SB-0346, As Passed Senate, May 16, 2013
May 1, 2013, Introduced by Senators SMITH, KOWALL and JANSEN and referred to the Committee on Economic Development.
A bill to amend 1966 PA 346, entitled
"State housing development authority act of 1966,"
by amending section 22 (MCL 125.1422), as amended by 2012 PA 327.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 22. The authority possesses all powers necessary or
convenient to carry out this act, including the following powers in
addition to other powers granted by other provisions of this act:
(a) To sue and to be sued; to have a seal and to alter the
seal at pleasure; to have perpetual succession; to make and execute
contracts and other instruments necessary or convenient to the
exercise of the powers of the authority; and to make, amend, and
repeal bylaws and rules.
(b) To undertake and carry out studies and analyses of housing
needs within this state and ways of meeting those needs, including
data with respect to population and family groups, the distribution
of population and family groups according to income, and the amount
and quality of available housing and its distribution according to
rentals and sales prices, employment, wages, and other factors
affecting housing needs and the meeting of housing needs; to make
the results of those studies and analyses available to the public
and the housing and supply industries; and to engage in research
and disseminate information on housing.
(c) To agree and comply with conditions attached to federal
financial assistance.
(d) To survey and investigate housing conditions and needs,
both urban and rural, throughout this state and make
recommendations to the governor and the legislature regarding
legislation and other measures necessary or advisable to alleviate
any existing housing shortage in this state.
(e) To establish and collect fees and charges in connection
with the sale of the authority's publications and the authority's
loans, commitments, and servicing, including, but not limited to,
the reimbursement of costs of financing by the authority, service
charges,
and insurance premiums as that
the authority determines to
be reasonable and as approved by the authority. Fees and charges
shall
be determined by the authority and shall not be considered to
be
are not interest. The authority may use any accumulated fees
and
charges and interest income for achieving any of the corporate
purposes of the authority, to the extent that the fees, charges,
and interest income are not pledged to the repayment of bonds and
notes of the authority or the interest on those bonds and notes.
(f) To encourage community organizations to assist in
initiating housing projects as provided in this act.
(g) To encourage the salvage of all possible usable housing
scheduled for demolition because of highway, school, urban renewal,
or other programs by seeking authority for the sponsors of the
programs to use funds provided for the demolition of the buildings,
to be allocated to those sponsors approved by the authority to
defray moving and rehabilitation costs of the buildings.
(h) To engage and encourage research in, and to formulate
demonstration projects to develop, new and better techniques and
methods for increasing the supply of housing for persons eligible
for assistance as provided in this act; and to provide technical
assistance in the development of housing projects and in the
development of programs to improve the quality of life for all the
people of this state.
(i) To make or purchase loans, including loans for condominium
units as defined in section 4 of the condominium act, 1978 PA 59,
MCL 559.104, and including loans to mortgage lenders, which are
unsecured or the repayments of which are secured by mortgages,
security interests, or other forms of security; to purchase and
enter into commitments for the purchase of securities, certificates
of deposits, time deposits, or mortgage loans from mortgage
lenders; to participate in the making or purchasing of unsecured or
secured loans and undertake commitments to make or purchase
unsecured or secured loans; to sell mortgages, security interests,
notes, and other instruments or obligations evidencing or securing
loans, including certificates evidencing interests in 1 or more
loans, at public or private sale; in connection with the sale of an
instrument or obligation evidencing or securing 1 or more loans, to
service, guarantee payment on, or repurchase the instrument or
obligation, whether or not it is in default; to modify or alter
mortgages and security interests; to foreclose on any mortgage,
security interest, or other form of security; to finance housing
units; to commence an action to protect or enforce a right
conferred upon the authority by law, mortgage, security agreement,
contract, or other agreement; to bid for and purchase property that
was the subject of the mortgage, security interest, or other form
of security, at a foreclosure or at any other sale, and to acquire
or take possession of the property. Upon acquiring or taking
possession of the property, the authority may complete, administer,
and pay the principal and interest of obligations incurred in
connection with the property, and may dispose of and otherwise deal
with the property in any manner necessary or desirable to protect
the interests of the authority in the property. If the authority or
an entity that provides mortgage insurance to the authority
acquires property upon the default of a borrower, the authority may
make a mortgage loan to a subsequent purchaser of that property
even if the purchaser does not meet otherwise applicable income
limitations and purchase price limits.
(j) To set standards for housing projects that receive loans
under this act and to provide for inspections to determine
compliance with those standards. The standards for construction and
rehabilitation of mobile homes, mobile home parks, and mobile home
condominium projects shall be established jointly by the authority
and the mobile home commission, created in section 3 of the mobile
home commission act, 1987 PA 96, MCL 125.2303. However, financing
standards shall be established solely by the authority.
(k) To accept gifts, grants, loans, appropriations, or other
aid from the federal, state, or local government, from a
subdivision, agency, or instrumentality of a federal, state, or
local government, or from a person, corporation, firm, or other
organization.
(l) To acquire or contract to acquire from a person, firm,
corporation, municipality, or federal or state agency, by grant,
purchase, or otherwise, leaseholds or real or personal property, or
any interest in a leasehold or real or personal property; to own,
hold, clear, improve, and rehabilitate and to sell, assign,
exchange, transfer, convey, lease, mortgage, or otherwise dispose
of or encumber any interest in a leasehold or real or personal
property. This act shall not be construed to impede the operation
and effect of local zoning, building, and housing ordinances,
ordinances relating to subdivision control, land development, or
fire prevention, or other ordinances having to do with housing or
the development of housing.
(m) To procure insurance against any loss in connection with
the property and other assets of the authority.
(n) To invest, at the discretion of the authority, funds held
in reserve or sinking funds, or money not required for immediate
use or disbursement, in obligations of this state or of the United
States, in obligations the principal and interest of which are
guaranteed by this state or the United States, or in other
obligations as may be approved by the state treasurer.
(o) To promulgate rules necessary to carry out the purposes of
this act and to exercise the powers expressly granted in this act
pursuant to the administrative procedures act of 1969, 1969 PA 306,
MCL 24.201 to 24.328.
(p) To enter into agreements with nonprofit housing
corporations, consumer housing cooperatives, limited dividend
housing corporations, mobile home park corporations, and mobile
home park associations that provide for regulation by the authority
of the planning, development, and management of any housing project
undertaken by nonprofit housing corporations, consumer housing
cooperatives, limited dividend housing corporations, mobile home
park corporations, and mobile home park associations and that
provide for the disposition of the property and franchises of those
corporations, cooperatives, and associations.
(q) To appoint to the board of directors of a nonprofit
housing corporation, consumer housing cooperative, limited dividend
housing corporation, mobile home park corporation, or mobile home
park association, a number of new directors sufficient to
constitute a majority of the board notwithstanding other provisions
of the articles of incorporation or other provisions of law.
Directors appointed under this subsection need not be stockholders
or members or meet other qualifications that may be described by
the certificate of incorporation or bylaws. In the absence of fraud
or
bad faith, directors appointed under this subsection shall not
be
subdivision are not personally liable for debts, obligations, or
liabilities of the corporation or association. The authority may
appoint
directors under this subsection subdivision
only if 1 or
more of the following occur:
(i) The nonprofit housing corporation, consumer housing
cooperative, limited dividend housing corporation, mobile home park
corporation, or mobile home park association has received a loan or
advance, as provided for in this act, and the authority determines
that the loan or advance is in jeopardy of not being repaid.
(ii) The nonprofit housing corporation, consumer housing
cooperative, limited dividend housing corporation, mobile home park
corporation, or mobile home park association received a loan or
advance as provided for in this act and the authority determines
that the proposed housing project for which the loan or advance was
made is in jeopardy of not being constructed.
(iii) The authority determines that some part of the net income
or net earnings of the nonprofit housing corporation is inuring to
the benefit of a private individual, firm, corporation,
partnership, or association; the authority determines that an
unreasonable part of the net income or net earnings of the consumer
housing cooperative is inuring to the benefit of a private
individual, firm, corporation, partnership, or association; or the
authority determines that some part of the net income or net
earnings of the limited dividend housing corporation, in excess of
that permitted by other provisions of this act, is inuring to the
benefit of a private individual, firm, corporation, partnership, or
association.
(iv) The authority determines that the nonprofit corporation or
consumer housing cooperative is in some manner controlled by, under
the direction of, or acting in the substantial interest of a
private individual, firm, corporation, partnership, or association
seeking to derive benefit or gain from, or seeking to eliminate or
minimize losses in any dealings or transactions with, the nonprofit
corporation or consumer housing cooperative. However, this
subparagraph
shall apply applies to individual cooperators in
consumer housing cooperatives only in circumstances defined by the
authority in its rules.
(v) The authority determines that the nonprofit housing
corporation, consumer housing cooperative, limited dividend housing
corporation, mobile home park corporation, or mobile home park
association is in violation of the rules promulgated under this
section.
(vi) The authority determines that the nonprofit housing
corporation, consumer housing cooperative, limited dividend housing
corporation, mobile home park corporation, or mobile home park
association is in violation of 1 or more agreements entered into
with the authority that provide for regulation by the authority of
the planning, development, and management of a housing project
undertaken by the nonprofit housing corporation, consumer housing
cooperative, limited dividend housing corporation, mobile home park
corporation, or mobile home park association or that provide for
the disposition of the property and franchises of the corporation,
cooperative, or association.
(r) To give approval or consent to the articles of
incorporation submitted to the authority by a corporation seeking
approval as a nonprofit housing corporation, consumer housing
cooperative, limited dividend housing corporation, or mobile home
park corporation under chapter 4, 5, 6, or 8; to give approval or
consent to the partnership agreement, joint venture agreement,
trust agreement, or other document of basic organization of a
limited dividend housing association under chapter 7 or mobile home
park association under chapter 9.
(s) To engage the services of private consultants on a
contract basis for rendering professional and technical assistance
and advice.
(t) To lease real or personal property, to act as the sole
statewide public housing agency, and to accept federal funds for,
and participate in, federal programs of housing assistance. For
purposes of this subdivision, "public housing agency" means that
term as defined in 42 USC 1437a.
(u) To review and approve rental charges for authority-
financed housing projects and require whatever changes the
authority
determines to be necessary. The changes shall become
effective after not less than 30 days' written notice is given to
the residents of the affected authority-financed housing projects.
(v) To set forth in the various loan documents of the
authority those restrictions on the sale, conveyance by land
contract, or transfer of residential real property, housing
projects, or housing units for which a note is held by the
authority and restrictions on the assumption by subsequent
purchasers of loans originated by and held by, or originated for
purchase by and held by, the authority as the authority determines
to
be necessary in order to
comply with requirements of federal
statutes, federal rules or regulations promulgated under 5 USC 551
to 559, state statutes, or state rules promulgated under the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328, or to obtain and maintain the tax exempt status of
authority bonds and notes. However, the authority shall not use a
due on sale or acceleration clause solely for the purpose of
renegotiating the interest rate on a loan made with respect to an
owner-occupied single-family housing unit. Without limiting the
authority's power to establish other restrictions, as provided in
this section, on the sale, conveyance by land contract, or transfer
of residential real property, housing projects, or housing units
for which a note is held by the authority and the assumption by
subsequent purchasers of loans made or purchased by the authority,
the authority shall provide in its loan documents relating to a
single family loan that the single family loan may be assumed by a
new purchaser only when the new purchaser qualifies under the
authority income limitations rules, unless such a restriction
diminishes or precludes the insurance or a guarantee by an agency
of the federal government with respect to the single family loan. A
loan made for a mobile home that the borrower does not intend to
permanently affix to real property shall become immediately due and
payable if the mobile home is moved out of the state. Any
restrictions on conveyance by sale, conveyance by land contract, or
transfer
that are authorized in this section shall apply only to
loans originated by and held by, or originated for purchase by and
held by, the authority and may, at the option of the authority, be
enforced by accelerating and declaring immediately due and payable
all sums evidenced by the note held by the authority. An
acceleration
and declaration of all sums to be due and payable on
conveyance by sale, land contract, or transfer is not an
unreasonable restraint on alienation. An acceleration and
declaration, unless otherwise prohibited in this subdivision, of
all
sums to be due and payable under this subdivision is
enforceable in any court of competent jurisdiction. This
subdivision
is applicable applies to secured and unsecured loans.
This
subdivision is also applicable also
applies to loan documents
utilized in conjunction with an authority-operated program of
residential rehabilitation by an entity cooperating or
participating with the authority under section 22a(4), if the loans
are originated with the intent to sell those loans to the
authority.
(w) To set forth in the various loan documents of the
authority
remedies for the making of a false statement,
representation, or pretense or a material misstatement by a
borrower during the loan application process. Without limiting the
authority's power to pursue other remedies, the authority shall
provide in its loan documents that, if a borrower makes a false
statement, representation, or pretense or a material misstatement
during the loan application process, the authority, at its option,
may accelerate and declare immediately due and payable all sums
evidenced by the note held by the authority. An acceleration and
declaration
of all sums to be due and payable as provided in this
subdivision is enforceable in any court of competent jurisdiction.
This subdivision is applicable to secured and unsecured loans.
(x) To collect interest on a real estate loan, the primary
security for which is not a first lien on real estate, at the rate
of 15% or less per annum on the unpaid balance. This subdivision
does not impair the validity of a transaction or rate of interest
that is lawful without regard to this subdivision.
(y) To encourage and engage or participate in programs to
accomplish
the preservation of preserve housing in this state
available for occupancy by persons and families of low or moderate
income.
(z) To verify for the state treasurer statements submitted by
a city, village, township, or county as to exempt properties under
section 7d of the general property tax act, 1893 PA 206, MCL
211.7d.
(aa) For the purpose of more effectively managing its debt
service, to enter into an interest rate exchange or swap, hedge, or
similar agreement with respect to its bonds or notes on the terms
and payable from the sources and with the security, if any, as
determined by a resolution of the authority.
(bb) To make working capital loans to contractors or
subcontractors on housing projects financed by the authority. The
authority shall submit an annual report to the legislature
containing the amount, recipient, duration, circumstance, and other
related statistics for each capital loan made to a contractor or
subcontractor under this subdivision. The authority shall include
in the report statistics related to the cost of improvements made
to adapt property for use by disabled individuals as provided in
section 32b or 44.
(cc) Subject to rules of the civil service commission, to
adopt a code of ethics with respect to its employees that requires
disclosure of financial interests, defines and precludes conflicts
of interest, and establishes reasonable post-employment
restrictions for a period of up to 1 year after an employee
terminates employment with the authority.
(dd) To impose covenants running with the land in order to
satisfy requirements of applicable federal law with respect to
housing assisted or to be assisted through federal programs such as
the low income housing tax credit program or the home investment
partnerships program. These covenants shall be imposed by executing
and recording regulatory agreements between the authority, or a
municipality or other entity designated by the authority, and the
person or entity to be bound. The covenants shall run with the land
and be effective with respect to the parties making the covenants
and other intended beneficiaries of the covenants, even though
there is no privity of estate or privity of contract between the
authority and the persons or entities to be bound.
(ee) To impose covenants running with the land in order to
satisfy requirements of applicable state or federal law with
respect to housing financed by the authority. These covenants shall
be imposed by executing and recording regulatory agreements between
the authority and the person or entity to be bound. The covenants
shall run with the land and be effective with respect to the
parties making the covenants and other intended beneficiaries of
the covenants, even though there is no privity of estate or privity
of contract between the authority and the persons or entities to be
bound. With respect to any applicable environmental laws, this
subdivision does not grant to the authority any additional rights,
privileges, or immunities not otherwise afforded to a private
lender that is not in the chain of title for the land.
(ff) To participate in programs designed to assist persons and
families whose incomes do not exceed 115% of the greater of
statewide median gross income or the area median gross income
become
homeowners where and in
which loans are made by private
lenders for purchase by the government national mortgage
association, federal national mortgage association, federal home
loan mortgage corporation, or other federally chartered
organizations. Participation may include providing or funding
homeownership counseling and providing some or all of a reserve
fund to be used to pay for losses in excess of insurance coverage.
(gg) To invest, under the conditions prescribed in this
subdivision and without the consent of the escrow depositors, up to
20% of funds held, by or for the authority, in escrow accounts for
the benefit of the authority or mortgagors of authority-financed
housing. The investments under this subdivision shall be made in
loans originated or purchased by the authority for construction or
rehabilitation of multifamily housing developments for occupancy by
persons or families without regard to income. In connection with
loans described in this subdivision, the authority may charge and
retain fees in amounts similar to those charged with respect to
similar loans for which the source of funding does not come from
escrow accounts. For purposes of this subdivision, "escrow account"
means any account or reserve held by the authority and established
in a mortgage or a regulatory agreement to which the authority is a
party or which has been assigned to the authority. However, for
purposes of this subdivision, escrow account does not include any
account labeled in the associated regulatory agreement as
"development cost escrow principal" or "operating assurance
reserve". For purposes of this subdivision, "multifamily housing
development" means a development in which not less than 50% of the
floor space is used primarily for residential purposes. The
investment authorized by this subdivision shall not be made unless
both of the following requirements are met:
(i) The return on the loan is approximately equivalent to that
which could be obtained from investments of substantially similar
credit quality and maturity, as determined by the authority.
(ii) The authority agrees to pay with its own funds the
principal
balance of any loan, made with the escrow funds, account
money, that becomes delinquent in excess of 30 days. This
subdivision does not obligate the authority to purchase a
delinquent
loan so long as if, with respect to that loan, the
authority
pays to the escrow funds account
from its own funds the
amount of the delinquent payments. The authority's election to pay
the
delinquent payments to the escrow funds account does not in any
manner abate or cure the delinquency of the loan and the authority
may resort to any remedies that would exist in the absence of that
payment.
(hh) To acquire, develop, rehabilitate, own, operate, and
enter into contracts with respect to the management and operation
of real and personal property to use as office facilities by the
authority and to enter into leases with respect to facilities not
immediately necessary for the activities of the authority.
(ii) To make loans to certain qualified buyers and resident
organizations and to make grants to resident organizations as
provided in the following:
(i) The urban homestead act, 1999 PA 127, MCL 125.2701 to
125.2709.
(ii) The urban homesteading on vacant land act, 1999 PA 129,
MCL 125.2741 to 125.2748.
(iii) The urban homesteading in single-family public housing
act, 1999 PA 128, MCL 125.2761 to 125.2770.
(iv) The urban homesteading in multifamily public housing act,
1999 PA 84, MCL 125.2721 to 125.2734.
(jj) To implement and administer a housing and community
development program as described in this act.
(kk) To implement, administer, or execute administrative,
substantive, or supervisory powers pursuant to the individual or
family development account program act, 2006 PA 513, MCL 206.901 to
206.911.