TITLE 13. HOUSING
REGISTRAR'S NOTICE: The
Virginia Housing Development Authority is claiming an exemption from the
Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia)
pursuant to § 2.2-4002 A 4 of the Code of Virginia.
Title of Regulation: 13VAC10-190. Rules and
Regulations for Qualified Mortgage Credit Certificate Programs (amending 13VAC10-190-10, 13VAC10-190-30,
13VAC10-190-40, 13VAC10-190-50, 13VAC10-190-60, 13VAC10-190-70, 13VAC10-190-200).
Statutory Authority: § 36-55.30:3 of the Code of
Virginia.
Public Hearing Information:
February 5, 2019 - 10 a.m. - Virginia Housing Development
Authority, 601 South Belvidere Street, Richmond, VA
Public Comment Deadline: February 5, 2019.
Agency Contact: Jeff Quann, Senior Counsel, Virginia
Housing Development Authority, 601 South Belvidere Street, Richmond, VA 23220,
telephone (804) 343-5603, or email jeffrey.quann@vhda.com.
Summary:
The proposed amendments update the mortgage credit certificate
(MCC) regulations for consistency with other regulations, including (i) adding
definitions and (ii) clarifying language used in the regulation and conditions
under which the authority may issue an MCC to an applicant.
13VAC10-190-10. Definitions.
The following words and terms when used in this chapter shall
have the following meanings, unless the context clearly indicates otherwise:
"Applicant" means the individual applying for a
mortgage credit certificate.
"Authority" means the Virginia Housing Development
Authority, a political subdivision of the Commonwealth of Virginia constituting
a public instrumentality.
"Certificate credit rate" has the meaning set forth
in IRC § 25.
"Certified indebtedness" has the meaning set forth
in IRC § 25. It is the indebtedness loan or portion thereof
that the applicant will incur uses to acquire his principal
residence and that, in the determination of the authority, meets the
requirements of IRC § 25 and will be used in calculating the amount of the
potential tax credit under the mortgage credit certificate MCC.
"Commitment" means the obligation of the authority
to provide a mortgage credit certificate to an eligible applicant pursuant to
an approved application.
"Commitment term" means the period of time during which
the applicant must close on his loan to be entitled to a mortgage credit
certificate pursuant to his commitment.
"Executive director" means the executive director
of the authority or any other officer or employee of the authority who is
authorized to act on behalf of the executive director or the authority
pursuant to a resolution of the board of the authority.
"Internal Revenue Code" or "IRC" means
Title 26 of the United States Code, as the same may be amended from time to
time.
"Loan" means any extension of credit that finances
the purchase of and will be secured by a principal residence.
"Mortgage credit certificate" or "MCC"
means a certificate issued by the authority pursuant to IRC § 25.
"Participating lender" means any person or
organization that is legally authorized to engage in the business of making
loans for the purchase of principal residences and meets the qualifications in
this chapter to participate in the programs.
"Principal residence" means a dwelling that will be
occupied as the primary residence of the purchaser, that will not be property
held in a trade or business or as investment property, that is not a
recreational or second home, and no part of which will be used for any business
purposes for which expenses may be deducted for federal income tax purposes.
"Program" means a qualified mortgage credit
certificate program as defined in IRC § 25, in particular IRC
§ 25(c)(2)(A).
"Private activity bonds" has the meaning set forth
in IRC § 141.
"Qualified home improvement loan" has the meaning
set forth in IRC § 143(k)(4).
"Qualified mortgage bond" has the meaning set
forth in IRC § 143.
"Qualified rehabilitation loan" has the meaning
set forth in IRC § 143(k)(5).
"Qualified veteran's mortgage bond" has the
meaning set forth in IRC § 143.
13VAC10-190-30. Purpose, applicability, and scope of
regulations.
A. All programs described in 13VAC10-190-20 and all of the
MCCs issued by the authority pursuant to such programs are subject to this
chapter.
B. This chapter is intended to provide a general description
of the authority's requirements and processing and is not intended to include
all actions involved or required in the processing and administration of MCCs.
This chapter is subject to amendment by the authority at any time and may be
supplemented by policies, rules, and regulations adopted by the authority from
time to time with respect to all of the programs.
C. Notwithstanding anything to the contrary in this chapter,
the executive director is authorized with respect to any MCC program to waive
or modify any provision of this chapter where deemed appropriate by him for
good cause, to the extent not inconsistent with the IRC.
D. Notwithstanding anything to the contrary in this chapter,
MCCs can only be issued when and to the extent permitted by the IRC and the
applicable federal laws, rules, and regulations governing the issuance of MCCs.
E. Notwithstanding anything to the contrary in this chapter,
the federal laws, rules, and regulations governing the MCCs shall control over
any inconsistent provision in this chapter, and individuals applicants
to whom MCCs have been issued shall be entitled to the privileges and benefits
thereof only to the extent permitted by the IRC.
F. Wherever appropriate in this chapter, the singular shall
include the plural; the plural shall include the singular; and the masculine
shall include the feminine.
13VAC10-190-40. Eligible persons.
The authority may only issue an MCC to an individual
only if he would be eligible to be a borrower of a tax exempt bond financed loan
pursuant to 13VAC10-40-30, 13VAC10-40-40, 13VAC10-40-50, 13VAC10-40-70,
13VAC10-40-90, and 13VAC10-40-100 applicant if the applicant meets the
requirements the authority establishes for the program, which include
requirements that ensure the applicant qualifies under 26 CFR 1.25-3T so that
the MCC would be a qualified mortgage credit certificate pursuant to 26 CFR
1.25-3T.
13VAC10-190-50. Eligible properties.
The authority may issue an MCC to an individual applicant
only if his application for the MCC is based upon his purchasing a principal
residence that qualifies under 26 CFR 1.25-3T so that the MCC would be eligible
for a tax exempt bond financed loan a qualified mortgage credit
certificate pursuant to 13VAC10-40-40 through 13VAC10-40-80 26 CFR
1.25-3T.
13VAC10-190-60. Eligible lenders.
The authority may issue an MCC to an individual applicant
only if his application for the MCC is based upon his obtaining a loan from a
participating lender.
13VAC10-190-70. Eligible loans.
The authority may issue an MCC to an individual applicant
only if his application for the MCC is based upon a loan that:
1. Is not funded in whole or in part from the proceeds of a
qualified mortgage bond or a qualified veteran's mortgage bond as defined in
IRC § 143,
2. Is incurred by the applicant to acquire his principal
residence,
3. Is not being assumed from another borrower, and
4. Is not a refinancing of other indebtedness of the
applicant, except in the case of construction period loans, bridge loans, or
similar temporary financing that has a term of 24 months or less,
5. Is not a qualified home improvement loan or a qualified
rehabilitation loan, and
6. Otherwise satisfies the requirements of 26 CFR
1.25-2T(c)(1).
13VAC10-190-200. Compliance investigations.
After each MCC is issued, the authority shall have the right,
but not the obligation, to investigate the facts and circumstances relating to
any application and the issuance and use of the related MCC and, if
there are proper grounds, to revoke the MCC and take other appropriate legal
action.
VA.R. Doc. No. R19-5801; Filed January 15, 2019, 3:31 p.m.