Development of Additional Units on Land Subject to a Contract for Financial Assistance by LHAs or

Controlled Affiliates (1) Pursuant to M.G.L. c. 121B, § 31 an LHA or a controlled affiliate may submit to the Department an application for a new affordable housing development utilizing private or mixed public and private financing on land which is or has been subject to a contract for financial assistance for or in connection with a state-aided housing project between the LHA and the Department. The form and contents of such an application shall be prescribed by the Department and shall include the plans and description of the new affordable housing development, the estimated cost thereof, the proposed method of financing, and a detailed estimate of the expenses and revenue thereof. Within 60 days of receipt of a complete application the Department shall approve such application provided that it shall have made the following findings: (a) The land is surplus to the needs of any existing state-aided housing project and to any planned state-aided housing project on the site. 4.11: continued (b) Excepting any market-rate housing, the housing to be constructed will be deed restricted to occupancy by low or moderate income households at affordable rents or sales prices. Any deed restriction shall specify the term for which the housing shall be affordable. The term may be perpetual or for a lesser number of years provided that the term shall be a minimum of 40 years or such other term as may be approved by the Department in a waiver of the 40­ year minimum term. The purpose of the deed restriction shall be to ensure affordability of the housing during the term. (c) Adequate provision has been made so that the tenant share of the rent for an affordable rental housing unit will be no more than the greater of the following amounts: 1. no more than the percentage of monthly net household income which is specified in 760 CMR 6.04(1)(b) with net household income of the tenant household determined in the manner specified in 760 CMR 6.05: Determination of Gross Household Income and Net Household Income; or 2. an amount not to exceed 30% of 75% of area median household income adjusted for household size as determined by HUD except as the Department may otherwise approve; or 3. the amount allowed as the tenant share of rent by a state or federal affordable housing program which has provided financing for or has otherwise subsidized the housing unit. (d) Alternatively, adequate provision has been made so that the sales price of an affordable homeownership housing unit shall not exceed: 1. the amount which a low or moderate income household of appropriate size could afford using reasonable assumptions determined by the Department with respect to financing, household assets, and percentage of income available for housing costs; or 2. a sales price allowed as the sales price of the housing unit by a state or federal affordable housing program which has provided financing for or has otherwise subsidized the housing unit. (e) The affordable housing to be constructed shall have a similar purpose as that of any housing project on such land or, if the land is vacant, with the purposes of the contract for financial assistance respecting such land. (f) Adequate provision has been made so that the lot or lots of land on which the additional housing will be constructed will be suitably subdivided from the remaining land or a suitable condominium will be created at such time as homeownership housing units are constructed on such lot or lots or at such earlier time as financing is secured by a mortgage on such lot or lots. Any such mortgage shall contain provisions requiring notice to the Department and a reasonable opportunity for it to cure in the event of foreclosure for breach of the terms of such mortgage. Any such mortgage shall also contain such commercially reasonable protections against loss of affordability as are permitted by mortgagee. (g) Adequate provision has been made so that a state or federal affordable housing program or the Department will approve the plans and description of the new or rehabilitated housing, its estimated construction costs, and its financing and will ensure that proper standards of health, sanitation, and safety are met by such housing. When approval is given by a state or federal affordable housing program, copies of the approval, the approved plans, description and other information must be provided to the Department. (h) Any market-rate housing units specified in the application appear to be reasonably necessary for the economic feasibility of the construction or operation of the affordable housing units and comprise no more than 25% of the total affordable housing and market-rate housing units, unless the Department shall find that a greater percentage of market-rate housing units is reasonably financially necessary for the economic feasibility of the construction or operation of the affordable housing units. (i) There is a requirement that public construction and prevailing wage requirements, insofar as applicable, will be complied with in the construction of the housing. (j) There is a requirement that tenant or homeowner selection procedures including any preferences will be fair and reasonable and will not contravene any applicable state or federal anti-discrimination laws or any state or federal fair housing laws. 4.11: continued (2) The Department shall notify the LHA or its controlled affiliate in writing whether an application is incomplete or whether it has been approved, approved with conditions, or denied within 60 days from the date of the Department’s receipt of the application. Housing approved by the Department under 760 CMR 4.11 shall not be subject to any contract for financial assistance between the LHA and the Department for or in connection with a state-aided housing project under M.G.L. c. 121B shall not be a housing project eligible for subsidy under M.G.L. c. 121B, § 32, and shall not be subject to regulation by the Department as such. With respect to housing approved under 760 CMR 4.11, the LHA shall not be obligated to repay any state bond funds received pursuant to a CFA for relevant acquisition, development or modernization. Implementation of any application for an affordable housing development approved by the Department under 760 CMR 4.11 shall be subject to receipt by the LHA or its controlled affiliate of a building permit under applicable zoning or under a comprehensive permit and subject to the approval of any necessary subdivision plan, within 24 months of the Department’s approval or such further time as may be approved by the Department.