R460.  Housing Corporation, Administration.
R460-3.  Programs of UHC.
R460-3-1.  Single-Family Program.
	(1)  Eligible mortgage lender.
	(a)  To be eligible to participate in the single-family program, a mortgage lender must have as one of its principal purposes the origination of mortgage loans in its usual and regular course of business.
	(b)  UHC may establish criteria that mortgage lenders must meet relating to approved mortgagee status by the Federal Housing Administration, Rural Housing Service or Department of Veterans Affairs, the financial condition of the mortgage lender, the number of mortgage loan originations during a period specified by UHC, the length of time a mortgage loan origination office has been maintained in the state, seller/servicer approval by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, and other criteria as UHC deems necessary to maintain a safe and sound program and to establish that mortgage loans are a part of a mortgage lender's usual and regular business activities and that the mortgage lender possesses the capability to make and to have adequate financial resources to fund mortgage loans.
	(c)  UHC may require that mortgage lenders, from time to time, furnish to UHC evidence as UHC may request to confirm a mortgage lender's eligibility to participate in the single-family program.
	(d)  A mortgage lender shall employ and maintain qualified personnel to carry out the obligations arising under contracts with UHC.
	(e)  All transactions between a mortgage lender and UHC shall be subject to the relevant single-family program contract documents which may include the following: participation agreement, selling supplement, mortgage credit certificate program guide, mortgage purchase agreement ("MPA"), mortgage credit certificate request and reservation ("MCC request"), notice of availability of funds, MPA request, and other documents deemed necessary by UHC ("Program Documents").
	(2)  Mortgage purchase agreement request; mortgage purchase agreement; mortgage credit certificate request and reservation.
	(a)  UHC may distribute to mortgage lenders via any electronic, digital, or written means, any interest rate and/or program changes affecting the single-family program.
	(b)  Mortgage lenders may submit one or more mortgage purchase agreement or MCC requests to UHC via electronic, digital or written means as specified by UHC, in which an amount of funds is requested for a specific mortgage loan or MCC that the mortgage lender is processing.
	(c)  UHC may require that each mortgage purchase agreement or MCC request submitted by a mortgage lender be accompanied by an application or other fee in an amount specified by UHC in its Program Documents.  The fee shall not be refunded or accrue interest payable by UHC, unless otherwise specified by UHC in the Program Documents.
	(d)  Upon receipt of a mortgage purchase agreement or MCC request, UHC may deliver to the mortgage lender 1) a mortgage purchase agreement confirming UHC's commitment to purchase the specified mortgage loan or 2) an MCC reservation confirming UHC's commitment to issue an MCC for the requested amount.  The mortgage purchase agreement or MCC request shall terminate automatically if the mortgage lender fails to deliver all necessary Program Documents with respect to the mortgage loan or MCC to UHC on or prior to the date specified in the Program Documents.
	(3)  Single-family mortgage loans.
	(a)  From time to time, UHC may develop individualized single-family mortgage programs designed to meet the needs of certain populations.  In such cases, UHC shall establish maximum fees that may be charged or collected, final mortgage delivery date, interest rate, and loan term.  Fee requirements shall be uniformly applied to all mortgage lenders, without preference of one mortgage lender over another.
	(b)  All mortgage loans shall be made to finance single-family residential housing located in the state which conform to the requirements of the single-family mortgage program or any other requirements specified in the Program Documents.
	(c)  UHC may provide priority allocations to make mortgage financing available to persons qualified for any of UHC's single-family programs or in targeted, rural, inner city or other areas experiencing difficulty securing mortgage loans to make housing available to persons of low and moderate income.
	(d)  Each mortgage loan purchased by UHC shall conform to the credit underwriting, property valuation, hazard insurance, title insurance, mortgage insurance, security and collateralization, and all other requirements of the Program Documents.  Closings or deliveries must occur on or before the date established in Program Documents.  UHC shall have the right to decline to finance any mortgage loan if, in the reasonable opinion of UHC, the mortgage loan does not meet all requirements of the Program Documents.
	(4)  Income limits of borrowers.
	Income limits for low and moderate income persons eligible as borrowers for UHC financing are based on area or state median income as determined and published by the U.S. Department of Housing and Urban Development (HUD). UHC's president is authorized to establish income limits of UHC's single family programs and such limits shall not exceed 140% of area or state median income as determined and published by HUD.  UHC shall post income limits on its website, incorporate the limits as terms of the Program Documents, and shall make information concerning the limits available to all interested persons.  Income limits may vary based on, but not limited to, loan program, household size, county, targeted area, source and availability of funds, and risk to UHC.
	(5)  Acquisition cost limits.
	When loan funding sources have federal regulations that require the establishment of acquisition cost limits, UHC's president is authorized to establish acquisition cost limits in accordance with the requirements detailed in Section 143 of the Internal Revenue Code.
	When loan funding sources have no federal regulations requiring acquisition cost limits, UHC may or may not establish acquisition cost limits. UHC's president will establish any acquisition cost limits based on Average Area Purchase Prices as published by the Internal Revenue Service (IRS).  The acquisition cost of residential housing is the cost of acquiring a completed residential housing unit and shall include all amounts paid in cash or in kind for all structures, fixtures, improvements, and land.  UHC shall post any acquisition cost limits on its website, incorporate the limits as terms of the Program Documents, and shall make information concerning the limits available to all interested persons.
	(6)  Mortgage Credit Certificates (MCC).
	(a)  From time to time, UHC may make available amounts to issue mortgage credit certificates to qualified applicants in conjunction with a mortgage loan obtained to purchase residential housing within the state of Utah.
	(b)  All MCCs issued by UHC shall only be done when an eligible mortgage loan shall be made to finance single-family residential housing in the state which conforms to the requirements of the single-family mortgage program or any other requirements specified in the Program Documents.
	(c)  UHC may provide priority allocations to make mortgage credit certificates available to persons qualified for any of UHC's single-family loan programs or in targeted, rural, inner city or other areas experiencing difficulty securing mortgage loans to make housing available to persons of low and moderate income.  Furthermore, UHC may provide an allocation of MCCs to a particular development subject to certain conditions.
	(d)  Each MCC request reserved and issued by UHC shall conform to all requirements of the Program Documents.  UHC shall have the right to decline to issue an MCC if, in the reasonable opinion of UHC, the MCC request does not meet all requirements of the Program Documents.
	(7)  Assumption of single-family mortgage loans.
	(a)  UHC shall establish and may amend conditions and requirements for the assumption of mortgage loans.  The conditions and requirements for the assumption of mortgage loans may vary between the different series of bonds and mortgage insurers or guarantors under which the various mortgage loans have been purchased.
	(b)  Conditions and requirements for the assumption of mortgage loans may include the following:  acquisition cost limits for the residential housing; income limits for the assuming purchaser; the establishment of a limit, expressed as a percentage of the assuming purchaser's income, of the purchaser's monthly housing expenses; a requirement that the purchaser not own any other properties financed under any other UHC program; and any other requirements and qualifications deemed necessary or advisable by UHC.  Purchasers, who assume mortgage loans, shall generally be required to satisfy the same requirements that applied to the original borrower.
	(c)  UHC may impose limits on the maximum amount of assumption fees that may be charged in connection with the assumption of mortgage loans.
	(d)  UHC may require the continuing liability of the original borrowers in connection with the assumption of mortgage loans.
	(e)  The required documentation for the assumption of mortgage loans may include documents deemed necessary by UHC, applicable to the particular program.
	(8)  Limitation of frequency of loan applications.
	UHC may establish limitations on the frequency with which a Mortgage Lender, on behalf of a particular mortgage applicant or co-applicant, may request a mortgage purchase agreement or otherwise apply for a reservation of mortgage loan funds if UHC deems a limitation to be necessary to ensure the efficient and equitable allocation of funds.
	(9)  Definitions.
	(a)  As used herein, "Mortgage Lender" shall mean a mortgage lender that UHC has determined to be an eligible mortgage lender in accordance with this Rule.
	(b)  As used herein, "Mortgage Loan" shall mean a loan secured by a deed of trust or mortgage on a single-family residence that UHC has determined to be an eligible mortgage loan in accordance with this Rule.

R460-3-2.  Multifamily Mortgage Programs.
	(1)  No Standard Program.
	(a)  UHC does not have a standard financing program for bond financed multifamily rental housing.  It is the developer's responsibility to engage professionals to assist in obtaining adequate bond credit enhancement and in structuring a sale or placement of the bonds.  UHC, as issuer, reserves the right to approve or disapprove the terms of any proposed project or the bond financing enhancement or structure.
	(b)  The sole source of repayment of the bonds, including all interest and any premiums, for a multifamily rental housing project shall be the revenue sources related to the project financed by the bonds.  Neither the bonds nor any interest or premium shall constitute a general indebtedness of UHC.
	(c)  One or more national rating services must rate publicly offered bonds issued by UHC.  A minimum rating as determined by UHC is required, unless specifically waived for good cause.  A type of credit enhancement backing the bonds must be in place to increase the probability that the bond holders will be repaid even if the project and its underlying mortgage loan defaults.  UHC reserves the right to approve all forms of credit enhancement for the bonds.  With certain restrictions, UHC may permit bonds privately placed with institutional investors to be unrated.
	(d)  Publicly offered bonds issued by UHC shall be sold to underwriter(s) with the financial backing and capability to generate cash at closing equal to the amount of the bonds, regardless of whether the bonds have been resold to investors.  UHC may appoint underwriters requested by the developer; however, UHC reserves the right to approve any underwriter, and may appoint co-underwriters, as it deems appropriate.
	(2)  Legal Opinions.
	(a)  UHC appoints bond counsel to render any opinion with respect to the tax exemption of the interest on the bonds.
	(b)  Any other opinions regarding UHC that may be required by other parties to a bond transaction will be rendered by counsel appointed by UHC but paid for by the developer.
	(3)  Income limits of qualifying tenants.
	UHC shall establish and may amend maximum income limits for low and moderate income persons eligible as qualifying tenants of multifamily developments.  UHC's president is authorized to establish income limits of UHC's multifamily programs and such limits shall not exceed 140% of area or state median income as determined and published by HUD.  UHC shall make information concerning the limits available to interested persons including potential renters and developers and shall incorporate the limits into appropriate documents.  Income limits may vary based on, but not limited to, loan program, household size, county, targeted area, source and availability of funds, and risk to UHC.
	(4)  Eligible developers/owners.
	(a)  To be eligible to participate in the multifamily financings, the mortgagor/owner may be an individual, a limited liability company, a partnership or a corporation having the legal capacity and authority to borrow money for the purposes of constructing, owning and operating a multifamily development.
	(b)  UHC may establish criteria relating to the credit worthiness and the financial, construction and operating capacity of the developer/owner as UHC deems necessary to maintain a secure program and to provide decent, safe and sanitary rental housing.  Alternatively, in situations where UHC will be issuing bonds the proceeds of which will be loaned to the developer/owner, UHC may rely on the due diligence of the underwriters or purchasers of the bonds and/or the issuer of the credit enhancement for the bonds in making the determination that the developer/owner possesses sufficient creditworthiness and sufficient financial, construction and operating capacity.
	(5)  Fees and Expenses.
	The developer shall be responsible for all fees and expenses incurred in connection with the issuance of any bonds.  UHC may charge a developer a fee for issuing the bonds or for performing any services required by UHC.

R460-3-3.  Home Improvement Loan Programs (Reserved).
	(1)  Reserved.

R460-3-4.  Low-Income Housing Tax Credit Program.
	(1)  Application procedures.
	(a)  UHC shall prepare a low-income housing tax credit allocation plan that provides the administration procedures, allocation procedures, and compliance monitoring procedures that UHC will follow in administering the low income housing tax credit program for the state. The allocation plan may be amended by UHC as is necessary to comply with amendments to section 42 of the code or as deemed necessary by UHC to maintain a sound program.  UHC shall prepare an application form that shall be used to request an allocation of both federal and state low income housing tax credits for a proposed residential housing development.  The allocation plan and application form shall be made available electronically via UHC's website or upon request.
	(b)  UHC may establish and collect fees payable by low income housing tax credit applicants to cover administrative and legal expenses of UHC incurred in processing and reviewing applications, allocating tax credits, monitoring compliance with the provisions of section 42 of the code, and other program requirements.
	(2)  Reservation of credits.
	(a)  UHC shall score and rank all applications according to the procedures set forth in the allocation plan.  A reservation of low income housing tax credits allocated to an applicant shall be in an amount determined by UHC and shall be based upon the facts, circumstances, and representations made by the applicant in the application.
	(b)  UHC may condition a reservation of low-income housing tax credits to an applicant upon any restrictions and conditions UHC believes are consistent with the purpose and intent of the program, and those which will ensure the completion of the residential housing development.
	(c)  No reservation of low-income housing tax credits may be transferred by an applicant unless the specific written approval of UHC is obtained before the proposed transfer.  Any transfer shall be made in writing, with copies of all written documents provided to UHC.
	(d)  Applicants shall provide UHC with any information that may be requested by UHC in performing its duties and responsibilities required under the low-income housing tax credit program and the allocation plan.
	(3)  Allocation.
	(a)  UHC shall enter into an agreement for the carry-over allocation of low-income housing tax credits, or make a final allocation of low-income housing tax credits, to applicants who have received a reservation of low-income housing tax credits upon satisfaction to UHC of all of the conditions to the reservation of the low-income housing tax credits and satisfaction of all other requirements under section 42 of the code and the allocation plan.
	(b)  UHC may disclose the application materials, or any allocating documents, to the Rural Housing Service, Department of Housing and Urban Development or other state or federal agency as is necessary to comply with state or federal law requiring the review of financial subsidies to low-income housing developments.
	(c)  As a condition to making any allocation of low-income housing tax credits, UHC may require an applicant to make a deposit, or provide other guarantees of performance, in an amount and manner as determined by UHC to ensure the completion of the residential housing development.  Circumstances under which deposits or performance guarantees will be returned or forfeited, in whole or in part, shall be made known to applicants in the allocation plan before the collection of the deposit or performance guarantee.
	(d)  UHC may reserve or allocate low-income housing tax credits in amounts that are less than amounts requested by housing credit applicants.  UHC may also forward-reserve credits from the following calendar year to complete the reservation of credits for an applicant that scored well enough to receive a partial reservation of the current year credits.
	(4)  Compliance monitoring.
	(a)  UHC shall prepare a compliance monitoring plan which satisfies the requirements of section 42 of the code.
	(b)  Recipients of low-income housing tax credits shall provide to UHC documentation, certifications and other evidences of compliance with the provisions of section 42 of the code as required in the compliance monitoring plan or other guidance issued by the IRS.
	(c)  UHC may establish and collect fees payable by recipients of low income housing tax credits to cover administrative and legal expenses of UHC incurred in on-site and/or office-based physical and file compliance reviews, associated documentation review and data input, internal and external reporting of compliance results, maintenance and updating of IT systems which support the program, or other requirements required under section 42 of the code.
	(d)  If an applicant for low income housing tax credits is considered not in good standing, as detailed in the allocation plan, UHC may disallow any application in which that individual or entity is participating in any way.  UHC may bar individuals or entities considered not in good standing from submitting low income housing tax credit applications for a period of time not to exceed five continuous tax-credit cycles which time will be calculated from the date of notification to the affected individuals or entities of the determination of not in good standing status.

R460-3-5.  Housing Development Program.
	(1)  Financial assistance to housing sponsors.
	UHC may provide financial assistance to a housing sponsor for the purpose of financing the construction, development, rehabilitation, purchase or operations of residential housing.
	(a)  UHC shall determine that the project proposed by the housing sponsor increases or maintains the supply of affordable, well-planned, well-designed, permanent, temporary transitional or emergency housing for low and moderate income persons.
	(b)  The housing sponsor shall agree to provide a specified number of units of residential housing for persons whose income does not exceed the maximum income limits established by UHC.  UHC's president is authorized to establish income limits of UHC's housing development programs and such limits shall not exceed 140% of area or state median income as determined and published by HUD.
	UHC shall incorporate the income limits in associated program documents and shall make information concerning the limits available to all interested persons.  Income limits may vary based on, but not limited to, program, household size, county, targeted area, source and availability of funds, and risk to UHC.  UHC may require that the income limits for a project be lower than the maximum income limits.
	(c)  The amount of the financial assistance shall not exceed the amount required to achieve financial feasibility in providing affordable housing for the intended occupants of the residential housing development.
	(d)  In determining the amount of financial assistance, UHC shall determine that the costs, including developer fees and reserves, incurred by the housing sponsor with respect to a residential housing development, are not excessively greater than similar housing developments.
	(e)  The housing sponsor shall agree to the controls and procedures required by UHC to ensure that the financial assistance is used only for the approved purposes.
	(f)  The housing sponsor shall agree to the continued availability and affordability of the residential housing to low and moderate income persons, pursuant to an enforceable covenant running with the land which is prepared by UHC and recorded with the real estate records of the county in which the residential housing is located.
	(g)  UHC shall determine that the housing sponsor has the necessary competence, experience and financial capability to complete or operate the residential housing development through an internal review of a sponsor's previous projects and/or through interviews of individuals involved with the sponsor in previous projects.
	(h)  UHC shall require security for any loan in a form and amount as UHC determines is reasonably necessary to secure repayment.  The security shall include a lien on the project property and may also include an irrevocable letter of credit, personal guarantees, security interests in unrelated real or personal property of the developer, assignments of contract rights and interests related to proposed development of the project, and/or power of attorney to replace manager, general partner or other principals of the developer.  The lien on the project property may be subordinate to other financing of the project.  Loans to non-profit or governmental entities are not required to be secured by personal guarantees.
	(i)  In the event that UHC makes a loan that is funded by or subject to any federal or state program, the terms of the loan shall be consistent with the requirements of the applicable program, notwithstanding any inconsistency with this Rule.
	(j)  As used herein, the "amount of financial assistance" means the principal amount of the loan together with the benefit of loan terms that are not typically available in the market, such as low (or no) interest rate, a long maturity date and/or a deferred (or no) amortization period.
	(2)  Financial assistance to low and moderate income persons.
	UHC may provide financial assistance to low and moderate income persons for the purpose of construction, rehabilitation, purchase, and/or financing of residential housing.
	(a)  UHC shall determine that, in order to make homeownership feasible for certain low and moderate income persons, financial assistance is necessary to reduce the cost of constructing, rehabilitating, purchasing and/or financing the residential housing.
	(b)  UHC may establish and amend maximum income limits for low and moderate income persons eligible to receive the financial assistance.  The limits shall not exceed 140% of area or state median income as determined and published by HUD.  UHC shall incorporate the income limits in associated program documents and shall make information concerning the limits available to all interested persons. Income limits may vary based on, but not limited to, loan program, household size, county, targeted area, source and availability of funds, and risk to UHC.  UHC may require that the income limits for a project be lower than the maximum income limits.
	(c)  The financial assistance will be provided only to assist with the construction, rehabilitation, purchase, and/or financing of residential housing which does not exceed the maximum acquisition cost and appraised value limits established by UHC.  The acquisition cost of residential housing is the cost of acquiring a completed residential housing unit and shall include all amounts paid in such or in kind for all structures, fixtures, and land.  UHC shall establish and may amend the limits in open public meetings of UHC for which UHC shall have given public notice as required by state law.
	(d)  UHC may condition the financial assistance provided to the home-buyer upon its repayment, with or without interest, to UHC.
	(3)  UHC may agree to provide any financial assistance pursuant to such additional conditions, terms and restrictions to ensure that the financial assistance is used as specified by UHC.
	(4)  UHC may establish application procedures and forms of applications and may collect fees payable by housing sponsors and/or low and moderate income persons to cover administrative and legal expenses of UHC incurred in processing and reviewing applications.
	(5)  UHC may provide financial assistance only if sufficient funds exist for that purpose and the financial assistance can be provided without jeopardizing the financial self-sufficiency of UHC.
	(6)  UHC may provide financial assistance to any subsidiary of UHC for any of the purposes set forth in this rule provided the applicable conditions for such financial assistance are satisfied.
	(7)  For financial assistance provided under a program established by the Trustees of UHC, the general terms of the financial assistance shall be consistent with the requirements of the program and the specific terms shall be determined by the President or another officer designated by the President.  For all other financial assistance, the general terms shall be determined by the Trustees and the specific terms shall be determined by the President consistent with the terms determined by the Trustees.

R460-3-6.  State Low-Income Housing Tax Credit Program.
	(1)  Application procedures.
	(a)  UHC shall incorporate in the low-income housing tax credit allocation plan prepared by UHC pursuant to R460-3-4 criteria and allocation procedures that UHC will follow in administering state low-income housing tax credits.
	(b)  UHC shall designate the form of application which shall be used to request an allocation of state low-income housing tax credits.
	(2)  Reservation of credits.
	(a)  UHC shall evaluate all applications according to the procedures set forth in the allocation plan, however, the applications will not be scored and ranked for purposes of reserving state low-income housing tax credits.  A reservation of state low-income housing tax credits allocated to an applicant shall be in an amount determined by UHC and shall be based upon the facts, circumstances, and representations contained in the application.  UHC may reserve state low-income housing tax credits to projects either in conjunction with the reservation of federal low-income housing tax credits or at a later date to a project not yet placed-in-service that previously received a reservation of federal low-income housing tax credits.
	(b)  UHC may condition a reservation of state low-income housing tax credits to an applicant upon any restrictions and conditions UHC believes are consistent with the purpose and intent of the program, and those which will ensure the completion of the residential housing development.
	(c)  No reservation of state low-income housing tax credits may be transferred by an applicant unless the specific written approval of UHC is obtained before the proposed transfer.  Any transfer shall be made in writing, with copies of all written documents provided to UHC.
	(d)  Applicants shall provide UHC with any information that may be requested by UHC in performing its duties and responsibilities required under the low-income housing tax credit program and the allocation plan.
	(3)  Allocation.
	(a)  UHC shall enter into an agreement for the carry-over allocation of state low-income housing tax credits, or make a final allocation of state low-income housing tax credits, to applicants who have received a reservation of state low-income housing tax credits upon satisfaction to UHC of all of the conditions to the reservation of the state and federal low-income housing tax credits.
	(b)  As a condition to making any allocation of state low-income housing tax credits, UHC may require an applicant to make a deposit, or provide other guarantees of performance, in an amount and manner as determined by UHC to ensure the completion of the residential housing development.  Circumstances under which deposits or performance guarantees will be returned or forfeited, in whole or in part, shall be made known to applicants before the collection of the deposit or performance guarantee.
	(c)  UHC may reserve or allocate state low-income housing tax credits in amounts that are less than amounts requested by applicants.

KEY:  housing finance
Date of Enactment or Last Substantive Amendment:  March 9, 2016
Notice of Continuation:  September 15, 2017
Authorizing, and Implemented or Interpreted Law:  63H-8-301; 63H-8-302