Mortgage Loans

(1) The Agency may make or participate in the making of mortgage loans as provided in Rule 0770—1—1—.04 of these Rules and Regulations to housing sponsors for the development, construction or rehabilitation and operation of non-owner occupied rental housing developments (‘‘housing developments’’). For purposes of 0770—1—4 of these Rules and Regulations housing developments shall include a housing development intended to be owned and operated on a cooperative basis. (2) Agency mortgage loans, as defined in Rule 0770—1—1—.01 (7) hereof, may be made for terms of up to forty (40) years, excluding the period of construction or rehabilitation of the housing development. The term of any such Agency mortgage loan, the date for the commencement of amortization of the principal amount thereof, the amortiza- tion period and other terms and conditions of such Agency mortgage loan and of the repayment thereof shall be set forth in the Agency Board’s Resolution authorizing such mortgage loan, or in the mortgage loan commitment issued on behalf of the Agency pursuant to Rule 0770—1—4—.03 (5). (3) An Agency mortgage loan under this Part may be made to public housing agencies, public and private not-for-profit corporations or other public or private non-profit entities and limited distribution entities as defined in T.C.A. §13— 23—117 as amended by Chapter 320, Public Acts of 1975 which are determined by the Agency to be qualified sponsors. Such an Agency mortgage loan may be made to limited distribution entities (hereinafter referred to as ‘‘limited profits’’) regulated by the Agency in an amount not to exceed ninety percent (90%) of the total project cost of the housing development, as determined by the Agency. Such an Agency mortgage loan may be made to not-for- profit housing sponsors in an amount not to exceed one hundred percent (100%) of the total project cost, as determined by the Agency. In all cases the Agency mortgage loan shall be ‘‘insured’’ as provided in Rule 0770—1— 1—.01 (7) of these Regulations. (4) The estimated total development cost of a housing development and the initial principal amount of the Agency mortgage loan with respect thereto, together with terms and conditions applicable to the equity contribution by the housing sponsor, required assurances of successful completion and operational stability, and related matters, shall be set forth in the Agency Board’s Resolution authorizing such mortgage loan, or in the mortgage loan commitment issued on behalf of the Agency pursuant to Rule 0770—1—4—.03 (5). (5) The principal amount of an Agency mortgage loan and other terms and conditions thereof, may be amended or modified by the Agency prior to the loan closing, pursuant to a Resolution of the Agency Board modifying such mortgage loan commitment. (6) In addition, the Resolution of the Agency Board authorizing such mortgage loan and the mortgage loan commitment issued on behalf of the Agency may authorize the Executive Director to approve and authorize an increase in the principal amount of the Agency mortgage loan. Any increase authorized by the Executive Director may not exceed two percent (2%) of the initial principal amount of the mortgage loan, and may only be authorized when in the judgement of the Executive Director, such an increase is justified by an RENTAL HOUSING LOAN PROGRAM CHAPTER 0770—1—4 increase in development costs and is necessary or desirable to effect the successful construction and completion of the housing development. Any such increase in the principal amount of an Agency mortgage loan must be consistent with the requirement of Rule 0770—1—1—.07 (7) that loans be ‘‘insured’’, and must not adversely affect the eco- nomic feasibility as determined pursuant to Rule 0770—1—4—.02 (3).