House Bill No. 6466
               House Bill No. 6466

              PUBLIC ACT NO. 97-156


AN  ACT  AUTHORIZING COMMUNITY HOUSING DEVELOPMENT
CORPORATIONS TO ESTABLISH REVOLVING LOAN FUNDS.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section  1.  Section   8-218  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) The state, acting by and in the discretion
of  the Commissioner  of  Economic  and  Community
Development, may enter  into  a  contract  with  a
community housing development  corporation  or  an
eligible developer, as  defined  in  section 8-39,
for state financial  assistance in the form of (1)
a state grant-in-aid, loan, deferred loan, advance
or any combination  thereof  equal  to the cost to
the community housing  development  corporation or
eligible   developer,   as    approved    by   the
commissioner, of developing  or rehabilitating low
and moderate income  housing  under section 8-217,
but limited to the following expenses: Appraisals,
title  searches, legal  fees,  option  agreements,
architectural, engineering and  consultants' fees,
financing  fees,  closing  costs  and  such  other
expenses as may  be  financed  by  a mortgage loan
under any federal  or  state  housing  statute and
incurred  by  a   community   housing  development
corporation or eligible  developer  prior  to  the
disbursement of mortgage  loan funds on account of
such  property;  provided,   to  the  extent  such
expenses are recovered  by  the  community housing
development corporation or  the eligible developer
from the mortgage  loan  or from the proceeds of a
sale of such  property,  such  expenses  shall  be
repaid to the  state  or  to  a  fund  established
pursuant to subsection  (b)  of  this section; and
(2)  an additional  grant-in-aid,  loan,  deferred
loan  or  advance  to  such  corporation  or  such
developer for the  development of housing which in
the determination of  the  commissioner contains a
substantial number of  dwelling  units of three or
more bedrooms provided  (A) that the mortgage loan
for such housing  shall  be eligible for insurance
by the United  States  Department  of  Housing and
Urban  Development  or   for   financing   by  the
Connecticut  Housing  Finance   Authority  or  the
Farmers' Home Administration,  and  (B)  that  the
commissioner, after consultation  with  the United
States   Department   of    Housing    and   Urban
Development,  the  Connecticut   Housing   Finance
Authority or the  Farmers' Home Administration, as
the case may  be,  shall  have determined that the
mortgage  loan  on   such  housing  would  not  be
insurable  in  the   absence  of  such  additional
financial  assistance;  such  grant-in-aid,  loan,
deferred loan or  advance  shall be in lieu of any
assistance to said housing under section 8-216 and
shall  be  equal   to   the   additional  cost  of
construction  caused  by  the  inclusion  of  such
dwelling units of  three  or more bedrooms in such
housing, but in  no event shall such grant-in-aid,
loan, deferred loan or advance be greater than ten
per cent of  the  cost  of  construction  of  such
housing,  as  determined   by  the  United  States
Department of Housing  and  Urban Development, the
Connecticut  Housing  Finance   Authority  or  the
Farmers' Home Administration. The commissioner may
require that any  assistance in the form of a loan
or deferred loan  be secured by a mortgage on such
housing. In the  case  of  a  deferred  loan,  the
contract shall require  that  payments on all or a
portion of the interest are due currently but that
payments on principal may be made at a later time.
    (b) The state, acting by and in the discretion
of the commissioner,  may  enter  into  a contract
with a community  housing  development corporation
or  an  eligible  developer  for  state  financial
assistance in the form of a loan or deferred loan,
which loan or  deferred  loan  shall  be  used  to
establish and administer a REVOLVING loan fund for
the construction, rehabilitation and renovation of
existing  or  planned   low  and  moderate  income
housing, as approved  by  the  commissioner.  Such
fund  may also  consist  of  any  state  financial
assistance received from  a  contract between said
commissioner    and   such    community    housing
development  corporation  or   eligible  developer
entered into pursuant  to  subsection  (a) of this
section,   any   proceeds    recovered   by   such
corporation or developer from any mortgage loan or
from any loan  or  on  account  of such project or
from the sale  of  such project and funds from any
other source. Such  fund  shall  be  used  by such
corporation  or  developer,  as  approved  by  the
commissioner,  for the  expenses  of  acquisition,
development,   project  selection,   construction,
rehabilitation,   renovation  and   oversight   of
existing  or  planned   low  and  moderate  income
housing  or  to   make   loans  for  construction,
rehabilitation and renovation  of  such housing on
such terms and  conditions as the commissioner may
determine.   Recipients  of   loans   under   this
subsection for housing  located  in  a  distressed
municipality, as defined  in  section  32-9p,  may
assign or prepay  such  loans with the approval of
the community housing  development corporation. IN
THE CASE OF  HOUSING DEVELOPED OR REHABILITATED BY
A  COMMUNITY HOUSING  DEVELOPMENT  CORPORATION  IN
DISTRESSED MUNICIPALITIES AS  DEFINED  IN  SECTION
32-9p, THE POLICIES  OF THE DEPARTMENT OF ECONOMIC
AND COMMUNITY DEVELOPMENT  ADOPTED  UNDER  SECTION
8-37dd, AS AMENDED  BY  SECTION 2 OF THIS ACT, AND
THE REGULATIONS OF  THE  DEPARTMENT  ADOPTED UNDER
THIS ACT SHALL  APPLY  ONLY TO THAT PORTION OF THE
ASSISTED  PROPERTY  WHICH   CORRESPONDS   TO   THE
PROPORTION  OF  THE   STATE   ASSISTANCE   TO  THE
PROPERTY'S  VALUE. THE  NUMBER  OF  INCOME-LIMITED
HOUSING UNITS SHALL  BE  DETERMINED BY MULTIPLYING
THE AMOUNT OF  THE HOUSING ASSISTANCE BY THE TOTAL
NUMBER OF HOUSING  UNITS  IN  THE ASSISTED HOUSING
AND DIVIDING THE  PRODUCT BY THE FAIR MARKET VALUE
OF THE PROPERTY.  THE  RESULT  SHALL BE ROUNDED TO
THE  LOWER  WHOLE   NUMBER.   NOTWITHSTANDING  THE
PROVISIONS OF ANY  STATUTE  TO THE CONTRARY OR ANY
REGULATION ADOPTED UNDER  THIS  SECTION OR SECTION
8-37dd, AS AMENDED  BY  SECTION  2 OF THIS ACT, OR
ANY  OTHER STATUTE  OR  REGULATION,  LIMITING  THE
INCOME OF OCCUPANTS OF HOUSING ASSISTED UNDER THIS
SECTION   AND  NOT   LOCATED   IN   A   DISTRESSED
MUNICIPALITY, THE INCOME  OF  OCCUPANTS  OF  UNITS
ASSISTED  UNDER  THIS   SECTION   AND  LOCATED  IN
DISTRESSED MUNICIPALITIES MAY BE TWO HUNDRED FIFTY
PER  CENT OR  LESS  OF  THE  AREA  MEDIAN  INCOME,
ADJUSTED FOR FAMILY  SIZE, AS DETERMINED FROM TIME
TO TIME BY THE UNITED STATES DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT.
    (c) The state, acting by and in the discretion
of the commissioner,  may  enter  into  a contract
with a community  housing  development corporation
for state financial  assistance  within  available
appropriations in the form of a grant-in-aid which
shall   be  used   by   such   COMMUNITY   HOUSING
DEVELOPMENT corporation to  provide  grants, OR TO
ESTABLISH A REVOLVING  LOAN  FUND TO PROVIDE loans
or  deferred  loans  for  the  purpose  of  making
structural or interior  or  exterior modifications
to any dwelling  which  may  be  necessary to make
such dwelling accessible  to and usable by persons
having  physical  or   mental  disabilities.  Such
corporation  may provide  such  grants,  loans  or
deferred loans to (1) any owner of a single-family
or multifamily dwelling  or  (2)  any  tenant  who
furnishes satisfactory evidence  that the owner of
the  dwelling in  which  the  tenant  resides  has
approved the intended  structural  or  interior or
exterior modifications. Any  such loan or deferred
loan may be  prepaid at any time, without penalty,
and the commissioner shall release the lien on the
property. IN THE  CASE  OF  HOUSING  DEVELOPED  OR
REHABILITATED BY A  COMMUNITY  HOUSING DEVELOPMENT
CORPORATION   IN  DISTRESSED   MUNICIPALITIES   AS
DEFINED IN SECTION  32-9p,  THE  POLICIES  OF  THE
DEPARTMENT OF ECONOMIC  AND  COMMUNITY DEVELOPMENT
ADOPTED  UNDER  SECTION   8-37dd,  AS  AMENDED  BY
SECTION 2 OF  THIS  ACT, AND ANY REGULATION OF THE
DEPARTMENT ADOPTED UNDER THIS SECTION, SHALL APPLY
ONLY TO THAT  PORTION  OF  THE  ASSISTED  PROPERTY
WHICH CORRESPONDS TO  THE  PROPORTION OF THE STATE
ASSISTANCE TO THE  PROPERTY'S VALUE. THE NUMBER OF
INCOME-LIMITED HOUSING UNITS  SHALL  BE DETERMINED
BY  MULTIPLYING  THE   AMOUNT   OF   THE   HOUSING
ASSISTANCE BY THE TOTAL NUMBER OF HOUSING UNITS IN
THE ASSISTED HOUSING  AND  DIVIDING THE PRODUCT BY
THE FAIR MARKET  VALUE OF THE PROPERTY. THE RESULT
SHALL  BE  ROUNDED  TO  THE  LOWER  WHOLE  NUMBER.
NOTWITHSTANDING THE PROVISIONS  OF  ANY STATUTE TO
THE CONTRARY OR  ANY REGULATION ADOPTED UNDER THIS
SECTION  LIMITING  THE   INCOME  OF  OCCUPANTS  OF
HOUSING  ASSISTED  UNDER   THIS  SECTION  AND  NOT
LOCATED IN A  DISTRESSED  MUNICIPALITY, THE INCOME
OF OCCUPANTS OF  UNITS ASSISTED UNDER THIS SECTION
AND LOCATED IN  DISTRESSED  MUNICIPALITIES  MAY BE
TWO HUNDRED FIFTY  PER  CENT  OR  LESS OF THE AREA
MEDIAN  INCOME,  ADJUSTED   FOR  FAMILY  SIZE,  AS
DETERMINED FROM TIME  TO TIME BY THE UNITED STATES
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.
    (d) The Commissioner of Economic and Community
Development shall enter  into  a  contract  with a
COMMUNITY  housing  development   corporation  for
state  financial  assistance  in  the  form  of  a
grant-in-aid which shall be used by such COMMUNITY
HOUSING DEVELOPMENT corporation  to provide grants
for the purpose  of conversion of adaptable living
units  into  units   accessible  to  persons  with
disabilities and for reconversion of such units to
adaptable living units.  Eligible applicants shall
include any tenant or owner of a unit in a complex
or  building  subject   to   the   provisions   of
subsections (c) and (d) of section 29-273.
    (e) The Commissioner of Economic and Community
Development shall enter  into  a  contract  with a
COMMUNITY  housing  development   corporation  for
state  financial  assistance  in  the  form  of  a
grant-in-aid which shall be used by such COMMUNITY
housing development corporation to provide grants,
loans, deferred loans,  loan  guarantees, lines of
credit, or any  combination  thereof,  to eligible
developers for activities  that  build, expand and
enhance capacity, including,  but  not limited to,
development of marketing or neighborhood strategic
plans,  professional  staff   training,  technical
assistance, predevelopment expenses as provided in
subsection  (a)  of   this   section   and   other
activities pursuant to section 8-217.
    (f) The Commissioner of Economic and Community
Development shall adopt regulations, in accordance
with  chapter  54,   to  administer  the  programs
established under subsections  (c) and (d) of this
section. Such regulations  shall establish maximum
income  levels  for  tenants  and  homeowners  and
provide for adjustment  of  income for family size
and medical expenses  and  may  set  maximum  loan
amounts for loans  made  under subsection (c) that
are  not  secured   and   for  grants  made  under
subsection (d).
    (g)  On  and   after  the  effective  date  of
regulations  adopted  under   section  8-437,  the
Commissioner of Economic and Community Development
shall  not  accept   any   application  for  state
financial  assistance  pursuant  to  this  section
except (1) an  application  by a community housing
development corporation to establish or administer
a  loan  fund  under  subsection  (b)  or  (2)  an
application  for  a  project  or  development  not
qualifying for financial  assistance  pursuant  to
section 8-433.
    Sec. 2. Section 8-37dd of the general statutes
is repealed and  the  following  is substituted in
lieu thereof:
    [(a)] Not more  than  six months after July 1,
1990,  each housing  agency  shall  adopt  written
policies concerning the  extent  to  which housing
assisted by such  agency  shall  be  retained on a
long-term basis for  members  of  the income group
for which the housing was developed.
    [(b)  In the  case  of  housing  developed  or
rehabilitated  by  community  housing  development
corporations  in  distressed   municipalities   as
defined  in  section   32-9p,  the  provisions  of
subsection (a) of this section shall apply only to
that  portion  of   the  assisted  property  which
corresponds to the  proportion of state assistance
to the property's  value.  The  number of assisted
housing  units retained  shall  be  determined  by
multiplying the amount  of  the housing assistance
by  the total  number  of  housing  units  in  the
assisted housing and  dividing  the product by the
fair market value  of  the  property.  The  result
shall be rounded  to the nearest whole number. The
income of occupants  of  assisted  units shall not
exceed one hundred  fifty  per  cent  of  the area
median  income,  adjusted   for  family  size,  as
determined from time  to time by the United States
Department of Housing and Urban Development.]
    Sec. 3. This  act  shall  take  effect July 1,
1997.

Approved June 24, 1997