R460-3-2. Multifamily Mortgage Programs

  (1) No Standard Program.

  (a) UHC does not have a standard financing program for bond financed multifamily rental housing. It is the developer's responsibility to engage professionals to assist in obtaining adequate bond credit enhancement and in structuring a sale or placement of the bonds. UHC, as issuer, reserves the right to approve or disapprove the terms of any proposed project or the bond financing enhancement or structure.

  (b) The sole source of repayment of the bonds, including all interest and any premiums, for a multifamily rental housing project shall be the revenue sources related to the project financed by the bonds. Neither the bonds nor any interest or premium shall constitute a general indebtedness of UHC.

  (c) One or more national rating services must rate publicly offered bonds issued by UHC. A minimum rating as determined by UHC is required, unless specifically waived for good cause. A type of credit enhancement backing the bonds must be in place to increase the probability that the bond holders will be repaid even if the project and its underlying mortgage loan defaults. UHC reserves the right to approve all forms of credit enhancement for the bonds. With certain restrictions, UHC may permit bonds privately placed with institutional investors to be unrated.

  (d) Publicly offered bonds issued by UHC shall be sold to underwriter(s) with the financial backing and capability to generate cash at closing equal to the amount of the bonds, regardless of whether the bonds have been resold to investors. UHC may appoint underwriters requested by the developer; however, UHC reserves the right to approve any underwriter, and may appoint co-underwriters, as it deems appropriate.

  (2) Legal Opinions.

  (a) UHC appoints bond counsel to render any opinion with respect to the tax exemption of the interest on the bonds.

  (b) Any other opinions regarding UHC that may be required by other parties to a bond transaction will be rendered by counsel appointed by UHC but paid for by the developer.

  (3) Income limits of qualifying tenants.

  UHC shall establish and may amend maximum income limits for low and moderate income persons eligible as qualifying tenants of multifamily developments. UHC's president is authorized to establish income limits of UHC's multifamily programs and such limits shall not exceed 140% of area or state median income as determined and published by HUD. UHC shall make information concerning the limits available to interested persons including potential renters and developers and shall incorporate the limits into appropriate documents. Income limits may vary based on, but not limited to, loan program, household size, county, targeted area, source and availability of funds, and risk to UHC.

  (4) Eligible developers/owners.

  (a) To be eligible to participate in the multifamily financings, the mortgagor/owner may be an individual, a limited liability company, a partnership or a corporation having the legal capacity and authority to borrow money for the purposes of constructing, owning and operating a multifamily development.

  (b) UHC may establish criteria relating to the credit worthiness and the financial, construction and operating capacity of the developer/owner as UHC deems necessary to maintain a secure program and to provide decent, safe and sanitary rental housing. Alternatively, in situations where UHC will be issuing bonds the proceeds of which will be loaned to the developer/owner, UHC may rely on the due diligence of the underwriters or purchasers of the bonds and/or the issuer of the credit enhancement for the bonds in making the determination that the developer/owner possesses sufficient creditworthiness and sufficient financial, construction and operating capacity.

  (5) Fees and Expenses.

  The developer shall be responsible for all fees and expenses incurred in connection with the issuance of any bonds. UHC may charge a developer a fee for issuing the bonds or for performing any services required by UHC.