DEPARTMENT OF ENERGY, LABOR AND ECONOMIC GROWTH

                      STATE HOUSING DEVELOPMENT AUTHORITY

                               GENERAL RULES

(By authority  conferred  on  the  state  housing  development  authority  by 
sections 22 and 58b of 1966 PA 346, MCL 125.1422 and  MCL  125.1458b  of  the 
Michigan Compiled Laws)


                       PART I.  GENERAL PROVISIONS


R 125.101    Definitions; A, C.
  Rule 101. (1) As used in these rules:
 (a) "Act" means Act No. 346 of the Public  Acts   of   1966,   as   amended, 
being S125.1401 et seq. of the Michigan Compiled Laws.
 (b) "Adjusted annual income" means gross income  less   $750.00   for   each 
member of the household living in the same dwelling unit.
 (c) "Adjusted household income" means the gross  annual  income   from   all 
sources and before taxes or withholding of  all  members   of   a   household 
living in a dwelling unit or housing  unit  after  deducting   all   of   the 
following:
 (i) Unusual or temporary income of any member of the household.
 (ii) Six hundred and fifty dollars for each member of the household.
 (iii) Earnings of a member of a household who is under 18 years  of  age  or 
who is physically or mentally handicapped.
 (iv) Fifty percent of the income of a second  adult  wage   earner   jointly 
occupying the dwelling or housing unit whose  individual   income   is   less 
than that of the wage earner with the highest income.
 (v) The lesser of $1,000.00 or 10% of the gross annual income.
 (d) "Applicant" means a corporation,  partnership,  joint  venture,   trust, 
individual, public body or agency, or other  entity   applying   to   receive 
authority monies or services under the act.
 (e) "Application" means a request for authority  assistance  under  the  act 
made on forms furnished by the authority.
 (f) "Authority" means the Michigan  state  housing   development   authority 
created by the act.
 (g) "Central city" means any 1 of the following:
 (i) A city that is eligible for listing  in  the   title   of   a   standard 
metropolitan statistical area according to the criteria set  forth   in   the 
publication entitled "Standard Metropolitan   Statistical   Areas,"   revised 
edition 1975, a publication of the United States office  of  management   and 
budget, copies of which are available  from  the  Lansing   office   of   the 
authority at a cost of $6.00 per copy.
 (ii) A city that is eligible for listing in the  title  of  a   metropolitan 
statistical area or a primary metropolitan statistical  area   according   to 
the  criteria  set  forth  in  the   publication    entitled    "Metropolitan 
Statistical Areas," 1983, a publication of the  United   States   office   of 
management and budget, copies of which  are  available   from   the   Lansing 
office of the authority at a cost of $6.00 per copy.
 (iii) An incorporated area that is  totally  surrounded   by   a   city   or 
cities which are eligible pursuant to the provisions of  paragraph   (i)   or 
(ii) of this subdivision.
 (iv) Two or more incorporated areas, the total combined  area  of  which  is 
surrounded by a city or cities eligible  pursuant  to   the   provisions   of 
paragraph (i) or (ii) of this subdivision.
 (2) Terms defined in the act have the same meanings  when  used   in   these 
rules.

  History:  1979 AC; 1982 AACS; 1985 AACS; 1986 AACS; 1991 AACS.


R 125.102    Definitions; D to G.
  Rule 102.  As used in these rules:
 (a)  "Development fund grant" means a  grant  which  is  authorized  by  the 
authority and which is to be made to an applicant authorized by  the  act  to 
receive a grant from the housing development fund created by the act.
 (b)  "Development fund loan"  means  a  loan  which  is  authorized  by  the 
authority, and which is to be made from the housing development fund  created 
by the act.
 (c)  "Dwelling unit" means living accommodations within  a  housing  project 
which are intended for occupancy by a single household.
 (d)  "Eligible deferred payment loan administering agency"  means  either  a 
gov-erning body or a subdivision, agency, or instrumentality of  a  governing 
body which shall, as of December 31, 1978, have applied for participation  in 
the  authority's  neighborhood  improvement  loan  program  or  the  Michigan 
commis-sion on Indian affairs.
 (e)  "Executive director" means  the  executive  director  employed  by  the 
a-uthority who is the chief administrative officer of the authority.
 (f)  "Existing housing unit" means a housing unit  that  has  been  occupied 
before the issuance of a commitment by the authority.
 (g)  "Family" means 2 or more persons living together not contrary to law.
 (h)  "Feasible housing project" means a proposed housing project as to which 
the authority has made a determination that such project  can  reasonably  be 
expected to be successfully constructed on  the  proposed  site  within  cost 
limit-ations acceptable to the authority and can reasonably be expected to be 
operated in a fiscally sound manner.
 (i)  "Gross income," for determining eligibility, means all  income  derived 
from whatever source, as follows:
 (i)  In computing gross income,  all  the  income  of  the  members  of  the 
house-hold,  other  than  minors,  living  in  the  same  dwelling  unit  and 
contributing to the expenses of the household is  to  be  considered.   Gross 
income shall be computed without deduction for the following:
 (A)  Funds paid into a tax shelter retirement account.
 (B)  Losses attributable to a farming syndicate as described in section  464 
of the internal revenue code, 26 U.S.C. §464.
 (C)  Losses attributable to any type of corporation or  partnership  engaged 
in exploring for or exploiting oil and gas resources.
 (D)  Losses attributable to any type of corporation or  partnership  engaged 
in equipment leasing.
 (E)  Losses attributable to any type of corporation or  partnership  engaged 
in holding, producing, or distributing motion picture films or video tapes.
 (F)  Child support payments made by an applicant  for  the  benefit  of  the 
appli-cant's child or children.
 (G) Alimony, separate maintenance, or  similar  periodic  payments  that  an 
applicant is required to make to a spouse or former spouse.
 (ii)  Gross income shall include all of the following:
 (A)  The gross amount, before any payroll deductions,  of  wages;  salaries; 
all overtime earnings in excess of $4,000.00 per  annum;  commissions;  fees; 
tips; bonuses; gambling winnings; and prizes won, except for Michigan lottery 
winnings and prizes.
 (B)  The net income from the operation of a business or profession  or  from 
the rental of real or personal property.  For this purpose, if the  operation 
results in a loss, the loss may not be used to offset income  generated  from 
other sources.  For this purpose, any shareholder that owns 10%  or  more  of 
any outstanding class of stock in a corporation shall also be deemed to  have 
received income in its proportionate share  of  net  earnings  not  otherwise 
dis-tributed in salaries or dividends.
 (C)  All dividends and interest, including otherwise tax-exempt interest.
 (D)  The full amount of periodic payments  received  from  social  security, 
hous-ing  assistance  payments,  annuities,  insurance  policies,  retirement 
funds, pen-sions, disability or death benefits, and other  similar  types  of 
periodic receipts.
 (E)  Payments in place of earnings,  such  as  unemployment  and  disability 
compen-sation, worker's compensation, and severance pay.
 (F)  The full amount of public assistance payments.
 (G)  Periodic and determinable allowances,  such  as  alimony  and  separate 
main-tenance payments received,  housing  allowances  received,  and  regular 
contribu-tions or gifts received from  persons  who  do  not  reside  in  the 
dwell-ing, if such sums are received on a recurrent basis and  if  such  sums 
may be reason-ably expected to continue.
 (H)  The distributive share of partnership income.
 (I)  All capital gains.
 (J)  Child support payments received by an applicant for the benefit of  the 
applicant's child or children.
 (iii)  Gross income does not include any of the following:
 (A)  Casual, sporadic, or irregular gifts.
 (B)  Amounts that are specifically for, or in reimbursement of, the cost  of 
medical expenses.
 (C)   Lump  sum  additions  to  household  assets,  such  as   inheritances; 
insur-ance payments, including payments under health and accident  insurance; 
worker's com-pensation; and settlements for personal or property losses.
 (D)  Amounts of educational scholarships paid directly to the student or  to 
the educational institution, and veterans administration schooling bene-fits.
 (E)  Foster child care payments.
 (F)  The value of coupon allotments for the purchase of food pursuant to the 
food stamp act of 1977, 7 U.S.C. §§2011 to 2027, which is in  excess  of  the 
amount actually charged the eligible household.
 (G)  Overtime earnings of $4,000.00 or less per annum.

  History:  1979 AC; 1982 AACS; 1985 AACS; 1986 AACS;  1991  AACS;  1998-2000 
AACS.


R 125.103    Definitions; H to S.
  Rule 103.  As used in these rules:
 (a)  "Household" means a person or family residing or intend-ing  to  reside 
in a single-dwelling unit.
 (b)  "Housing unit"  means  living  accommodations  that  are  intended  for 
occu-pancy by a single family  and  with  respect  to  which  either  of  the 
following applies:
 (i)  An occupant owns the housing unit.
 (ii)  An  occupant  is  a  cooperative  shareholder  or  member  who  has  a 
propri-etary lease of the housing unit.
A housing unit may be site-constructed or may be a mobile home or other  form 
of manufactured housing.  Unless otherwise specified, housing  units  include 
new housing units, existing housing units,  and  substantially  rehabilitated 
housing units.
 (c)  "Local community" means any of the following  entities  which  presents 
evidence that it is acting in a manner consistent with the objec-tives of the 
act with respect to the pro-vision of housing or community development:
 (i)  A public body or agency.
 (ii)  A quasi-governmental body approved by the authority and established by 
state or federal law,  the  governing  board  of  which  is  elected  by  the 
resi-dents of a definite geo-graph-ical area.
 (iii)   A  park  or  playground  association  established  pursuant  to  the 
pro-visions of Act No. 161 of the Public Acts  of  1911,  as  amended,  being 
§455.301 et seq. of the Michigan Compiled Laws.
 (iv)  A nonprofit corporation,  limited  dividend  housing  corporation,  or 
limited dividend housing association .
(d)  "Minor" means a member of a household, other than the household head  or 
spouse, who is under 18 years of age or who is a full-time student.
 (e)  "Mortgage loan" means a loan which is authorized by resolution  of  the 
authority or by a mortgage loan commitment issued on behalf of the author-ity 
and which is made to an applicant for a housing project or  a  hous-ing  unit 
from the proceeds of sale of the authority's bonds or  notes  and  any  other 
available funds for  the  purpose  of  providing  construction  financing  or 
long-term financing, or both, the repayment of which is secured, or is to  be 
secured, as provided in the act.
 (f)  "Neighborhood improvement program"  means  that  portion  of  the  home 
improvement loan program that  involves  a  specific  agreement  between  the 
author-ity and a local governing body to  provide  a  concentration  of  home 
improvement loans in a specific geographical area within the jurisdiction  of 
the government body.
 (g)  "Person" means any 1 of the following:
 (i)  A person who is physically or mentally handicapped.
 (ii)  A person who is 62 or more years of age.
 (iii)  A single person who is neither handicapped nor 62 or  more  years  of 
age.  However, the authority may limit,  by  resolution,  the  percentage  of 
dwell-ing units within a housing project financed with a mortgage  loan  that 
may be made available for occupancy by such single persons.
 (h)   "Permanent  general  improvements"  means  alterations,  repairs,  and 
improvements on or in connection with an existing residential structure which 
substantially protect or improve the basic livability or energy efficiency of 
the residential structure to be improved.  Permanent general improvements  do 
not  include materials,  fixtures,  or  landscaping  of  a  type  or  quality 
exceeding that customarily used in the locality for residential structures of 
the same general type as the structure to be improved.
 (i)  "Qualified sponsor" means a local community or  an  eligible  applicant 
pursuant to the provisions of R 125.122.
 (j)  "Residential structure" means real  property  that  is  improved  by  a 
structure, which structure is used primarily for residential  purposes  on  a 
year-round basis.  This term does not include a mobile home or a trailer.
 (k)  "Sponsor" means an individual, group, or organization which stimu-lates 
or promotes an  applicant  and  which  continues  to  be  interested  in  the 
activities of such applicant with respect to a housing project.

  History:  1979 AC; 1980 AACS; 1981 AACS; 1982 AACS; 1983 AACS;  1991  AACS; 
1998-2000 AACS.


R 125.105    Income limitations.
  Rule 105. (1)  For a  household  to  be  considered  eligible  for  initial 
occupan-cy in a housing project or housing unit financed  by  the  authority, 
that household's income shall  not  exceed  the  following  household  income 
limita-tions:
 (a)  Unless otherwise permitted by the act, for housing, other  than  single 
family housing units, that has been financed by  the  proceeds  of  authority 
bonds which have been delivered before June 9, 1977, the  effective  date  of 
certain emergency  rules  that  temporarily  effectuated  the  provisions  of 
subdivisions (b) and (c) of this subrule,  a  household  shall  not  have  an 
adjusted household income of more  than  $12,000.00  plus  $500.00  for  each 
member of the household in addi-tion to the head of the household and his  or 
her spouse;  provided,  however,  that  the  authority,  by  resolution,  may 
deter-mine, with respect to a particular hous-ing project, that  20%  of  the 
dwelling units in that project shall be available for occupancy by households 
having adjusted household incomes of not more than 125% of  that  established 
in this subdivision.  Such resolution shall  include  determinations  by  the 
authority that the project could not be marketed  success-fully  without  the 
higher income limit and that the project is in compliance with either of  the 
following:
 (i)  It is located in a city, other than a central city, with a  per  capita 
personal income less than the per capita personal income for the state.
 (ii)  It is located elsewhere and the number of units  for  households  with 
incomes eligible for public housing or a program equivalent is at least equal 
to the number of units for households with incomes between the 100% and  125% 
limits.  The $12,000.00 amount  established  in  this  subdivision  shall  be 
auto-matically  increased  in  accordance  with  the  following   formula:
($12,000.00) + ($12,000.00 x .07 x n) where n is the number of complete years 
elapsed since January 1, 1973.
 (b)  Unless otherwise permitted by the act, for housing, other than  single- 
family housing units, that has been financed before  May 1,  1984,  and  that 
has not been  financed  by  proceeds  of  authority  bonds  which  have  been 
deliver-ed before June 9, 1977, a household shall not have a gross income  of 
more than  $28,000.00,  which  is  the  estimated  median  family  income  in 
Michigan. provided, however, in the case of shared housing,  a  gross  income 
limit of $15,000.00 shall be applied separately to  each  household  assigned 
separate sleeping and bathroom facilities,  notwithstanding  the  sharing  of 
other living space.
 (c)  For all single-family housing units, a household shall not have a gross 
income in excess of that permitted in the act.
 (d)  Notwithstanding the provisions of subdivisions (a),  (b),  and  (c)  of 
this subrule, but subject to the act, a household may have a gross income  up 
to that established pursuant to the following formula:   1.5  x  a  x  1.07n, 
where a is the median family income for the  county  in  which  the  proposed 
housing is to be located, as identified in the publication entitled "1969 and 
Estimated  1977   Decile  Distributions  of  Family  Income  by  SMSA's   and 
Non-Metropolitan Counties," prepared  by  the  United  States  department  of 
housing and urban development,  office  of  economic  affairs,  economic  and 
market analysis divi-sion, June 1,  1977,  and  where  n  is  the  number  of 
complete years elapsed since June 1, 1977, if the authority,  by  resolution, 
makes all of the following determinations:
 (i)  The economic integration encouraged by the higher income  limits  shall 
pro-mote the financial and social stability of  housing  financed  or  to  be 
financed by the authority.
 (ii)  Private enterprise has failed  to  provide  a  substantial  supply  of 
adeq-uate, safe, and sanitary dwellings in the area of the  housing  proposed 
for occupancy by households which qualify for  assistance  pursuant  to  this 
subdi-vision within the financial means of, and suitable for, such households.
 (iii)  The housing shall be located in an area in a central city which meets 
the  criterion  set  forth  in  paragraph  (ii)  of  this  subdivision.   The 
publica-tion entitled "1969 and Estimated 1977 Decile Distributions of Family 
Income  by  SMSA's  and  Non-Metropolitan  Counties"  is  herein  adopted  by 
reference.  Copies are available from the United States Department of Housing 
and Urban  Develop-ment,  Market  Analysis  Division,  477  Michigan  Avenue, 
Detroit, Michigan 48226 at a cost of 35 cents and  from  the  Michigan  State 
Housing Development Authority, 401 South Washington Square, Lansing, Michigan 
48909, at no cost.
 (e)  Notwithstanding the provisions of subdivisions (a),  (b),  and  (d)  of 
this subrule, a household may have a gross income up to the income limits set 
forth in sections 44(1)(a)(iv), 44(1)(a)(v), and 44(1)(b) of the act, if  the 
authority, by resolution, determines that  the  higher  income  limits  shall 
pro-mote the authority's ability to preserve the low income occupancy of  the 
housing project.
 (f)  For housing, other than single-family  housing  units,  that  has  been 
financed on or after  May 1, 1984, a  household shall not have a gross income 
in excess of that permitted in the act.
 (2)  If a household income limitation is a requirement for an assumption  of 
a mortgage on a  single  family  housing  unit,  then  the  household  income 
limita-tion for a household to be considered eligible to assume a mortgage on 
a single family housing unit shall be the highest household income limitation 
ever estab-lished in subdivision (c) of subrule (1) of this rule.
 (3)   If federal subsidy  payments  are  made  on  behalf  of  occupants  of 
authority-financed  dwelling  units  or  housing  units,  then   the   income 
limitations established in this rule shall be superseded by federal laws  and 
regulations applicable with respect to those applicants.
 (4)  If the program providing the funds for a loan or grant  is  subject  to 
laws, regulations, rules, or other requirements which have particular  income 
or other programmatic restrictions, or if the entity providing the funds  for 
a loan or grant has particular income  or  other  programmatic  restrictions, 
then the authority may elect to apply some  or  all  of  these  restrictions, 
instead of those which would otherwise be applicable pursuant to this rule.
 (5)  Subrule (1) of this rule does not apply to households  applying  for  a 
home improvement loan pursuant to part 8 of these rules.
 (6)  The income limitation contained in subrules (1) and (2) of this rule is 
subject to state and federal laws which may establish income limitations as a 
prerequisite to obtaining tax-exempt status of authority notes and bonds.

  History:  1979 AC; 1980 AACS; 1981 AACS; 1982 AACS; 1983  AACS  1985  AACS; 
1986 AACS; 1998-2000 AACS.


R 125.107    Asset Criteria.
  Rule 107. The authority by resolution may establish asset criteria  when it 
determines that action to be  necessary  to   preserve   the   integrity   of 
established income limitations and to effectuate the purposes of the  act.

  History:  1979 AC.


R 125.109    Acceptance of aid and guarantees.
  Rule 109. (1) Pursuant to sections 22(c)  and  22(k)  of   the   act,   the 
authority, by resolution, may accept gifts, grants, loans   or   other   aid, 
including guarantees, from  the  federal  government  or   any   persons   or 
corporations, agree and comply with any condition   attached   thereto,   and 
authorize and direct the execution on  behalf  of  the   authority   or   any 
agreement which it considers necessary or  appropriate   to   implement   any 
such gifts, grants, loans, guarantees or other aid.
 (2) Without limitation on the provisions of subrule (1),  the  authority  by 
resolution may accept any guarantee  or  commitment  to  guarantee  its bonds
 or   notes   issued   for   the   purpose   of   financing   real   property 
acquisition  and  land  development  pursuant   to   community    development 
programs, accept any grant with respect to bonds or  notes   guaranteed   and 
accept any public service grants for providing  essential  public   services, 
including educational, health  and  safety  services,   and   authorize   and 
direct the execution on behalf of the authority of any  agreement  which   it 
considers necessary or appropriate with respect thereto.

  History:  1979 AC.


R 125.111    Hearings.
  Rule 111. (1) To inform itself and the public  the   authority   may   hold 
public hearings anywhere in the state and may  limit  the   scope   of   such 
hearings.
 (2) A person, firm, corporation, or public body or agency, aggrieved   by  a 
decision of the authority or the   executive   director,   may   request   in 
writing that the authority hold a hearing in accordance with  Act  No. 306 of 
the Public Acts of 1969, as amended,  being  SS24.201  to   24.315   of   the 
Michigan Compiled Laws.

  History:  1979 AC.


R 125.113    Waiver.
  Rule 113. The executive director may waive a requirement  in  these   rules 
which is not specifically required by  statute  upon   notification   by   an 
applicant that the enforcement of the rule  will   negate   the   applicant's 
opportunity to obtain a loan or other assistance from   the   authority   and 
when the failure to meet the requirement was caused by   the   provision   of 
inaccurate information by a financial institution participating  in  one   of 
the authority programs.

  History:  1985 AACS.


R 125.115    Bylaws.
  Rule 115. The bylaws of the authority shall be adopted   and   amended   by 
resolution and shall be public records. The bylaws shall  include  the   time 
and place of regular meetings, the manner of calling  special  meetings   and 
such internal procedures as the authority requires.

  History:  1979 AC.


R 125.119    Rescission.
  Rule 119. The General Rules of the authority, as amended, being R  125.1 to 
R 125.73 of the Michigan Administrative Code  and  appearing  on  pages  4963 
to 4969 of the  1969   Annual   Supplement   to   the   Code,   page   5   of 
Supplement No. 63 to the Code and page 5 of Supplement No. 64  to  the  Code, 
are rescinded. This rescission  shall  not  defeat  or   impair   any   right 
accrued,  or  affect  any  penalty  incurred,  under    such    rules,    and 
applications pending with the authority may be  amended   to   conform   with 
these rules.

  History:  1979 AC.



             PART 2. APPLICATIONS AND APPLICANT ELIGIBILITY


R 125.121    Applications.
  Rule 121. (1) The authority staff may provide staff services  to  assist an 
applicant in complying with the   requirements   of   the   act   and   these 
rules. The executive director may establish a preapplication procedure.
 (2) Forms to be  employed  for  applications  may   be   prepared   by   the 
authority staff and shall be approved by the executive  director  and   shall 
specify  the  information  to  be  included  therein   and   the   supporting 
materials to be submitted therewith.

  History:  1979 AC.


R 125.122    Eligible applicants.
  Rule 122. (1)  A  development  fund  loan,  mortgage  loan  or  part  of  a 
development fund loan or mortgage loan, shall not be made or disbursed to  an 
applicant until such time as the applicant is an eligible applicant.
 (2)  An eligible applicant is an applicant authorized by the act to  receive 
a development fund loan or a mortgage loan. To become an eligible appli-cant, 
an applicant shall obtain the authority's  approval  of  its  organi-zational 
documents, where applicable, as provided in the act.

  History:  1979 AC; 1998-2000 AACS.


R 125.123    Approval of organizational documents.
  Rule 123. (1) Proposed articles of incorporation and proposed amendments to 
existing articles of  incorporation  of  a  nonprofit  housing   corporation, 
consumer housing cooperative, or limited dividend  housing  corporation,  and 
the  proposed  partnership  agreement,  joint   venture   agreement,    trust 
agreement, or other document then existing of a  limited   dividend   housing 
association shall be submitted in duplicate  originals   to   the   executive 
director, together with a request for  the  authority's   approval   of   the 
documents.
 (2) The authority staff shall review  such   organizational   documents   to 
determine the compliance with the requirements of the act  and  these  rules, 
and, if it is determined that  the  documents  so   comply,   the   executive 
director or other employee of the authority authorized   by   resolution   of 
the authority shall issue, on behalf of the authority,   a   certificate   of 
approval with respect to the organizational documents, on a form  approved by 
the executive director.

  History:  1979 AC.


          PART 3. DEVELOPMENT FUND LOANS AND FEASIBLE PROJECTS


R 125.131    Applications.
  Rule 131. (1) An application for a determination that  a  proposed  housing 
project is a feasible housing project shall include  information,  and  where 
required by the authority  staff,  supporting  materials  and  evidence  with 
respect to all of the following:
 (a)  The  status  of  the  applicant  as  an  eligible  applicant,  or  that 
reas-onable steps have been taken to become an eligible applicant.
 (b)   The  site  of  the  proposed  housing  project,  including   location, 
dimen-sions,  ownership,  present  zoning,  present  use  and  occupancy  and 
relocation requirements as to present occupants, present on-site improvements 
such as streets, utili-ties, and structures, status of off-site utilities and 
streets, present property taxes and assessments, utility charges,  and  liens 
or other charges on the land, and all physical characteristics  of  the  site 
that may affect construction.
 (c)  The  status  and  characteristics  of  the  proposed  housing  project, 
includ-ing number and size of dwelling units, type of  occupancy  (ownership, 
rental,  or  cooperative),  rehabilitation  or  new  construction,  range  of 
proposed  rents,  occu-pancy  charges  or   sale   prices,   building   type, 
federally-aided  mortgage    or   other-wise,   and   social,   recreational, 
commercial, and  communal  facilities  proposed  to  serve  and  improve  the 
residential area in which the proposed housing is located or to be located.
 (d)  A schedule of the proposed uses of any requested development fund  loan 
and the amounts proposed to be allocated to each such use.
 (e)  Other matters as to the proposed housing project,  the  applicant,  and 
other parties involved in the housing project as the authority staff and  the 
executive director may require.
 (2)  An application for a development fund loan shall  include  information, 
and where required by the authority staff, supporting materials and  evidence 
with respect to all of the following:
 (A)  The  status  of  the  applicant  as  an  eligible  applicant,  or  that 
reas-onable steps have been taken to become an eligible applicant.
 (B)  The site of the proposed housing project.
 (C)  The status and characteristics of  the  proposed  housing  project  and 
social, recreational, commercial, and communal facilities proposed  to  serve 
and improve the residential area in which the proposed housing is located  or 
to be located.
 (D)  A schedule of the proposed uses of the requested development fund  loan 
and the amounts proposed to be allocated to each such use.
 (E)  Other matters as to the proposed housing project,  the  applicant,  and 
other parties involved in the housing project as the authority staff and  the 
executive director may require.

  History:  1979 AC; 1998-2000 AACS.


R 125.132    Processing and evaluation of applications.
  Rule  132.  (1)   An  application  for  a  development  fund  loan   or   a 
determination that a proposed housing project is a feasible housing  project, 
or both, shall be processed by the authority staff on the basis of processing 
and underwrit-ing procedures and guidelines developed by the authority  staff 
under direction of the executive director on behalf of the authority.
 (2)  An applicant  may  be  required  to  furnish  to  the  authority  staff 
supplement-ary information and to amend the application to cause the proposed 
hous-ing project  to  be  consistent  with  the  authority's  processing  and 
under-writing pro-cedures and guidelines.
 (3)  Upon completion of the processing, all applications for a determination 
that a  proposed  housing  project  is  feasible  and  all  applications  for 
development fund loans in the principal amount of $250,000 or more  shall  be 
presented to the authority for  approval,  along  with  the  authority  staff 
analysis of the application and the executive director's recommendation  with 
respect to the application.
 (4)  If the principal amount of the  development  fund  loan  is  less  than 
$250,000.00, the executive director shall review the authority staff analysis 
and,  if  the  executive  director  determines  that  all  of  the  following 
requirements are met:
 (a)  The applicant is an applicant  authorized  by  the  act  to  receive  a 
development fund loan.
 (b)  The applicant shall use the loan funds in planning for or  implementing 
any activi-ties permitted in the act.
 (c)  The applicant  is  reasonably  expected  to  be  able  to  successfully 
imple-ment the proposal.
 (d)  The authority reasonably anticipates that the applicant will receive an 
authority-aided or a federally-aided mortgage loan, to be obtained to provide 
financing for the proposed housing project.
 (e)  The development fund loan can reasonably be anticipated  to  be  repaid 
from the proceeds of the authority-aided or a federally-aided mortgage loan.
Then the executive  director  may  issue,  on  behalf  of  the  authority,  a 
commitment for a development fund loan to  the  applicant.   The  development 
fund loan commitment shall contain terms,  conditions,  and  requirements  as 
deemed neces-sary by the executive director.

  History:  1979 AC; 1998-2000 AACS.


R 125.133    Determinations of feasibility and authorization of loans.
  Rule 133. (1)  The authority shall review the analysis  and  recommendation 
for applications for a determination  that  a  proposed  housing  project  is 
feasible and applications for development fund loans in the principal  amount 
of $250,000 or more, and, if it determines that  the  application  meets  the 
requirements  of  the  act  and  these  rules  and  is  consistent  with  the 
authority's  processing  and  under-writing  procedures  and  guidelines,  by 
resolution, the authority may determine that the proposed housing project  is 
a feasible housing project or authorize  a  devel-opment  fund  loan  to  the 
applicant, or both.
 (2)   For applications for a determination that a proposed  housing  project 
is feasible, the resolution shall include all of the following determinations 
by the authority :
 (a)  The proposed housing project will provide housing for  persons  of  low 
and moderate income or will serve and improve the residential area  in  which 
author-ity financed housing is located or is planned to  be  located  thereby 
enhancing the viability of such housing.
 (b)  The applicant is reasonably expected to be able to  achieve  successful 
com-pletion of the proposed housing project.
 (c)  The proposed housing project will meet a social need  in  the  area  in 
which it is to be located.
 (d)  A mortgage loan, or a mortgage loan not made by the authority that is a 
federally-aided mortgage, can reasonably be anticipated  to  be  obtained  to 
pro-vide financing for the proposed housing project.
 (e)  The proposed housing project is a feasible housing project.
 (3)  For applications for development fund loans in the principal amount  of 
$250,000 or more, the  resolution shall include the following  determinations 
by the authority:
 (a)  The applicant is an applicant  authorized  by  the  act  to  receive  a 
development fund loan.
 (b)  The applicant shall use the loan funds in planning for or  implementing 
any activi-ties permitted in the act.
 (c)  The applicant  is  reasonably  expected  to  be  able  to  successfully 
imple-ment the proposal.
 (d)  The authority reasonably anticipates that the applicant will receive an 
authority-aided or a federally-aided mortgage loan, to be obtained to provide 
financing for the proposed housing project.
 (e)  The development fund loan can reasonably be anticipated  to  be  repaid 
from the proceeds of the authority-aided or a federally-aided mortgage loan.
 (4)  The resolution may include such conditions as the  authority  considers 
appro-priate with respect to an application for a mortgage loan  as  to  such 
feasible housing project or the  use,  disbursement,  and  repayment  of  the 
devel-opment fund loan.

  History:  1979 AC; 1998-2000 AACS.


R 125.134    Priorities for allocation of development fund monies.
  Rule 134. Priorities for allocation of monies in  the  housing  development 
fund available for development fund loans may be established  and  revised by 
the authority. Priorities shall be  based  on  criteria  established  by  the 
authority as best effectuating the purposes of the  act  including,   without 
limitation, a determination by the authority of an area's  need  for  housing 
for persons of low and moderate income  as  compared   to   the   authority's 
determination of the overall housing needs of the state.

  History:  1979 AC.

                         PART 4. MORTGAGE LOANS

R 125.141    Applications.
  Rule 141. An application for a mortgage loan  shall  include   information, 
and where required by  the  authority  staff,   supporting   materials,   and 
evidence, with respect to all of the following:
 (a) The status of the applicant as an eligible applicant.
 (b) The site  of  the  proposed   housing   project,   including   location, 
dimensions, ownership, present  zoning,  present  use   and   occupancy   and 
relocation  requirements  as  to  present    occupants,    present    on-site 
improvements, such  as  streets,  utilities,  and   structures,   status   of 
off-site utilities and streets, present property   taxes   and   assessments, 
utility charges, and liens or other charges on the land,  and  all   physical 
characteristics of the site that may affect construction.
 (c) The status and characteristics  of   the   proposed   housing   project, 
including number and size of dwelling units, type  of  occupancy  (ownership, 
rental, or cooperative),  rehabilitation  or   new   construction,   building 
type, federally-aided mortgage or  otherwise,   and   social,   recreational, 
commercial, and communal facilities proposed  to  serve   and   improve   the 
residential area in which the proposed housing is or is to be located.
 (d) Identity and qualifications of   the   design   architect,   supervisory 
architect, applicant's attorney, housing  consultant,   general   contractor, 
marketing or sales agent, and management agent.
 (e) Architectural drawings and specifications,  site   plan,   schedule   of 
construction  costs,  reports  of  soil  tests   or    engineering    studies 
performed,  and  evidence  of  approval  of   the   architectural   drawings, 
specifications, and site plan by governmental bodies having  jurisdiction.
 (f) Proposed marketing plan, reports  of   market   surveys   or   analyses, 
schedule of proposed rents, occupancy charges  or   sale   prices,   proposed 
operating budget, proposed management plan, proposed  relocation   plan   and 
cost analysis, schedule of the proposed uses  of   the   requested   mortgage 
loan and the amounts to be  allocated  to  each  such   use   including   the 
applicant's  equity  investment,  where   applicable,    and    a    proposed 
construction schedule.
 (g) The applicant's compliance with, and the fulfillment of,  the  terms and 
conditions of any   prior   determination   by   the   authority   that   the 
proposed housing project is a feasible housing project.
 (h)  The  applicant's   proposed   plans    for    compliance    with    the 
nondiscrimination provisions of section 46 of the  act   and   the   proposed 
affirmative action plans for minority group employment  in  construction   of 
the proposed housing project.
 (i) Other matters as to the proposed housing  project,  the  applicant,  and 
other parties involved in the housing project as the  authority   staff   and 
the executive director may require.

  History:  1979 AC.


R 125.142    Processing and evaluation of applications.
  Rule 142. (1) An application for a mortgage loan shall  be   processed   by 
the authority staff  on  the  basis  of  the   authority's   processing   and 
underwriting  procedures  and  guidelines.  The   authority    staff    shall 
undertake such land appraisals, market surveys and   analyses,   reviews   of 
the architectural design, site plan, and construction  costs,  materials  and 
methods, and other matters as may  be  determined  to   be   appropriate   to 
insure  that  the  proposed  housing  project  is   consistent    with    the 
authority's processing and underwriting procedures and guidelines.
 (2) An applicant may be required to furnish   the   authority   staff   with 
supplementary information and  to  amend  the  application   to   cause   the 
proposed housing project to be consistent with  the  authority's   processing 
and underwriting procedures and guidelines.
 (3) Except as provided for in  R  125.143(3),   upon   completion   of   the 
processing and approval of the application by the  executive  director,   the 
authority staff's analysis of the application and  the  executive  director's 
recommendation with respect thereto shall be presented to  the  authority.

  History:  1979 AC; 1981 AACS.


R 125.143    Authorization of mortgage loans.
  Rule 143.  (1)  The  authority   shall    review    each    analysis    and 
recommendation and, if  it  determines  that  the   application   meets   the 
requirements of the act  and  these  rules  and  is   consistent   with   the 
authority's processing and  underwriting  procedures   and   guidelines,   by 
resolution, it may  authorize  a  mortgage  loan  to   the   applicant.   The 
resolution may authorize  the  executive  director  to   issue   a   separate 
authority mortgage loan commitment to the applicant with   respect   to   the 
proposed housing project.
 (2)  The  resolution  shall  include  all   of   the   following   authority 
determinations:
 (a) The applicant is an eligible applicant.
 (b) The proposed housing project will provide housing for persons of low and 
moderate income or will serve and  improve  the  residential  area  in  which 
authority-financed housing is located or is planned to  be  located,  thereby 
enhancing the viability of such housing. In the  case  of  a  loan being made 
pursuant to section 44a (2) of the act,  such  loan  may   be   made  without 
regard to the income of the owner  or  occupants  if  the  housing project is 
located in an area of  chronic   economic   distress   or   if   the  housing 
project constitutes  moderate  cost  residential   rental   property  located 
elsewhere in the state.
 (c)  The  applicant  is  reasonably  expected  to   be   able   to   achieve 
successful completion of the proposed housing project.
 (d) The proposed housing project will meet a social need  in  the  area   in 
which it is to be located.
 (e) The proposed housing  project  may  reasonably   be   expected   to   be 
marketed successfully.
 (f) All elements of the proposed   housing   project,   including,   without 
limitation, the ownership, design,   construction,   occupancy,   management, 
and operation thereof, have been established in a  manner   consistent   with 
the authority's processing and  underwriting   procedures   and   guidelines, 
except as to any such elements as are the subject of conditions  as  to   the 
authorization of the mortgage loan as provided in R 125.144.
 (g) In light of the estimated  project  cost   of   the   proposed   housing 
project, the amount of the mortgage loan authorized by  such  resolution   is 
consistent with the requirements of the act as to the  maximum  limitation on 
the ratio of mortgage loan amount to estimated project cost.
 (3)  If  the  principal  amount  of  the  mortgage   loan   is   less   than 
$250,000.00, the executive director shall  review   the   authority   staff's 
analysis and, if the executive director determines that the  applicant  is an 
eligible applicant, that the application meets the requirements of   the  act 
and these rules, and  that   the   application   is   consistent   with   the 
authority's processing and underwriting procedures and   guidelines   as   to 
the proposed housing project, the executive director may issue, on  behalf of 
the  authority  and  pursuant   to   resolution   of   the   authority,   the 
authority's mortgage loan commitment to the applicant with  respect  to   the 
proposed housing project.  The  mortgage  loan   commitment   shall   contain 
terms, conditions, and requirements as deemed necessary  by   the   executive 
director.

  History:  1979 AC; 1981 AACS; 1983 AACS.


R 125.144    Conditions and special determinations in authorizations.
  Rule 144. A resolution of the authority authorizing a mortgage  loan  or  a 
mortgage loan commitment of  the  authority,  the  issuance   of   which   is 
authorized by such a resolution, shall  include  such   conditions   as   the 
authority considers  appropriate  with  respect  to   the   commencement   of 
construction of the proposed housing project, the marketing and  occupancy of 
such housing project and the  use,  disbursement,  and   repayment   of   the 
mortgage loan authorized. A resolution or  mortgage   loan   commitment   may 
include a financial analysis of the subject housing  project,   which   shall 
establish the initial schedule of rents or occupancy  charges,  the  approved 
budget for operation of the housing project, and the schedule   of   use   of 
the proceeds of the mortgage loan. A  resolution   authorizing   a   mortgage 
loan to an applicant which is a limited dividend   housing   corporation   or 
limited dividend housing association shall include a  determination  of   the 
maximum reasonable and proper rate of return  on  the   investment   of   the 
applicant in the proposed housing project, which   determination   shall   be 
made upon a consideration of the then existing conditions  in   the   housing 
industry and financial markets and rates  of  return   then   prescribed   by 
other governmental agencies.

  History:  1979 AC.


R 125.145    Priorities for allocation of monies for mortgage loans.
  Rule 145. Priorities for allocation of authority   monies   available   for 
mortgage loans may be established and revised by  the  authority.  Priorities 
shall  be  based  on  criteria  established  by  the   authority   as    best 
effectuating the purposes of the act,  including,   without   limitation,   a 
determination by the authority of an area's need for housing  for  persons of 
low and moderate income as compared to the authority's determination  of  the 
overall housing needs of the state.

  History:  1979 AC.


R 125.146    Mortgage loans to individuals.
  Rule 146. (1) An application by an  individual  for  a  mortgage  loan  for 
long-term financing of a housing unit to be purchased by the individual shall 
include information, and where required by the  authority  staff,  supporting 
materials and evidence with respect to all of the following:
 (a)  The eligibility of the applicant.
 (b)  The eligibility of the housing unit proposed to be purchased.
 (2)  An application for  a mortgage loan, submitted pursuant to subrule  (1) 
of this rule, shall be processed by the a-uthority staff, and  the  authority 
staff's analysis of such application shall  be  presented  to  the  executive 
director.
 (3)  The executive director shall review each  analysis and, if  he  or  she 
determines that the applicant is an eligible applicant, that the  application 
meets the requirements of the act and these rules, and that  the  application 
is consistent with the authority's processing and underwriting procedures and 
guide-lines as to the housing  unit  to  be  purchased,  then  the  executive 
director may issue, on behalf of the authority and pursuant to resolution  of 
the authority, the author-ity's mortgage loan  commitment  to  the  applicant 
with respect to the housing unit proposed to be purchased.  The mortgage loan 
commitment shall  contain  terms,  conditions,  and  requirements  as  deemed 
necessary  by  the  executive  director,   including,   without   limitation, 
conditions establishing that the purchase price of the subject housing  unit, 
the method of making payments after the purchase of  the  housing  unit,  the 
security afforded, the interest rate, and fees and charges,  if  any,  to  be 
paid by the eligible applicant shall at all times be sufficient to permit the 
authority  to  make  the  payments  on  its  bonds   and   notes   plus   any 
administra-tive or other costs to  the  author-ity  in  connection  with  the 
transaction.
 (4)  The authority, by resolution, may authorize the execution, on behalf of 
the authority, of agreements with  corporations,  partnerships,  individuals, 
financial institutions, or other entities qualified  to  do  business  within 
this state.  The  agreements  may  provide  that  the  authority  shall  make 
mort-gage loans to individual eligible applicants for the long-term financing 
of housing units to be purchased by such applicants,  and  that  the  housing 
units shall be con-structed by or with the assistance of an entity that shall 
be a party to such an agreement.
 (5)   An  individual  shall  not  receive  a  mortgage  loan  for  long-term 
financ-ing a housing unit to be purchased that  is  not  intended  for  owner 
occupancy.
 (6)  An individual shall not receive  a  mortgage  loan  for  the  long-term 
f-inancing of a housing unit to be purchased unless the  husband,  wife,  and 
all other adult individuals whose  income  is  required  to  be  computed  in 
determin-ing the household gross income agree to sign  a  mortgage,  mortgage 
note, and such other loan docu-ments determined by the executive director  to 
be neces-sary, provided however, that  children  of  the  applicant  who  are 
claimed as dependants on the applicant's federal income tax  return  and  who 
are full-time  students need not sign the loan documents.
 (7)  An individual shall not receive  a  mortgage  loan  for  the  long-term 
f-inancing of a housing unit unless the individual meets credit  requirements 
as established by the authority.

  History:  1979 AC; 1980 AACS; 1982 AACS; 1983 AACS;  1986  AACS;  1998-2000 
AACS.


                      PART 5. DEVELOPMENT FUND GRANTS


R 125.151    Applications.
  Rule 151.  An application  for  a  development  fund  grant  shall  include 
informa-tion and, where required by the authority staff, supporting materials 
and evi-dence with respect to all of the following:
 (a)  That the applicant is an applicant authorized by the act to  receive  a 
development fund grant.
 (b)  The proposed housing or  community  development  activities  for  which 
assist-ance in planning or implementation is being requested.
 (c)  The total cost  of  the  planned  activities,  the  net  costs  to  the 
applicant, and a schedule of the proposed uses of the requested  develop-ment 
fund grant and the amounts proposed to be allocated to each use.
 (d)  Other matters with respect to the proposal, the  applicant,  and  other 
parties involvedas the authority staff and the executive director require.

  History:  1979 AC; 1986 AACS; 1998-2000 AACS.


R 125.152    Processing and evaluation of applications.
  Rule 152.  (1)  An application  for  a  development  fund  grant  shall  be 
process-ed by the authority staff on the basis of the authority's  evaluation 
factors.
 (2)  An applicant  may  be  required  to  furnish  to  the  authority  staff 
supplemen-tary information and to amend the application to cause the  planned 
activi-ties to be fully consistent with the authority's evaluation factors.
 (3)  Upon completion of the processing all applications for development fund 
grants in the amount of $250,000 or more  shall be presented to the authority 
for approval, along with the authority staff analysis of the application  and 
the executive director's recommendation with respect to the application.
 (4)  If the amount of the development fund grant is less  than  $250,000.00, 
the executive director shall review the authority staff analysis and, if  the 
executive director determines that all of the following requirements are met:
 (a)  The applicant is an applicant  authorized  by  the  act  to  receive  a 
development fund grant.
 (b)  The applicant shall use the grant funds in planning for or implementing 
any activi-ties permitted in the act.
 (c)  The applicant  is  reasonably  expected  to  be  able  to  successfully 
imple-ment the proposal.
 (d)  The application satisfies the evaluation factors and  criteria  adopted 
by the authority.
Then the executive  director  may  issue,  on  behalf  of  the  authority,  a 
commitment for a development fund grant to the applicant .   The  development 
fund grant commitment shall contain terms, conditions,  and  requirements  as 
deemed neces-sary by the  executive  director.   The  authority  may  require 
repayment of these grants.

  History:  1979 AC; 1998-2000 AACS.


R 125.153    Authorization of  development  fund  grants  in  the  amount  of 
$250,000 or more.
  Rule 153.  (1) For applications for development fund grants in  the  amount 
of  $250,000  or  more,  the  authority  shall  review  each   analysis   and 
recommendation presented and, if it determines that the application meets the 
requirements  of  the  act  and  these  rules  and  is  consistent  with  the 
authority's evaluation factors, by resolution, it may authorize a development 
fund grant to the applicant in an amount not to exceed the net costs  to  the 
applicant of the planned activities.
 (2)  The resolution of the authority shall  include  all  of  the  following 
determ-inations by the authority:
 (a)  The applicant is an applicant  authorized  by  the  act  to  receive  a 
development fund grant.
 (b)  The applicant shall use grant funds  in planning  for  or  implementing 
any activi-ties permitted in the act.
 (c)  The applicant  is  reasonably  expected  to  be  able  to  successfully 
imple-ment the proposal.
 (d)  The application satisfies the evaluation factors and  criteria  adopted 
by the authority.
 (3)  The resolution may include conditions  which  the  authority  considers 
appro-priate with respect to the use and disbursement of the development fund 
grant. The authority may require repayment of these grants.

  History:  1979 AC; 1986 AACS; 1998-2000 AACS.


R 125.154    Priorities for allocation of development fund monies.
  Rule 154. Priorities for allocation of monies in  the  housing  development 
fund available for development fund grants may be established and  revised by 
the authority. Priorities shall be  based  on  criteria  established  by  the 
authority as best effectuating the purposes of the act.

  History:  1979 AC.


                    PART 6. AUTHORITY LOAN DOCUMENTS


R 125.161    Authority loan documents.
  Rule 161. (1) Forms of documents to be used with  respect  to   development 
fund loans, mortgage loans, and the issuance and sale  of   authority   notes 
and bonds shall be prepared, and  may  be  revised  and   amended,   by   the 
authority staff under direction of the executive director on  behalf  of  the 
authority, subject to legal requirements.
 (2) The appropriate forms of  such  documents   shall   be   employed   with 
respect to all matters relating to development  fund   loans   and   mortgage 
loans.

  History:  1979 AC.


R 125.162    Remedies.
  Rule 162. The authority  reserves  the  right  to   pursue   all   remedies 
prescribed by law or in the act for breach or violation of  any  provision of 
any authority loan document described in R 125.161.

  History:  1979 AC.


                PART 7. LAND ACQUISITION AND DEVELOPMENT


R 125.171    Land acquisition and development proposals.
  Rule 171. (1) The authority staff may develop proposals for  the   use   of 
monies in the land acquisition and development fund created  by  the  act.
Such a proposal may be for:
 (a) The acquisition by grant, purchase, or  otherwise  of   real   property, 
which for purposes of this part  7  shall  be  defined   as   any   interest, 
including a fee and leasehold interest, in land or improvements  to  land, or 
a portion  thereof,  by  the   authority   under   any   of   the   following 
circumstances:
 (i) The real property may be suitable for a future  housing  development  or 
housing project.
 (ii) The real property is  located  in  a   residential   area   where   the 
authority has financed or has planned to finance housing,  and  the  proposed 
use of the real property shall improve the quality of the residential area by 
eliminating blight or provide needed public or  commercial  facilities.
 (iii) The real property is so situated that the present or future use of the 
real property, if not  acquired  by  the  authority,  shall  adversely affect 
the  value  or  marketability  of  the  authority-financed  housing project.
 (b) Any  of  the  following  types  of   improvements   to   real   property 
purchased or otherwise acquired for the purposes of the fund:
 (i) Improvements that are necessary to place  the   real   property   in   a 
safe, sanitary, and decent condition,   including   demolition,   excavation, 
and landscaping.
 (ii) Improvements to real property which is  to   be   dedicated   for   the 
public use and  enjoyment,  including  the   installation   of   recreational 
facilities, benches, shelters, lighting, and walkways.
 (iii) Improvements that are necessary to insure the planned  development  of 
the real property,  including   the   installation   of   roads,   sidewalks, 
sewers, and utilities.
 (c) The payment of any of the following costs on real property purchased  or 
being purchased with monies from this fund or acquired by  gift,   grant,  or 
exchange for the purposes of this fund:
 (i)  The  costs  of  property   taxes,   insurance    premiums,    interest, 
maintenance  expenses,  and  other  carrying  charges  on  real  property.
Notwithstanding the provisions of section 42 of the act,  during  the  period 
when real property is owned or is being purchased by the  authority  or   its 
agent, the authority shall pay all property taxes levied  against  the   real 
property unless a taxing  jurisdiction  exempts  the   real   property   from 
property taxes. The assessed valuation of the real property   while   it   is 
owned or being purchased by the  authority  or  its  agent   shall   not   be 
increased  by  any  taxing  jurisdiction,  except  to   reflect   the   state 
equalization valuation process.
 (ii) The costs  of  planning  the  development   of   the   real   property, 
including, but not limited to, the costs of  economic  feasibility   studies, 
land use studies, site development planning,  architectural  and  engineering 
design, market analysis and all related analyses,   studies,   and   planning 
services.
 (iii) The costs incurred in the transfer   of   real   property,   including 
brokerage and appraisal fees, recording expenses, and the  costs  of  surveys 
and title insurance.
 (d) The costs of improvements to  real   property   permitted   by   section 
24b(2) of the act.
 (2) A proposal shall contain information as to  the  description  and   fair 
market value of any real property  or  interest  therein   proposed   to   be 
acquired and the proposed method of acquisition thereof,   the   nature   and 
cost of any improvements proposed to be undertaken or  carrying  charges   or 
transfer expenses proposed to be paid, the nature and cost of any planning of 
the development of real property proposed to be undertaken. A proposal,  upon 
completion, and the executive director's recommendation with  respect thereto 
shall be presented to the authority.

  History:  1979 AC.


R 125.172    Approval and implementation of proposals.
  Rule 172. (1) The authority shall review a  proposal   and   recommendation 
and, if it determines that the proposal meets the requirements  of  the   act 
and these rules, by resolution, it may approve the  proposal  and   authorize 
and direct the implementation thereof and the use of  appropriate  monies  of 
the authority in connection with the implementation.
 (2) The resolution may  provide  that  any   real   property   or   interest 
therein to be acquired by the authority may be acquired  by  the  authority's 
name or through and in  the  name  of  a  duly  authorized   agent   of   the 
authority. If any  such  real  property  or  interest  therein   is   to   be 
purchased on land contract, option, or  other  form   of   deferred   payment 
agreement, or subject to mortgages or other encumbrances,  the  authority, by 
the resolution, shall  reserve   monies   in   the   land   acquisition   and 
development fund or authorization to issue notes and  bonds,  the   aggregate 
amount of which equals the unpaid principal balance of  such  land  contract, 
option, mortgage, or other encumbrance or deferred  payment  agreement   plus 
any anticipated carrying charges, including  without  limitation,   insurance 
premiums, interest, maintenance expenses, and property taxes.  In  the  event 
that such acquisition is to be  accomplished  through   a   duly   authorized 
agent of the authority, the authority shall require such  agent  to   protect 
the authority's interest in  the  property  and  to   convey   the   property 
interest therein to the authority upon the authority's   request,   and   the 
records  of  the  authority  shall  reflect  the  existence   of,   and   the 
authority's rights in, the real property or interest therein.

  History: 1979 AC.


R 125.173    Sale or exchange of property of authority.
  Rule 173. (1) The authority, by resolution, may authorize  and  direct  the 
sale, assignment, transfer, conveyance, lease, mortgage, or other disposal or 
encumbrance of real or personal property or any  interest  therein,  or  part 
thereof, with respect  to  which  monies  from  the  land   acquisition   and 
development fund have been expended to any individual,  firm,  partnership or 
corporation, county,   municipality,   authority,   or   federal   or   state 
agency at such price  and  on  such  terms  and  conditions   as   meet   the 
requirements of the act and are considered appropriate by  the  authority.
 (2) The authority, by resolution, may authorize and direct the  exchange  of 
real property with respect to which monies from  the  land   acquisition  and 
development fund have been expended, if the authority  determines   that  the 
real property proposed  for  acquisition  meets   the   requirements   of   R 
125.171(1)(a).

  History:  1979 AC.

                      PART 8. HOME IMPROVEMENT LOANS


R 125.181    Eligible applicants.
  Rule 181.  An applicant for a home improvement loan shall  satisfy  all  of 
the following requirements:
 (a)  An applicant shall be either an individual fee owner or purchaser under 
a land contract of the residential structure to be improved or an individ-ual 
member-shareholder in a nonprofit cooperative housing corpora-tion who has  a 
proprietary interest in a residential structure.
The residential structure  may  be  subject  to  a  mortgage  or  other  lien 
secur-ing a debt.
 (b)  An applicant shall meet  credit  requirements  as  established  by  the 
authority.
 (c)  The residential structure to be improved shall not be in  violation  of 
applicable zoning ordinances or other applicable land use guidelines.
 (d)  The residential structure shall not contain more than 11 dwelling units.
 (e)  The applicant shall use Home improvement loan proceeds  to finance only 
new im-provements upon, or in connection with, existing structures and  shall 
not be used for the refinancing of an existing mortgage or debt  or  for  the 
completion of an unfinished residential structure.
 (f)  All improvements shall be reasonably capable of being completed, except 
for causes beyond the applicant's reasonable control, within 6 months of  the 
date of the first disbursement of funds  pursuant  to  the  home  improvement 
loan.  The authority may extend this period for good cause shown.

  History:  1979 AC; 1980 AACS; 1982 AACS; 1983 AACS;  1991  AACS;  1998-2000 
AACS.


R 125.182    Eligible improvements.
  Rule 182. Improvements made with home improvement   loan   proceeds   shall 
satisfy the following requirements:
 (a) Improvements may be made in order to  comply  with   applicable   state, 
county, and municipal  health,  housing,  building,   fire   prevention   and 
housing  maintenance  codes,  or  other  public   standards   applicable   to 
housing.
 (b) Improvements may also be made which protect   or   improve   the   basic 
livability or utility of  a  residential  structure,   thereby   making   the 
residential structure safe, sanitary,  or  adequate.  However,   to   be   an 
eligible improvement, it shall be a permanent general improvement.
 (c) An improvement shall be  made  in   compliance   with   all   applicable 
health, fire prevention, building, housing, and  housing  maintenance  codes, 
and other public standards applicable to housing.  However,  no   application 
for a home improvement loan for a dwelling  unit  occupied   by   the   owner 
shall be denied  solely  because  the  improvements  will   not   bring   the 
dwelling  unit  into  full  compliance  with  all   applicable   codes    and 
standards.
 (d) Home improvement loans proceeds shall not be  used  for   the   payment, 
wholly or in part, of an  assessment  for   public   improvements.   However, 
proceeds may be used for  improvements  which  will   bring   an   individual 
sewage  disposal  system,  including  septic  systems,   located    on    the 
residential  real  property  improved  by  a   residential   structure   into 
compliance with local,  state,  and  federal   environmental   and   sanitary 
standards.
 (e) The authority may require that all contracts   covering   all   or   any 
portion of  an  improvement  contain  an   authority-approved   warranty   on 
workmanship and materials.

  History:  1979 AC.


R 125.183    Rescinded.

  History:  1979 AC; 1981 AACS; 1982 AACS; 1998-2000 AACS.


R 125.184    Rescinded.

  History:  1979 AC; 1998-2000 AACS.


      PART 9 - MICHIGAN HOUSING AND COMMUNITY DEVELOPMENT  FUND;  
         MICHIGAN  HOUSING AND COMMUNITY DEVELOPMENT PROGRAM

R 125.190 Program purpose and applicability.
  Rule 190.  The Michigan state housing development authority shall  use  the 
housing and community development fund to provide  loans,  grants,  or  other 
comparable forms of assistance to eligible applicants  to  finance,  acquire, 
rehabilitate, and develop decent, safe, and  sanitary  housing  and  projects 
located in a downtown area or adjacent neighborhood in this state.   The  use 
of the fund, created pursuant to MCL  125.1458b,  is  limited  to  activities 
outlined in MCL 125.1458b and 125.1458c as follows: 
  (a) Developing and coordinating public and private resources  to  meet  the 
housing needs of low income,  very  low  income,  and  extremely  low  income 
households in  this  state,  particularly  innovative  strategies  leveraging 
public and private resources to meet these needs.
  (b) Developing  housing  for  the  homeless,  including  both  transitional 
housing and permanent   housing.
  (c) Developing rental housing.
  (d) Providing funding to eligible applicants with  respect  to  housing  or 
homeownership for individuals and families of low income,  very  low  income, 
and extremely low income households and projects located in a  downtown  area 
or adjacent neighborhood in this state, including  funding  for  all  of  the 
following:
  (i) Acquisition of land and buildings.
  (ii) Rehabilitation.
  (iii)  New construction.
  (iv) Development costs and predevelopment costs.
  (v) Preservation of existing housing.
  (vi)  Community  development  projects,  including,  but  not  limited  to, 
infrastructure   improvements,   economic   development   projects,    blight 
elimination, or community facilities.
  (vii) Insurance.
  (viii) Operating and replacement reserves.
  (ix) Down payment assistance.
  (x) Security deposit assistance.
  (xi) Foreclosure prevention and assistance.
  (xii) Individual development accounts established under the  individual  or 
family development account program act, 2006 PA 513, MCL 206.701 to 206.711.
  (xiii) Activities related to ending homelessness.
  (XIV) Assistance to nonprofit organizations, municipalities, and land  bank 
fast track authorities organized under the land bank fast track act, 2003  PA 
258, MCL 124.751 to 124.774.
  (XV) Predatory lending prevention or relief.		

  History: 2008 AACS; 2009 MR 8, Eff. Apr. 28, 2009.


R 125.191 Definitions.
  Rule 191. Definitions provided for in part I of the  authority's  rules,  R 
125.101 to R 125.103, shall apply to the  provisions  of  this  part,  unless 
superseded in this rule as follows:
  (a) "Adjacent neighborhood" means a residential area as determined  by  the 
authority immediately adjoining or near  a  downtown  area  within  the  same 
municipality. 
  (b) "Allocation plan" means the plan referred to in  and  required  by  MCL 
125.1458b (3).
  (c) "Annual report" means the annual report required  under  MCL  125.1458b 
(6).
  (d) "Applicant" means a person who has submitted an application,  proposal, 
or other documentation related to a request  for  an  award  of  housing  and 
community development fund monies meeting the requirements contained  in  the 
applicable NOFA or RFP related to the applicable application year.
  (e) "Biennial plan" means the allocation plan as defined in subdivision (b) 
of this subrule. 
  (f) "Chief Executive Officer" or "CEO" means the senior manager responsible 
for overseeing the activities of the entire company or organization. The  CEO 
usually holds a position  on  the  board  of  directors  of  the  company  or 
organization and may also hold the title of president.
  (g)  "Chief  Financial  Officer"  or   "CFO"   means   the   company's   or 
organization's top managerial and financial accountant and the individual  in 
charge of the company's or organization's financial matters.	
  (h) "Community development"  means  a  process  involving  the  conception, 
planning,  and  implementation  of  projects  or  activities   which   create 
improvements in, or reduce the extent of declines in, the living standards of 
people in a particular community.
  (i) "Controlling interest" means the  holding  by  1  person  or  group  of 
persons of a majority of the  stock  or  other  indicia  of  ownership  of  a 
business entity, giving the holder or holders a means of  exercising  control 
over the actions of the entity.
 (j) "Development costs" means the sum total  of  all  costs  incurred  in  a 
housing development or a partnershipproject located in  a  downtown  area  or 
special purpose entity  that  is  approved  by  the  authority  and  that  is 
organized for the purpose of developing and supporting affordable housing for 
low income, very low income, or extremely low income households, any of which 
are determined by the authority to qualify for funding under the program.
  (k) "Extremely low income household" means a person, a family, or unrelated 
persons living together whose adjusted household income is not more than  25% 
of the median income, as determined by the authority.
  (l) "Formula" means the standard procedure  for  distributing  the  program 
funds across the state as specified in MCL 125.1458b (4) (a).
  (m) "For-profit corporation" means  an  entity  that  exists  primarily  to 
generate more income than it spends.
  (n) "Housing development costs" means the sum total of all  costs  incurred 
in a housing development adjacent neighborhood determined by the authority to 
be reasonable and necessary,  including  but  not  limited  to,  all  of  the 
following: 
  (i) Cost of land acquisition and  any  buildings  on  the  land,  including 
payments for options, deposits, or contracts to purchase  properties  on  the 
proposed housing development site or project located in a  downtown  area  or 
adjacent neighborhood site or payments for the purchase of properties. 
  (ii) Cost of site preparation, demolition, and clearing.
  (iii) Architectural, engineering, legal, accounting, corporation, and other 
fees paid  or  payable  in  connection  with  the  planning,  execution,  and 
financing of the housing development or project located in a downtown area or 
adjacent neighborhood and the finding of an eligible mortgagee or  mortgagees 
for the housing development or project located in a downtown area or adjacent 
neighborhood. 
  (iv) Cost of necessary studies, surveys, plans, and permits.  
  (v) Insurance, interest, financing, tax and  assessment  costs,  and  other 
operating and carrying costs during construction.
  (vi)  Cost  of  construction,  rehabilitation,  reconstruction,   fixtures, 
furnishings, equipment, machinery, apparatus, and similar facilities  related 
to the real property. 
  (vii)  Cost  of  land  improvements,  including  landscaping  and   offsite 
improvements.
  (viii) Necessary expenses in  connection  with  initial  occupancy  of  the 
housing development or the project located in a  downtown  area  or  adjacent 
neighborhood.
  (ix) A reasonable profit and risk fee in addition to job  overhead  to  the 
general contractor and, if applicable, a limited-dividend housing sponsor. 
  (x) An allowance established by  the  authority  for  working  capital  and 
contingency reserves and reserves  for  any  anticipated  operating  deficits 
during construction and initial occupancy. 
  (xi) Cost of other items that are determined to be reasonable and necessary 
for the housing development or project located in a downtown area or adjacent 
neighborhood, less any net rents and other  net  revenue  received  from  the 
operation of the real and  personal  property  on  the  development  site  or 
project site during the construction.
  (k) "Downtown area" means an area where 20 or  more  contiguous  properties 
have been planned, zoned, or used for commercial  purposes  for  50  or  more 
years and where a majority of the buildings are built adjacent to each  other 
as determined by the authority and up to the public right-of-way.   To  be  a 
downtown area, the area shall contain a  significant  number  of  multilevel, 
mixed use buildings and property in the downtown area must be owned  by  more 
than 3 private owners.
  (l) "Eligible applicant" means a not-for-profit corporation,  a  for-profit 
corporation, a municipality, a land bank fast track authority organized under 
the land bank fast track act, 2003 PA 258, MCL 124.751 to MCL 124.774,  or  a 
partnership or special purpose entity that is approved by the  authority  and 
that is organized for the purpose of  developing  and  supporting  affordable 
housing for low income, very low income, or extremely low income  households, 
or projects located in a downtown area or adjacent neighborhood, any of which 
are determined by the authority to qualify for funding under the program.
  (m) "Extremely low income household" means a person, a family, or unrelated 
persons living together whose adjusted household income is not more  than  25 
30% of the area median income, as determined by the authority.
 (n) "Formula" means the standard  procedure  for  distributing  the  program 
funds throughout the state  based  on  the  number  of  persons  experiencing 
poverty, economic and housing distress as specified in MCL 125.1458b (3) (A).
  (o) "For-profit corporation" means  an  entity  that  exists  primarily  to 
generate more income than it spends.
  (p) "Homelessness" means lacking a fixed, regular, and  adequate  nighttime 
residence with priority given to those living in any of the following:  
  (i) A publicly or privately operated shelter and/or  transitional  facility 
designed to provide temporary living accommodations.
  (ii) A public or private place not designed for, or ordinarily  used  as  a 
regular sleeping accommodation for human beings.
  (iii) An institution that  provides  temporary  residence  for  individuals 
intended to be institutionalized. 
  (q) "Housing development" means single-family homes,  rental  developments, 
elderly developments, affordable  assisted  living  developments,  supportive 
housing developments, and any work or undertaking financed  in  whole  or  in 
part under this part for the primary purpose of acquiring,  constructing,  or 
rehabilitating housing for low, very low, or extremely low income  households 
in need  of  housing.   An  undertaking  may  include  any  buildings,  land, 
equipment, facilities, or other real or personal property that is  necessary, 
convenient, or desirable in connection with a development, including but  not 
limited to streets, sewers, utilities, parks, site preparation,  landscaping, 
and other non-housing facilities determined to be necessary,  convenient,  or 
desirable.
  (r)  "HUD"  means  the  United  States  department  of  housing  and  urban 
development,  the  federal  department  responsible  for  the  major  housing 
programs in the United States.
  (s)  "Lookback"  means  the  process  of  reviewing  an  intended  proposed 
distribution of program funds in a program year to ensure compliance with the 
earmark requirements provided in the statute and these rules.
  (t) "Low income household" means a person, a family, or  unrelated  persons 
living together whose adjusted household income is more than 50% but not more 
than 60% of the median income, as determined by the authority.
  (u) "Michigan housing  and  community  development  fund"  means  the  fund 
created in MCL 125.1458a.
  (v)  "Michigan  housing  and  community  development  programfund  advisory 
committee"   means   the   programcommittee   created   inpursuant   to   MCL 
125.1458b.1458e.
  (w) "Michigan housing and community development program" means the  program 
created in MCL 125.1458b.
  (x) "Mixed use buildings" means buildings that can be used for more than  1 
purpose, and in any combination, including, but not limited  to,  residential 
housing combined with either commercial or retail space.	
  (y) "NOFA" means a notice of funding availability issued pursuant  to  this 
rule and the applicable statutory law governing the program.
  (z) "Not-for-profit corporation" means a public or private corporation that 
meets all of the following: 
  (i) Is organized under state or local laws.
  (ii) Has no part of its net earnings inuring to the benefit of any  member, 
founder, contributor, or individual. 
  (iii) Has a current tax exemption ruling from the internal revenue  service 
(IRS) under  section  501(c)(3),  a  charitable,  nonprofit  corporation,  or 
section 501(c)(4), a community or civic organization, of the internal revenue 
code of 1986, as evidenced by a certificate from the IRS that is  dated  1986 
or later. The  exemption  ruling  must  be  effective  on  the  date  of  the 
application and must continue to be effective throughout the  length  of  any 
contract  agreements;  or  classification  as  a  subordinate  of  a  central 
organization non-profit under the internal revenue code, as  evidenced  by  a 
current group exemption letter, that is dated 1986 or  later,  from  the  IRS 
that includes the applicant. The group  exemption  letter  must  specifically 
list the applicant. 
  (iv) A private nonprofit organization's  pending  application  for  section 
501(c) (3) or (c) (4) status does not comply with the tax status requirement.
  (aa)  "Persons with disabilities" means a household composed of 1  or  more 
persons, at least 1 of whom is a person  who  has  a  disability  that  is  a 
physical or mental impairment that substantially limits 1 or more major  life 
activities; has a record of such impairment; or is regarded as having such an 
impairment as defined in the developmental disabilities assistance  and  bill 
of rights act (42 U.S.C. §15002).
  (bb) "Persons with special needs" means adult individuals or categories  of 
adult individuals determined by the authority  to  have  unmet  housing   and 
supportive service needs and may include any household composed of 1 or  more 
persons with physical, mental, or emotional impairment of long-term duration, 
including, but not limited to, alcohol and/or drug addictions,  persons  with 
disabilities including profound deafness and the legally  blind,  victims  of 
domestic violence, persons with HIV/AIDS, homeless populations, migrant  farm 
workers, and individuals that are recipients of Supplemental Security  Income 
(SSI) or Social Security Disability Insurance (SSDI) benefits.   In  addition 
to a physical, mental, or  emotional  impairment,  the  person  must  have  a 
substantial and sustained need for supportive services assistance in at least 
two of  the  following  life-skills  areas  in  order  to  successfully  live 
independently:  
  (i) The ability to independently meet personal care  needs,  economic  self 
sufficiency (capacity for sustained and successful functioning is vocational, 
learning and employment contexts).
 (ii) Use of language (ability to effectively understand, be understood,  and 
handle communication as needed on a daily and ongoing basis).
 (iii) Instrumental living skills (managing  money,  getting  around  in  the 
community, grocery shopping, complying with prescription  requirements,  meal 
planning and preparation, mobility).
 (iv) Self direction skills (making decisions/choices about one's  day-to-day 
activities and regarding one's future.)   "Persons with special needs"  shall 
also include persons legally responsible for caring for persons with  special 
needs.
  (cc) "Predevelopment costs" means reimbursable costs, related to a specific 
eligible housing, downtown, or adjacent neighborhood project, that  meet  all 
of the following:
  (i) Predevelopment project costs that are determined to  be  customary  and 
reasonable by the authority, including but not limited to,  consulting  fees, 
architectural fees, engineering fees, and costs related to the engagement  of 
a development team, costs related to establishing  site  control,  and  costs 
related to title clearance. 
  (ii) Pre-construction project costs that are determined to be customary and 
reasonable by the authority, including but  not  limited  to,  the  costs  of 
obtaining  architectural  plans   and   specifications,   zoning   approvals, 
engineering studies, and legal fees.  
  (iii)  Predevelopment  costs  do  not  include   general   operational   or 
administrative costs.
  (zd) "Project" means those activities defined under MCL 125.1458C.
  (ee) "Recipient" means an  eligible  applicant  receiving  funds  or  other 
assistance under the program.   The  term  recipient  shall  also  include  a 
subrecipient and any requirement applying to a recipient shall likewise apply 
to a subrecipient.
  (ff) "Rental housing project" means a housing development consisting  of  1 
or more dwelling units that will be rented to individuals or families meeting 
applicable occupancy and income requirements related to  the  nature  of  the 
housing unit or development.
  (gg) "RFP" means "request for proposals."  An RFP is an announcement  of  a 
willingness to consider proposals requesting the awarding  of  program  funds 
for a particular use or uses related to the fund or program.
  (hh) "Special purpose entity" means a legal entity created for the  primary 
purpose of sponsoring, originating, creating, sustaining,  or  assisting  the 
provisioning of housing to low, very low, or extremely low income  households 
the costs of which, if not funded from other sources,  are  reasonably  fully 
payable out of the persons monthly income, including earned  income,  grants, 
or other public or non-public assistance. 
  (ii) "State" means the state of Michigan  and  any  state  level  component 
units thereof.
  (jj) "Statute" means the state housing development authority act  of  1966, 
1966 PA 346, MCL 125.1401 et seq.
  (kkgg) "Supportive housing" means a rental housing project in which some or 
all of the units are targeted to persons with household incomes at  or  below 
30% of area median income and  that  provide  services,  either  directly  or 
contracted for, to those persons with special needs that include, but are not 
limited to, mental health  services,  substance  abuse  services,  counseling 
services, and daily living services.	
  (ll) "Very low income household" means a person,  a  family,  or  unrelated 
persons living together whose adjusted household income is not more than  50% 
of the median income, as determined by the authority.

  History: 2008 AACS; 2009 MR 8, Eff. Apr. 28, 2009.


R 125.192  (1) Housing and community development program funds may be  used 
for the following activities:
  (a) Acquisition activities.   Acquisition  in  whole  or  in  part  by  the 
recipient, by purchase, long-term lease,  donation,  or  otherwise,  of  real 
property (including air rights, water rights, rights-of-way,  easements,  and 
other interests therein) for any purpose authorized by the program.
  (b) Rehabilitation, clearance, and remediation activities.   Rehabilitation 
activities include  clearance,  demolition,  and  removal  of  buildings  and 
improvements, movement of structures to other sites, and remediation of known 
or suspected environmental contamination for a current  or  proposed  housing 
development or project located in a downtown area or  adjacent  neighborhood. 
Demolition of HUD-assisted or HUD-owned housing units may be undertaken  only 
with the prior approval of HUD. 
  (c) New construction  of  housing  activities  or  projects  located  in  a 
downtown  area  or  adjacent  neighborhood.   Construction   of   a   housing 
development or projects located in a downtown area or adjacent  neighborhood, 
including housing assisted under federal or state law, through the incurrence 
of development costs and predevelopment costs.
  (d) Activities incurring development costs and predevelopment costs.  
  (e)  Preservation  of  existing  housing  or  activities  related  to   the 
preservation of existing housing.
  (f) Activities related to community  development  projects,  infrastructure 
improvements,  economic  development  projects,   blight   elimination,   and 
community  facilities.  Activities  under   this   category   shall   include 
acquisition, construction, reconstruction, rehabilitation or installation  of 
community facilities and infrastructure improvements or other  incurrence  of 
development costs or predevelopment costs carried out by  the  recipient.  In 
undertaking such activities, design features and improvements  which  promote 
energy efficiency may be included.  Such  activities  may  also  include  the 
execution of architectural design features and similar treatments intended to 
enhance the  aesthetic  quality  of  facilities  and  improvements  receiving 
assistance. Such community  facilities  include,  but  are  not  limited  to, 
shelters for the homeless;  battered  spouse  shelters;  halfway  houses  for 
run-away children, drug offenders  or  parolees;  group  homes  for  mentally 
retarded persons and temporary housing for disaster victims. 
  (g) Activities incurring insurance costs related to any purpose  authorized 
by the program.
  (h) Activities involving operating, replacement and other reserves  related 
to any purpose authorized by the program.
  (i) Activities  providing  down  payment  and  other  direct  homeownership 
assistance to low, very low, or extremely low income households.
  (j) Activities providing security deposit assistance to low, very  low,  or 
extremely low income households.
  (k)  Supportive  services  activities  (including  labor,   supplies,   and 
materials) for Activities providing  foreclosure  prevention  or  foreclosure 
assistance to low, very low, or extremely low  income  households,  INCLUDING 
BUT NOT LIMITED TO THOSE CONCERNED WITH EMPLOYMENT, CRIME  PREVENTION,  CHILD 
CARE,  HEALTH,  DRUG  ABUSE,  EDUCATION,  FAIR  HOUSING  COUNSELING,   ENERGY 
CONSERVATION, WELFARE,  HOMEBUYER  DOWNPAYMENT  ASSISTANCE,  OR  RECREATIONAL 
NEEDS TO A PERSON, PERSON WITH DISABILITIES OR PERSON WITH SPECIAL NEEDS.  TO 
BE ELIGIBLE FOR ASSISTANCE, A SUPPORTIVE SERVICE MUST BE EITHER A NEW SERVICE 
OR A QUANTIFIABLE INCREASE IN THE LEVEL OF AN  EXISTING  SERVICE  ABOVE  THAT 
WHICH HAS BEEN PROVIDED IN THE 12 CALENDAR MONTHS BEFORE  THE  SUBMISSION  OF 
THE FUNDING APPLICATION. .
  (l) Activities related to individual development accounts established under 
the individual or family development account program act, 2006  PA  513,  MCL 
206.701 to 206.711.
  (m) Activities related to ending homelessness.  
  (n) The provision of assistance either through the  recipient  directly  or 
through public and private organizations, agencies, and  other  subrecipients 
(including nonprofit and for-profit  subrecipients)  to  facilitate  economic 
development projects or activities that support housing development that does 
the following:
  (i) Provides financial support for the  establishment,  stabilization,  and 
expansion of business enterprises.
  (ii) Provides technical assistance, advice, and business  support  services 
to  owners  of  business  enterprises   and   persons   developing   business 
enterprises. 
  (iii) Provides general support, including, but not limited to, peer support 
programs, counseling, child care, transportation, and other similar services, 
to owners of business enterprises and persons developing business enterprises.
  (iv) Assistance under this subdivision may also include training, technical 
assistance, or other  support  services  to  increase  the  capacity  of  the 
recipient or subrecipient to carry out the activities under this subdivision.
  (o)  Assistance  activities  provided  to  public  or  nonprofit  entities, 
including municipalities and land bank fast track authorities organized under 
the land bank fast track act,  2003  PA  258,  MCL  124.751  to  124.774,  to 
increase the capacity of such entities to carry out program eligible  housing 
development, neighborhood revitalization or economic development activities. 
 (p) Predatory lending prevention or relief.
 (q) Any other housing and community development fund or  program  activities 
authorized under the authority's act.
  (2) Ineligible applicants include the following:
  (a) An applicant, recipient,  or  an  entity  in  which  the  applicant  or 
recipient has or had a controlling interest, either failed to  submit  or  is 
now delinquent in providing an explanation, evidence of corrective action  or 
a payment of disallowed costs or fees  as  a  result  of  a  program  funding 
monitoring review. 
  (b) An applicant, recipient,  or  an  entity  in  which  the  applicant  or 
recipient has or had a controlling interest, is currently delinquent  on  any 
loan payments or any fees due and payable to the authority. 
  (c) An applicant, recipient,  or  an  entity  in  which  the  applicant  or 
recipient has  or  had  a  controlling  interest,  has  been  or  is  barred, 
suspended, or terminated from procurement in a state or  federal  program  or 
listed  in  the  list  of  parties  excluded  from  federal  procurement   or 
non-procurement programs or  has  otherwise  been  debarred  by  HUD  or  the 
authority. 
  (d) Any individual acting as an owner, member, principal, officer,  manager 
or key employee of the applicant,  recipient,  or  an  entity  in  which  the 
applicant or recipient has or had a controlling interest, has been  convicted 
of  a  state  or  federal  felony  crime  involving  fraud,  bribery,  theft, 
misrepresentation of material  fact,  misappropriation  of  funds,  or  other 
similar criminal offenses within  fifteen  years  preceding  the  application 
deadline.
  (e) An applicant, recipient,  or  an  entity  in  which  the  applicant  or 
recipient has or had a controlling  interest,  at  the  time  of  application 
submission is subject to any of the following:
  (i) Enforcement or disciplinary action under state  or  federal  securities 
law or by the NASD. 
  (ii) A federal tax lien.
  (iii) An enforcement proceeding with any governmental entity.
  (f) An applicant, recipient,  or  an  entity  in  which  the  applicant  or 
recipient has or had a controlling interest has open and/or unresolved  audit 
issues with HUD or the authority related to this program  or  other  programs 
administered by HUD or the authority.
  (g) A  submitted  application  is  incomplete;  lacks  required  supporting 
documentation; or is so unclear or disjointed that, in the discretion of  the 
authority, it cannot reasonably be reviewed to  determine  whether  it  meets 
program criteria. If an application is determined to be  ineligible  pursuant 
to this rule, the application will be terminated.  To  the  extent  that  the 
authority staff was able to complete a limited application  review,  specific 
reasons for the authority's determination of ineligibility shall be  included 
in the termination letter to the applicant.
  (h) An applicant or recipient or a person who  has  or  had  a  controlling 
interest in the applicant or recipient has an ownership interest or exercises 
control of 1 or more rental housing  properties  in  the  state  of  Michigan 
subject to a regulatory agreement or tax credit regulatory agreement with the 
authority and is in material noncompliance with such regulatory agreement  or 
tax credit regulatory agreement. 
  (i) Any application that includes financial participation by a person  who, 
during the 5-year period preceding the date of the bid  or  award,  has  been 
convicted of violating a federal law in connection with a contract awarded by 
the federal government for relief, recovery, or reconstruction efforts  as  a 
result of any disaster occurring after January 1, 2000,  or  was  assessed  a 
federal civil or administrative penalty in relation to such a contract. 
  (j) Applications for proposals which  cause  or  result  in  the  permanent 
displacement of low, very low, or extremely low income households.  Low, very 
low, or extremely low income households who may be temporarily  displaced  by 
the rehabilitation of affordable housing may be eligible for compensation  of 
moving and relocation expenses.  If  a  recipient  violates  the  dislocation 
provisions of this subsection, that recipient shall repay program monies  and 
the landlord/developer must pay the affected parties' costs  and  all  moving 
expenses.

  History: 2008 AACS; 2009 MR 8, Eff. Apr. 28, 2009.


  PART 9A. APPLICATION, EVALUATION, AND PROGRAM REQUIREMENTS


R 125.193 Application procedures and requirements.  
  Rule 193. (1) Applications received by the authority in response to a  NOFA 
or RFP shall be handled in the following manner: 
  (a) The authority will accept applications on an ongoing basis  during  the 
application acceptance period as specified in the NOFA or RFP. 
  (b) Applications submitted and accepted by the authority shall be  reviewed 
in the following manner:
  (i)  Authority  staff  shall  review  all  applications  for   eligibility, 
threshold,  and  selection  criteria  and   ensure   that   all   application 
requirements have been met. 
  (ii) Authority staff shall review applications to ensure that they  are  in 
accordance with the NOFA or RFP and applicable law.  
 (iii) Authority staff may issue a notice of any administrative  deficiencies 
related to applications reviewed. 
  (iv) Authority staff shall conduct  a  comprehensive  review  of  financial 
feasibility for development activities proposed  in  any  application  deemed 
acceptable under subdivision (b)(i) to (b)(v) of this subrule. 
  (v) Authority staff shall create a report  setting  forth  the  recommended 
terms, amount, and any conditions related to the  proposed  loan,  grant,  or 
project. 
  (2) Upon completion of staff review and any associated  resolution  of  any 
applicable  administrative  deficiencies,  applications  which   the   review 
committee reviews, scores, and selects for award will be recommended  to  the 
authority for approval. 
  (3) If an application contains deficiencies which, in the determination  of 
the authority staff, require clarification or correction, the authority staff 
may request clarification or correction of the  administrative  deficiencies, 
including threshold and/or selection criteria documentation and/or  financial 
feasibility analysis. 
  (a) Requests for clarification or correction may be sent to  the  applicant 
in the form of a facsimile, e-mail, and/or be relayed to the applicant via  a 
telephone call and documented in the application file. 
  (b) An applicant may not change or supplement any part of an application in 
any manner after submission to the authority, increase the award  amount,  or 
revise the unit mix (both income levels and bedroom mixes), except to  remedy 
an administrative deficiency. 
  (4) The authority may decline to  fund  any  application  if  the  proposed 
activities do not, in the authority's sole determination, represent a prudent 
use of the housing and community development fund funds. 
  (5) The authority is not obligated to proceed with any action pertaining to 
any applications which are received, and may decide it is in the  authority's 
best interest to refrain from pursuing any selection process. 
  (6) The authority may negotiate individual elements of any application. 
  (7) The authority may  conduct  a  site  review.  Applicants  must  receive 
recommendation for approval from the authority staff and the review committee 
to be considered for funding by the authority. 

  History: 2008 AACS; 2009 MR 8, Eff. Apr. 28, 2009.


R 125.194 Evaluation criteria for funding; other program requirements.
  Rule 194.  (1) Requests for funding scoring the  highest  on  the  criteria 
explained in subrule (2) of this rule are most likely to be awarded funds.
  (2) The following criteria will be used in evaluating the responses to  any 
NOFA or RFP:  
  (a) To be eligible for funding, an applicant must first demonstrate that it 
meets each of the following threshold criteria: 
  (i) The application is consistent with the requirements established in  the 
statute, this rule, the NOFA, or the RFP. 
  (ii) If the application involves either a rental housing project or a  home 
ownership project, the application requests funding for a project which  sets 
aside at least 20% of the rental units or housing units in  the  project  for 
households earning not more than 60% of the median income.
  (iii) The application includes a letter of support from the highest ranking 
elected official for each of the jurisdictions served by the proposed project.
  (iv)  The  application  meets  the  readiness   to   proceed   requirements 
established in the NOFA or the RFP.
  (v) Any outstanding housing and community development  fund  predevelopment 
loans for the same proposed development site must be paid in full at the time 
of loan closing for the current requested funds.
  (b) Evaluation factors used to evaluate and  score  applications,  as  more 
fully described in a NOFA or RFP, will include at  a  minimum  the  following 
factors:
  (i) The extent to which the proposal or project represents  the  leveraging 
of program funds.
  (ii) The ability of the applicant, recipient, or  both  to  administer  the 
funding award effectively and deliver results within program timelines. 
  (iii) The extent to which the  proposal  or  project  helps  meet  the  25% 
earmark provided in the statute for  rental  housing  projects  that  do  not 
qualify under preferences for special population groups, or other preferences 
contained in the allocation plan.
  (iv) The extent to which the proposal or project helps meet the 30% earmark 
provided in the  statute  for  projects  that  target  extremely  low  income 
households,  including  developing  housing  for  the  homeless,   supportive 
housing, transitional housing, and permanent housing. 
   (v) The extent to which the proposal helps meet the statutory  requirement 
that a portion of the fund be expended for persons with  physical  or  mental 
handicaps and persons living in eligible distressed areas.
  (3)  Other program requirements include the following: 
  (a) All uses of program funds  shall  comply  with  the  applicable  income 
limitations  contained  in  the  act,  these  rules,  the  annual  plan,  the 
applicable NOFA or RFP, and any statements or  representations  made  in  any 
application or other documentation submitted as a part  of  any  application, 
reporting or other monitoring related to any award of program funds.
  (b) A rental housing project assisted by the fund must set aside  at  least 
20% of the housing units in the project for households earning not more  than 
60% of the area median income.
  (c) A home ownership project assisted by the fund must set aside  at  least 
20% of the housing units in the project for households earning not more  than 
60% of the area median income.
  (d) If the housing funded by the program is rental housing,  the  owner  or 
manager of the housing must agree in writing not to evict  a  tenant  without 
just cause, as defined in section 44a of 1933 (Ex Sess) PA 18, MCL 125.694a.
  (e) All assistance for housing and real property acquired or  supported  by 
program funds shall include  an  agreement,  restriction,  or  real  covenant 
related  to  the  recapture  of  program  funds  upon  sale,  conversion,  or 
disposition of the property if the recapture provisions of  these  rules  are 
triggered.

  History: 2008 AACS; 2009 MR 8, Eff. Apr. 28, 2009.


R 125.195  Biennial plan; allocations; earmarks; carryover.
  Rule 195. Pursuant to the statute, the authority shall biennially  develop, 
propose, and establish a biennial plan related to the program.  The  biennial 
plan shall be issued pursuant to the requirements of the statute and  all  of 
the following:
  (a) The authority  shall,  as  a  part  of  the  biennial  plan,  issue  an 
allocation plan related to the disbursement of program funds.   
  (b) The authority's biennial plan and  allocation  plan  shall  contain  an 
allocation formula related to the disbursement of program funds.
  (c) The following statutory earmark and lookback procedures shall apply  to 
any biennial plan, allocation plan, and allocation formula:
  (i)  The following statutory earmarks shall be  included  in  the  biennial 
plan, allocation plan, and allocation formula:
  (A) Not less than 25% of the dollars used for loans or grants made  in  any 
program year shall be earmarked for  rental  housing  projects  that  do  not 
qualify under preferences for special population groups, or other preferences 
contained in the allocation plan.
  (B) Not less than 30% of the dollars used for loans or grants made  in  any 
program year shall be earmarked for projects that target extremely low income 
households  and  include  housing  for  the  homeless,  supportive   housing, 
transitional housing, or permanent housing.
  (C) A portion of the fund shall be expended for housing  for  persons  with 
physical or mental handicaps and persons living in eligible distressed areas.
  (ii) After the completion of any application  receipt,  review,  selection, 
and approval process  related  to  any  biennial  plan,  allocation  plan  or 
allocation formula in any program year, the authority  shall  look  back  and 
review the intended distribution of the  program  funds  for  that  year  and 
determine whether the earmark requirements in this rule and in  statute  will 
be met under the proposed distribution.  If the earmark requirements are  not 
met, and eligible applications meeting the  earmark  requirements  have  been 
received, accepted, and have not otherwise been  approved  for  funding,  the 
authority  shall  revise  the  proposed  distribution  to  comply  with   the 
applicable earmark requirements.  The revised plan shall be presented to  and 
approved by the authority.
  (iii) Uncommitted funds at the end of any program  year  shall  be  carried 
over and used under  the  applicable  biennial  plan,  allocation  plan,  and 
allocation formula related to any subsequent program year.

  History: 2008 AACS; 2009 MR 8, Eff. Apr. 28, 2009.


R 125.196 Reporting requirements;  program  periods;  compliance  monitoring; 
review; recapture.
  Rule 196. (1) The following provisions regarding reporting apply:
  (a) All recipients of program funds shall report back to the authority on a 
semiannual basis about their use  of  program  funds.   The  authority  shall 
collect information from recipients to establish that  the  funds  are  being 
spent correctly and to measure the results or  performance  of  its  spending 
against the objectives of the program.
  (b) The authority will establish as a part of each biennial plan  reporting 
forms that shall be submitted by the recipients on a semiannual basis.  These 
reports shall include both a performance  monitoring  form  and  a  financial 
monitoring form.
  (c) The performance monitoring form shall be signed by the chief  executive 
officer of the recipient and shall analyze the management performance of  the 
recipient, specifically including a description of the following items: 
  (i) What was done with the program funds and  whether  what  was  done  was 
consistent with the goals and strategies outlined in the application.
  (ii) How well it was done, including a discussion of how success or failure 
will be measured.
  (iii) Who has benefited from the distribution of program  funds,  including 
details on results.
  (d) The financial monitoring form shall be signed by  the  chief  financial 
officer of the recipient and shall analyze the financial performance  of  the 
recipient.  Program funds shall be  used  in  an  efficient,  effective,  and 
appropriate  manner,  consistent  with  program  objectives  and  priorities, 
including community needs.  Program funds shall  also  be  appropriately  and 
properly accounted for with documentation that adequate safeguards have  been 
instituted by the recipient to ensure that there is  not  misuse  of  program 
funds.  
  (2)  The following provisions apply to program periods and extensions:
  (a) The initial program period for any loan  or  grant  awarded  under  the 
program 2 years from date of the award  of  program  funds.   All  activities 
related to the use of program funds shall be  completed  within  this  2-year 
time frame.  Any program monies outstanding on the date which is 2 years from 
the date of the award are subject to the recapture provisions  of  this  rule 
and shall be immediately repaid to the authority.
  (b) Recipients must maintain compliance with each of its contracts with the 
authority. 
  (c) Recipients must comply  with  any  restrictions  that  are  stated  and 
enforced  through  a  regulatory  agreement  or  any  other  legal   document 
associated with any award of program funds.  These restrictions may  include, 
but are not limited to, the following:  
  (i) Rent restrictions.
  (ii) Record keeping and reporting.
  (iii) Income targeting of tenants. 
  (d) The authority monitors compliance with  project  restrictions  and  any 
other covenants by recipient in any housing and  community  development  fund 
agreement. An annual compliance fee of up to $75.00 per unit may  be  charged 
for this review.
  (3) The authority executive director shall  name  a  review  committee  who 
shall meet to consider, review, score, and  recommend  for  approval  program 
funding awards and award  amounts  based  on  applications  received  in  any 
program funding round.  The review committee shall meet  to  formally  review 
the applications and shall make recommendation to the authority regarding the 
total awards to be made in any application year and the amount and  recipient 
of the proposed awards.  Each  member  of  the  committee  shall  complete  a 
scoring sheet detailing the member's evaluation and score of the  application 
on the various evaluation factors or criteria.  The committee shall make  any 
funding award recommendation decisions based on the scoring of these  factors 
or criteria, subject to revision under the applicable earmark requirements.   
All decisions of the committee shall be made based on  the  scoring  outcomes 
and/or by majority vote  as  applicable.   The  authority  shall  have  final 
authority to approve or disapprove of any funding award  recommendation  made 
by the review committee. 
  (4) Recapture of program funds shall be accomplished as follows:
  (a) The authority shall have the power to recapture or de-obligate  program 
funds and program awards in certain circumstances.  The power to recapture or 
deobligate funds  can  apply  to  entire  awards  or  portions  of  awards.   
Recaptured or deobligated funds shall be re-deposited in the fund  and  shall 
be used to make future awards in the current and next applicable program year 
or program funding round.
  (b) The following reasons shall justify the deobligation  or  recapture  of 
program funds:
  (i) Inability of applicant or recipient to execute the program activity and 
obligate the program funds within the initial program period 2-year timeline.
  (ii) Inability of the applicant or recipient to make draw downs of  program 
funds on a regular and timely basis, such that the authority has  grounds  to 
question the overall viability of the project.
  (iii)   Substantial,  significant,  and  lengthy  noncompliance  with   the 
statute, rules, NOFA,  RFP,  application,  biennial  plan,  allocation  plan, 
allocation formula, program funding agreement or any other  documentation  or 
requirement related to any award.  In making the decision on deobligation  or 
recapture in this instance, the authority shall consider whether or  not  the 
non-compliance is due to factors beyond the  applicant's  and/or  recipient's 
control.  
  (iv)  If the total cost of the anticipated program activity  is  less  than 
the total  costs  anticipated  in  the  application  or  other  documentation 
provided by the applicant and/or recipient, the authority can deobligate  the 
portion of the award exceeding the actual costs of the program activity.
  (v)  At the end of the initial program period and any approved extension of 
that period, the unspent funds remaining  in  the  program  account,  project 
account, or any other account  related  to  the  program  activity  shall  be 
recaptured and returned to the fund.  
  (vi)  If the applicant and/or recipient voluntarily returns  the  funds  to 
the authority/fund and ceases all program activity  and  reporting  upon  the 
return of program funds.
  (vii) Any other reason justifying recapture or deobligation approved by the 
authority, upon  notice  to  the  applicant  and/or  recipient  of  both  the 
authority's consideration of a recapture or obligation  decision  and  notice 
that the authority  has  approved  a  resolution  or  motion  evidencing  its 
decision to recapture or deobligate the funds.

  History: 2008 AACS; 2009 MR 8, Eff. Apr. 28, 2009.


R 125.197 Hearings procedures.
  Rule 197. Hearing procedures shall include citizen participation as follows:
  (a) The authority shall  hold  at  least  3  public  hearings  in  separate 
locations throughout the state biennially on the program priorities  for  the 
upcoming 2-year. period.   At  the  hearings,  the  authority  shall  solicit 
comments  from  the  public,  eligible  applicants,  and  administrators  and 
development owners on the housing and community development fund and  program 
rules, guidelines, and  procedures  related  to  the  housing  and  community 
development fund and program. 
  (b) The authority shall consider the comments received at public  hearings. 
Biennially, the authority shall review the performance,  administration,  and 
implementation of the housing and community  development  fund  in  light  of 
public comment it receives. The authority  shall  also  review  the  biennial 
plan, allocation plan and allocation formula,  funding  goals,  and  earmarks 
relating to allocation and award of housing and  community  development  fund 
monies. 
  (c) The authority shall submit an annual report to  the  governor  and  the 
legislature under  MCL  125.1458b  (6).   The  authority  shall  include  the 
statutorily required information in the annual report, as well as  any  other 
information that the authority staff, review  committee  or  authority  board 
believe would enhance  the  understanding  that  the  elected  officials  and 
citizens of the state have regarding the operation of the program.
  (d) After the applicable application deadline related to the NOFA  or  RFP, 
applications  for  housing  and  community  development  funds   are   public 
information subject to release under the freedom of  information  act  (FOIA) 
MCL  15.231  to  15.246,  and  the  authority  shall  afford  the  public  an 
opportunity to comment on proposed housing applications prior to  the  making 
of awards.
 (e) Prior to any proposed change to these rules, the authority shall conduct 
a public hearing in accordance with  the  provisions  of  the  administrative 
procedures act, MCL 24.201 to 24.328.

  History: 2008 AACS; 2009 MR 8, Eff. Apr. 28, 2009.


R 125.198 Michigan housing and community development fund advisory committee
  Rule 198.  Pursuant to MCL 125.1458e, the authority shall seek  the  advice 
of the Michigan housing and community development fund advisory committee  on 
all of the following:
  (a) Recommendations for the biennial allocation  plan  required  under  MCL 
125.1458b.
  (b)  Fund  expenditure  review,  including  whether  the  expenditures  are 
distributed fairly  and  equitably,  whether  the  expenditures  satisfy  the 
housing needs and priorities in this  state,  and  whether  the  expenditures 
satisfy the economic needs and priorities in this state. 

  History: 2009 MR 8, Eff. Apr. 28, 2009.

R 125.199   Records.
Rule 199.  Records maintenance requirements  for  applicants  and  recipients 
include the following:
  (a) In addition to any  regular  reporting  obligations  provided  under  R 
125.193, applicants, recipients, or both are required to maintain records  on 
each of  the  following  issues  and  shall,  upon  the  written  request  of 
authority, submit information to the authority on  any  program  activity  or 
administration issues,  which  may  include,  but  are  not  limited  to  the 
following:
  (i) Such information as may be necessary to determine whether a project  is 
benefiting low, very low, and extremely low-income households.
  (ii) The monthly rent or mortgage payment for each dwelling  unit  in  each 
structure assisted.
  (iii) Such information  as  may  be  necessary  to  determine  whether  the 
applicant and/or  recipient  has  carried  out  their  housing  or  community 
development activities  in  accordance  with  the  requirements  and  primary 
objectives of the housing and community  development  fund  and  implementing 
regulations.
  (iv) The size and income of the household for each unit occupied by a  low, 
very low, and extremely low-income households.
  (v) Data on the extent to which any racial and ethnic group and  households 
have applied for and benefited from any project or activity funded  in  whole 
or in part with funds made available under this program. This data  shall  be 
updated annually.
  (vi) A final statement of accounting upon completion of the project.
  (vii)  Any  other  information  reasonably  within   the   applicant's   or 
recipient's ability to determine and to report to the  authority  related  to 
the award.
  (b) Applicants or recipients, or both, shall maintain records pertinent  to 
the tenant's files for at least 3 years.
  (c) Applicants or recipients, or both, shall maintain records pertinent  to 
funding awards including, but not limited to, project costs and certification 
work papers for at least 5 years.
  (d) Applicants or  recipients,  or  both,  shall  maintain  records  in  an 
accessible location.

  History: 2008 AACS.


     PART 10. IDENTITY OF INTEREST WITH VENDORS TO AUTHORITY-FINANCED
                               DEVELOPMENTS


R 125.201    Applicability.
  Rule  201.  The  rules  contained  in  this  part  shall   apply   to   all 
transactions  that  involve  the  supply  of   goods    and    services    to 
authority-financed  housing  developments  between  the   owners    or    the 
management agents of the developments and  vendors  who   supply   goods   or 
services to those developments.

  History:  1991 AACS.


R 125.202    Identity of interest; "member of the family" defined.
  Rule 202. (1) Any contractual relationship between either   an   owner   or 
management agent and a vendor described in subrule (2) of  this  rule   shall 
constitute an identity of interest.
 (2) An identity  of  interest  shall  exist  if   any   of   the   following 
conditions occurs:
 (a) Either the owner or management  agent,   or   any   officer,   director, 
stockholder, partner, or joint venturer of either the  owner  or   management 
agent, has a financial interest in the vendor.
 (b) Either the owner or management  agent,   or   any   officer,   director, 
stockholder, partner, or joint venturer of either the  owner  or   management 
agent, is also  an  officer,  director,  stockholder,   partner,   or   joint 
venturer of the vendor.
 (c) Either the owner or management  agent,   or   any   officer,   director, 
stockholder, partner, or joint venturer of either the  owner  or   management 
agent, is also the vendor.
 (d) A member of the family of either the owner or management  agent,  or  of 
any officer, director,   stockholder,   partner,   or   joint   venturer   of 
either the owner or  management  agent,  is  the  vendor   or   an   officer, 
director, stockholder, partner, or joint venturer of the vendor  or   has   a 
financial interest in the vendor. For purposes of this   part,   "member   of 
the family" means any person who is related to the party   in   question   by 
blood, marriage, or operation of law.

  History:  1991 AACS.


R 125.203    Requirements  for  conducting  business   with    identity    of 
interest vendors.
  Rule 203. Owners and management agents  shall  conform  to   all   of   the 
following requirements when conducting business  with   vendors   with   whom 
there is an identity of interest:
 (a) Both the owner and  management  agent   shall   inform   the   authority 
division of management and reinvestment of any proposed  vendor   with   whom 
there is an identity of interest. Such  notification   shall   be   submitted 
concurrent with submission of the development  operating   budget,   but   at 
least once per year.
 (b) The owner and management agent shall submit a  certified  disclosure for 
each proposed vendor with whom there is an identity of interest  which  lists 
the names of all of the following persons:
 (i) All owners and managers of vendors that are sole proprietorships.
 (ii)  All  copartners  or  general  partners    of    vendors    that    are 
copartnerships or limited partnerships.
 (iii) All joint venturers of vendors that are joint ventures.
 (iv) All directors, officers,  and  shareholders   of   vendors   that   are 
corporations.
 (c) The certified disclosure shall list, for  each   person   described   in 
subdivision (b) of this rule the names of the   individuals   involved   with 
the owner or management agent with whom there is an  identity   of   interest 
and the extent or degree of  such  identity  of   interest.   The   certified 
disclosure shall also contain other information  as   the   authority   shall 
require, such as the following:
 (i) Federal tax identification number of all vendors  with  whom  there   is 
identity of interest.
 (ii) The location of all offices that contain  business   records   of   the 
vendors with whom there is an identity of interest.
 (iii) The names and addresses of the bookkeepers  and  accountants  of   the 
vendors with whom there is an identity of interest.
 (d) The certified disclosure shall be submitted on such  form  as  shall  be 
designated by the authority and  shall  be  submitted   together   with   the 
submission described in subdivision (a) of this rule or,  if   the   proposed 
vendor is not listed  on  such  submission,  at  the  time   the   owner   or 
management agent requests approval to contract with a  proposed  vendor  with 
whom there is an identity of interest.
 (e) The owner and management  agent  shall   submit,   together   with   its 
certified disclosure, a copy of  the  organizational   documents   for   each 
proposed vendor with whom an identity of interest is shared.
 (f) The authority shall have the right to audit the  books  of  the   vendor 
with whom there is an identity of interest to   determine   whether   amounts 
paid to identity of interest vendors were reasonable and  whether  there  has 
been  compliance  with  applicable  restrictions  on   return.   The   owner, 
management agent, and proposed vendor shall   acknowledge   the   authority's 
right to conduct such an audit in the certified disclosure.
 (g) Both the owner and management agent shall submit, to the   authority,  a 
request for approval to use a proposed vendor   with   whom   there   is   an 
identity of  interest.  Neither  the  owner  nor   management   agent   shall 
contract for goods or services from any  vendor  with  whom   there   is   an 
identity of interest until the proposed  vendor  and   contract   amount   is 
approved by the authority. If  an  owner  or  management   agent   enters   a 
contract for goods or services beyond the  goods   or   services   previously 
approved by the authority, or if the contract price  increases   beyond   the 
prices previously approved by the authority, then  an   additional   approval 
shall be obtained.
 (h) The authority may, upon a request from the owner or management agent and 
after review of the  disclosure  required  pursuant  to  the  provisions   of 
subdivisions (b) to (f) of this  rule,  determine  that   the   identity   of 
interest  between  the  owner  and  agent  is  insignificant.   If   such   a 
determination is made, the owner and management agent need  not  comply  with 
the provisions of subdivision (i) of this rule.
 (i) Unless compliance with this subdivision is  excused  pursuant   to   the 
provisions of subdivision (h) of this rule, all requests  for   approval   of 
proposed vendors shall be accompanied by a  detailed   explanation   of   the 
goods or services to be provided by the proposed vendor and not less  than  3 
bids for such goods and services. The 3 bids shall include  a  bid  from  the 
vendor with whom there is an identity of interest.
 (j) Requests for approval  of  a  proposed   vendor   shall   be   submitted 
concurrent with the submission of the development operating  budget  and  any 
other time that the owner or management agent wishes to   contract   with   a 
vendor with whom there is an identity of  interest.   However,   a   proposed 
vendor and contract amount need be approved only 1 time  per  operating  year 
per development, unless the vendor supplies goods or  services   beyond   the 
goods or services previously approved by the  authority   or   the   contract 
price increases beyond the prices previously approved by the authority.

  History:  1991 AACS.


R 125.204    Sanctions; "excessive costs" defined.
  Rule 204. (1) If an  owner  or  management  agent  is  found   to   be   in 
violation of these rules concerning identity of interest,  the  authority, or 
the officers or employees to  whom   it   shall   delegate   authority,   may 
impose the following sanctions in addition to any  other  remedies  available 
through contractual documents or at law or equity:
 (a) On the first occurrence of  a  violation,  either   or   both   of   the 
following sanctions may be imposed:
 (i) The owner or management agent  may  be   required   to   reimburse   the 
development operating account for all excessive costs,   as   determined   by 
the authority, incurred as a result of the contract with  the   vendor   with 
whom there is an identity of interest.
 (ii) The owner and management agent found to  be   in   violation   may   be 
prohibited from using any  vendor  with  whom  there  is   an   identity   of 
interest for a period of 1 year.
 (b) For each violation after the first, the  following  sanctions   may   be 
imposed, as applicable:
 (i) The owner or management agent  may  be   required   to   reimburse   the 
development operating account for all excessive costs,   as   determined   by 
the authority, incurred as a result of the contract with  the   vendor   with 
whom there is an identity of interest.
 (ii) If the violation involves a vendor who has  an  identity  of   interest 
with the management agent, then either or both of  the  following   sanctions 
may be imposed:
 (A) The management agent's management agreement may be terminated and  a new 
management agent shall be hired.
 (B) The vendor who shares the identity of  interest  with   the   management 
agent may be barred from  doing  business   with   other   authority-financed 
developments managed by the same management agent.
 (iii) If the violation involves a vendor who has  an  identity  of  interest 
with the owner, then the owner and its management agent  may  be   prohibited 
from doing business with the  particular  vendor  at   the   development   in 
question for a period of 5 years.
 (2) As used in this rule, the term "excessive   costs"   means   all   costs 
which would not have been incurred by the  development  if   the   owner   or 
management agent, or both, had exercised reasonable  business  judgment   and 
obtained only those goods and services reasonably necessary for  operation of 
the development at competitive prices.

  History:  1991 AACS.


    PART 11. DEBARMENT AND SUSPENSION FROM PARTICIPATION IN AUTHORITY
                         PROGRAMS AND TRANSACTIONS


R 125.211    Applicability; sanctions.
  Rule 211. (1) The provisions of this part shall apply to  any  program   or 
transaction funded or administered by the authority, including  any  of   the 
following:
 (a) Grants, assistance contracts, loans,  subsidies,  awards,  loan  service 
contracts, allocations,  or  contracts  related  to   federal   tax   credits 
administered by the authority.
 (b) Participation or agency contracts for authority programs.
 (c) Professional or technical service contracts or subcontracts.
 (2) Sanctions imposed pursuant to this part shall  not  preclude   a   party 
from  the  purchase  from  the  authority  of   housing    developments    or 
single-family homes which the authority has acquired  through  foreclosure or 
deed in lieu of foreclosure if the acquisition is on a  cash  basis  or  made 
with financing from sources other than the authority.
 (3) Sanctions imposed pursuant to this part shall   not   bar   any   person 
from receipt of any funds, credit, or  benefit  to  which   the   person   is 
otherwise entitled under federal or state law and for which the  authority is 
solely the program  administrator;   however,   this   exception   does   not 
enable or authorize participation in the program  involving  the   applicable 
funds, credit, or benefit beyond the mere receipt of such  funds,  credit, or 
benefit. This provision does not  prevent  sanctions  under  this  part where 
the authority acts as program administrator  and  also  has  the  ability  to 
impose additional requirements  beyond  those  requirements   of   state   or 
federal law as a prerequisite to receipt of the respective funds,  credit, or 
benefit.
 (4) Persons are subject to the provisions of   this   part   whether   their 
involvement is as  a  contractor,  participant,  or   one   receiving   funds 
directly or indirectly from a contractor or  a   participant.   Persons   are 
subject to the provisions of this part whether  or  not   the   conduct   for 
which a sanction is  imposed  occurred  while  they  were   engaged   in   an 
authority program or transaction. Persons are subject to  the  provisions  of 
this part whether their actions upon which a sanction is based were  taken in 
their own behalf or on behalf of another person.

  History:  1991 AACS.


R 125.212    Definitions.
  Rule 212. As used in this part:
 (a) "Adequate evidence" means information that is sufficient to   support  a 
reasonable  belief  that  a  particular   act,   omission,   or   event   has 
occurred.
 (b) "Affiliate" means individuals or entities with whom a person  shares  an 
identity of interest as defined in part 10 of these rules.
 (c) "Contractor" means an individual or entity that  does  either   of   the 
following:
 (i) Performs or provides labor or professional  or  technical  services   or 
supplies goods to the authority pursuant to a   contract   or   participation 
agreement.
 (ii) Conducts business with the authority as the agent,  representative,  or 
subcontractor of another contractor.
 (d) "Conviction" means a judgment of guilt in a   criminal   case   by   any 
court of competent jurisdiction, whether by verdict, guilty plea, or  plea of 
nolo contendre, and whether or not the   judgment   has   been   or   is   on 
appeal.
 (e) "Debarment" means action taken to exclude a  person   from   direct   or 
indirect participation in any authority program or transaction whether  as  a 
contractor or participant.
 (f) "Notice" means written communication delivered by  personal  service  or 
sent  either  by  certified   mail,   return   receipt   requested,   or   by 
commercial courier with verification of delivery.
 (g) "Participant" means any person who directly or indirectly takes part  in 
or is involved in an authority program  or  transaction  other  than   as   a 
contractor. Participant includes a person who receives  benefits  or   income 
from or through another participant or contractor.  A  participant   includes 
any of the following:
 (i) Bonding companies.
 (ii) Borrowers.
 (iii) Builders.
 (iv) Mortgagors.
 (v) Management agents.
 (vi) Marketing agents.
 (vii) Owners of housing developments.
 (viii) Recipients of authority subsidies.
 (ix) Grantees.
 (x) Persons employed by, or offering services to, participants, such  as any 
of the following:
 (A) Architects.
 (B) Accountants.
 (C) Attorneys.
 (D) Consultants.
 (E) Engineers.
 (F) Contractors with participants.
 (G) Subcontractors of contractors with participants.
 (h) "Person" means an  individual,  partnership,  corporation,  association, 
unit of government, or other form of legal entity.
 (i) "Respondent" means the persons against whom debarment or  suspension  is 
to be imposed.
 (j) "Suspension" means an action which   immediately   excludes   a   person 
from  direct  or  indirect  participation   in    authority    programs    or 
transactions, whether as a participant  or  contractor,   for   a   temporary 
period pending completion of an investigation or  administrative   or   other 
legal proceeding.

  History:  1991 AACS.


R 125.213    Debarment; causes.
  Rule 213. Debarment may be imposed for any of the following causes:
 (a) Conviction of a criminal offense,  including   a   conviction   for   an 
attempted criminal activity, or civil judgment for an  offense   or   actions 
involving or indicating dishonesty, false pretense, or  misrepresentation.
The following list contains examples of the  type  of   offense   which   may 
result in debarment:
 (i) Fraud.
 (ii) Bribery.
 (iii) Embezzlement.
 (iv) Forgery.
 (v) Falsification of documents or records.
 (vi) Theft.
 (vii) Robbery.
 (viii) Larceny.
 (ix) Receiving and concealing stolen property.
 (x) Obtaining goods, money, or services under false pretenses.
 (xi) Negligent misrepresentation.
 (xii) Price-fixing.
 (xiii) Bid-rigging or other violation of federal or state laws involving the 
submission of bids or proposals.
 (xiv) Violation of  other  federal  or   state   law   involving   illegally 
obtaining or attempting to obtain public or private   goods,   services,   or 
contracts.
 (b) Violation  of  any  federal,  state,  or   authority   law,   rule,   or 
regulation, whether or not in connection  with  an   authority   program   or 
transaction, which indicates dishonesty, lack of   business   integrity,   or 
willful or repeated  failure  to  perform  obligations   in   a   responsible 
manner.
 (c) Violation  of  any  federal,  state,  or   authority   law,   rule,   or 
regulation, whether as a participant or  contractor,   in   connection   with 
either of the following which indicates a willful or  repeated   failure   to 
perform  obligations  in  accordance  with  relevant   laws,    rules,    and 
regulations:
 (i)  Application  for  participation  in    an    authority    program    or 
transaction.
 (ii) Participation in an authority program or transaction.
 (d) Violation of 1 or more contracts or   agreements,   either   public   or 
private, which involves willful or repeated noncompliance  with   the   terms 
and conditions of the  contracts  or  agreements  and   which   indicates   a 
failure or refusal to perform in a responsible manner.
 (e) Debarment or equivalent exclusionary action by  a   public   agency   or 
instrumentality involving substantially the same causes as   set   forth   in 
this rule.
 (f) Loss or suspension of a license or  the  right   to   do   business   or 
practice  a  profession,  the  loss  or  suspension   of   which    indicates 
dishonesty, a lack of integrity, or a failure or  refusal   to   perform   in 
accordance with the ethical standards of the  business   or   profession   in 
question.
 (g) Violation of federal, state, or local civil  rights,  equal  rights,  or 
nondiscrimination laws, ordinances, rules, or regulations.
 (h) Violation  of  provisions  in   contracts   or   agreements   concerning 
nondiscrimination or equal opportunity in employment, housing, or lending.
 (i) Violation of law, rule, regulation,  or   provision   of   contract   or 
agreement involving conflict of interest or an improper  shared  identity  of 
interest.
 (j) Other events, conduct,  or  causes  serious  enough   to   lead   to   a 
determination of dishonesty, a lack of business integrity,  or   willful   or 
repeated failure to perform obligations in a responsible manner.

  History:  1991 AACS.


R 125.214    Debarment procedures.
  Rule 214. (1) Debarment procedures shall be initiated  by   an   authorized 
officer of the authority. Procedures shall commence with the  sending  of   a 
notice of debarment to the respondent.
 (2) A notice of debarment shall be sent to   each   respondent   and   shall 
contain all of the following information:
 (a) That debarment is being proposed.
 (b) The acts or omissions that are  the   grounds   upon   which   debarment 
shall be based.
 (c) The particular provisions of laws,  regulations,  rules,   and   program 
requirements involved.
 (d) The time, location, and nature of the hearing.
 (e) The potential effects of debarment.
 (3) A respondent who receives a notice of debarment shall be entitled  to  a 
hearing on the issue. The hearing will be conducted in  accordance  with  the 
provisions of Act No. 306 of the Public  Acts  of  1969,  as  amended,  being 
S24.201 et seq. of the Michigan Compiled Laws,  which  shall  govern  all  of 
the following:
 (a) Choice and authority of hearing officers.
 (b) Rules of conduct and evidence for hearing.
 (c) Decisions of hearing officers.
 (d) Burdens or levels of proof required.
 (e) Rights of administrative and judicial appeal.
 (4) If the authority official who is to make the  final  decision  has   not 
heard the contested case or read the record, the decision,  if   adverse   to 
the respondent, shall not be made until a written   proposal   for   decision 
has been sent to all parties. Any party who is   adversely   affected   shall 
have 10  days  to  file  written  exceptions  and   arguments.   If   written 
exceptions or arguments are not submitted within 10 days, there  shall  be no 
further proceedings before the issuance of a final decision.
 (5) The final decision of the authority shall be  issued  within   60   days 
after the date of the hearing or, if a proposal for  decision   is   required 
pursuant to the provisions of subrule (4) of this rule, within  60  days   of 
the closing date for submission of written exceptions to  the  proposal   for 
decision, whichever is later.

  History:  1991 AACS.


R 125.215    Debarment; duration.
  Rule 215. Debarment shall be for a period of time  commensurate  with   the 
acts or omissions of the person to be debarred. In general,  a  person  shall 
not be debarred for more than 3  years.  However,  where   the   offense   is 
egregious, a longer period of debarment may be imposed.  If   a   person   is 
suspended  pursuant  to  these  rules  before  debarment,   the   period   of 
debarment shall be reduced by the period of time that the  person  has   been 
suspended.

  History:  1991 AACS.


R 125.216    Debarment; scope and effect.
  Rule 216. (1) The decision to debar a person shall specify  the  scope   of 
debarment. A person can be debarred from 1 or   more   particular   authority 
programs or transactions or from all authority programs and  transactions.
 (2) The decision to debar  a  person,  unless   prohibited   by   law,   may 
terminate existing contracts or agreements between   the   debarred   persons 
and other nondebarred participants or contractors. However,  the  decision to 
debar may allow such contracts or  agreements  to   remain   in   effect.   A 
participant or  contractor  shall  not  renew  or  extend   a   contract   or 
agreement with a debarred person.
 (3) A decision to debar a person may also serve to debar  any  affiliate  of 
such person, if the affiliate is named in the notice to debar  and  given  an 
opportunity to participate in the debarment hearing.
There need not be shown any participation or  knowledge   of   the   improper 
conduct that led to the decision to debar.

  History:  1991 AACS.


R 125.217    Debarment; time limitations.
  Rule 217. A notice of proposed debarment shall be issued  within  3   years 
after the latter of any of the following:
 (a) Criminal conviction or civil judgment.
 (b) Completion of administrative  proceedings,   investigation,   or   other 
action.
 (c) Discovery by the authority of  the   facts,   actions,   omissions,   or 
events which provide the cause upon which the debarment is based.

  History:  1991 AACS.


R 125.218    Reinstatement.
  Rule 218. (1) Debarred participants or contractors shall not be  allowed to 
resume  participation   in   authority   programs   or   transactions   until 
expiration of the period of  debarment  or  until  a   petition   for   early 
reinstatement has been submitted and approved by an  authorized  officer   of 
the authority, whichever occurs first.
 (2) Petitions  for  early  reinstatement  shall   only   be   submitted   as 
follows:
 (a) Upon discovery of new evidence which was not previously discoverable  or 
upon the dismissal of criminal  charges  or   a   civil   or   administrative 
action, the reversal of a criminal conviction or a civil  judgment,  or   the 
reversal  of  the  debarment  or  other  exclusion   imposed    by    another 
governmental agency, upon which the authority debarment was based.
 (b) Upon a bona fide change in ownership or   management   of   the   person 
debarred.
 (c) Upon proof that the causes for debarment have been eliminated.
 (3) A petition for early reinstatement may be submitted as follows:
 (a) Immediately after the occurrence of  events   set   forth   in   subrule 
(2)(a) of this rule.
 (b) Not less than 6 months after the issuance of   a   final   decision   of 
debarment if the petition is based  upon  reasons  set   forth   in   subrule 
(2)(b) and (c) of this rule.
 (4) The petition for early  reinstatement  shall   be   submitted   to   the 
authority officer who issued the decision  to  debar  or  to   his   or   her 
successor. The petition shall be  accompanied  by   written   evidence   that 
supports the request. The authority officer may request a written response to 
the petition from the authority  officials  or  staff  that   initiated   the 
debarment proceedings. There shall not be a hearing upon   a   petition   for 
early reinstatement unless ordered by the authority   officer   ruling   upon 
the petition. The  authority  officer  may  refer  a   petition   for   early 
reinstatement, together with evidence submitted in connection  with   or   in 
response to the petition, to a hearing  officer  for   review   and   written 
recommendation.

  History:  1991 AACS.


R 125.219    Suspension; causes.
  Rule 219. Suspension may be imposed, pursuant to the  provisions  of   this 
rule, if adequate evidence of any of the following exists:
 (a) That the person has committed an offense set forth in R  125.213(a).
Either of the following  events  shall,  by   itself,   constitute   adequate 
evidence for purposes of imposing suspension:
 (i) Indictment for an offense listed in R 125.213(a).
 (ii) Arraignment on the information in circuit  court,  or   an   equivalent 
state court in a state other than Michigan, for an  offense   listed   in   R 
125.213(a).
However, adequate evidence may exist although neither of the events listed in 
paragraphs (i) and (ii) of this subdivision has occurred.
 (b) That cause for debarment under R 125.213 exists.
 (c) Suspension by a federal agency or another state  agency  for  any  cause 
specified in R 125.213.

  History:  1991 AACS.


R 125.220    Suspension; procedures.
  Rule 220. (1) Suspension procedures shall be initiated  by  an   authorized 
officer of the authority. Procedures shall commence with the  sending  of   a 
notice of suspension to the respondent.
 (2) A notice of suspension shall be sent to  each   respondent   and   shall 
contain all of the following information:
 (a) That suspension has been proposed.
 (b) The acts, events, or omissions upon which suspension shall be based.
 (c) The particular provisions of  law,   regulation,   rules,   or   program 
requirements involved.
 (d) When the suspension shall become effective.
 (e) The time, location, and nature of the hearing.
 (f) The potential effects of suspension.
 (3) A respondent who receives a notice of suspension shall  be  entitled  to 
a hearing on the issue. The hearing will  be  conducted  in  accordance  with 
the provisions of Act No. 306 of the Public Acts of 1969, as  amended,  being 
S24.201 et seq. of the Michigan Compiled Laws,  which  shall  govern  all  of 
the following:
 (a) Choice and authority of hearing officers.
 (b) Rules of conduct and evidence for hearing.
 (c) Decisions of hearing officers.
 (d) Burdens or levels of proof required.
 (e) Rights of administrative and judicial appeal.
 (4) If the authority official who is to make the  final  decision  has   not 
heard the contested case or read the record, the decision,  if   adverse   to 
the respondent, shall not be made until a written   proposal   for   decision 
has been sent to all parties. Any party who is   adversely   affected   shall 
have 10  days  to  file  written  exceptions  and   arguments.   If   written 
exceptions or arguments are not submitted within 10 days, there  shall  be no 
further proceedings before the issuance of a final decision.
 (5) The final decision of the authority shall be  issued  within   60   days 
after the date of the hearing or, if a proposal for  decision   is   required 
pursuant to the provisions of subrule (4) of this rule,  the   closing   date 
for submission  of  written  exceptions  to  the   proposal   for   decision, 
whichever is later.

  History:  1991 AACS.


R 125.221    Suspension; scope and effect.
  Rule 221. (1) A suspension shall specify  the  scope   of   suspension.   A 
person can be suspended from 1 or more particular   authority   programs   or 
transactions or from all authority programs and transactions.
 (2) The suspension may, unless prohibited by law, suspend the  operation  of 
existing contracts or agreements  between  the  suspended  persons  and other 
nonsuspended participants or contractors. However, the  decision   may  allow 
such contracts  or  agreements  to  remain  in  effect.  A   participant   or 
contractor shall not renew or  extend  a  contract  or   agreement   with   a 
suspended person.
 (3) A suspension may also serve to suspend any affiliate of such person,  if 
any such affiliate is named in the  notice  of  suspension   and   given   an 
opportunity to participate in the hearing. There need  not   be   shown   any 
participation or knowledge  of  the  improper  conduct  that   led   to   the 
decision to suspend.

  History:  1991 AACS.


R 125.222    Suspension; duration.
  Rule 222. (1) Suspensions shall be for a temporary   period   pending   the 
completion of  the  specified  legal   proceeding,   administrative   action, 
investigation, or other such event.
 (2) The suspension shall become  effective  upon   the   issuance   of   the 
authority's final decision following a hearing on the notice of suspension or 
immediately upon the issuance of a notice of suspension if there exists cause 
for suspension  pursuant   to   the   provisions   of   R  125.219   and   an 
authorized  officer  of  the  authority  determines   that    an    immediate 
suspension is necessary to protect the public health, safety, or  welfare.
 (3) The suspension shall remain effective, unless  overruled  by  the  final 
decision following  a  hearing  on  a  notice  of   suspension,   until   the 
expiration of the stated period of suspension  or  a   petition   for   early 
reinstatement is granted, whichever occurs first.
 (4) In cases involving an alleged or suspected  violation  of   federal   or 
state law, a suspension shall terminate within 12 months, unless  1  of   the 
following actions has been initiated:
 (a) Criminal prosecution.
 (b) Civil action.
 (c) An administrative hearing or action for   the   alleged   or   suspected 
violation of law.

  History:  1991 AACS.


R 125.223    Suspension decision; time limitation.
  Rule 223. A notice of suspension shall be issued within   3   years   after 
any of the following:
 (a) Criminal conviction or finding of liability as   a   result   of   civil 
action or administrative action.
 (b) Completion of the investigation or  similar   process   which   is   the 
basis for the suspension.
 (c) The authority's discovery of the acts,   omissions,   or   events   upon 
which the suspension is based.

  History:  1991 AACS.


R 125.224    Reinstatement.
  Rule 224. (1) Suspended participants or contractors shall not be allowed to 
resume participation in  authority  programs  or   transactions   until   the 
expiration of the stated period of suspension  or  a   petition   for   early 
reinstatement has been submitted and approved by an  authorized  officer   of 
the authority, whichever occurs first.
 (2) Petitions  for  early  reinstatement  shall   only   be   submitted   as 
follows:
 (a) Upon discovery of new evidence which was not previously discoverable  or 
upon the dismissal of   criminal   charges   or   civil   or   administrative 
action, the reversal of a criminal conviction or civil   judgment,   or   the 
reversal of the suspension,  debarment,  or  other   exclusion   imposed   by 
another government agency, upon which the authority suspension was  based.
 (b) Upon a bona fide change in ownership or   management   of   the   person 
suspended.
 (c) Upon proof that the causes for suspension have been eliminated.
 (3) A petition for early  reinstatement   may   be   submitted   immediately 
after the occurrence of the events set forth in subrule (2) of this  rule.
 (4) The petition for early  reinstatement  shall   be   submitted   to   the 
authority officer who issued the suspension or to his  or  her  successor.
The petition shall be accompanied by written evidence in support  thereof.
The authority officer may request a written response to  the  petition   from 
the  authority  officials  or  staff  that  requested   initiation   of   the 
suspension proceedings. There shall not be a hearing upon  a   petition   for 
early reinstatement unless ordered by the authority   officer   ruling   upon 
the petition. The  authority  officer  may  refer  a   petition   for   early 
reinstatement, together  with  evidence  submitted  in   connection   or   in 
response to the petition, to a hearing  officer  for   review   and   written 
recommendation.

  History:  1991 AACS.