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The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Commission" means the Washington state housing finance commission.
"Department" means the department of commerce.
"Eligible organizations" includes nonprofit developers, for-profit developers, public housing authorities, public development authorities, and other applicants eligible under rules established by the commission.
"Homeownership housing" means residential dwelling units provided for ownership that are permanently affordable for low-income households.
"Low-income household" means a single person, family, or unrelated persons living together whose adjusted income is less than 80 percent of the median family income adjusted for household size, for the county where the project is located.
A revolving loan fund is created in the department to provide loans to eligible organizations to finance mixed-income affordable homeownership development in which a portion of the development is permanently affordable for low-income households. The department shall contract with the commission to administer the revolving loan fund, subject to the availability of amounts appropriated for the specific purposes provided in this section.
If economically feasible, the commission may administer loans subject to the following considerations:
Loans must be awarded to eligible organizations based on criteria established by the commission, including at least the following:
Readiness to proceed with construction, including possession of necessary permits and completed land use entitlements;
Amount and commitment of private capital being leveraged as part of the financing for the project;
Amount of homeownership housing provided in the project;
Development location, with the goal of awarding funding to projects in as many areas of the state as financially feasible and viable;
The applicant's qualifications and demonstrated capability to develop and manage the proposed project; and
Any other criteria established by the commission, provided that such criteria may not exceed the priority of any other criterion listed in this subsection.
The homeownership housing financed under this section must be sold and resold only to low-income households for at least 99 years; however, the commission, in consultation with loan recipients, may establish a longer time period. The commission must:
Require the applicant to record a covenant or deed restriction that ensures the affordability requirements and other conditions are met for the homeownership housing; and
Refer any applicable homebuyer to education seminars available through local partnerships. The commission may establish qualifying purchase price thresholds and requirements to ensure that the purchase price is affordable to low-income households under the program.
Loans awarded under this section must:
Not exceed the lesser of $5,000,000 or 20 percent of total project costs of the housing to be developed. The commission may exceed this maximum allowable loan amount for cause; and
Provide loan terms and amounts that are proportional to the estimated value of homeownership housing.
Loans awarded under this section may be used in combination with private sector loans, tax-exempt or taxable bonds, real estate excise tax abatements, corporate funding, or any other source of capital as recognized by the commission.
The commission must structure loans issued pursuant to this section with a below market interest rate above one percent.
Loans administered under this section may not include repayment timelines longer than 36 months, except as authorized by policies established by the commission.
If a loan recipient refinances, the commission may require loan repayment at an equivalent percentage to the overall capital project financing package at the time of award.
Upon receipt and repayment, any interest earnings and repaid loan funds must be tracked separately from other revenue and be reloaned to qualifying applicants to finance additional mixed-income affordable homeownership development in which a portion of the development is homeownership housing.
The commission must:
Strive to provide as much geographic distribution in areas where this type of financing tool is feasible and viable. The commission may not allocate more than $5,000,000 per round of funding to projects in each individual county. However, subject to available funding, the commission may award more than $5,000,000 per round of funding to projects in an individual county if there are no qualifying applications in other counties;
Establish criteria and procedures for long-term monitoring of the program, including the number of affordable housing units developed at each income level; and
Establish reporting requirements for loan recipients. The report must include, at minimum:
The total value, number, and type of affordable housing constructed; and
The value, number, and type of homeownership housing.
The commission may adopt policies necessary to administer the program established in this section.
No commission general funds shall be expended to implement this program.
If economically feasible, the commission must adopt and implement a program to effectively audit or review each project to ensure that the units sold to low-income households are affordable and include a covenant or deed restriction that ensures the affordability requirements and other conditions are met for at least 99 years. The commission may determine the percentage of the loan amount to use to subcontract with eligible organizations to monitor the long-term affordability of homeownership housing for each project.
If the review or audit required under subsection (1) of this section for a given project finds that the developer did not offer the amount of homeownership housing committed to for the project, or is not properly screening households for income-restricted units, the developer must repay the full loan amount plus interest and a penalty not to exceed 10 percent to the commission.
If a subsequent review or audit required under subsection (1) of this section for a given project finds that homeownership housing has not been sold as affordable, the seller must pay a penalty to the commission not to exceed the difference between the sale price and the affordable price.