Chapter 175-3 Seed Money Loans

(A) Seed money loans shall be made to sponsors.

(B) An applicant for a seed money loan shall demonstrate that mortgage financing may reasonably be obtained for permanent financing of the housing development. “Permanent financing” is any financing provided by private lending institutions, federal, state, or local agencies, charitable sources, equity investments or a combination thereof.

(C) The amount of an application for a seed money loan shall be limited to the minimum amount essential for the predevelopment of a project.

(D) Sponsors shall use seed money loans to pay those expenses which are necessary and proper in connection with the preparation of applications for financial assistance for housing developments, which may include payments for options to purchase proposed housing development sites; deposits on purchase contracts; payments for the purchase of development sites; legal, organizational, and marketing expenses; project manager and clerical staff salaries; office rent; fees for preliminary feasibility studies, planning, engineering, and architectural work; and application and other fees of federal, state, and local agencies.

HISTORY: Eff 5-31-86; 3-23-04

Rule promulgated under: RC Chapter 119.03

Rule authorized by: RC 175.02

Rule amplifies: RC 175.04

RC 119.032 Review Date: 3/23/09

(A) A sponsor shall submit, on a form provided by the agency, an application for a seed money loan. .

(B) Applications that meet all minimum criteria as defined in this chapter and in agency guidelines shall be presented to the agency or a committee of the agency for review. Approval shall be made by the agency..

(C) All applications shall include, at a minimum, the following items:

(1) Evidence that a site for a housing development has been identified.

(2) Evidence of sufficient collateral to secure the amount of the seed money loan. The collateral shall be in the form of a mortgage on the real property, irrevocable letters of credit, or other security devices and collateral required or approved by the agency.

(3) Evidence that the project shall be occupied by low- and moderate-income persons, as determined by the agency.

(4) Sufficient information regarding the identity, background, and experience of all officers, general or limited partners, and other principal personnel who would be a member of the development team for the proposed project.

(5) A proposed budget showing the sources, uses and amounts of financing needed for the project and evidence of conditional financial support for the project.

(6) Copies of audited financial statement and tax returns, if determined to be necessary.

HISTORY: Eff 5-31-86; 3-23-04

Rule promulgated under: RC 119.03

Rule authorized by: RC 175.02

Rule amplifies: RC 175.04

RC 119.032 Review Date: 3/23/09

(A) The sponsor shall notify the agency upon the closing of a construction loan or the receipt of permanent financing, and the seed money loan shall be repaid in full to the agency at that time out of such proceeds.

(B) The agency may charge fees for application, processing, extensions, closings, and other fees deemed reasonable by the agency.

HISTORY: Eff 3-23-04

Rule promulgated under: RC 119.03

Rule authorized by: RC 175.02

Rule amplifies: RC 175.04

RC 119.032 Review Date: 3/23/09

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