. 
    Sec. 12.  Minnesota Statutes 1988, section 462A.07, 
subdivision 14, is amended to read: 
    Subd. 14.  It may engage in housing programs for low and 
moderate income American Indians developed and administered 
separately or in combination by the Minnesota Chippewa tribe, 
the Red Lake band of Chippewa Indians, and the Sioux communities 
as determined by such tribe, band, or communities.  In 
furtherance of the policy of economic integration stated in 
section 462A.02, subdivision 6, it may engage in housing 
programs for American Indians who intend to reside on 
reservations and who are not persons of low and moderate income, 
provided that the aggregate dollar amount of the loans for each 
lender's fiscal year shall not exceed an amount equal to 25 
percent of the total dollar amount of all loans made by that 
lender during the lender's fiscal year at the time of loan 
application.  In developing such housing programs the tribe, 
band, or communities shall take into account the housing needs 
of all American Indians residing both on and off reservations 
within the state.  A plan for each such program, which 
specifically describes the program (a) content, (b) utilization 
of funds, (c) administration, (d) operation, (e) implementation 
and other matter, as determined by the agency, must be submitted 
to the agency for its review and approval prior to the making of 
eligible loans pursuant to section 462A.21.  All such programs 
must conform to rules promulgated by the agency concerning 
program administration, including but not limited to rules 
concerning costs of administration; the quality of housing; 
interest rates, fees and charges in connection with making 
eligible loans; and other matters determined by the agency to be 
necessary in order to effectuate the purposes of this 
subdivision and section 462A.21, subdivisions 4b and 4c.  All 
such programs must provide for a reasonable balance in the 
distribution of funds appropriated for the purpose of this 
section between American Indians residing on and off 
reservations within the state.  Nothing in this section shall 
preclude such tribe, band, or communities from requesting and 
receiving cooperation, advice, and assistance from the agency as 
regards program development, operation, delivery, financing, or 
administration.  As a condition to the making of such eligible 
loans, the Minnesota Chippewa tribe, the Red Lake band of 
Chippewa Indians and the Sioux communities shall: 
     (a) enter into a loan agreement and other contractual 
arrangements with the agency for the purpose of transferring the 
allocated portion of loan funds as set forth in section 462A.26 
and to insure compliance with the provisions of this section and 
this chapter, and 
    (b) shall agree that all of their official books and 
records related to such housing programs shall be subjected to 
audit by the legislative auditor in the manner prescribed for 
agencies of state government. 
    The agency shall submit a biennial report concerning the 
various housing programs for American Indians, and related 
receipts and expenditures as provided in section 462A.22, 
subdivision 9, and such tribe, band, or communities to the 
extent that they administer such programs, shall be responsible 
for any costs and expenses related to such administration 
provided, however, they shall be eligible for payment for costs, 
expenses and services pursuant to subdivision 12, and section 
462A.21.  The agency may provide or cause to be provided 
essential general technical services as set forth in subdivision 
2, and general consultative project assistance services, 
including, but not limited to, management training, and home 
ownership counseling as set forth in subdivision 3.  Members of 
boards, committees, or other governing bodies of the tribe, 
band, and communities administering the programs authorized by 
this subdivision must be compensated for those services as 
provided in section 15.0575.  Rules promulgated under this 
subdivision may be promulgated as emergency rules under chapter 
14. 
    Sec. 13.  Minnesota Statutes 1988, section 462A.21, 
subdivision 4c, is amended to read: 
    Subd. 4c.  It may establish a revolving loan fund and may 
make eligible loans, pursuant to subdivision 4b, to low and 
moderate income American Indians as provided in section 462A.07, 
subdivision 14, and may pay the costs and expenses necessary and 
incidental to the development and operation of such programs. 
    Sec. 14.  Minnesota Statutes 1988, section 462A.21, 
subdivision 12, is amended to read: 
    Subd. 12.  It may make loans or grants for the purpose of 
section 462A.05, subdivision 20, and may pay the costs and 
expenses necessary and incidental to the loan or grant program 
authorized therein.  Grants pursuant to section 462A.05, 
subdivision 20 may be made only with specific appropriations by 
the legislature. 
    Sec. 15.  Minnesota Statutes 1988, section 462A.21, is 
amended by adding a subdivision to read:  
     Subd. 41.  It may expend money for the purposes of section 
462A.05, subdivision 33, and may pay the costs and expenses for 
the development and operation of the program. 
    Presented to the governor May 23, 1989 
    Signed by the governor May 25, 1989, 6:37 p.m.