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    Subdivision 1. Use of loans; conditions. A city may also include in the housing plan, a
program or programs to administer, and make or purchase a loan or loans to finance one or more
multifamily housing developments within its boundaries, of the kind described in subdivision 2,
3, 4 or 7, and upon the conditions set forth in this section. A loan may be made or purchased for:
(a) the acquisition and preparation of a site and the construction of a new development;
(b) the rehabilitation of an existing building and site and the discharge of any lien or other
interest in the building and site;
(c) for the acquisition of an existing building and site and the rehabilitation thereof;
(d) for the acquisition of an existing building and site for purposes of conversion to limited
equity cooperative ownership by low or moderate income families;
(e) for the acquisition, or acquisition and improvement, of an existing building and site by a
nonprofit corporation which will operate the building as a multifamily housing development for
rental primarily to elderly or disabled persons; or
(f) the taking out of accumulated equity in connection with a program of federal insurance
for the preservation of low-income housing.
With respect to loans made or purchased pursuant to clause (b) or (c), the cost of
rehabilitation of an existing building must be estimated to equal at least $1,000 per dwelling unit
or 20 percent of the appraised value of the original building and site whichever is less, except
that with respect to rehabilitation which consists primarily of improvement of the property with
facilities or improvements to conserve energy or convert or retrofit for use of alternative energy
sources, rehabilitation loans may be made without regard to cost; and at least a substantial portion
of such rehabilitation cost must be estimated to be incurred for compliance with building codes
or conservation of energy.
Each development upon completion shall comply with all applicable code requirements. A
loan or loans may be made or purchased for either the construction or the long-term financing of a
development, or both, including the financing of the acquisition of dwelling units and interests in
common facilities provided therein, by persons to whom such units and facilities may be sold as
contemplated in chapter 515, 515A, or 515B, or any supplemental or amendatory law thereof or
as contemplated for a development consisting of cooperative housing.
Substantially all of the proceeds of each loan shall be used to pay the cost of a multifamily
housing development, including property functionally related and subordinate to it; but nothing
herein prevents the construction or acquisition of the development over, under, or adjacent to, and
in conjunction with facilities to be used for purposes other than housing.
    Subd. 2. Affordability standard. A development shall be designed to be affordable by
persons and families with adjusted gross income not in excess of the limits set forth in section
462C.03, subdivision 2, and by other persons and families to the extent determined to be necessary
in furtherance of the policy of economic integration stated in section 462A.02, subdivision 6,
with at least 20 percent of the dwelling units are held for occupancy by families or individuals
with adjusted gross income not in excess of 80 percent of the median family income as estimated
by the United States Department of Housing and Urban Development for the nonmetropolitan
county or standard metropolitan statistical area, as the case may be.
    Subd. 3. Maximum price or value. A development may be located within a targeted area
without regard to the limitations and conditions set forth in subdivision 2, and without regard
to those set forth in section 462C.03 except section 462C.03, subdivision 10, except that in no
case shall the maximum purchase price or appraised value for a dwelling unit in the multifamily
housing development exceed four times the income limit established by section 462C.03,
subdivision 2
, unless the development is in a building officially built before 1900, designated as
an historical structure under state, local, or national procedures.
    Subd. 4. Primary rentals to elderly, disabled. A development may be designed for rental
primarily to elderly or disabled persons without regard to the limitations and conditions set
forth in section 462C.03 and in subdivision 2.
    Subd. 5. Hearing; assumption limits, prohibitions. Each program for a multifamily
housing development or developments described in subdivision 1 shall be adopted after public
hearing on the program which includes such development or developments and shall be approved
by the Minnesota Housing Finance Agency as provided in section 462C.01, and on the basis of
the considerations stated in section 462C.04, subdivision 2. The multifamily housing development
program may include limitations or prohibitions on the assumption of the loans or other terms
which are inconsistent with section 47.20, subdivision 6 or 6a, for bonds or other obligations
issued by the city pursuant to section 462C.07.
    Subd. 6. Required demonstrations. The program shall demonstrate need for the
development or developments, describe the method of financing proposed, state whether the
development is to be constructed pursuant to subdivision 2, 3, or 4, and state the applicable
limitations on gross income, if any, of the occupants.
    Subd. 6a. Qualified allocation plan requirement. Multifamily housing developments
described in subdivision 1 for which an application is submitted for low-income housing tax
credits provided under section 42 of the Internal Revenue Code of 1986, as amended, must also
satisfy the qualified allocation plan applicable to the area in which the project is located.
    Subd. 7. Combined facility conditions, report. A development may consist of a
combination of a multifamily housing development and a new or existing health care facility, as
defined by section 469.153, if the following conditions are satisfied:
(a) the multifamily housing development is designed and intended to be used for rental
(b) the multifamily housing development is designed and intended to be used primarily by
elderly or physically disabled 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
October 1, 1983.
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.
    Subd. 8. Revenue agreement and financing lease. Any revenue agreement or financing
lease which includes a provision for a conveyance of real estate to the lessee or contracting party
may be terminated in accordance with the revenue agreement or financing lease, notwithstanding
that the revenue agreement or financing lease may constitute an equitable mortgage. No financing
lease of any development is subject to section 504B.291, unless expressly so provided in the
financing lease. Leases of specific dwelling units in the development to tenants are not affected
by this subdivision.
History: 1979 c 306 s 5; 1980 c 593 s 9; 1981 c 306 s 15; 1981 c 327 s 1,2; 1Sp1981 c 4 art
3 s 11; 1982 c 624 s 9-12; 1983 c 185 s 13; 1987 c 291 s 221; 1987 c 344 s 8; 1989 c 328 art 6 s
4; 1995 c 256 s 5; 1996 c 362 s 6; 1999 c 11 art 3 s 17; 1999 c 199 art 2 s 16; 2005 c 56 s 1

Official Publication of the State of Minnesota
Revisor of Statutes