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,

MCL125.1415a, 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.

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

of Management and Budget.

(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 AACS.

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

AACS.

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) “HUD” means the United States Department of Housing and Urban Development.

(c) "Individual or individuals with disabilities" means an individual who has a disability

that is a physical or mental impairment that substantially limits 1 or more major life

activities, has a record of the impairment, or meets the definition of having a disability

under any federal, state, or local program for the disabled.

(d) "Individual or individuals with special needs" means an individual with physical

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

may need supportive services to succeed.

(e) "Local community" means any of the following entities that 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.

(f) "Low-income individuals and families" means, as used in section 15a of the act,

MCL 125.1415a, any of the following:

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

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

for family size, as published by HUD.

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

an ordinance enacted by the municipality where the housing project is located, based on

conditions existing in that municipality such as affordable housing needs, variations in

construction costs, and fair market rents.

(iii) As used in 15a of the act, MCL 125.1415a, only, provided that not less than 30%

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

median income, the household income of all individuals and families occupying units in

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

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

published by HUD.

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

income individuals 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.

(g) "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.

(h) "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 the sale of the

authority's bonds or notes and 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.

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(i) "Permanent general improvements" means alterations, repairs, and improvements

on or in connection with an existing residential structure that substantially protects or

improves 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.

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

home improvements that protects or improves the basic livability of a single-family or

manufactured home.

(k) "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.

(l) "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 AACS; 2026 MR 11, Eff. June 8, 2026.

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 AACS.

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 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:

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(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.

(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.

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(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 AACS.

R 125.107 Asset Criteria.

Rule 107. The authority by resolution may establish asset criteria when it determines

that action to be necessary to preserve the integrity of established income limitations

and to effectuate the purposes of the act.

History: 1979 AC.

R 125.109 Acceptance of aid and guarantees.

Rule 109. (1) Pursuant to sections 22(c) and 22(k) of the act, 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 execution on

behalf of the authority of any agreement that it considers necessary or appropriate with

respect thereto.

History: 1979 AC; 2023 AACS.

R 125.111 Hearings.

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Rule 111. (1) To inform itself and the public the authority, through its members or its

staff, may hold public hearings anywhere in this 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 authority’s executive director, or authorized officer

issuing a final decision of the authority, 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. Hearings on matters related to participation in the HUD housing choice

voucher programs administered by the authority may be requested and held in accordance

with 24 CFR parts 982 and 983, as applicable, and in accordance with the authority’s

housing choice voucher administrative plan.

(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 chief legal

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

History: 1979 AC; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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 AACS.

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 AACS.

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 AACS.

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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 AACS.

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

authority staff’s approval of its organizational documents, where applicable, as provided

in the act.

History: 1979 AC; 1998-2000 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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 AACS.

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 AACS.

R 125.132 Processing and evaluation of applications.

Rule 132. (1) An application for a development fund loan or a determination that a

proposed housing project is a feasible housing project, or both, must be processed by the

authority staff based on processing and underwriting procedures and guidelines developed

by the authority staff under direction of the executive director on behalf of the authority.

(2) An applicant may be required to furnish to the authority staff supplementary

information and to amend the application so that the proposed housing project is consistent

with the authority’s processing and under-writing procedures and guidelines.

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(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 $350,000.00 or more, must be presented to the authority for approval,

along with the authority staff’s analysis of the application and the executive director’s

recommendation with respect to the application, subject to the terms, conditions, and

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

(4) If the principal amount of the development fund loan is less than $350,000.00, the

executive director shall review the authority staff’s 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 allowed in the act.

(c) The applicant is reasonably expected to successfully implement the proposal.

(d) The authority staff 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 determined necessary by

the executive director.

History: 1979 AC; 1998-2000 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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 $350,000.00 or more, and, if the

authority 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 provides housing for individuals of low- and

moderate-income or serves and improves the residential area where authority-financed

housing is located or is planned to be located that enhances the viability of the housing.

(b) The applicant is reasonably expected to be able to achieve successful completion

of the proposed housing project.

(c) The proposed housing project meets 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.

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(e) The proposed housing project is a feasible housing project.

(3) For applications for development fund loans in the principal amount of $350,000.00

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 allowed in the act.

(c) The applicant is reasonably expected to successfully implement the proposal.

(d) The authority staff reasonably anticipates that the applicant will receive an

authority-aided or a federally-aided mortgage loan that provides 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 AACS; 2026 MR 11, Eff. June 8, 2026.

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 AACS.

PART 4. MORTGAGE LOANS

R 125.141 Multifamily mortgage loan applications.

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;

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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 AACS.

R 125.142 Processing and evaluation of applications.

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

staff based on the authority's processing and underwriting procedures and guidelines. The

authority staff shall undertake and require applicants to obtain and submit land appraisals,

market surveys and analyses, reviews of the architectural design, a site plan, construction

costs, materials 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 so that the proposed housing project is 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 AACS; 2026 MR 11, Eff. June 8, 2026.

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R 125.143 Authorization of mortgage loans.

Rule 143. (1) The authority shall review each analysis and recommendation and, if the

authority 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 provides housing for individuals of low- and

moderate-income or serves and improves the residential area where authority- financed

housing is located or is planned to be located that enhances 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 this state.

(c) The applicant is reasonably expected to be able to achieve successful completion

of the proposed housing project.

(d) The proposed housing project meets a social need in the area where it will 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, are

established in a manner consistent with the authority's processing and underwriting

procedures and guidelines, except as to any elements that 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.

(3) If the principal amount of the mortgage loan is less than $350,000.00, the executive

director may 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 determined necessary by the executive director.

History: 1979 AC; 1981 AACS; 1983 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

R 125.144 Conditions and special determinations in authorizations.

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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 AACS.

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 AACS.

R 125.146 Single family mortgage loans.

Rule 146. (1) An application by an individual for a mortgage loan for long-term

financing of a housing unit, which for purposes of this rule may include owner-occupied

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

or mobile homes permanently affixed to land and considered real property, to be purchased

by the individual, must include information, and if required by authority staff, supporting

materials and evidence with respect to both 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 by authority staff and may be approved by an authorized officer.

(3) The authorized homeownership staff shall review each application and, if the

authorized homeownership staff determine 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, the authorized officer may issue, on behalf of the

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

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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 determined 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 allow 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.

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

a housing unit that is not intended for owner occupancy.

(6) If an individual is a qualifying applicant, only the qualifying applicant is required

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

officer to be necessary, and only the qualifying applicant is 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 shall 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 is considered

for determining eligibility of the household for program qualification and loan terms. Those

non-qualified-applicant individuals are required to attest to their incomes, and those

incomes are included in determining the household gross income; non-qualified-applicant

individuals are not 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 the credit requirements established by the

authority.

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

AACS; 2026 MR 11, Eff. June 8, 2026.

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.

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(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 AACS.

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 based on the authority's evaluation factors.

(2) An applicant may be required to furnish to the authority staff supplementary

information and amend the application so that the planned activities are fully consistent

with the authority's evaluation factors.

(3) Upon completion of the processing, all applications for development fund grants in

the amount of $350,000.00 or more must be presented to the authority for approval, along

with the authority staff’s analysis of the application and the executive director's

recommendation with respect to the application subject to the terms, conditions, and

requirements determined necessary by the authority.

(4) If the amount of the development fund grant is less than $350,000.00, the executive

director shall review the authority staff’s 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 allowed in the act.

(c) The applicant is reasonably expected to successfully implement the proposal.

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

authority.

(5) 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 determined necessary by the executive director. The authority may require repayment

of these grants.

History: 1979 AC; 1998-2000 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

R 125.153 Authorization of development fund grants in the amount of $350,000.00

or more.

Rule 153. (1) For applications for development fund grants in the amount of

$350,000.00 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:

Page 17

(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

allowed in the act.

(c) The applicant is reasonably expected to successfully implement the proposal.

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

authority.

(3) The resolution may include conditions that 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 AACS; 2026 MR 11, Eff. June 8, 2026.

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 AACS.

PART 6. AUTHORITY LOAN DOCUMENTS

R 125.161 Authority loan documents.

Rule 161. (1) Forms of documents to be used with respect to development fund loans,

mortgage loans, and the issuance and sale of authority notes and bonds 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 AACS.

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

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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 in its own name or

through and in the name of an agent, 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.

(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 the authority’s 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 the authority’s 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 allowed by section 24b(2) of the act,

MCL 125.1424b.

Page 19

(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, and 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, must be

presented to the authority.

History: 1979 AC; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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 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 AACS.

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).

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History: 1979 AC; 2023 AACS.

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 the 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 may 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 after the date of the first

disbursement of funds pursuant to the property improvement loan. The authority’s

executive director may extend this period for good cause shown.

History: 1979 AC; 1980 AACS; 1982 AACS; 1983 AACS; 1991 AACS; 1998-2000 AACS; 2023

AACS; 2026 MR 11, Eff. June 8, 2026.

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 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.

Page 21

(d) Property improvement loan 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 brings 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 under this part must be between the homeowner and

the contractor. The authority shall not negotiate or enter into rehabilitation contracts under

this part.

History: 1979 AC; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

R 125.183 Rescinded.

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

R 125.184 Rescinded.

History: 1979 AC; 1998-2000 AACS.

PART 9. MICHIGAN HOUSING AND COMMUNITY DEVELOPMENT

FUND;

MICHIGAN HOUSING AND COMMUNITY DEVELOPMENT PROGRAM

R 125.190 Program purpose and applicability.

Rule 190. The 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 to meet the housing needs of low-

income, very low-income, and extremely low-income households, and households 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 in downtown areas and adjacent neighborhoods.

(c) Developing housing for the homeless, including both transitional housing and

permanent housing.

(d) Developing rental housing.

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(e) 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 AACS; 2026 MR 11, Eff. June 8, 2026.

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 an individual 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 that term is defined in subdivision

(a) of this rule.

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

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.

Page 23

(f) "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.

(g) "Controlling interest" means the holding by 1 individual or group of individuals

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.

(h) "Development costs" means the total 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, and

projects located in a downtown or adjacent neighborhood in this state.

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

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

individuals experiencing poverty, economic, and housing distress as specified in section

58b of the act, MCL 125.1458b.

(j) "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.

(k) "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-income, very low-

income, or extremely low-income households in need of housing, and households located

in downtown areas or adjacent neighborhoods. 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.

(l) "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.

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

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

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

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

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

the applicable statutory law governing the program.

(p) "Predevelopment costs" means reimbursable costs, related to a specific eligible

housing, downtown, or adjacent neighborhood project, that meet all of the following:

(i) Predevelopment project costs that are determined to be customary and reasonable

by the authority, including, but not limited to, consulting fees, architectural fees,

Page 24

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.

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

development fund.

(r) "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.

(s) "Rental housing project" means a housing development consisting of 1 or more

dwelling units that are rented to individuals or families meeting applicable occupancy and

income requirements related to the nature of the housing unit or development.

(t) “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.

(u) "State" means this state and any state level component units thereof.

History: 2008 AACS; 2009 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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 limited to occupancy by low-

income, very low-income, and/or extremely low-income households, or 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

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facilities. Activities under this category include acquisition, construction, reconstruction,

rehabilitation or installation of community facilities, and infrastructure improvements or

other incurrence of development costs or predevelopment costs carried out by the recipient.

In undertaking these activities, design features and improvements that promote energy

efficiency may be included. These 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. These 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 individuals 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-income, very low-income, or extremely low-income households.

(j) Activities providing security deposit assistance to low-income, very low-income,

or extremely low-income households.

(k) Activities providing foreclosure prevention or foreclosure assistance to low-

income, very low-income, 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 individuals 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 individuals developing business enterprises.

(iv) Provides 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 the entities to carry

out program eligible housing development, neighborhood revitalization, or economic

development activities.

(p) Predatory lending prevention or relief.

(q) Other housing and community development fund or program activities authorized

under the act.

Page 26

(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, that has 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, that 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, that was 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 any

federal agency 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, who was 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 before the application deadline.

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

a controlling interest, and 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 that has open or unresolved, or both, audit issues with any federal

agency or the authority related to this program or other programs administered by any

federal agency or the authority.

(g) An applicant for whom a submitted application is incomplete, lacks required

supporting documentation, or is so unclear or disjointed that, in the discretion of the

authority staff, the application 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 staff’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 that is subject to a regulatory agreement or tax credit

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

regulatory agreement or tax credit regulatory agreement as determined by authority staff.

(i) Any applicant submitting an application that includes financial participation by an

individual who, during the 5-year period before the date of the bid or award, was 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

Page 27

January 1, 2000, or was assessed a federal civil or administrative penalty in relation to the

contract.

(j) An applicant submitting an application for proposals that 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, that must be paid by the housing and

community development funding recipient. If a recipient violates the displacement or

relocation provisions of subrule (2) of this rule, that recipient shall repay program money

and the landlord or developer shall pay the affected parties' costs and all moving expenses.

History: 2008 AACS; 2009 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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 staff 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 are reviewed in the

following manner:

(i) Authority staff shall review all applications for eligibility, threshold, and selection

criteria and ensure that all application requirements are 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 determined 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 authority staff reviews and selects for

award are recommended to the authority for approval. In accordance with section 21(6) of

the act, MCL 125.1421, the authority may delegate approval of housing and community

development program awards to the authority’s executive director.

(3) If the authority staff determines that an application contains deficiencies that

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.

Page 28

(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.

(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 identified by authority staff.

(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. Authority staff may make this determination if application

materials or terms are determined by staff to be unacceptable or unaligned with housing

and community development program requirements.

(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) Authority staff may negotiate individual elements of any application, loan, or

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

(9) Authority staff may conduct a site review. Applicants shall receive

recommendation for approval from the authority staff to be considered for funding by the

authority.

History: 2008 AACS; 2009 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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 are used in evaluating the responses to any Michigan

housing and community development program NOFA or RFP:

(a) To be eligible for funding, an applicant shall 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 not less than 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 applications, as more fully described in a

NOFA or RFP, includes, at a minimum, the following factors:

Page 29

(i) The extent that the proposal or project represents the leveraging of program funds

with additional, non-housing and community development fund sources.

(ii) The ability of the applicant or recipient, or both, to administer the funding award

effectively and deliver results within program timelines.

(iii) The extent that the proposal or project helps meet any 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 that the proposal or project helps meet any 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 that the proposal helps meet any statutory requirement that a portion

of the fund be expended for individuals 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 not less than 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 not less than 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 shall agree in writing not to evict a tenant without just cause, as that phrase is

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 AACS; 2026 MR 11, Eff. June 8, 2026.

R 125.195 Biennial plan; allocations; earmarks; carryover.

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

propose, and the authority shall 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.

Page 30

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

plan, allocation plan, and allocation formula, unless amended by statute:

(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 individuals with

disabilities and individuals living in eligible distressed areas.

(2) After 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 staff 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 are received,

accepted, and have not otherwise been approved for funding, the authority staff shall revise

the proposed distribution to comply with the applicable earmark requirements. The revised

plan must 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 AACS; 2026 MR 11, Eff. June 8, 2026.

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 in a manner provided by authority staff. The

authority staff 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 staff shall establish 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

or equivalent of the funding 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 it is consistent with the goals

and strategies outlined in the application.

(ii) How well program activities were performed, including a discussion of how

success or failure is measured.

(iii) What populations have benefited from the distribution of program funds,

including details on results.

Page 31

(d) The financial monitoring form must be signed by the chief financial officer, or

equivalent, of the recipient and analyze the financial performance of the recipient. Program

funds must 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 after 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 money

outstanding on the date that is 2 years after the date of the award is subject to the recapture

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

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

with the authority.

(c) Recipients shall comply with any restrictions that are stated in and enforced

through a regulatory agreement, grant agreement, or other legal documents associated with

any award of program funds. These restrictions may include, but are not limited to, the

following, for a term of years:

(i) Rent restrictions.

(ii) Record keeping and reporting.

(iii) Income targeting of tenants.

(d) Authority staff shall monitor compliance with project restrictions and any other

covenants by recipients in any Michigan housing and community development

program fund agreement. An annual compliance fee of up to $100.00 per unit may be

charged for this review.

(3) 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 may justify the de-obligation or recapture of program

funds:

(i) Inability of the applicant or recipient to effectively carry out the program activity

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

(ii) Inability of the applicant or recipient to make 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, applicable federal requirements, or other documentation or requirements

related to any award. In making the decision on de-obligation or recapture in this instance,

the authority staff shall consider whether or not the non-compliance is due to factors

beyond the applicant's or recipient's control.

Page 32

(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 other

accounts related to the program activity must be recaptured and returned to the program

fund.

(vi) 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) Other reasons 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 AACS; 2026 MR 11, Eff. June 8, 2026.

R 125.197 Hearings procedures.

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

(a) The authority shall, through its staff, hold not less than 3 public hearings in

separate locations throughout this state biennially on the program priorities for the

upcoming 2-year period. The in-person hearings may include an option for virtual

participation. At the hearings, the authority staff 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 shall consider the comments received at public hearings. Biennially,

the authority shall 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 money.

(c) The authority shall 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, and other information that the authority staff or

authority board believe would enhance the 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, 1976 PA 442, MCL 15.231 to

15.246.

History: 2008 AACS; 2009 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

Page 33

R 125.198 Michigan housing and community development fund advisory

committee.

Rule 198. Pursuant to Executive Reorganization Order No. 2009-24, MCL 125.1392,

all of the authority, powers, duties, functions, records, personnel, property, unexpended

balances of appropriations, allocations or other funds of the Michigan housing and

community development fund advisory committee authorized under MCL 125.1458e, were

transferred by Type III transfer to the authority and the Michigan housing and community

development fund advisory committee is abolished.

History: 2009 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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-

income, very low-income, 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-income,

very low-income, and extremely low-income households.

(v) Data on the extent to which any demographic groups and households of a type

identified by the authority 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) Other information reasonably within the applicant's or recipient's ability to

determine and to report to the authority, requested by the authority, related to the grant or

loan.

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

not less than 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

not less than 5 years.

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

History: 2008 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

Page 34

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 AACS.

R 125.202 Identity of interest; "member of the family" defined.

Rule 202. (1) Any contractual relationship between either an owner or management

agent and a vendor described in subrule (2) of this rule 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, "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 AACS.

R 125.203 Requirements for conducting business with identity of interest

vendors.

Rule 203. Owners and management agents shall conform to all of the following

requirements when conducting business with vendors with whom there is an identity of

interest:

(a) Both the owner and management agent shall inform the authority division of 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.

Page 35

(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 individuals:

(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 individual described in subdivision (b)

of this subrule, 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

staff and be submitted together with the submission described in subdivision (a) of this

subrule or, if the proposed vendor is not listed on the submission, when 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 staff 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.

(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 staff. 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, an

additional approval must be requested of the authority.

(h) The authority staff 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 subrule, 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 subrule.

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(i) Unless compliance with this subdivision is excused pursuant to the provisions of

subdivision (h) of this subrule, 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 the 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 AACS; 2026 MR 11, Eff. June 8, 2026.

R 125.204 Sanctions; "excessive costs" defined.

Rule 204. (1) 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.

(2) 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 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 or the officers or

employees to whom it may delegate 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 or the officers or

employees to whom it may delegate authority, incurred as a result of the contract with the

vendor with whom there is an identity of interest.

(ii) If the violation involves a vendor who has an identity of interest with the

management agent, 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.

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(iii) If the violation involves a vendor who has an identity of interest with the owner,

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.

History: 1991 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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 an individual from receipt of

any funds, credits, or benefits, as administered by the authority, that the individual is

otherwise entitled under federal or state law; however, this exception does not enable or

authorize participation in the program involving the applicable funds, credit, or benefit

beyond the mere receipt of the funds, credit, or benefit. This provision does not prevent

sanctions under this part where the authority acts as program administrator and 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) Individuals 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. Individuals are subject to the provisions of this part whether or not the

conduct for which a sanction is imposed occurred while the individual was engaged in an

authority program or transaction. Individuals are subject to the provisions of this part

whether their actions upon which a sanction is based were taken on their own behalf or on

behalf of another individual.

(5) If a program participant is debarred or suspended by any federal agency from

participation in any federal program, federal debarment and suspension proceedings and

findings that result in debarment or suspension are effective as to any federal program that

the authority participates in. The lack of a federal finding as to debarment or suspension

does not prevent the authority from proceeding against an authority-administered federal

program participant under this part.

History: 1991 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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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 was 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 or federal subsidies administered by the

authority.

(ix) Grantees.

(x) Persons employed by, or offering services to, participants, such as any of the

following:

(A) Architects.

(B) Accountants.

(C) Attorneys.

(D) Consultants.

(E) Engineers.

(F) Contractors to participants.

(G) Subcontractors of contractors to participants.

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(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 AACS; 2026 MR 11, Eff. June 8, 2026.

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.

(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.

Page 40

(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 AACS.

R 125.214 Debarment procedures.

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

Procedures will commence with the authority staff 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 that debarment is based on.

(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 that receives a notice of debarment is entitled to a hearing on the

issue. The hearing must 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, must not be made until a written

proposal for decision is sent to all parties by the hearing officer who has heard the contested

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

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

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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, as issued by an authorized officer, 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, within 60 days after the closing date

for submission of written exceptions to the proposal for decision, whichever is later.

History: 1991 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

R 125.215 Debarment; duration.

Rule 215. Debarment is for a period of time commensurate with the acts or omissions

of the person to be debarred. In general, a person may not be debarred for more than 3

years. However, if 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 AACS; 2026 MR 11, Eff. June 8, 2026.

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 may 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 AACS; 2026 MR 11, Eff. June 8, 2026.

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 AACS.

R 125.218 Reinstatement after debarment.

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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 is submitted and approved by an authorized officer of the

authority, whichever occurs first.

(2) Petitions for early reinstatement must 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, that the authority debarment was based on.

(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 the official’s 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 is no 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 AACS; 2026 MR 11, Eff. June 8, 2026.

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 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 this state, 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 or debarment by a federal agency or another state agency for any

cause.

History: 1991 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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.

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

following information:

(a) That suspension is proposed.

(b) The acts, events, or omissions the suspension is based on.

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

involved.

(d) When the suspension becomes effective. The suspension may be made effective

immediately if the authorized officer determines that an exigent need to cease activity is

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

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

(f) The potential effects of suspension.

(3) A respondent that 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 makes the final decision has not heard the contested case or

read the record, the decision, if adverse to the respondent, must not be made until a written

proposal for decision is sent to all parties by the hearing officer who heard the contested

case or read the record. Any party who is adversely affected has 10 after 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, as issued by an authorized officer, 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 AACS; 2026 MR 11, Eff. June 8, 2026.

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 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

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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 AACS.

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 suspension date indicated in the notice

provided pursuant to R 125.220. The suspension continues until the authority issues a final

decision following a hearing, if a hearing is requested, on the notice of suspension, which

may lift or continue the suspension on such terms determined by the authorized officer..

(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 is initiated:

(a) Criminal prosecution.

(b) Civil action.

(c) An administrative hearing or action for the alleged or suspected violation of law

and issuance of a final decision and order, which may lift or continue the suspension on

such terms determined by the authorized officer issuing the final decision.

History: 1991 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.

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 AACS.

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.

(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

Page 45

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 AACS.

PART 12. BROWNFIELD REDEVELOPMENT FINANCING ACT

ACTIVITIES

R 125.225 Review of brownfield plans.

Rule 225. Authority staff shall propose to the authority criteria for the evaluation of plans

submitted to the authority pursuant to the brownfield redevelopment financing act, 1996

PA 381, MCL 125.2651 to 125.2670. Upon adoption of the criteria, authority staff shall

analyze, and approve or deny, plan submissions according to the criteria, and report on

brownfield redevelopment and tax increment financing activity to the authority no less than

quarterly.

History: 2026 MR 11, Eff. June 8, 2026.

R 125.227 Coordination with brownfield redevelopment oversight agencies.

Rule 227. The executive director and authority staff shall ensure that the authority’s

guidance, documents, and reporting requirements regarding the brownfield redevelopment

financing act, 1996 PA 381, MCL 125.2651 to 125.2670, and tax increment financing align

with that of the department, of environment, Great Lakes, and energy, or its successor

agency, and the Michigan Strategic Fund, or its successor agency.

History: 2026 MR 11, Eff. June 8, 2026.

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