                                 CODE OF VIRGINIA

MORTGAGE LOAN TERMS AND CONDITIONS (§ 36-55.33:1)

A. All mortgage loans made by HDA pursuant to § 36-55.31 of this chapter shall
be subject to the following terms and conditions:

   1. The ratio of mortgage loan principal amount to total housing development
   costs and the amortization period of any mortgage loans made by HDA which are
   federally insured mortgages, in whole or in part, or which are otherwise
   assisted or aided, directly or indirectly, by the federal government, shall be
   governed by the rules and regulations provided in or pursuant to the federal
   government program under which the HDA mortgage loan or part thereof is
   insured, guaranteed, assisted or aided; but in no event shall such
   amortization period exceed 50 years.

   2. A mortgage loan made by HDA may be prepaid to maturity after a period of
   years, and on such terms and conditions, as are determined by HDA in its rules
   and regulations or in the HDA resolution authorizing, or commitment for, such
   mortgage loan.

   3. HDA shall have authority to establish and modify from time to time the
   interest rates at which it shall make mortgage loans and commitments therefor.
   Such interest rates shall be established by HDA in its sole discretion at the
   lowest level consistent with HDA&#8217;s cost of operation and its
   responsibilities to the holders of its bonds, bond anticipation notes and
   other obligations. In addition to such interest charges, HDA may make and
   collect such fees and charges, including but not limited to reimbursement of
   HDA&#8217;s financing costs, service charges, insurance premiums and mortgage
   insurance premiums, as HDA determines to be reasonable. No person shall, by
   way of defense or otherwise, avail himself of any of the provisions of Chapter
   3 (&#xA7; 6.2-300 et seq.) of Title 6.2 to avoid or defeat the payment of any
   interest or fee which he shall have contracted to pay on any loan or
   forbearance of money made, directly or indirectly, or assisted in any manner
   by HDA under or pursuant to this chapter.

B. Mortgage loans made by HDA to housing sponsors to finance the ownership and
operation of housing developments and multifamily residential housing intended
for occupancy by persons and families of low and moderate income, pursuant to
subdivision (10) of § 36-55.31, shall be subject to the following terms and
conditions in addition to those contained in subsection A of this section:

   1. The amount disbursed with respect to an HDA mortgage loan to a limited
   profit housing sponsor shall not exceed 95 percent of the total housing
   development costs and to a nonprofit housing sponsor shall not exceed 100
   percent of the total housing development costs. Subsequent to the disbursement
   of such amount, additional amounts may be from time to time disbursed if the
   sum of the amount to be so disbursed and the then outstanding principal
   balance of the HDA mortgage loan does not exceed 95 percent of the market
   value of the housing development or residential housing as then determined by
   the Authority. The amortization period of such an HDA mortgage loan shall be
   as determined by HDA in its rules and regulations or in the HDA resolution
   authorizing, or commitment for, such mortgage loan; but in no event shall such
   amortization period exceed 50 years.

   2. The instrument evidencing any such HDA mortgage loan and the mortgage
   securing any such HDA mortgage loan shall be in such form and contain such
   terms and conditions as shall be prescribed or approved by HDA. The aforesaid
   mortgage and instrument evidencing an HDA mortgage loan may contain
   exculpatory provisions relieving the housing sponsor or its principal or
   principals from personal liability if deemed desirable by HDA.

   3. With respect to any such HDA mortgage loan made to a limited profit housing
   sponsor, HDA may require that such limited profit housing sponsor not make
   distributions in any one year with respect to the housing development or
   multifamily residential housing financed by such HDA mortgage loan in excess
   of such percentage of such limited profit housing sponsor&#8217;s equity in
   the housing development or multifamily residential housing as may be
   determined by HDA in its rules and regulations or in the HDA resolution
   authorizing, or commitment for such mortgage loan. None of the partners,
   principals, stockholders or holders of a beneficial interest in such limited
   profit housing sponsor shall earn, accept or receive a return in any one year
   with respect to the housing development or multifamily residential housing
   financed by such HDA mortgage loan greater than his applicable proportion of
   any such percentage of such limited profit housing sponsor&#8217;s equity in
   the housing development or multifamily residential housing as may be
   determined by HDA in its rules and regulations or in the HDA resolution
   authorizing, or commitment for, such mortgage loan. The right to any such
   limited distribution or return may be cumulative to the extent provided by HDA
   in its rules and regulations or in the HDA resolution authorizing, or
   commitment for, such mortgage loan. For the purpose of this section, the terms
   &#8220;distribution&#8221; and &#8220;return&#8221; are intended to mean
   payments on account of the housing development or multifamily residential
   housing financed by such HDA mortgage loan resulting from the operation
   thereof. Any payment to a person or entity who is a partner, principal,
   stockholder or holder of a beneficial interest in such limited profit housing
   sponsor shall not be deemed a &#8220;distribution&#8221; or
   &#8220;return&#8221; to such person or entity if the funds with which such
   payment is made are funds paid or contributed to such limited profit housing
   sponsor by persons or entities purchasing a beneficial interest in such
   limited profit housing sponsor. At or after the completion of construction,
   rehabilitation or improvement of the housing development or multifamily
   residential housing financed by such HDA mortgage loan, such limited profit
   housing sponsor&#8217;s equity in the housing development or multifamily
   residential housing shall be established in the manner provided by HDA in its
   rules and regulations or in the HDA resolution authorizing, or commitment for
   such mortgage loan. Such equity shall be determined by HDA, at its option, as
   either (i) the difference between the total housing development costs as to
   the housing development or multifamily residential housing and the final
   principal amount of such HDA mortgage loan, or (ii) the difference between the
   fair market value of such housing development and the final principal amount
   of such HDA mortgage loan. HDA may thereafter from time to time adjust such
   equity to be equal to the difference, as of the date of adjustment, between
   the fair market value of such housing development and the outstanding
   principal balance of such HDA mortgage loan. HDA may review and regulate a
   proposed retirement of any capital investment in, or redemption of any stock
   of, such limited profit housing sponsor in the manner provided by HDA in its
   rules and regulations or in the HDA resolution authorizing, or commitment for,
   such mortgage loan.

   4. With respect to any such HDA mortgage loan, HDA may require the housing
   sponsor and other parties related to the housing development or multifamily
   residential housing financed by such HDA mortgage loan to execute such
   agreements, assurances, guarantees and certifications as HDA shall determine
   to be necessary including, without limitation, agreements between HDA and such
   housing sponsor and its partners, principals or stockholders to limitations
   established by HDA as to rentals and other charges, profits, fees, the use and
   disposition of the real property constituting the site of or relating to the
   housing development or multifamily residential housing and other property of
   such housing sponsor, and the use and disposition of franchises of such
   housing sponsor to the extent more restrictive limitations are not provided by
   the law under which such housing sponsor is incorporated or organized.

   5. As a condition of any such HDA mortgage loan, HDA shall have the power to
   supervise the housing sponsor in accordance with the provisions of &#xA7;
   36-55.34:1 at all times during which such HDA mortgage loan is outstanding and
   thereafter as necessary to preserve the federal tax exemption of the notes or
   bonds issued by HDA to finance such HDA mortgage loan.

C. Mortgage loans made by HDA to persons and families of low and moderate income
to finance the purchase or refinancing of single-family residential housing,
pursuant to subdivision (11) of § 36-55.31, shall be subject to the following
terms and conditions in addition to those contained in subsection A of this
section:

   1. The amount disbursed with respect to such HDA mortgage loan shall not
   exceed 100 percent of the sales price or market value of the single-family
   residential housing, as determined or approved by or on behalf of HDA. HDA may
   also disburse additional amounts to finance such closing costs and fees as it
   may deem necessary or appropriate, and all such disbursements and financings
   of closing costs and fees subsequent to the enactment of this chapter are
   hereby validated. The amortization period of such an HDA mortgage loan shall
   be as determined by HDA in its rules and regulations or in the HDA resolution
   authorizing, or commitment for, such mortgage loan; but in no event shall such
   amortization period exceed 50 years. If during the term of the HDA mortgage
   loan (i) the outstanding principal balance of the HDA mortgage loan is
   expected to increase to an amount in excess of the original principal balance
   or (ii) the amount of monthly payments on the HDA mortgage loan will or may be
   adjusted, HDA shall so notify the applicants prior to the execution of the HDA
   mortgage loan. Such notice shall describe the terms and conditions under which
   the outstanding principal balance or the amount of monthly payments, or both,
   may be so increased or adjusted, and such notice shall be signed by the
   applicants.

   2. Such an HDA mortgage loan shall be made only after a determination that
   such a mortgage loan is not otherwise available from private lenders upon
   reasonably equivalent terms and conditions, and the HDA resolution
   authorizing, or commitment for, such mortgage loan shall contain such a
   determination.

   3. The instrument evidencing any such HDA mortgage loan and the mortgage
   securing any such HDA mortgage loan shall be in such form and contain such
   terms and conditions as shall be prescribed or approved by HDA. With respect
   to any such HDA mortgage loan, HDA may require the person or family of low or
   moderate income to execute such agreements, assurances, guarantees and
   certifications as HDA shall determine to be necessary including, without
   limitation, agreements between HDA and such person or family of low or
   moderate income relating to the use, occupancy, maintenance and sale of the
   single-family residential housing financed by such HDA mortgage loan and the
   payment, prepayment and assignment of such HDA mortgage loan.

D. Mortgage loans made by HDA to housing sponsors or persons or families of low
or moderate income to finance the construction, rehabilitation, preservation or
improvement of housing developments or residential housing intended, upon
completion of such construction, rehabilitation, preservation or improvement,
for ownership or occupancy by persons and families of low and moderate income,
pursuant to subdivision (12) of § 36-55.31 of this chapter, shall be subject to
the following terms and conditions in addition to those contained in subsection
A of this section:

   1. The amount disbursed with respect to such an HDA mortgage loan to a limited
   profit housing sponsor shall not exceed 95 percent of the total housing
   development costs and to a nonprofit housing sponsor or a person or family of
   low or moderate income shall not exceed 100 percent of the total housing
   development costs. Subsequent to the disbursement of such amount, additional
   amounts may be from time to time disbursed if the sum of the amount to be so
   disbursed and the then outstanding principal balance of the HDA mortgage loan
   does not exceed 95 percent of the market value of the housing development or
   residential housing as then determined by the Authority. Without regard as to
   whether HDA intends to remain the lender in respect to such mortgage loan
   throughout the amortization period thereof, the amortization period of such an
   HDA mortgage loan shall be as determined by HDA in its rules and regulations
   or in the HDA resolution authorizing, or commitment for, such mortgage loan.

   2. In considering any application for such an HDA mortgage loan, HDA shall
   give first priority to applications relating to housing developments or
   residential housing which are or will be well-planned and well-designed, and
   also shall give consideration to:
   				a. The comparative need for housing for persons and families of low and
   moderate income in the area proposed to be served by the housing development
   or residential housing;
   				b. The ability of the applicant to construct, rehabilitate or improve and
   market or operate, manage and maintain the housing development or residential
   housing;
   				c. The existence of zoning or other regulations to protect adequately the
   housing development or residential housing against detrimental future uses
   which could cause undue depreciation in the value of the housing development
   or residential housing;
   				d. The availability of adequate parks, recreational areas, utilities,
   schools, transportation and parking; and
   				e. The existence of statewide housing plans.

   3. With respect to any such HDA mortgage loan, HDA may require the housing
   sponsor, person or family of low or moderate income, contractors, architects,
   marketing agents, management agents and other parties related to the housing
   development or residential housing financed by such HDA mortgage loan to
   execute such agreements, assurances, guarantees and certifications as HDA
   shall determine to be necessary including, without limitation, agreements
   between HDA and such housing sponsor and its partners, principals or
   stockholders or such person or family of low or moderate income to limitations
   established by HDA as to rentals and other charges, profits, fees, the use and
   disposition of the real property constituting the site of or relating to the
   housing development or residential housing and other property of such housing
   sponsor, and the use and disposition of franchises of such housing sponsor to
   the extent more restrictive limitations are not provided by the law under
   which such housing sponsor is incorporated or organized. HDA shall require the
   housing sponsor or person or family of low or moderate income receiving such
   HDA mortgage loan, or the construction contractor, or both, to furnish such
   assurances of completion of the construction, rehabilitation or improvement as
   determined by HDA in its rules and regulations or in the HDA resolution
   authorizing, or commitment for, such mortgage loan.

   4. As a condition of any such HDA mortgage loan to a housing sponsor, HDA
   shall have the power to supervise such housing sponsor in accordance with the
   provisions of &#xA7; 36-55.34:1 at all times during which such HDA mortgage
   loan is outstanding and thereafter as necessary to preserve the federal tax
   exemption of the notes or bonds issued by HDA to finance such HDA mortgage
   loan.

   5. With respect to any such HDA mortgage loan, the provisions of subdivisions
   2 and 3 of subsection B of this section shall be applicable.

E. Mortgage loans made by HDA pursuant to subdivision 13 of § 36-55.31 to
finance the construction, rehabilitation, preservation or improvement, or
ownership and operation, of economically mixed projects or portions thereof and,
if any such project is within a revitalization area designated in or pursuant to
§ 36-55.30:2, any nonhousing buildings that are incidental to such project or
are determined by such governing body of the city or county to be necessary or
appropriate for the revitalization of such area or for the industrial,
commercial or other economic development of such area shall be subject to the
following terms and conditions in addition to those contained in subsection A of
this section:

   1. The principal amount of such an HDA mortgage loan shall not exceed 95
   percent of the total housing development costs, and the amortization period of
   such an HDA mortgage loan shall be as determined by HDA in its rules and
   regulations or in the HDA resolution authorizing, or in the commitment for,
   such mortgage loan; but in no event shall such amortization period exceed 50
   years.

   2. Such an HDA mortgage loan shall be made only if the provisions of &#xA7;
   36-55.30:2 are satisfied.

   3. The instrument evidencing any such HDA mortgage loan and the mortgage
   securing any such HDA mortgage loan shall be in such form and contain such
   terms and conditions as shall be prescribed or approved by HDA. The aforesaid
   mortgage and instrument evidencing an HDA mortgage loan may contain
   exculpatory provisions relieving a housing sponsor, if any, or its principal
   or principals from personal liability if deemed desirable by HDA.

   4. The nonhousing buildings shall be financed by such an HDA mortgage loan
   only if the HDA shall receive a certification from the housing sponsor that a
   mortgage loan for the financing of such nonhousing buildings is not otherwise
   available from private lenders upon reasonably equivalent terms and
   conditions.

HISTORY: 1975, c. 536; 1979, c. 374; 1982, c. 176; 1987, c. 164; 1988, c. 556;
1989, c. 161; 1991, c. 447; 2004, c. 187; 2010, c. 794.