Sec. 8-304. Adoption of a housing finance assistance plan. Provisions.

(a) The powers granted to municipalities under the provisions of this chapter may be exercised by the legislative body of the municipality, but such powers or any of them shall be exercised only upon the adoption of a general resolution containing findings and determinations substantially in accordance with section 8-301, which findings or determinations shall specifically state that an adequate amount of mortgage financing is unavailable from lending institutions at a rate which is low enough to permit low and moderate income families and persons to finance safe, decent and sanitary housing within the municipality.

(b) Upon the adoption of a resolution making the findings or determinations as set forth in subsection (a) of this section, the legislative body of the municipality may by resolution authorize and adopt a housing finance assistance plan which may provide for (1) the issuance of notes and bonds of the municipality in accordance with sections 8-306, 8-307 and 8-314; (2) the establishment of a capital reserve fund and of such other funds as the legislative body may determine are necessary or appropriate for the protection of holders of the municipality's notes and bonds; (3) the financing of mortgage loans to low and moderate income persons and families for the purposes of the purchase and the rehabilitation of housing within the boundaries of the municipality under such rules and regulations and pursuant to such contracts or agreements with lending institutions as the legislative body may prescribe; and (4) the appointment of a plan administrator who shall have primary responsibility for the effectuation of such plan and who may be a municipal officer or any other person designated by the legislative body.

(c) Any housing finance assistance plan adopted pursuant to subsection (b) of this section shall require that (1) the difference between the interest rate on any mortgage loan made pursuant to such plan and the interest rate on bonds issued under such plan shall be limited to the extent necessary to prevent such bonds from becoming arbitrage bonds under the regulations of the Department of the Treasury under Section 103 of the Internal Revenue Code, as from time to time amended; (2) any contract or agreement with a lending institution for the origination of mortgage loans pursuant to such plan shall require that such lending institution utilize its normal underwriting criteria in any determination made with respect to such mortgage loans; (3) the legislative body shall find and determine that all contractual agreements with lending institutions and any other parties involved in the origination, servicing and insuring of mortgages made or financed pursuant to the housing finance assistance plan are fair and reasonable; (4) the legislative body shall find and determine that all contractual agreements with respect to the provision of services by financial advisors, investment bankers, bond counsel and any other party involved in the issuance of bonds under this chapter are fair and reasonable; (5) the legislative body shall establish, and review semiannually, eligibility limits with respect to the plan, including limits on the maximum amount of any mortgage loan made or financed thereunder and the maximum income of the family or person assisted thereunder; and (6) the legislative body shall receive and review at least once every six months during which the plan is in effect a report from the plan administrator summarizing the actions taken pursuant to the plan.

(d) The legislative body may adopt one or more housing finance assistance plans pursuant to this chapter and may, in its discretion, amend any housing finance assistance plan from time to time.

(P.A. 79-596, S. 5, 17; P.A. 80-483, S. 30, 186.)

History: P.A. 80-483 made technical changes.