HomeMy WebLinkAboutResolution No. 281-12 a
• RESOLUTION
BE IT RESOLVED by the Common Council of the City of Rochester that the City adopt a
Low Income Housing Tax Credit Qualified Contract Process policy. A copy of the policy is
attached.
PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF
ROCHESTER, MINNESOTA, THIS DAY OF 12012.
ACTING PR SIDENT O SAID
COMMON/COUNCIL
ATTEST: C/
CrFY CLERK
APPROVED THIS DAY OF 12012.
•
MAYOR OF SAID CITY
(Seal of the City of
Rochester, Minnesota)
Res10kAdopt.TaxCred itPolicyl
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• CITY OF ROCHESTER LOW INCOME HOUSING TAX CREDIT "QUALFIED
CONTRACT" PROCESS
BACKGROUND
Under Minnesota Statutes Chapter 462A, the Minnesota Housing Finance Agency ("MHFA") is
designated as the primary allocating agency of housing tax credits ("HTC") in Minnesota, and as
such, may charge a fee for services required to administer the program. Qualified local cities
and counties have also been designated by the legislature as suballocators of the HTC.
Rochester is one of those suballocators. The City has entered into a joint powers agreement
with MHFA for HTC program administration, since MHFA staff is experienced with the program,
and the City has not felt the need to duplicate their efforts. The City has also chosen to adopt
the State's Qualified Allocation Plan ("QAP"), which identifies the criteria for allocation of tax
credits.
Housing tax credit projects are subject to a 15 year affordability compliance period as a
requirement of the tax credit allocation. Projects that were awarded housing tax credits in the
year 1990 or after are subject to an additional 15 year affordability compliance period known as
the "extended use period."These projects are also eligible for the qualified contract option,
which is designed to permit owners of housing tax credit properties an option to exit the
• program after the initial 15 year compliance period without continued affordability restrictions
under the extended use period. The request for presentation of a qualified contract may occur
after year 14 of the compliance period and is a request that the housing credit agency find a
buyer (who will continue to operate the property as a qualified low-income property) to
purchase the property for a qualified contract price, pursuant to the IRS regulations. If the
housing credit agency is unable to find a buyer within one year, the extended use period is
terminated.
PROCESS
• The City, as a sub-allocator has to determine if the development is eligible to request a
qualified contract under the CLAP and declaration of restrictive covenants that were in
place at the time of reservation and any other sub-allocator eligibility requirements.
• Under the terms of the joint powers agreement, MHFA will review applications for a
qualified contract after a determination of eligibility has been made by the City. MHFA
will notify the City of the results of the review of Qualified Contract applications. A fee
of$5,000 payable by the owner/requestor is payable to MHFA upon submission of the
application, to cover their costs for Qualified Contract application review.
is * The City, as a sub-allocator is responsible for:
• • Tracking the one year period and providing 100% compliance monitoring
service.
• Responding to any presentation of Qualified Contract.
• Monitoring compliance with any remaining restrictions under the
Declaration, including the 3 years following any Qualified Contract
release.
• The City, as a sub-allocator may choose to retain outside professional services to assist
with the City's responsibilities in the Qualified Contract process. Under the provisions of
Minnesota Statutes Chapter 462A, any fees or costs for those services shall be borne by
the applicant, with no out of pocket expenses to the City.
• The City shall require payment of a $2,000 application filing fee to cover a portion of the
City costs for administration of the Qualified Contract process.
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