12 U.S.C. § 1715s — Treatment of mortgages covering tax credit projects
submitted 92 years ago by Pub. L. 110-289 to r/title-12-BANKS-AND-BANKING · 482 words · no verdicts yet
This section gives special treatment to insured mortgages for multifamily projects using low-income housing tax-credit equity. It limits escrow and security requirements, coordinates inspections, and creates a streamlined-processing pilot program.
(a) Definition. An “insured mortgage covering a tax credit* project” is a mortgage insured under this subchapter for construction, rehabilitation, purchase, or refinancing of a multifamily project receiving equity through a section 42 low-income housing tax credit. (b) Letters of credit. The Secretary may not require escrow of equity from selling the project’s tax credits or require another security form such as a letter of credit. (c) Asset management. If the tax-credit allocating agency periodically inspects the project as section 42 requires, the project is exempt from Secretary requirements for periodic mortgagee inspections. If that agency performs other section 42 compliance monitoring, the Secretary must accept its compliance evidence when the Secretary finds the monitoring sufficient for the Secretary’s requirements. (d) Pilot program. (1) The Secretary must establish a pilot program for all subchapter mortgage-insurance applications connected with construction, rehabilitation, purchase, or refinancing of such tax-credit multifamily projects, and must issue implementation instructions within 180 days after July 30, 2008. (2) The program must provide for (A) Secretary-designated underwriters to review applications and decide eligibility instead of the Department employees who ordinarily process them; (B) applications by mortgagees previously expressly approved by the Secretary; and (C) eligibility decisions by the chief underwriter under Secretary-prescribed requirements, including reports on proposed mortgagees from third parties expressly approved by the chief underwriter.
For purposes of this section, the term “insured mortgage covering a tax credit* project” means a mortgage insured under any provision of this subchapter that is executed in connection with the construction, rehabilitation, purchase, or refinancing of a multifamily housing project for which equity 1 provided through any low-income housing tax credit pursuant to section 42 of title 26.
In the case of an insured mortgage covering a tax credit project, the Secretary may not require the escrowing of equity provided by the sale of any low-income housing tax credits for the project pursuant to section 42 of title 26, or any other form of security, such as a letter of credit.
In the case of an insured mortgage covering a tax credit project for which project the applicable tax credit allocating agency is causing to be performed periodic inspections in compliance with the requirements of section 42 of title 26, such project shall be exempt from requirements imposed by the Secretary regarding periodic inspections of the property by the mortgagee. To the extent that other compliance monitoring is being performed with respect to such a project by such an allocating agency pursuant to such section 42, the Secretary shall, to the extent that the Secretary determines such monitoring is sufficient to ensure compliance with any requirements established by the Secretary, accept such agency’s evidence of compliance for purposes of determining compliance with the Secretary’s requirements.
The Secretary shall establish a pilot program to demonstrate the effectiveness of streamlining the review process, which shall include all applications for mortgage insurance under any provision of this subchapter for mortgages executed in connection with the construction, rehabilitation, purchase, or refinancing of a multifamily housing project for which equity 1 provided through any low-income housing tax credit pursuant to section 42 of title 26. The Secretary shall issue instructions for implementing the pilot program under this subsection not later than the expiration of the 180-day period beginning upon July 30, 2008.
Such pilot program shall provide for—
the Secretary to appoint designated underwriters, who shall be responsible for reviewing such mortgage insurance applications and making determinations regarding the eligibility of such applications for such mortgage insurance in lieu of the processing functions regarding such applications that are otherwise performed by other employees of the Department of Housing and Urban Development;
submission of applications for such mortgage insurance by mortgagees who have previously been expressly approved by the Secretary; and
determinations regarding the eligibility of such applications for such mortgage insurance to be made by the chief underwriter pursuant to requirements prescribed by the Secretary, which shall include requiring submission of reports regarding applications of proposed mortgagees by third-party entities expressly approved by the chief underwriter.
Source credit: (June 27, 1934, ch. 847, title II, § 228, as added Pub. L. 110–289, div. B, title VIII, § 2834(c), July 30, 2008, 122 Stat. 2870.)
- 1934Enacted · Pub. L. 110-289 · 122 Stat. 2870
A history note hasn’t been published yet. The record shows enactment by Pub. L. 110-289 on 1934-06-27.
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