Rent Increases

MHMFA Legislation (St. 1974 c. 846 § 5, subsection 8) requires that MHMFA loans minimize residential displacement of existing tenants in 2-4 unit structures due to rehabilitation. Therefore, any loan which includes amounts for rehabilitation of a 2-4 unit structure in which a Loan Participation is purchased by MHMFA will require execution by both the existing tenants and the Borrower of an agreement that (a) establishes a base rent resulting fromthe costof rehabilitation and (b) restricts any further increases in rent for a period of two years to a pro-rata share of increases in expenses (limited to increases in property taxes, operating or maintenance expenses or additional capital improvements). This agreement shall run between the tenant and the Borrower, and shall not be required when no rehabilitation costs are included in theMortgageLoanor whenthe proposed rehabilitation is to alleviate conditions which violate the state sanitary code or applicable building or housing codes or to carry out other essential maintenance.