2007 Minnesota Statutes

CHAPTER 462C. MUNICIPAL HOUSING PROGRAMS

462C.001 APPLICATION OF LAWS 2005, CHAPTER 56, TERMINOLOGY CHANGES.
State agencies shall use the terminology changes specified in Laws 2005, chapter 56, section
1, when printed material and signage are replaced and new printed material and signage are
obtained. State agencies do not have to replace existing printed material and signage to comply
with Laws 2005, chapter 56, sections 1 and 2. Language changes made according to Laws 2005,
chapter 56, sections 1 and 2, shall not expand or exclude eligibility to services.
History: 2005 c 56 s 3

462C.01 AUTHORIZATION.
A city may develop and administer programs of (1) making or purchasing mortgage or
rehabilitation loans pursuant to section 462C.03 to finance the acquisition or rehabilitation of
single family housing by low and moderate income persons and families anywhere within its
boundaries, or (2) making or purchasing loans pursuant to section 462C.05 to finance multifamily
housing developments or the rehabilitation of multifamily housing developments if the program is
submitted for review pursuant to section 462C.04, subdivision 2.
History: 1979 c 306 s 1; 1982 c 624 s 1; 1995 c 167 s 1

462C.02 DEFINITIONS.
    Subdivision 1. Application. For the purposes of sections 462C.01 to 462C.08, the terms
defined in this section have the meanings given them.
    Subd. 2.[Repealed, 1995 c 167 s 16]
    Subd. 3. Program. "Program" means an individual component of a city's overall program for
housing for which one or more issues of revenue bonds or obligations is proposed.
    Subd. 4. Single-family housing. "Single-family housing" means real property and
improvements thereon consisting of a one, two, three or four unit dwelling, one unit of which is
occupied as a principal residence by the owner of the units, or a unit or an apartment as described
in chapter 515, 515A, or 515B, or any amendatory or supplemental law, which is owned or to be
owned and occupied by one person or family as a principal residence, or a unit in a cooperatively
owned group of dwelling units which is occupied as a principal residence. Single-family housing
may include new construction, or the acquisition and rehabilitation of an existing building and
site, or the rehabilitation of and discharge of any interest or lien in an existing building and site.
    Subd. 5. Multifamily housing development, development. "Multifamily housing
development" or "development" means an apartment facility, including an apartment or unit
described in chapter 515, 515A, or 515B, or a cooperative, or a group of townhouses, which
include four or more dwelling units, each to be rented or sold to or occupied by a person or family
for use as a residence, or a building or buildings which include one or more dwelling units,
each to be rented by a person or family for use as a residence. A development may include
new construction or the acquisition and rehabilitation of an existing building and site or the
rehabilitation of and discharge of any interest or lien in an existing building and site.
    Subd. 6. City. "City" means any statutory or home rule charter city, a county housing and
redevelopment authority created by special law or authorized by its county to exercise its powers
pursuant to section 469.004, or any public body which (a) is the housing and redevelopment
authority in and for a statutory or home rule charter city, the port authority of a statutory or home
rule charter city, or an economic development authority of a city established under sections
469.090 to 469.108, and (b) is authorized by ordinance to exercise, on behalf of a statutory or
home rule charter city, the powers conferred by sections 462C.01 to 462C.10.
    Subd. 7. Adjusted gross income. "Adjusted gross income" means gross family income
less $750 for each adult in the family to a maximum of two adults and less $500 for each other
dependent in the family.
    Subd. 8. Rehabilitation. "Rehabilitation" means the improvement of existing single family
housing or an existing multifamily housing development to improve the basic livability of the
housing or restore it to a decent, safe, and sanitary condition. Improvements may include, without
limitation, room additions, renovation, improvement or construction of a garage, repair of
sidewalks, and improvements used or useful to conserve energy or to convert or refit an existing
residential building for the use of any energy source which does not depend on nuclear fuel
or nonrenewable fossil fuel, or which makes available another energy source which is wasted
including, without limitation, cogeneration or district heating. Improvements shall not include the
construction or improvement of recreational facilities, routine or minor repairs or maintenance,
or cosmetic improvements unless coupled with the cure of substantial accumulation of deferred
maintenance or other permitted improvements.
    Subd. 9. Targeted area. "Targeted area" means
(a) a development district established pursuant to section 469.126,
(b) a development district established pursuant to Laws 1971, chapter 677 as amended,
(c) a redevelopment project established pursuant to section 469.028,
(d) an industrial development district established pursuant to section 469.058,
(e) a census tract in which 70 percent or more of the families have income which is
80 percent or less of the statewide median family income as estimated by the United States
Department of Housing and Urban Development,
(f) an area of chronic economic distress designated by the Minnesota Housing Finance
Agency, or
(g) an economic development district established pursuant to section 469.101.
    Subd. 10. Mortgage credit certificate. "Mortgage credit certificate" means any certificate
which satisfies the definition of such term as contained in section 25(c)(1) of the Internal Revenue
Code of 1954, as amended through July 18, 1984.
    Subd. 11. Qualified mortgage credit certificate program. "Qualified mortgage credit
certificate program" means any program which satisfies the definition of such term as contained in
section 25(c)(2) of the Internal Revenue Code of 1954, as amended through July 18, 1984.
    Subd. 12. Loan. "Loan" means (1) for single-family housing, any loan, mortgage, or other
form of owner financing; and (2) for multifamily housing developments which are rental property,
any loan, mortgage, financing lease, or revenue agreement.
    Subd. 13. Revenue agreement. "Revenue agreement" has the meaning given that term
in section 469.153, subdivision 10.
History: 1979 c 306 s 2; 1982 c 624 s 2-6; 1Sp1985 c 14 art 8 s 21,22; 1986 c 399 art 2 s
35,36; 1986 c 400 s 35,36; 1986 c 465 art 2 s 11; 1Sp1986 c 3 art 2 s 41; 1987 c 291 s 219,220;
1989 c 209 art 2 s 1; 1989 c 328 art 6 s 2,3; 1991 c 199 art 2 s 1; 1995 c 167 s 2; 1999 c 11 art
3 s 15,16

462C.03 CITY HOUSING PLAN.
    Subdivision 1.[Repealed, 1995 c 167 s 16]
    Subd. 1a. Plan requirements. In addition to the requirements provided in subdivisions 2
and 3, if applicable, each program to be developed and administered by a city under a housing
plan shall, at a minimum, set forth:
(a) a general description of the program;
(b) a designation of the geographic location to which the program will be limited;
(c) in the case of a program for single family housing, the number and qualifications of
lenders eligible to participate in the program;
(d) in the case of a program for single family housing, the estimated amount of mortgage or
rehabilitation loans to be made or purchased in the program;
(e) the estimated amounts and timing of the sale of revenue bonds required to finance the
program, including the funding of appropriate reserves, and paying costs of issuance;
(f) methods for monitoring the implementation by participants to insure that the program will
be consistent with the plan and its objectives;
(g) the portion, if any, of the state ceiling for qualified mortgage bonds needed for the
program;
(h) an analysis of how the program will meet the needs of low and moderate income
families; and
(i) for mortgage credit certificate programs the program shall additionally set forth, or
contain as an exhibit, the following:
(1) the range of credit certificate rates to be used and how the rates are assigned to certificate
recipients;
(2) the nonissued bond amount as that term is used in section 25(d)(2)(B) of the Internal
Revenue Code of 1954, as amended through July 18, 1984;
(3) the form used to elect under section 25(c)(2)(A)(ii) of the Internal Revenue Code of 1954,
as amended through July 18, 1984;
(4) the plan submitted to the secretary of the treasury pursuant to section 25(d)(3) of the
Internal Revenue Code of 1954, as amended through July 18, 1984; and
(5) how the city will ensure compliance with all of the requirements of section 25 of the
Internal Revenue Code of 1954, as amended through July 18, 1984.
    Subd. 2. Income limits; exception; source of data. Each single family housing program
shall establish limits on gross income for persons and families to be served by the program.
The adjusted gross income may not exceed the greater of (a) 110 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, or (b) 100
percent of the income limits established by the Minnesota Housing Finance Agency in which the
city is located; except as provided in subdivision 8. The Minnesota Housing Finance Agency shall
provide the relevant income data to any city requesting the data.
    Subd. 3. Maximum prices or values. The single family housing program shall establish
maximum purchase prices or appraised values for single family housing eligible for mortgage
loans in the program. The maximum purchase price allowable for each dwelling unit shall not
exceed three times the income limit established for the program in subdivision 2, except that, for
any program or portion of a program undertaken within a targeted area, the maximum purchase
price for each dwelling unit shall not exceed four times the income limit established pursuant to
subdivision 2.
    Subd. 4. Loan originators. Any financial institution as defined in section 47.0151, doing
business within the city which is an approved FHA/VA or FNMA/FHLMC lender shall be eligible
for consideration for origination of single family housing loans in any city single family housing
program. Other lenders may be eligible as provided in the program. Origination of loans in the
single family program may not be limited to a single lender unless other eligible lenders are
not interested in participating or the program clearly sets forth why a public purpose would be
served by confining participation to one lender.
    Subd. 5.[Repealed, 1995 c 167 s 16]
    Subd. 6. Multiple developers, builders required. Loans under a single family housing
program may not be made to one developer or builder or restricted to housing provided by one
developer or builder.
    Subd. 7. Half to those under 90 percent of limit. Fifty percent of the money available for
loans for each single family housing program subject to the income limits established pursuant to
subdivision 2, must be made available to persons and families with adjusted gross incomes of less
than 90 percent of the program's income limits for a period of six months from the date when the
money becomes available for the program.
    Subd. 8. Other conditions. Twenty percent of the aggregate amount of all loans provided
under all city housing programs included in the housing plan for single family housing may be
provided without regard to income limits or net worth limits if: (a) the single family housing
program is used to finance single family housing in a targeted area; or (b) the city has previously
developed and administered a housing program for low and moderate income persons and
families and the single family housing program will be used to further policies of economic
integration, stability and revitalization of residential areas. No single family housing program
shall be developed or administered pursuant to this subdivision if the single family housing
program will contribute to urban sprawl. A housing program shall be deemed to contribute
to urban sprawl if the housing program is to be used to finance single family housing in any
previously unincorporated real property annexed by the city pursuant to chapter 414, within one
year prior to the date of the resolution adopted pursuant to Laws 1979, Chapter 306.
    Subd. 9. Assumption. The single family housing 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 notes or bonds or other obligations issued by the city pursuant
to section 462C.07.
    Subd. 10. Tax exempt board proceeds; aggregate limits. Notwithstanding any provision of
this chapter, not more than 20 percent of the aggregate dollar amount of tax-exempt bond proceeds
appropriated by any city within any calendar year to make or purchase loans providing single
family housing or dwelling units for sale within multifamily housing developments described
in section 462C.05, subdivision 3, shall be appropriated to provide single family housing for
persons or families, including renters of the single family housing, whose gross income exceeds
the limit in section 462C.03, subdivision 2. If 20 percent of the total amount of tax-exempt bond
funds so appropriated by the city in any calendar year is expended for housing not within the
limit, no additional funds may be expended pursuant to any other similar appropriation until the
remaining 80 percent is expended for housing within the limit. Notwithstanding subdivision 2,
the city may use taxable bond proceeds for single family housing for persons and families with
adjusted gross incomes of up to 175 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, whichever is appropriate.
    Subd. 11. Rehabilitation. The single family housing program may provide for loans for
rehabilitation of single family housing or for the acquisition of rehabilitated housing. The single
family housing program may also provide loans for acquisition of and the discharge of any lien or
interest in and rehabilitation of single family housing if:
(a) the mortgagor to whom the financing is provided is the first resident of the residence
after completion of the rehabilitation;
(b) there is a period of at least 20 years between the date on which the structure was first used
and the date on which the physical work on the rehabilitation begins;
(c) 75 percent or more of the existing external walls of the structure are retained in place as
external walls in the rehabilitation process; and
(d) the expenditures for the rehabilitation equal 25 percent or more of the mortgagor's
"adjusted basis" (as determined pursuant to the Internal Revenue Code of 1954, as amended
through December 31, 1981), in the residence, determined at the time of completion of the
rehabilitation, or, if later, the date on which the mortgagor acquires the residence.
History: 1979 c 306 s 3; 1980 c 593 s 7; 1981 c 306 s 14; 1982 c 624 s 7; 1Sp1985 c 14 art
8 s 23,24; 1991 c 291 art 21 s 16

462C.04 PLAN REVIEW.
    Subdivision 1.[Repealed, 1995 c 167 s 16]
    Subd. 2. Program review. A public hearing shall be held on each program after one
publication of notice in a newspaper circulating generally in the city, at least 15 days before the
hearing. On or before the day on which notice of the public hearing is published, the city shall
submit the program to the metropolitan council, if the city is located in the metropolitan area as
defined in section 473.121, subdivision 2, or to the regional development commission for the
area in which the city is located, if any, for review and comment. The appropriate reviewing
agency shall comment on:
(a) whether the program furthers local and regional housing policies and is consistent with
the Metropolitan Development Guide, if the city is located in the metropolitan area, or adopted
policies of the regional development commission; and
(b) the compatibility of the program with the housing portion of the comprehensive plan of
the city, if any.
Review of the program may be conducted either by the board of the reviewing agency or
by the staff of the agency. Any comment submitted by the reviewing agency to the city must be
presented to the body considering the proposed program at the public hearing held on the program.
A member or employee of the reviewing agency shall be permitted to present the comments
of the reviewing agency at the public hearing. After conducting the public hearing, the program
may be adopted with or without amendment, provided that any amendments must not be
inconsistent with the comments, if any, of the reviewing agency and must not contain any material
changes from the program submitted to the reviewing agency other than changes in the financial
aspects of any proposed issue of bonds or obligations. If any material change other than a change
in the financial aspects of a proposed issue of bonds or obligations, or any change which is
inconsistent with the comments of the reviewing agency is adopted, the amended program shall
be resubmitted to the appropriate reviewing agency for review and comment, and a public hearing
shall be held on the amended program after one publication of notice in a newspaper circulating
generally in the city at least 15 days before the hearing. The amended program shall be considered
after the public hearing in the same manner as consideration of the initial program.
    Subd. 3. City report. Within 30 days after the bonds are issued for a housing program, the
city shall submit a report to the Minnesota Housing Finance Agency, the Metropolitan Council if
the city is located within the metropolitan area as defined in section 473.121, subdivision 2, or the
appropriate regional development commission. The report must include a program description,
the amount of bonds issued, the income limits, and the rent levels.
    Subd. 4. Annual legislative report. The Minnesota Housing Finance Agency, in cooperation
with the Metropolitan Council and the regional development commissions, shall report annually
to the legislature on the number and amounts of bond issues and the number of housing programs
established pursuant to sections 462C.01 to 462C.08.
History: 1979 c 306 s 4; 1982 c 624 s 8; 1983 c 216 art 1 s 70; 1Sp1985 c 14 art 8 s 25;
1987 c 384 art 1 s 40; 1993 c 236 s 18; 1995 c 167 s 3,4

462C.05 MULTIFAMILY HOUSING, HEALTH CARE FACILITY.
    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
occupancy;
(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

462C.06 COUNTY HRA ACTING ON BEHALF OF CITY.
A housing and redevelopment authority in and for a county may exercise the powers
conferred by sections 462C.01 to 462C.10 either (1) on its own behalf or (2) on behalf of a city
(other than a county housing and redevelopment authority), if the city authorizes the housing
and redevelopment authority in and for the county in which the city is located to exercise such
powers and the county has authorized its housing and redevelopment authority to exercise its
powers pursuant to section 469.004 or the county housing and redevelopment authority has
been created by special law; provided, however, that any program undertaken pursuant to this
section is subject to the limitations of sections 462C.03 and 462C.04 in the case of a single-family
housing program, and subject to the limitations of section 462C.05 in the case of a multifamily
housing development program.
History: 1979 c 306 s 6; 1986 c 465 art 2 s 12; 1987 c 291 s 222

462C.07 HOUSING REVENUE BONDS.
    Subdivision 1. City has HFA powers. 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. The proceeds of revenue bonds issued to make or purchase
single-family housing loans that are jointly issued by two or more cities pursuant to section
471.59 may be used to make or purchase single-family housing loans secured by homes in any of
the cities.
    Subd. 2.[Repealed, 1982 c 624 s 15]
    Subd. 3. Port authorities. Upon approval of the housing plan as provided in section
462C.01, clause (c), any port authority referred to in chapter 458 may, until July 1, 1982, issue
revenue bonds of the port authority to finance multifamily housing developments undertaken in
accordance with the provisions of section 462C.05, and for such purpose the port authority may
exercise any and all powers set forth in chapters 458 and 474, provided that nothing herein shall
be construed as authorizing a port authority to finance any housing program other than that
authorized by section 462C.05. After July 1, 1982, the port authority may issue revenue bonds
solely in accordance with the provisions of Laws 1979, Chapter 306, Sections 1 to 16.
    Subd. 4. Foreclosure. Upon foreclosure of any mortgage securing a revenue agreement
entered into with respect to revenue bonds issued under this section, the city, trustee, or other
mortgagee may determine that the mortgage debt for purposes of chapters 580, 581, 582, and 583
is the revenue agreement debt and does not include the bond debt, or the mortgagee may determine
that the mortgage debt includes both the revenue agreement debt and the bond debt. The notice of
sale or complaint shall state whether the foreclosure is to enforce only the revenue agreement
debt or both the revenue agreement debt and the bond debt. If the mortgagee determines that the
foreclosure is to enforce only the revenue agreement debt and not the bond debt:
(1) the revenue agreement debt is the mortgage debt for all purposes under chapters 580,
581, 582, and 583;
(2) the bond debt will remain outstanding as a valid and continuing separate debt and will
not be extinguished, satisfied, relinquished, or otherwise terminated by the foreclosure sale; and
(3) the city or mortgagee may enter into a revenue agreement with the purchaser of the
mortgaged property or a subsequent transferee, which provides for satisfaction by payment in full
or otherwise of all principal of and interest on the bonds then in arrears and to become due.
History: 1979 c 306 s 7; 1980 c 487 s 17; 1980 c 595 s 6; 1981 c 306 s 16; 1982 c 624 s 13;
1983 c 185 s 14; 1986 c 465 art 2 s 13; 1990 c 520 s 3

462C.071 SINGLE-FAMILY MORTGAGE BONDS; LIMITATIONS.
    Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the
meanings given them.
(b) "Existing housing" means single-family housing that (i) has been previously occupied
prior to the first day of the origination period; or (ii) has been available for occupancy for at least
12 months but has not been previously occupied.
(c) "Metropolitan area" means the metropolitan area as defined in section 473.121,
subdivision 2 .
(d) "New housing" means single-family housing that has not been previously occupied.
(e) "Origination period" means the period that loans financed with the proceeds of qualified
mortgage revenue bonds are available for the purchase of single-family housing. The origination
period begins when financing actually becomes available to the borrowers for loans.
(f) "Redevelopment area" means a compact and contiguous area within which the city
finds by resolution that 70 percent of the parcels are occupied by buildings, streets, utilities, or
other improvements and more than 25 percent of the buildings, not including outbuildings, are
structurally substandard to a degree requiring substantial renovation or clearance.
(g) "Single-family housing" means dwelling units eligible to be financed from the proceeds
of qualified mortgage revenue bonds under federal law.
(h) "Structurally substandard" means containing defects in structural elements or a
combination of deficiencies in essential utilities and facilities, light, ventilation, fire protection
including adequate egress, layout and condition of interior partitions, or similar factors, which
defects or deficiencies are of sufficient total significance to justify substantial renovation or
clearance.
    Subd. 2. Limitation; origination period. During the first ten months of an origination
period, a city may make loans financed with proceeds of mortgage bonds for the purchase of
existing housing. Loans financed with the proceeds of mortgage bonds for new housing in the
metropolitan area may be made during the first ten months of an origination period only if at
least one of the following conditions is met:
(1) the new housing is located in a redevelopment area;
(2) the new housing is replacing a structurally substandard structure or structures;
(3) the new housing is located on a parcel purchased by the city or conveyed to the city
under section 282.01, subdivision 1;
(4) the new housing is part of a housing affordability initiative, other than those financed
with the proceeds from the sale of bonds, in which federal, state, or local assistance is used to
substantially improve the terms of the financing or to substantially write down the purchase
price of the new housing; or
(5) the new housing is located in a city that has entered into a housing affordability
agreement with the metropolitan council.
Upon expiration of the first ten-month period, a city may make loans financed with the
proceeds of mortgage bonds for the purchase of new and existing housing.
    Subd. 3. Nonmetropolitan area. Cities shall initiate steps in the nonmetropolitan areas of
the state similar to those required for the metropolitan area under subdivision 2 to encourage loans
for existing housing or for new housing under the conditions specified in subdivision 2.
    Subd. 4. Redevelopment area. A city located within the metropolitan area must submit to
the Metropolitan Council the resolution adopted by the governing body of the city finding an area
to be a redevelopment area and a map of the redevelopment area.
    Subd. 5. Limitation; commitments and loans to builders and developers. A city may not
make available, provide set-asides, or commit to make available proceeds of mortgage bonds
for the exclusive use of builders or developers for loans to eligible purchasers for new housing
except for new housing described in subdivision 2, clauses (1) to (3). This prohibition is in
effect for the total origination period.
    Subd. 6. Reporting requirement. A city that provides loans for new housing financed with
the proceeds of mortgage bonds shall report to the chairs of the appropriate housing-related
standing committees or divisions of the state senate and house of representatives by January 1 of
each year detailing new housing activity financed with the proceeds of mortgage bonds, including
a description of affordable housing initiatives, the number of loans, the average purchase price,
average borrower income, and steps taken to encourage loan activity as required in subdivision 3.
History: 1991 c 346 s 2; 1995 c 167 s 5

462C.08 OTHER HOUSING LEGISLATION.
Sections 462C.01 to 462C.07 do not impair or otherwise affect the validity or provisions for
the security of any obligations issued or agreements made pursuant to law before June 2, 1979.
Sections 462C.01 to 462C.07 do not preclude or affect or limit the institution or financing or
character of a housing program, project or development permitted for any city by any special law
in effect on June 2, 1979, except that: (a) section 462C.03 is applicable to any program undertaken
pursuant to a special law adopted after January 1, 1979, (b) no such city or agency thereof may
issue obligations after January 1, 1980, for the purpose of financing a housing program or
development of any kind referred to in sections 462C.01 to 462C.05, unless its plan therefor has
previously been reviewed by the appropriate reviewing body and its program has been reviewed
and approved by the agency; and all such obligations issued by such cities after January 1, 1980,
shall be subject to the limitations set forth in sections 462C.01 to 462C.07.
History: 1979 c 306 s 8

462C.09    Subdivision 1.[Repealed, 1986 c 465 art 1 s 31]
    Subd. 2.[Repealed, 1Sp1985 c 14 art 8 s 63]
    Subd. 2a.[Repealed, 1986 c 465 art 1 s 31]
    Subd. 3.[Repealed, 1986 c 465 art 1 s 31]
    Subd. 4.[Repealed, 1986 c 465 art 1 s 31]
    Subd. 5.[Repealed, 1986 c 465 art 1 s 31]
    Subd. 6.[Repealed, 1986 c 465 art 1 s 31]

462C.10 OFFICIAL ACTION EXCEPTION.
Bonds or other obligations which were approved by official action of a city before April
25, 1979, and exempted from the provisions of the Mortgage Subsidy Bond Tax Act of 1980,
Public Law 96-499, pursuant to section 1104(b) may be issued without regard to the restrictions
of section 462C.07, subdivision 2, except that for the purpose of subsequent bond issues, the
exempted issues shall count against the cap provided in section 462C.07, subdivision 2.
History: 1981 c 306 s 18

462C.11 MORTGAGE CREDIT CERTIFICATE PROGRAMS.
    Subdivision 1. City program. A city may include in the housing plan a program to issue and
administer mortgage credit certificates, under a qualified mortgage credit certificate program, to
assist in the acquisition, qualified rehabilitation, or qualified home improvement of the recipient's
principal residence.
    Subd. 2. Program requirements. Mortgage credit certificate programs adopted by the city
shall comply with all of the provisions of section 25 of the Internal Revenue Code of 1986.
    Subd. 3. Correction amounts. Correction amounts determined by the secretary of the
treasury because of the failure of a mortgage credit certificate program to comply with a federal
statute or regulation shall be assessed against the amount of qualified mortgage bonds allocated by
chapter 474A to the issuer which adopted the program. If no allocation exists or it is less than the
correction amount determined by the secretary of the treasury, then the amount of the correction
amount in excess of the allocation shall be assessed against the multifamily housing pool.
History: 1Sp1985 c 14 art 8 s 29; 1987 c 268 art 16 s 43,44

462C.12 MINNEAPOLIS/ST. PAUL HOUSING FINANCE BOARD; POWERS;
JURISDICTION.
    Subdivision 1. Establishment of housing board ratified. The establishment of the
Minneapolis/St. Paul Housing Finance Board in accordance with a joint powers agreement
entered into between the Minneapolis Community Development Agency and the Housing and
Redevelopment Authority of the city of St. Paul, and accepted by the cities of Minneapolis and St.
Paul under section 471.59, is ratified and approved.
    Subd. 2. Powers. The board is granted the following powers:
(a) The board may issue obligations and other forms of indebtedness under this section,
subject to the terms and conditions set forth in the joint powers agreement, as may be from
time to time amended.
(b) The board is authorized to exercise the powers conferred upon the cities of Minneapolis
and St. Paul and their designated housing and redevelopment authorities, or the powers of an
agency exercising the powers of a housing and redevelopment authority by this chapter and
chapter 462 and any other general or special law of the state of Minnesota relating to housing or
housing finance. The powers which may be exercised by the board include, without limitation, the
power to undertake and implement projects, developments, or programs, the power to issue and
sell obligations and other forms of indebtedness payable exclusively from the revenues of the
programs, projects, or developments undertaken by the board, or any of the powers the Minnesota
Housing Finance Agency may exercise under chapter 462A, provided that the obligations and
other forms of indebtedness may be sold upon terms and conditions as the board may from time to
time determine. The board may exercise the powers conferred by this section only with respect to
projects, programs, or developments within the corporate limits of the cities of Minneapolis and
St. Paul, except as may be otherwise provided in a joint powers agreement entered into under
section 471.59 between the board and any other city, housing and redevelopment authority, port
authority or economic development authority established under sections 469.090 to 469.108
in the state of Minnesota.
    Subd. 3. Jurisdiction. Notwithstanding any other provision of law, the territorial jurisdiction
of the board shall extend to all of the area within the corporate limits of the cities of Minneapolis
and St. Paul and shall for the purposes of any particular project, development, or program
undertaken in whole or part for any other city include all of the area within the corporate limits of
the city. For the purposes of any provision of law intended to apply within a particular jurisdiction,
the provision shall be construed to apply to the entire area within the corporate limits of the cities
of Minneapolis and St. Paul, together with the entire area within the corporate limits of any other
city with which the board has entered into a joint powers agreement and on whose behalf a
project, development, or program is undertaken or implemented, or on whose behalf obligations
or other forms of indebtedness are issued by the board.
    Subd. 4. Powers supplementary. The powers granted by this section are in addition
and supplemental to the powers granted by section 471.59, or the law under which a project,
development, or program is undertaken or implemented by the board, or under which the board
issues obligations or other forms of indebtedness.
History: 1Sp1985 c 14 art 8 s 30; 1986 c 399 art 2 s 37; 1986 c 400 s 37; 1Sp1986 c 3 art 2
s 41; 1987 c 384 art 1 s 41; 1989 c 209 art 2 s 1; 1995 c 186 s 79

462C.13 CITY INDIAN HOUSING AUTHORITY.
A city may establish an Indian housing authority as provided in the Code of Federal
Regulations, title 24, part 905, with all necessary legal powers to carry out housing projects for
low- and moderate-income American Indians.
History: 1989 c 328 art 4 s 7

462C.14 HOUSING PROGRAM AND DEVELOPMENTAL FINANCIAL SERVICES.
    Subdivision 1. Authorization to provide services. A city, as defined in section 462C.02,
subdivision 6 , may provide housing program and development financial services, including
mortgage banking services, for housing financed or assisted under a housing program of the city.
The services provided by the city may include all housing program and development financial
services, including origination of loans or other indebtedness, administration and servicing of
loans or other indebtedness, arranging for mortgage insurance from private or public sources, and
other related services. For this purpose, the city may exercise any of the powers relating to housing
or housing finance provided in this section and the powers of a city under chapter 462C, a housing
and redevelopment authority under chapter 469, or the Minnesota Housing Finance Agency under
chapter 462A. Housing program and development financial services provided by the city are
determined to be for the public purpose of ensuring an adequate supply of affordable, decent, safe,
and sanitary housing. A city may form a corporation under chapter 302A or 317A controlled by
the city and delegate to it the power to exercise the powers granted to the city by this section.
    Subd. 2. Boundary limitations. A city may provide housing program and development
financial services only within its corporate boundaries, except to the extent that a joint powers
agreement or contract authorizes a city to provide the services within the boundaries of another
city or within the jurisdiction of a state agency.
    Subd. 3. Joint action. Two or more cities, or housing and redevelopment authorities or port
authorities authorized to exercise the powers of a city under chapter 462C, or a joint powers board
formed by them, may act jointly pursuant to section 471.59 and this section or may delegate the
exercise of their powers under this section to a corporation controlled by them. A city as defined
in section 462C.02, subdivision 6, or other political subdivision or state agency may contract with
the city or a joint powers board or a corporation for housing program and development financial
services for housing.
    Subd. 4. Obligations. The city may issue bonds or other obligations and apply their proceeds
for any proper purpose of the city or a corporation formed by the city relating to housing program
and development financial services. Bonds or other obligations issued for a specific program
or development shall be issued only in accordance with sections 462C.01 to 462C.07 to the
extent required by section 462C.08. Bonds or obligations issued for financial services purposes
may be sold at public or private sale, without an election, on the terms and conditions the city
shall determine. For that purpose, the city may exercise any of the powers that a housing and
redevelopment authority may exercise under chapter 469, or the Minnesota Housing Finance
Agency may exercise under chapter 462A, in either case without limitation under the provisions
of chapter 475. The city or corporation may purchase real or personal property used or useful
for housing program or development financial services under an installment contract, or lease
real or personal property with an option to purchase under a lease purchase agreement. The city
may issue bonds or other obligations secured by obligations under an installment contract or
lease, in the manner provided in this section for other bonds or obligations issued for financial
services purposes.
History: 1991 c 342 s 10

462C.15 [Repealed, 1Sp2005 c 1 art 4 s 124]