DEPARTMENT OF LABOR AND ECONOMIC OPPORTUNITY

STATE HOUSING DEVELOPMENT AUTHORITY

GENERAL RULES

(By authority conferred on the state housing development authority by sections 15a,

22, and 58b of the state housing development authority act of 1966, 1966 PA 346, MCL

125.1415a, 125.1422, and 125.1458b)

PART I. GENERAL PROVISIONS

R 125.101 Definitions; A, C.

Rule 101. As used in these rules:

(a) "Act" means the state housing development authority act of 1966, 1966 PA 346,

MCL 125.1401 to 125.1499c.

(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 a

person with disabilities.

(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 money 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) "Authorized officer" means any person designated as an authorized officer of

the authority or any other person to whom a power or duty has been specifically

delegated by the signatory resolution adopted by the authority.

(h) "Central city" means any 1 of the following:

(i) An area delineated in a Metropolitan Statistical Area by the United States Office

of Management and Budget.

(ii) An area that is delineated in a Metropolitan Division by the United States

Office of Management and Budget.

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(iii) An area that is delineated in a Combined Statistical Area by the United States

Office of Management and Budget.

History: 1979 AC; 1982 AACS; 1985 AACS; 1986 AACS; 1991 AACS; 2023 MR 6, Eff. March 21,

2023.

R 125.102 Definitions; D to G.

Rule 102. As used in these rules:

(a) "Development fund grant" means a grant that is authorized by the authority, and

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 that is authorized by the authority, and is

to be made from the housing development fund created by the act.

(c) "Dwelling unit" means living accommodations within a housing project that are

intended for occupancy by a single household.

(d) "Executive director" means the executive director or an individual acting within

this capacity employed by the authority who is the chief administrative officer of the

authority.

(e) "Existing housing unit" means a housing unit that has been occupied before the

issuance of a commitment by the authority.

(f) "Family" means 2 or more individuals living together not contrary to law.

(g) "Feasible housing project" means a proposed housing project that the authority

has determined can reasonably be expected to be successfully constructed on the

proposed site within cost limitations acceptable to the authority and can reasonably be

expected to be operated in a fiscally sound manner, within authority parameters.

(h) "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 household,

other than minors, living in the same dwelling unit and contributing to the expenses of the

household is to be considered. Gross income must 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 USC 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 applicant'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 includes all of the following:

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(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 is

deemed to have received income in its proportionate share of net earnings not otherwise

distributed 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, housing

assistance payments, annuities, insurance policies, retirement funds, pensions, disability

or death benefits, and other similar types of periodic receipts.

(E) Payments in place of earnings, such as unemployment and disability

compensation, worker's compensation, and severance pay.

(F) The full amount of public assistance payments.

(G) Periodic and determinable allowances, such as alimony and separate

maintenance payments received, housing allowances received, and regular contributions

or gifts received from individuals who do not reside in the dwelling, if such sums are

received on a recurrent basis and if such sums may be reasonably 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; insurance

payments, including payments under health and accident insurance; worker's

compensation; 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 benefits.

(E) Foster childcare payments.

(F) The value of coupon allotments for the purchase of food pursuant to the food

and nutrition act of 2008, 7 USC 2011 to 2036d, 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; 2023

MR 6, Eff. March 21, 2023.

R 125.103 Definitions; H to S.

Rule 103. As used in these rules:

(a) "Household" means an individual or family residing or intending to reside in a

single-dwelling unit.

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(b) "Local community" means any of the following entities which presents evidence

that it is acting in a manner consistent with the objectives of the act with respect to the

provision 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 residents of a definite

geographical area.

(iii) A park or playground association established pursuant to the provisions of

1911 PA 161 MCL 455.301 to 455.313.

(iv) A nonprofit corporation, limited dividend housing corporation, or limited

dividend housing association.

(c) "Low-income persons and families" means, for purposes of section 15a of the

act, MCL 125.1415a, any of the following:

(i) Any person or family whose household income, at the time of initial occupancy

of a unit in the housing project, does not exceed 80% of area median income, adjusted for

family size, as published by the United States Department of Housing and Urban

Development.

(ii) Any person or family whose household income does not exceed the limits

established pursuant to an ordinance enacted by the municipality in which the housing

project is located, on the basis of conditions existing in that municipality such as

affordable housing needs, variations in construction costs, and fair market rents.

(iii) For purposes of section 15a of the act, MCL 125.1415a, only, provided that at

least 30% of the units in the housing project are income- and rent-restricted to 80% or

less of area median income, the household income of all persons and families occupying

units in the housing that are not income- and rent-restricted to 80% or less of area median

income will be imputed to be 80% of area median income, adjusted for family size, as

published by the United States Department of Housing and Urban Development.

(iv) Except as provided in paragraph (ii) of this subdivision, this definition of low-

income persons and families applies to all housing projects that are now or become

eligible for the exemption under section 15a of the act, MCL 125.1415a.

(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 under 19.5 years of age and a full-time

high school or high-school alternative program student.

(e) "Mortgage loan" means a loan that is authorized by resolution of the authority or

by a mortgage loan commitment issued on behalf of the authority and is made to an

applicant for a housing project or a housing 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) "Permanent general improvements" means alterations, repairs, and

improvements on or in connection with an existing residential structure that 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.

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(g) "Person or persons with disabilities" means 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 meets the definition of having a disability under any

federal, state, or local program for the disabled.

(h) "Person or persons with special needs" means a person with physical

disabilities, mental illness, substance abuse, or an addiction, or who is homeless, and who

may need supportive services to succeed.

(i) "Property improvement loan" means a loan that is authorized by the authority for

home improvements that protect or improve the basic livability of a single-family or

manufactured home.

(j) "Residential structure" means real property that is improved by a structure, and

the structure is used primarily for residential purposes on a year-round basis. Residential

structure does not include a mobile home or a trailer.

(k) "Sponsor" means an individual, group, or organization that stimulates or

promotes an applicant, and continues to be interested in the activities of the applicant

with respect to a housing project.

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

AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.104 Rules of Construction.

Rule 104. (1) Terms not defined in these rules have the same meanings as those

terms that are defined in the act.

(2) Where terms are defined in both these rules and the act the definitions are

intended to be read in conjunction with each other.

(3) To the extent a term defined in the act conflicts with the same term as defined in

these rules, the definition in the act controls.

History: 2023 MR 6, Eff. March 21, 2023.

R 125.105 Income limitations.

Rule 105. (1) For a household to be considered eligible for initial occupancy in a

housing project or housing unit financed by the authority, that household's income shall

not exceed the following household income limitations:

(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 that 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 addition to the head of the household and

his or her spouse; provided, however, that the authority, by resolution, may determine,

with respect to a particular housing 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 subrule. The resolution must include

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determinations by the authority that the project could not be marketed successfully

without the higher income limit and that the project complies 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 this 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 subrule is automatically 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 that have been delivered 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 this state, provided, however, in the case of shared housing, a gross

income limit of $15,000.00 is 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 Division, 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 promotes 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 adequate, safe,

and sanitary dwellings in the area of the housing proposed for occupancy by households

that qualify for assistance pursuant to this subdivision within the financial means of, and

suitable for, such households.

(iii) The housing is located in an area in a central city that meets the criterion set

forth in subparagraph (ii) of this subdivision.

(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), MCL 125.1444, if the authority, by resolution,

determines that the higher income limits promote 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.

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(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 limitation for a

household to be considered eligible to assume a mortgage on a single-family housing unit

must be the highest household income limitation ever established in subrule (1)(c) 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 are 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 that 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 that would otherwise be applicable

pursuant to this rule.

(5) Subrule (1) of this rule does not apply to households applying for a property

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; 2023 MR 6, Eff. March 21, 2023.

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, MCL 125.1422, the

authority, by resolution, may accept gifts, grants, loans or other aid, including guarantees,

from the federal government or any public or private source, agree and comply with any

condition attached thereto, and authorize and direct the execution on behalf of the

authority or any agreement that 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) of this rule, 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

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execution on behalf of the authority of any agreement that it considers necessary or

appropriate with respect thereto.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

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 the hearings.

(2) An individual, firm, corporation, partnership, 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 the administrative procedures act of

1969, 1969 PA 306, MCL 24.201 to 24.328.

(3) Except for hearing and appeal procedures provided by statute or rule, a request

for a hearing under subrule (2) of this rule must be received by the authority’s director of

legal affairs within 60 days after the issuance of the decision.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

R 125.113 Waiver.

Rule 113. The executive director may, in his or her discretion, waive a requirement

in these rules that 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; 2023 MR 6, Eff. March 21, 2023.

R 125.115 Bylaws.

Rule 115. The bylaws of the authority shall be adopted and amended by resolution

and are public records. The bylaws must include the time and place of regular meetings,

the manner of calling special meetings, and the internal procedures as the authority

requires.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

R 125.119 Rescission.

Rule 119. R 125.1 to R 125.73 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; 2023 MR 6, Eff. March 21, 2023.

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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,

shall be approved by the executive director, and must specify the information to be

included and the supporting materials to be submitted with the application.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

R 125.122 Eligible applicants.

Rule 122. (1) A development fund loan, mortgage loan, or part of a development

fund loan or mortgage loan, must not be made or disbursed to an applicant until 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 applicant, an applicant

shall obtain the authority’s approval of its organizational documents, where applicable, as

provided in the act.

History: 1979 AC; 1998-2000 AACS; 2023 MR 6, Eff. March 21, 2023.

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 must be submitted in duplicate originals to the

executive director or director of legal affairs, together with a request for the authority’s

approval of the documents.

(2) The authority staff shall review the organizational documents to determine the

compliance with the requirements of the act and these rules, and, if it is determined that

the organizational documents comply, the executive director or other authority staff

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 or director of legal affairs.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

PART 3. DEVELOPMENT FUND LOANS AND FEASIBLE PROJECTS

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R 125.131 Applications.

Rule 131. (1) An application for a determination that a proposed housing project is a

feasible housing project must 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 reasonable steps have

been taken to become 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, including ownership, rental, or

cooperative; rehabilitation or new construction; range of proposed rents; occupancy

charges or sale prices; 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 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 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 must 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 reasonable 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; 2023 MR 6, Eff. March 21, 2023.

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, must be processed by the

authority staff on the basis of processing and underwriting procedures and guidelines

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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 supplementary

information and to amend the application to cause the proposed housing project to be

consistent with the authority’s processing and under-writing procedures 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 must 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, subject to terms, conditions, and

requirements deemed necessary by the authority, in accordance with R 125.133.

(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 determine whether 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

activities permitted in the act.

(c) The applicant is reasonably expected to be able to successfully implement 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. If the requirements in

this subrule are met, 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 must contain terms, conditions, and requirements as deemed necessary by

the executive director.

History: 1979 AC; 1998-2000 AACS; 2023 MR 6, Eff. March 21, 2023.

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 development fund loan to the applicant, or

both.

(2) For applications for a determination that a proposed housing project is feasible,

the resolution must 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 authority

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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

completion of the proposed housing project.

(c) The proposed housing project will meet a social need in the area where it will

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 provide

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 must 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

activities permitted in the act.

(c) The applicant is reasonably expected to be able to successfully implement 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 conditions that the authority considers appropriate

with respect to an application for a mortgage loan as to the feasible housing project or the

use, disbursement, and repayment of the development fund loan.

History: 1979 AC; 1998-2000 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.134 Priorities for allocation of development fund money.

Rule 134. Priorities for allocation of money in the housing development fund

available for development fund loans may be established and revised by the authority.

Priorities are 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 individuals of low- and moderate-income as compared to the

authority's determination of the overall housing needs of the state.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

PART 4. MORTGAGE LOANS

R 125.141 Multifamily mortgage loan applications.

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Rule 141. An application for a mortgage loan must 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; 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, including 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, MCL 125.1446, 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; 2023 MR 6, Eff. March 21, 2023.

R 125.142 Processing and evaluation of applications.

Rule 142. (1) An application for a mortgage loan must be processed by the authority

staff on the basis of the authority's processing and underwriting procedures and

guidelines. The authority staff shall undertake land appraisals, market surveys and

analyses, reviews of the architectural design, site plan, and construction costs, materials

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and methods, and other matters as may be determined to be appropriate to ensure 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 shall be presented to the

authority.

History: 1979 AC; 1981 AACS; 2023 MR 6, Eff. March 21, 2023.

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 must 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

the housing. In the case of a loan being made pursuant to section 44a(2) of the act, MCL

125.1444a, the 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 as that term is

defined in section 11 of the act, MCL 125.1411, 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 a 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.

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(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 must

contain terms, conditions, and requirements as deemed necessary by the executive

director.

History: 1979 AC; 1981 AACS; 1983 AACS; 2023 MR 6, Eff. March 21, 2023.

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 the resolution,

must include conditions that the authority considers appropriate with respect to the

commencement of construction of the proposed housing project, the marketing and

occupancy of the 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 must establish the initial schedule

of rents or occupancy charges, the approved budget for operation of the housing project,

and the schedule of uses of the proceeds of the mortgage loan. A resolution authorizing a

mortgage loan to an applicant that is a limited dividend housing corporation or limited

dividend housing association must 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 must 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 and applicable federal programs.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

R 125.145 Priorities for allocation of monies for mortgage loans.

Rule 145. Priorities for allocation of authority money available for mortgage loans

may be established and revised by the authority. Priorities are 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

individuals with low- and moderate-income as compared to the authority's determination

of the overall housing needs of the state.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

R 125.146 Single Family mortgage loans.

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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 must 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, must be processed and may be approved by an authorized officer.

(3) The authorized homeownership staff 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 guidelines as to the housing unit

to be purchased, then the authorized officer may issue, on behalf of the authority and

pursuant to resolution of the authority, the authority's mortgage loan commitment to the

originating lender with respect to the housing unit proposed to be purchased. The

mortgage loan commitment must contain terms, conditions, and requirements as deemed

necessary by an authorized officer, 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 must at all times be sufficient to

permit the authority to make the payments on its bonds and notes plus any administrative

or other costs to the authority 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 mortgage loans to eligible applicants for the

long-term financing of housing units to be purchased by eligible applicants, and that the

housing units must be constructed by or with the assistance of an entity that is a party to

the agreement.

(5) An individual shall not receive a mortgage loan for long-term financing a

housing unit to be purchased that is not intended for owner occupancy.

(6) Where an individual is a qualifying applicant, only the qualifying applicant will

be required to sign the mortgage note and any other loan documents determined by an

authorized officer to be necessary, and only the qualifying applicant will be subject to

credit qualification. If married, both the qualifying applicant and the applicant’s spouse

must be identified in the deed or other conveyance document, and both must execute the

mortgage securing the property, to the extent required by state law and title industry

practice. The income of all other non-qualified-applicant adult individuals who are to

reside in the home will be considered for determining eligibility of the household for

program qualification and loan terms. Those non-qualified-applicant individuals will be

required to attest to their incomes, and those incomes will be included in determining the

household gross income; non-qualified-applicant individuals will not be required to sign

mortgage loan documents.

(7) An individual shall not receive a mortgage loan for the long-term financing of a

housing unit unless the individual meets credit requirements as established by the

authority.

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(8) For purposes of this rule, housing unit or units may include owner-occupied new

housing units, existing housing units to be substantially rehabilitated, condominiums, or

mobile homes.

History: 1979 AC; 1980 AACS; 1982 AACS; 1983 AACS; 1986 AACS; 1998-2000 AACS; 2023

MR 6, Eff. March 21, 2023.

PART 5. DEVELOPMENT FUND GRANTS

R 125.151 Applications.

Rule 151. An application for a development fund grant must include information

and, where required by the authority staff, supporting materials and evidence 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 assistance

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 development 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

involved as the authority staff and the executive director require.

History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.152 Processing and evaluation of applications.

Rule 152. (1) An application for a development fund grant must be processed 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 supplementary

information and to amend the application to cause the planned activities 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 must 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 subject to such terms, conditions, and

requirements deemed necessary by the authority.

(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 determine whether all of

the following requirements are met:

(a) The applicant is authorized by the act to receive a development fund grant.

(b) The applicant will use the grant funds in planning for or implementing any

activities permitted in the act.

(c) The applicant is reasonably expected to be able to successfully implement the

proposal.

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(d) The application satisfies the evaluation factors and criteria adopted by the

authority.

If the requirements of this subrule are met, 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 must contain terms, conditions, and requirements as

deemed necessary by the executive director. The authority may require repayment of

these grants.

History: 1979 AC; 1998-2000 AACS; 2023 MR 6, Eff. March 21, 2023.

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 must include all of the following determinations

by the authority:

(a) The applicant is authorized by the act to receive a development fund grant.

(b) The applicant will use grant funds in planning for or implementing any activities

permitted in the act.

(c) The applicant is reasonably expected to be able to successfully implement 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 appropriate

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; 2023 MR 6, Eff. March 21, 2023.

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 are based on criteria established by the authority as best effectuating the

purposes of the act.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

PART 6. AUTHORITY LOAN DOCUMENTS

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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 must 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 the documents must be employed with respect to all

matters relating to development fund loans and mortgage loans.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

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 money in the

land acquisition and development fund created by the act. A proposal may be for the

following:

(a) The acquisition by grant, purchase, or otherwise of real property, which for

purposes of this part is 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

improves the quality of the residential area by eliminating blight or provides 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, adversely affects 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 that is to be dedicated for the public use and

enjoyment, including the installation of recreational facilities, benches, shelters, lighting,

and walkways.

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(iii) Improvements that are necessary to ensure 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 money 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, MCL 125.1442, 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 may 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, MCL 125.1424b.

(2) A proposal must 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; 2023 MR 6, Eff. March 21, 2023.

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 of

the proposal and the use of appropriate money 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 in 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 money 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 the land contract, option, mortgage, or other encumbrance or

deferred payment agreement plus any anticipated carrying charges, including without

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limitation, insurance premiums, interest, maintenance expenses, and property taxes. In

the event that the acquisition is to be accomplished through a duly authorized agent of the

authority, the authority shall require the agent to protect the authority's interest in the

property and to convey the property interest 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; 2023 MR 6, Eff. March 21, 2023.

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

money 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 a price and on the terms and conditions that 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 money 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; 2023 MR 6, Eff. March 21, 2023.

PART 8. HOME IMPROVEMENT LOANS

R 125.181 Eligible applicants.

Rule 181. An applicant for a property improvement loan shall satisfy all of the

following requirements:

(a) An applicant shall be an individual fee owner of the residential structure to be

improved or an individual member-shareholder in a nonprofit cooperative housing

corporation who has a proprietary interest in a residential structure. The residential

structure may be subject to a mortgage or other lien securing a debt.

(b) An applicant shall meet credit requirements as established by the authority.

(c) The residential structure to be improved must not be in violation of applicable

zoning ordinances or other applicable land use guidelines.

(d) The residential structure may not contain more than 24 dwelling units.

(e) The applicant shall use property improvement loan proceeds to finance only new

improvements upon, or in connection with, existing structures and shall not use the

property loan proceeds to refinance an existing mortgage or debt, or to complete an

unfinished residential structure.

(f) All improvements must be reasonably capable of being completed, except for

causes beyond the applicant's reasonable control, within 6 months of the date of the first

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disbursement of funds pursuant to the property 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; 2023

MR 6, Eff. March 21, 2023.

R 125.182 Eligible improvements.

Rule 182. (1) Improvements made with property improvement loan proceeds must

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 that protect or improve the basic livability or

utility of a residential structure and make the residential structure safe, sanitary, or

adequate. However, to be an eligible improvement, it must be a permanent general

improvement.

(c) An improvement must 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 property improvement loan for a

dwelling unit occupied by the owner may be denied solely because the improvements

will not bring the dwelling unit into full compliance with all applicable codes and

standards.

(d) Property improvement loans proceeds may not be used for the payment, wholly

or in part, of an assessment for public improvements. However, proceeds may be used for

improvements that 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.

(2) All rehabilitation contracts must be between the homeowner and the contractor.

The authority shall not negotiate or enter into rehabilitation contracts.

History: 1979 AC; 2023 MR 6, Eff. March 21, 2023.

R 125.183 Rescinded.

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

R 125.184 Rescinded.

History: 1979 AC; 1998-2000 AACS.

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PART 9. MICHIGAN HOUSING AND COMMUNITY DEVELOPMENT

FUND;

MICHIGAN HOUSING AND COMMUNITY DEVELOPMENT PROGRAM

R 125.190 Program purpose and applicability.

Rule 190. The authority shall use the Michigan housing and community

development fund created in section 58a of the act, MCL 125.1458a, 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 Michigan housing

and community development fund is limited to activities outlined in sections 58b and 58c

of the act, 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 206.901 to 206.911.

(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 AACS; 2023 MR 6, Eff. March 21, 2023.

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R 125.191 Definitions.

Rule 191. Definitions provided for in part 1 of the authority's rules, R 125.101 to R

125.103, apply to the provisions of this part, unless superseded in this rule as follows:

(a) "Allocation plan" means the plan referred to in and required by section 58b of

the act, MCL 125.1458b(3).

(b) "Annual report" means the annual report required under section 58b of the act,

MCL 125.1458b.

(c) "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 money meeting the requirements contained in the applicable NOFA or

RFP related to the applicable application year.

(d) "Biennial plan" means the allocation plan as defined in subrule (a) of this rule.

(e) "Chief Executive Officer" or "CEO" means the senior manager or person acting

within this capacity 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.

(f) "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 or the person acting within this capacity.

(g) "Community development" means a process involving the conception, planning,

and implementation of projects or activities that create improvements in, or reduce the

extent of declines in, the living standards of people in a particular community.

(h) "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.

(i) "Development costs" means the sum total of all costs incurred by eligible

applicants for the purpose of developing and coordinating public and private resources to

meet the housing needs of low-income, very low-income, and extremely low-income

households or to finance projects, as that term is defined in section 58 of the act, MCL

125.1458, located in a downtown or adjacent neighborhood in this state.

(j) "Formula" means the standard procedure for distributing the Michigan housing

and community development program funds throughout the state based on the number of

persons experiencing poverty, economic, and housing distress as specified in section 58b

of the act, MCL 125.1458b.

(k) "For-profit corporation" means an entity that exists primarily to generate more

income than it spends.

(l) "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 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 humans.

(iii) An institution that provides temporary residence for individuals intended to be

institutionalized.

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(m) "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.

(n) "HUD" means the United States Department of Housing and Urban

Development, the federal department responsible for the major housing programs in the

United States.

(o) "Lookback" means the process of reviewing an intended proposed distribution

of Michigan housing and community development program funds in a program year to

ensure compliance with the earmark requirements provided in the act and these rules.

(p) "Michigan housing and community development fund" means the fund created

in section 58a of the act, MCL 125.1458a.

(q) "Michigan housing and community development program fund advisory

committee" means the advisory committee created in section 58e of the act, MCL

125.1458e.

(r) "Michigan housing and community development program" means the program

created in section 58b of the act, MCL 125.1458b.

(s) "NOFA" means a notice of funding availability issued pursuant to this rule and

the applicable statutory law governing the program.

(t) "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, 26 USC 501(c)(3) or 26

USC 501(c)(4), 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 or grant 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, dated 1986 or later from the IRS, that

includes the applicant. The group exemption letter must specifically identify and list the

applicant.

(iv) A private nonprofit organization's pending application for section 501(c)(3) or

section 501(c)(4) of the internal revenue code, 26 USC 501(c)(3) or 26 USC 501(c)(4),

status does not comply with the tax status requirement.

(u) "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

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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.

(v) "Program funds" means the money in the Michigan housing and community

development fund.

(w) "Recipient" means an eligible applicant receiving funds or other assistance

under the program. Recipient includes a subrecipient and any requirement applying to a

recipient applies to a subrecipient.

(x) "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.

(y) “Request for proposals” or "RFP" means 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.

(z) "State" means the state of Michigan and any state level component units thereof.

History: 2008 AACS; 2009 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.192 Program funds eligible uses.

Rule 192. (1) Michigan 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 include acquisition, construction, reconstruction,

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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 that 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; shelters for victims of spousal

and dating violence; halfway houses for children temporarily separated from their parents

or guardians, drug offenders or parolees; group homes for persons with disabilities; and

temporary housing for disaster victims.

(g) Activities incurring insurance costs related to any purpose authorized by the

Michigan housing and community development program.

(h) Activities involving operating, replacement, and other reserves related to any

purpose authorized by the Michigan housing and community development 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) Activities providing foreclosure prevention or foreclosure assistance to low,

very low, or extremely low-income households.

(l) Activities related to individual development accounts established under the

individual or family development account program act, 2006 PA 513, MCL 206.901 to

206.911.

(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, childcare, transportation, and other similar services, to owners of business

enterprises and persons developing business enterprises.

(iv) Assistance under this subrule 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 subrule.

(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.

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(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, debarred, 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 15 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

National Association of Securities Dealers (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 or unresolved, or both, 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 must

be included in the termination letter to the applicant.

(h) An applicant, recipient, or an entity in which the applicant or recipient has or

had a controlling interest, has an ownership interest, or exercises control of 1 or more

rental housing properties in this state is subject to a regulatory agreement or tax credit

regulatory agreement with the authority and is in material noncompliance with the

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,

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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-income, very low-income, or extremely low-income households. Low-income,

very low-income, or extremely low-income households that 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

subrule, that recipient shall repay program money and the landlord or developer must pay

the affected parties' costs and all moving expenses.

History: 2008 AACS; 2009 AACS; 2023 MR 6, Eff. March 21, 2023.

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 Michigan

housing and community development program NOFA or RFP must be handled in the

following manner:

(a) The authority shall 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 will 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 determine whether they comply

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

paragraphs (i) to (iii) of this subdivision.

(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 that the review committee reviews, scores, and

selects for award shall be recommended to the authority for approval.

(3) If an application contains deficiencies that 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, selection criteria

documentation, and financial feasibility analysis.

(4) Requests for clarification or correction may be sent to the applicant in the form

of a facsimile, e-mail, or be relayed to the applicant via a telephone call and documented

in the application file.

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(5) An applicant may not change or supplement any part of an application in any

manner after submission to the authority, propose to increase the award amount, or revise

the unit mix, as to income levels or bedroom-count mixes, or both, except to remedy an

administrative deficiency.

(6) 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 program funds.

(7) The authority is not obligated to proceed with any action pertaining to any

applications that are received and may decide it is in the authority's best interest to refrain

from pursuing any selection process.

(8) The authority may negotiate individual elements of any application, loan, or

grant. Revision of application terms does not guarantee an award of funding.

(9) 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 AACS; 2023 MR 6, Eff. March 21, 2023.

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 Michigan

housing and community development program 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 act, 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 that sets aside at least 20% of the

rental units or housing units in the project for households earning not more than 60% of

the area 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 or recipient, or both, to administer the funding

award effectively and deliver results within program timelines.

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(iii) The extent to which the proposal or project helps meet the 25% earmark

provided in the act 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 act 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 disabilities and individuals living in

eligible distressed areas.

(3) Other Michigan housing and community development program requirements

include the following:

(a) All uses of program funds must 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 PA 18 (Ex. Sess.), MCL 125.694a.

(e) All assistance for housing and real property acquired or supported by program

funds must 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 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.195 Biennial plan; allocations; earmarks; carryover.

Rule 195. (1) Pursuant to the act, the authority shall biennially develop, propose,

and establish a biennial plan related to the Michigan housing and community

development program. The biennial plan must be issued pursuant to the requirements of

the act 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 must contain an allocation

formula related to the disbursement of program funds.

(c) The following statutory earmark and lookback procedures apply to any biennial

plan, allocation plan, and allocation formula:

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(i) Not less than 25% of the dollars used for loans or grants made in any program

year must be earmarked for rental housing projects that do not qualify under preferences

for special population groups, or other preferences contained in the allocation plan.

(ii) Not less than 30% of the dollars used for loans or grants made in any program

year must be earmarked for projects that target extremely low-income households and

include housing for the homeless, supportive housing, transitional housing, or permanent

housing.

(iii) A portion of the fund must be expended for housing for persons with

disabilities and individuals living in eligible distressed areas.

(2) 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 the

act 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.

(3) Uncommitted funds at the end of any program year must 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 AACS; 2023 MR 6, Eff. March 21, 2023.

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 program funds are being spent correctly

and to measure the results or performance of its spending against the objectives of the

Michigan housing and community development program.

(b) The authority shall establish as a part of each biennial plan reporting forms that

must be submitted by the recipients on a semiannual basis. These reports must include

both a performance monitoring form and a financial monitoring form.

(c) The performance monitoring form must be signed by the chief executive officer

of the recipient and 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 must be signed by the chief financial officer of

the recipient and analyze the financial performance of the recipient. Program funds must

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be used in an efficient, effective, and appropriate manner, consistent with the Michigan

housing and community development program objectives and priorities, including

community needs. Program funds must also be appropriately and properly accounted for

with documentation that adequate safeguards have been instituted by the recipient to

ensure that there is no misuse of program funds.

(2) The following provisions apply to Michigan housing and community

development program periods and extensions:

(a) The initial program period for any loan or grant awarded under the program is 2

years from the date of the award of program funds. All activities related to the use of

program funds must be completed within this 2-year time frame. Any program monies

outstanding on the date that is 2 years from the date of the award are subject to the

recapture provisions of this rule and must be immediately repaid to the authority.

(b) Recipients must maintain compliance with each of its contracts and agreements

with the authority.

(c) Recipients must comply with any restrictions that are stated in 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 will monitor compliance with project restrictions and any other

covenants by recipient in any Michigan housing and community development program

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 that 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 make recommendations to

the authority regarding the total awards to be made in any application year and the

amounts and recipients 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 program

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 or by majority vote, or both, as

applicable. The authority shall have final authority to approve or disapprove of any

program funding award recommendation made by the review committee.

(4) Recapture of program funds must be accomplished as follows:

(a) The authority has the power to recapture or de-obligate program funds and

program funding awards in certain circumstances. The power to recapture or de-obligate

program funds may apply to entire awards or portions of awards. Recaptured or de-

obligated program funds must be re-deposited in the fund and used to make future awards

in the current and next applicable program year or program funding round.

(b) The following reasons justify the de-obligation or recapture of program funds:

(i) Inability of the applicant or recipient to execute the program activity and

obligate the program funds within the initial program period 2-year timeline.

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(ii) Inability of the applicant or recipient to make drawdowns 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 act, 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 de-obligation or recapture in this instance, the authority shall consider

whether or not the non-compliance is due to factors beyond the applicant's or recipient's

control.

(iv) If the total cost of the anticipated program activity is less than the total cost

anticipated in the application or other documentation provided by the applicant or

recipient, or both, the authority may de-obligate 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 must be recaptured and returned to the program

fund.

(vi) If the applicant or recipient, or both, voluntarily returns the program funds to

the authority and ceases all program activity and reporting upon the return of program

funds.

(vii) Any other reason justifying recapture or de-obligation approved by the

authority, upon notice to the applicant or recipient, or both, 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 de-obligate the

program funds.

History: 2008 AACS; 2009 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.197 Hearings procedures.

Rule 197. Hearing procedures must include citizen participation as follows:

(a) The authority must 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 Michigan housing and community

development fund and program rules, guidelines, and procedures.

(b) The authority must consider the comments received at public hearings.

Biennially, the authority must review the performance, administration, and

implementation of the Michigan 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 the Michigan housing and community development fund monies.

(c) The authority must submit an annual report to the governor and the legislature

under section 58b(6) of the act, MCL 125.1458b. 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

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understanding that the elected officials and citizens of this state have regarding the

operation of the Michigan housing and community development program.

(d) After the applicable application deadline related to the NOFA or RFP,

applications for the Michigan housing and community development funds are public

information subject to release under the freedom of information act (FOIA), 1976 PA

442, 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) Before any proposed change to these rules, the authority must conduct a public

hearing in accordance with the provisions of the administrative procedures act of 1969,

1969 PA 306, MCL 24.201 to 24.328.

History: 2008 AACS; 2009 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.198 Michigan housing and community development fund advisory

committee

Rule 198. Pursuant to section 58e of the act, MCL 125.1458e, the authority shall

seek the advice of the Michigan housing and community development fund advisory

committee on both of the following:

(a) Recommendations for the biennial allocation plan required under section 58b of

the act, 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 AACS; 2023 MR 6, Eff. March 21, 2023.

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 the authority, submit information to the

authority on any program activity or administration issues, which may include, but are

not limited to, the following:

(i) 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) Information as may be necessary to determine whether the applicant or

recipient, or both, has carried out housing or community development activities in

accordance with the requirements and primary objectives of the Michigan housing and

community development fund program 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.

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(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 the Michigan housing and community development program.

This data must be updated annually by the applicant or recipient.

(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 grant or loan.

(b) Applicants and recipients shall maintain records pertinent to the tenant's files for

at least 3 years.

(c) Applicants and recipients shall maintain records pertinent to program grants or

loans, or both, including, but not limited to, project costs and certification work papers

for at least 5 years.

(d) Applicants and recipients shall maintain records in an accessible location.

History: 2008 AACS; 2023 MR 6, Eff. March 21, 2023.

PART 10. IDENTITY OF INTEREST WITH VENDORS

TO AUTHORITY-FINANCED DEVELOPMENTS

R 125.201 Applicability.

Rule 201. The rules contained in this part 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; 2023 MR 6, Eff. March 21, 2023.

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 constitutes an identity of interest.

(2) An identity of interest exists 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. As used in this part,

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"member of the family" means any individual who is related to the party in question by

blood, marriage, or operation of law.

History: 1991 AACS; 2023 MR 6, Eff. March 21, 2023.

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

asset management of any proposed vendor with whom there is an identity of interest. The

notification must 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 that 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 must 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 the identity of interest.

The certified disclosure must also contain other information as the authority requires,

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 must be submitted on forms designated by the authority

and 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 has 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, in the

certified disclosure, the authority's right to conduct such an audit.

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(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 may 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 into 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 must be requested of the authority.

(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 must 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 must

include a bid from the vendor with whom there is an identity of interest.

(j) Requests for approval of a proposed vendor must 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; 2023 MR 6, Eff. March 21, 2023.

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 may delegate authority, may impose the following sanctions in addition to any other

remedies available through contractual or grant 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.

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(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 the

hiring of a new management agent is required.

(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 that 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 that 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; 2023 MR 6, Eff. March 21, 2023.

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 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 do not preclude a party from the

purchase from the authority of housing developments or single-family homes that 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 do 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 the sole 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

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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; 2023 MR 6, Eff. March 21, 2023.

R 125.212 Definitions.

Rule 212. Definitions provided for in part 1 of the authority’s rules, R 125.101 to R

125.103, apply to the provisions of this part unless superseded in this rule as follows:

(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, but is not necessarily limited to, 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.

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(E) Engineers.

(F) Contractors to participants.

(G) Subcontractors of contractors to participants.

(h) "Person" means an individual, partnership, corporation, association, unit of

government, or other form of legal entity, whether in good standing or otherwise.

(i) "Respondent" means the person against whom debarment or suspension is to be

imposed.

(j) "Suspension" means an action that 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; 2023 MR 6, Eff. March 21, 2023.

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. Any following offenses 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.

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(d) Violation of 1 or more contracts or agreements, either public or private and that

involves willful or repeated noncompliance with the terms and conditions of the contracts

or agreements and 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; 2023 MR 6, Eff. March 21, 2023.

R 125.214 Debarment procedures.

Rule 214. (1) Debarment procedures shall be initiated by an authorized officer.

Procedures will commence with the authority sending a notice of debarment to the

respondent.

(2) A notice of debarment must be sent to each respondent and contain all of the

following information:

(a) That debarment is being proposed.

(b) The acts or omissions that are the grounds upon which debarment is based.

(c) The particular provisions of laws, regulations, rules, and program requirements

involved.

(d) The opportunity for the respondent to request and schedule a hearing on the

debarment.

(e) The potential effects of debarment.

(3) A respondent who receives a notice of debarment is entitled to a hearing on the

issue. The hearing will be conducted in accordance with R 125.111 and the provisions of

the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, which

governs all of the following:

(a) Choice and scope of 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 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, may not be made until a

written proposal for decision has been sent to all parties by the official who has heard the

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contested case or read the record. Any party who is adversely affected has 10 days from

issuance of the proposal for decision to file written exceptions and arguments. If written

exceptions or arguments are not submitted within 10 days, there will be no further

proceedings before the issuance of a final decision.

(5) The final decision of the authority will 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; 2023 MR 6, Eff. March 21, 2023.

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 must be reduced by the period of time that the person

has been suspended.

History: 1991 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.216 Debarment; scope and effect.

Rule 216. (1) The decision to debar a person must specify the scope of debarment. A

person may 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 the 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 the 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 in or knowledge of

the improper conduct, by the affiliate, that led to the decision to debar.

History: 1991 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.217 Debarment; time limitations.

Rule 217. A notice of proposed debarment must be issued within 3 years after the

later of either of the following:

(a) Criminal conviction or civil judgment.

(b) Completion of administrative proceedings, investigation, or other action.

History: 1991 AACS; 2023 MR 6, Eff. March 21, 2023.

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R 125.218 Reinstatement after debarment.

Rule 218. (1) Debarred participants or contractors may not 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 may only be submitted as follows:

(a) Upon discovery of new evidence that 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 must be submitted to the official who issued

the final decision to debar, or to his or her successor. The petition must be accompanied

by written evidence that supports the request. The official who issued the final decision

may request a written response to the petition from the authorized officer that initiated the

debarment proceedings. There shall not be a hearing upon a petition for early

reinstatement unless ordered by the official ruling upon the petition. The official 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; 2023 MR 6, Eff. March 21, 2023.

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.

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History: 1991 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.220 Suspension; procedures.

Rule 220. (1) Suspension procedures must be initiated by an authorized officer.

Procedures commence with sending a notice of suspension to the respondent.

(2) A notice of suspension must be sent to each respondent and contain all of the

following information:

(a) That suspension has been proposed.

(b) The acts, events, or omissions upon which suspension is based.

(c) The particular provisions of law, regulation, rules, or program requirements

involved.

(d) When the suspension becomes effective.

(e) The opportunity to request and schedule a hearing on the suspension.

(f) The potential effects of suspension.

(3) A respondent who receives a notice of suspension is entitled to a hearing on the

issue. The hearing must be conducted in accordance with the provisions of R 125.11 and

the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, which

governs all of the following:

(a) Choice and scope of 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 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 by the official who heard the

contested case or read the record. Any party who is adversely affected has 10 days from

the issuance of the proposal for decision 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 must 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; 2023 MR 6, Eff. March 21, 2023.

R 125.221 Suspension; scope and effect.

Rule 221. (1) A suspension must 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

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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 in or knowledge of the improper

conduct, by the affiliate, that led to the decision to suspend.

History: 1991 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.222 Suspension; duration.

Rule 222. (1) Suspensions are for a temporary period pending the completion of the

specified legal proceeding, administrative action, investigation, or other such event.

(2) A suspension becomes 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 office determines that an immediate

suspension is necessary to protect the public health, safety, or welfare.

(3) A suspension remains 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 based solely upon an alleged or suspected violation of federal or state

law, a suspension terminates 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; 2023 MR 6, Eff. March 21, 2023.

R 125.223 Suspension decision; time limitation.

Rule 223. A notice of suspension must be issued within 3 years after either 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 that establishes the basis for

the suspension.

History: 1991 AACS; 2023 MR 6, Eff. March 21, 2023.

R 125.224 Reinstatement after suspension.

Rule 224. (1) Suspended participants or contractors may not 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, whichever occurs first.

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(2) Petitions for early reinstatement may only be submitted as follows:

(a) Upon discovery of new evidence that 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 must be submitted to the official who issued

the final decision of suspension or to his or her successor. The petition must be

accompanied by written evidence in support. The official who issued the final suspension

decision may request a written response to the petition from the authorized officer that

requested initiation of the suspension proceedings. There may not be a hearing upon a

petition for early reinstatement unless ordered by the official ruling upon the petition. The

official 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; 2023 MR 6, Eff. March 21, 2023.

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