Project Eligibility; Other Responsibilities of Subsidizing Agency

(1) Project Eligibility. To be eligible to submit an application to a Board for a Comprehensive Permit or to file or maintain an appeal before the Committee, the Applicant and the Project shall fulfill, at a minimum, the following project eligibility requirements: (a) The Applicant shall be a public agency, a nonprofit organization, or a Limited Dividend Organization; (b) The Project shall be fundable by a Subsidizing Agency under a Low or Moderate Income Housing subsidy program; and (c) The Applicant shall control the site. Compliance with these project eligibility requirements shall be established by issuance of a written determination of Project Eligibility by the Subsidizing Agency that contains all the findings required under 760 CMR 56.04(4), based upon its initial review of the Project and the Applicant’s qualifications in accordance with 760 CMR 56.04. (2) Elements of Application. The Applicant shall submit an application for Project Eligibility to the Subsidizing Agency, with a copy to the Chief Executive Officer of the municipality and written notice to the Department, which shall include: (a) the name and address of the Applicant; (b) the address of the site and site description; (c) a locus map identifying the site within a plan of the neighborhood, accompanied by photographs of the surrounding buildings and features that provide an understanding of the physical context of the site; (d) a tabulation of proposed buildings with the approximate number, size (number of bedrooms, floor area), and type (ownership or rental) of housing units proposed; (e) the name of the housing program under which Project Eligibility is sought; (f) relevant details of the particular Project if not mandated by the housing program (including percentage of units for low or moderate income households, income eligibility standards, the duration of restrictions requiring Low or Moderate Income Housing, and the limited dividend status of the Applicant); (g) conceptual design drawings of the site plan and exterior elevations of the proposed buildings, along with a summary showing the approximate percentage of the tract to be occupied by buildings, by parking and other paved vehicular areas, and by open areas, the approximate number of parking spaces, and the ratio of parking spaces to housing units; (h) a narrative description of the approach to building massing, the relationships to adjacent properties, and the proposed exterior building materials; (i) a tabular analysis comparing existing zoning requirements to the Waivers requested for the Project; and (j) evidence of control of the site. In the case of a Local Initiative Project (LIP), the application shall be submitted by the Chief Executive Officer of the Municipality. (3) Review and Comment Process. Upon receipt of the application, the Subsidizing Agency shall provide written notice to the Chief Executive Officer of the municipality where the Project is located, initiating a 30-day review period of the Project. During the course of the review period the Subsidizing Agency shall conduct a site visit, which Local Boards may attend, and it shall accept written comments from Local Boards and other interested parties. The Subsidizing Agency shall consider any such comments prior to issuing a determination of Project Eligibility. No determination of Project Eligibility shall be issued for a Project before the end of the 30-day review period. (4) Findings in Determination. A determination of Project Eligibility, to be issued by the Subsidizing Agency after the close of the 30-day review period, shall make the following findings, based upon its review of the application, and taking into account information received during the site visit and from written comments: (a) that the proposed Project appears generally eligible under the requirements of the housing subsidy program, subject to final approval under 760 CMR 56.04(7); (b) that the site of the proposed Project is generally appropriate for residential development, taking into consideration information provided by the municipality or other parties regarding municipal actions previously taken to meet affordable housing needs, such as inclusionary zoning, multifamily districts adopted under M.G.L. c. 40A, and overlay districts adopted under M.G.L. c. 40R (such finding, with supporting reasoning, to be set forth in reasonable detail); (c) that the conceptual project design is generally appropriate for the site on which it is located, taking into consideration factors that may include proposed use, conceptual site plan and building massing, topography, environmental resources, and integration into existing development patterns (such finding, with supporting reasoning, to be set forth in reasonable detail); (d) that the proposed Project appears financially feasible within the housing market in which it will be situated (based on comparable rentals or sales figures); (e) that an initial pro forma has been reviewed, including a land valuation determination consistent with the Department’s guidelines, and the Project appears financially feasible and consistent with the Department’s guidelines for Cost Examination and Limitations on Profits and Distributions (if applicable) on the basis of estimated development costs; (f) that the Applicant is a public agency, a non-profit organization, or a Limited Dividend Organization, and it meets the general eligibility standards of the housing program; and (g) that the Applicant controls the site, based on evidence that the Applicant or a related entity owns the site, or holds an option or contract to acquire such interest in the site, or has such other interest in the site as is deemed by the Subsidizing Agency to be sufficient to control the site. The Subsidizing Agency shall provide copies of its written determination of Project Eligibility to the Department, the Chief Executive Officer of the municipality, and the Board. (5) Substantial Changes. If an Applicant desires to change aspects of its proposal that would affect the project eligibility requirements set forth at 760 CMR 56.04(1), after it has received a determination of Project Eligibility, it shall notify the Subsidizing Agency in writing of such changes, with a copy to the Department, the Chief Executive Officer of the municipality, and the Board. The Subsidizing Agency shall determine within 15 days whether such changes are substantial with reference to the project eligibility requirements. Failure to respond shall be deemed a finding that the change is not substantial. If the Subsidizing Agency finds that the changes are substantial, it shall ordinarily defer any review (except if the Applicant, the Chief Executive Office of the municipality, or the Board request otherwise) until either the Board has issued a Comprehensive Permit or the application has been denied and the Applicant has lodged an appeal with the Committee, at which time the Subsidizing Agency shall reaffirm, amend, or deny its determination of the project eligibility requirements. Only the changes affecting the project eligibility requirements set forth at 760 CMR 56.04(1) shall be at issue in such review. In the case of a Comprehensive Permit that is not subject to appeal, such decision may be incorporated into the Subsidizing Agency’s final approval issued pursuant to 760 CMR 56.04(7). If the Subsidizing Agency finds that the changes are not substantial and that the Applicant has good cause for not originally presenting such details in its application, the changes shall be permitted if the proposal as so changed meets the requirements of M.G.L. c. 40B, §§ 20 through 23 and 760 CMR 56.04. (6) Conclusive Nature of Determination. Issuance of a determination of Project Eligibility shall be considered by the Board or the Committee to be conclusive evidence that the Project and the Applicant have satisfied the project eligibility requirements of 760 CMR 56.04(1). Alleged failure of the Applicant to continue to fulfill any of these project eligibility requirements may be subsequently raised by the Board at any time, with the burden of proof on the Board, or by the Committee during an appeal, in either case solely upon the grounds that there has been a substantial change affecting the project eligibility requirements set forth at 760 CMR 56.04(1). Such challenge shall be decided by the Subsidizing Agency in accordance with the procedure set forth in 760 CMR 56.04(5), and the Board hearing or Committee appeal may be stayed until such challenge is decided. (7) Final Approval. Following the issuance of a Comprehensive Permit, the Subsidizing Agency shall issue its final written approval of the Project to the Applicant, with a copy to the Board and the Department. Such approval shall, at a minimum: (a) reaffirm each of the project eligibility requirements enumerated in 760 CMR 56.04(1); (b) confirm that the proposed Use Restriction is in a form consistent with Department guidelines; and (c) verify that cost examination requirements have been acknowledged, that a commitment has been made by the Applicant to comply with the cost examination requirements defined in 760 CMR 56.04(8) under the pains and penalties of perjuy, and that adequate financial surety, as defined in guidelines issued by the Department, has been secured by the Sub- sidizing Agency sufficient to ensure completion of the cost examination to the satisfaction of the Subsidizing Agency and the distribution of excess funds as required at 760 CMR 56.04(8)(e). (8) Cost Examination and Limitations on Profits and Distributions. (a) Following the issuance of a Comprehensive Permit, a Project for which the Developer is a Limited Dividend Organization shall be subject to the following limitations on reasonable return as determined by the Subsidizing Agency, in accordance with guidelines issued by the Department. The Subsidizing Agency shall be solely responsible for the monitoring and enforcement of such limitations, subject to the Subsidizing Agency’s right to delegate such functions as set forth in 760 CMR 56.02: Subsidizing Agency. (b) Certification of Total Development Costs. For purposes of compliance with 760 CMR 56.04(8)(b)1. and (c), total development costs, and the determination of qualifying inclusions and exclusions, shall be established by the Applicant or subsequent Developer in a detailed financial statement of all material costs of the project prepared by a certified public accountant and submitted to the Subsidizing Agency in a form and upon a schedule determined by the Department's guidelines. The Department's guidelines shall provide for verification of financial statements; submission of a copy of cost certifications to the affected municipality for its review and consideration by the Subsidizing Agency of any inaccuracies identified by the municipality during its review; and enforcement actions, including suspension or disqualification from state agency programs, in the event of noncompliance with 760 CMR 56.04(8). (c) Distribution of Excess Funds. Any funds in excess of the applicable limitations on profits and distributions shall be paid over to the Subsidizing Agency or the municipality or the Subsidizing Agency, as determined solely by the Subsidizing Agency's program requirements and the terms of a regulatory agreement, or similar agreement, to be entered into between the Subsidizing Agency and the Developer. (d) Cost Certification Inventory. The Department shall maintain an inventory of all projects granted a Comprehensive Permit and the respective status of each Project with respect to the submission of the certification of total development costs as required by 760 CMR 56.04(8)(d). For the purposes of such inventory, Subsidizing Agencies shall provide information to the Department in the manner and form required by the Department.