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Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1990 

                        CHAPTER 429-S.F.No. 1848 
           An act relating to housing; making changes in the home 
          equity conversion loan program, authorizing 
          manufactured home park loan assistance, requiring 
          limits, and regulating securities relating to certain 
          home loans; amending Minnesota Statutes 1988, sections 
          116J.980, by adding a subdivision; 462A.05, by adding 
          a subdivision; 462A.21, subdivision 9; 475.66, 
          subdivision 3; Minnesota Statutes 1989 Supplement, 
          sections 462A.05, subdivision 34; 462A.057, 
          subdivision 7; 462A.21, subdivisions 8b and 8c; and 
          Laws 1989, chapter 335, article 1, section 27, 
          subdivision 1. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:  
    Section 1.  Minnesota Statutes 1988, section 116J.980, is 
amended by adding a subdivision to read: 
    Subd. 3.  [COORDINATION REQUIRED FOR HOUSING RELATED 
GRANTS.] The commissioner must coordinate with the commissioner 
of the Minnesota Housing Finance Agency to ensure that housing 
related grant applications for the small cities community 
development block grant program under section 116J.401 are 
consistent with the agency's most recent housing affordability 
plan and do not duplicate existing state housing programs. 
    Sec. 2.  Minnesota Statutes 1989 Supplement, section 
462A.05, subdivision 34, is amended to read:  
    Subd. 34.  [HOME EQUITY CONVERSION LOANS.] (a) The agency 
may make or, purchase, or make a forward commitment to purchase 
home equity conversion loans for low- or moderate-income elderly 
homeowners.  Loan recipients must be at least 62 years of age, 
have substantial equity in their home, and have an income at or 
below 50 percent of the greater of statewide or area median 
income.  The agency must inform a program participant of 
available home equity conversion loan counseling services before 
making a loan.  
    (b) Repayment of a home equity conversion loan may not be 
required until at least one of the following conditions occurs:  
    (1) the sale or conveyance of the mortgaged property; 
    (2) the mortgaged property is no longer the mortgagor's 
principal residence; 
    (3) the death of the mortgagor; or 
    (4) a violation of an obligation of the mortgagor under the 
mortgage.  
    For purposes of this section, an obligation of the 
mortgagor under the mortgage does not include immediate 
repayment upon completion of loan disbursements at the end of a 
specified term.  
    Sec. 3.  Minnesota Statutes 1988, section 462A.05, is 
amended by adding a subdivision to read: 
    Subd. 35.  [MANUFACTURED HOME PARK LOANS.] The agency may 
provide financial assistance for the conversion of manufactured 
home parks to cooperative or nonprofit ownership.  Financial 
assistance may include direct loans, interest rate subsidy 
loans, loan guarantees, and down payment assistance. 
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
462A.057, subdivision 7, is amended to read:  
    Subd. 7.  [PURCHASE AND REHABILITATION.] An eligible 
organization may acquire up to five properties in a designated 
area with the consent of the advisory board for that area.  The 
organization must rehabilitate these properties to the standards 
established by the agency.  The total maximum cost of the 
acquisition, rehabilitation, closing costs, and back taxes must 
be no greater than $50,000 an amount equal to 90 percent of the 
home sale price limitation established for the agency's home 
mortgage programs per individual property.  The $50,000 maximum 
may be exceeded if the excess costs over $50,000 are attributed 
to rehabilitation or improvements to make the property 
handicapped accessible.  
    Sec. 5.  Minnesota Statutes 1989 Supplement, section 
462A.21, subdivision 8b, is amended to read: 
    Subd. 8b.  [FAMILY RENTAL HOUSING.] It may establish a 
family rental housing assistance program to provide loans or 
direct rental subsidies for housing for families with incomes of 
up to 60 percent of area median income.  Priority must be given 
to those developments with resident families with the lowest 
income.  The development may be financed by the agency or other 
public or private lenders.  Direct rental subsidies must be 
administered by the agency for the benefit of eligible 
families.  Financial assistance provided under this subdivision 
to recipients of aid to families with dependent children must be 
in the form of vendor payments whenever possible.  Loans and 
direct rental subsidies under this subdivision may be made only 
with specific appropriations by the legislature.  The 
limitations on eligible mortgagors contained in section 462A.03, 
subdivision 13, do not apply to loans for the rehabilitation of 
existing housing under this subdivision. 
    Sec. 6.  Minnesota Statutes 1989 Supplement, section 
462A.21, subdivision 8c, is amended to read: 
    Subd. 8c.  [RENTAL HOUSING FOR INDIVIDUALS.] It may 
establish a rental housing assistance program for persons of low 
income or with a mental illness to provide loans or direct 
rental subsidies for housing for individuals with incomes of up 
to 30 percent of area median income.  Priority must be given to 
developments with the lowest income residents.  Housing for the 
mentally ill must be operated in coordination with social 
service providers who provide services to tenants.  The 
developments may be financed by the agency or other public or 
private entities.  Direct rental subsidies must be administered 
by the agency for the benefit of eligible tenants.  Financial 
assistance provided under this subdivision must be in the form 
of vendor payments whenever possible.  Loans and direct rental 
subsidies under this subdivision may be made only with specific 
appropriations by the legislature.  The limitations on eligible 
mortgagors contained in section 462A.03, subdivision 13, do not 
apply to loans for the rehabilitation of existing housing under 
this subdivision. 
    Sec. 7.  Minnesota Statutes 1988, section 462A.21, 
subdivision 9, is amended to read:  
    Subd. 9.  It may make loans to encourage innovations in the 
development or rehabilitation of single or multifamily 
residential housing pursuant to section 462A.05, subdivision 
18.  Loans pursuant to this subdivision shall only be made with 
money appropriated directly by the legislature specifically for 
this purpose.  
    Sec. 8.  Minnesota Statutes 1988, section 475.66, 
subdivision 3, is amended to read:  
    Subd. 3.  Subject to the provisions of any resolutions or 
other instruments securing obligations payable from a debt 
service fund, any balance in the fund may be invested 
    (a) in governmental bonds, notes, bills, mortgages, and 
other securities, which are direct obligations or are guaranteed 
or insured issues of the United States, its agencies, its 
instrumentalities, or organizations created by an act of 
Congress, 
    (b) in shares of an investment company (1) registered under 
the Federal Investment Company Act of 1940, whose shares are 
registered under the Federal Securities Act of 1933, and (2) 
whose only investments are in (i) securities described in the 
preceding clause, (ii) general obligation tax-exempt securities 
rated A or better by a national bond rating service, and (iii) 
repurchase agreements or reverse repurchase agreements fully 
collateralized by those securities, if the repurchase agreements 
or reverse repurchase agreements are entered into only with 
those primary reporting dealers that report to the Federal 
Reserve Bank of New York and with the 100 largest United States 
commercial banks, 
    (c) in any security which is (1) a general obligation of 
the state of Minnesota or any of its municipalities or in 
general obligations of other state and local governments with 
taxing powers which are rated A or better by a national bond 
rating service, or (2) a general obligation of the Minnesota 
housing finance agency, or (3) a general obligation of a housing 
finance agency of any state if it includes a moral obligation of 
the state, provided that investments under clauses (2) and (3) 
must be in obligations that are rated the highest or next 
highest rating given by Standard & Poor's Corporation or Moody's 
Investors Service, Inc., and investments under clause (3) may be 
made only (i) prior to August 1, 1991, and (ii) for a period of 
no more than three years from the date of purchase and further 
provided that investments under clauses (2) and (3) be 
determined to be expedient to reduce the amount of arbitrage 
rebate otherwise payable to the United States under section 148 
of the Internal Revenue Code of 1986, A or better by a national 
bond rating service, 
    (d) in bankers acceptances of United States banks eligible 
for purchase by the Federal Reserve System, 
    (e) in commercial paper issued by United States 
corporations or their Canadian subsidiaries that is of the 
highest quality and matures in 270 days or less, or 
    (f) in guaranteed investment contracts issued or guaranteed 
by United States commercial banks or domestic branches of 
foreign banks or United States insurance companies or their 
Canadian or United States subsidiaries; provided that the 
investment contracts rank on a parity with the senior unsecured 
debt obligations of the issuer or guarantor and, (1) in the case 
of long-term investment contracts, either (i) the long-term 
senior unsecured debt of the issuer or guarantor is rated, or 
obligations backed by letters of credit of the issuer or 
guarantor if forming the primary basis of a rating of such 
obligations would be rated, in the highest or next highest 
rating category of Standard & Poor's Corporation, Moody's 
Investors Service, Inc., or a similar nationally recognized 
rating agency, or (ii) if the issuer is a bank with headquarters 
in Minnesota, the long-term senior unsecured debt of the issuer 
is rated, or obligations backed by letters of credit of the 
issuer if forming the primary basis of a rating of such 
obligations would be rated in one of the three highest rating 
categories of Standard & Poor's Corporation, Moody's Investors 
Service, Inc., or similar nationally recognized rating agency, 
or (2) in the case of short-term investment contracts, the 
short-term unsecured debt of the issuer or guarantor is rated, 
or obligations backed by letters of credit of the issuer or 
guarantor if forming the primary basis or a rating of such 
obligations would be rated, in the highest two rating categories 
of Standard and Poor's Corporation, Moody's Investors Service, 
Inc., or similar nationally recognized rating agency.  
    The fund may also be used to purchase any obligation, 
whether general or special, of an issue which is payable from 
the fund, at such price, which may include a premium, as shall 
be agreed to by the holder, or may be used to redeem any 
obligation of such an issue prior to maturity in accordance with 
its terms.  The securities representing any such investment may 
be sold or hypothecated by the municipality at any time, but the 
money so received remains a part of the fund until used for the 
purpose for which the fund was created.  
    Sec. 9.  Laws 1989, chapter 335, article 1, section 27, 
subdivision 1, is amended to read:  
    Subdivision 1.  Total 
Appropriation                           12,583,000   12,584,000
    Approved Complement - 134 
 Spending limit on cost of general 
administration of agency programs:  
     1990          1991 
  $7,130,000   $7,560,000 
 This appropriation is for transfer to 
the housing development fund for the 
programs specified.  
 $225,000 the first year and $225,000 
the second year are for housing 
programs for the elderly under 
Minnesota Statutes, section 462A.05, 
subdivision 24.  
 $2,115,000 the first year and 
$2,115,000 the second year are for home 
ownership assistance under Minnesota 
Statutes, section 462A.21, subdivision 
8.  
 $1,887,000 the first year and 
$1,887,000 the second year are for 
tribal Indian housing programs under 
Minnesota Statutes, section 462A.07, 
subdivision 14, of which $125,000 the 
first year and $125,000 the second year 
are for a demonstration program to make 
off-reservation loans in combination 
with bond proceeds from or other 
mortgage financing approved by the 
agency.  
 $233,000 the first year and $233,000 
the second year are for urban Indian 
housing programs under Minnesota 
Statutes, section 462A.07, subdivision 
15, to be distributed by the agency 
without regard to any allocation 
formula.  
 $4,842,000 the first year and 
$4,842,000 the second year are for 
housing rehabilitation and 
accessibility loans under Minnesota 
Statutes, section 462A.05, subdivisions 
14a and 15a.  
 $569,000 the first year and $569,000 
the second year are for temporary 
housing programs under Minnesota 
Statutes, sections 462A.05, subdivision 
20; and 462A.21.  
 Notwithstanding any law to the 
contrary, in the event that the housing 
finance agency assumes servicing 
responsibility for its home improvement 
loans, energy loans, and rehabilitation 
loans, the agency may apply for an 
increase in its complement and 
administrative cost ceiling through the 
regular legislative advisory commission 
process. 
    Presented to the governor April 10, 1990 
    Signed by the governor April 12, 1990, 10:55 a.m.