Code of Virginia

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Code of Virginia
Title 36. Housing
Chapter 9. Virginia Housing Trust Fund
7/2/2022

Chapter 9. Virginia Housing Trust Fund.

§ 36-141. Definitions.

As used in this chapter, unless the context requires a different meaning:

"Board" means the Board of Housing and Community Development.

"Department" means the Department of Housing and Community Development.

"Fund" means the Virginia Housing Trust Fund created by this chapter.

"HDA" means the Virginia Housing Development Authority created in Chapter 1.2 (§ 36-55.24 et seq.).

"Housing development" or "housing project" means any work or undertaking, whether new construction or rehabilitation, which is designed and financed pursuant to the provisions of this chapter for the primary purpose of providing affordable sanitary, decent and safe dwelling accommodations for persons and families of low or moderate income in need of housing; such work or undertaking may include any buildings, land, equipment, facilities, or other real or personal properties which are necessary, convenient, or desirable appurtenances, including but not limited to streets, sewers, utilities, parks, site preparation, landscaping, and such offices, and other nonhousing facilities incidental to such development or project such as administrative, community, health, educational and recreational facilities as the Department of Housing and Community Development determines to be necessary. "Low and moderate income" shall be defined in the program guidelines developed by the Department of Housing and Community Development.

"Housing sponsor" means individuals, joint ventures, partnerships, limited partnerships, public bodies, trusts, firms, associations, or other legal entities or any combination thereof, corporations, cooperatives and condominiums, approved by the Department of Housing and Community Development as qualified either to own, construct, acquire, rehabilitate, operate, manage or maintain a housing development, whether nonprofit or organized for limited profit subject to the regulatory powers of the Department of Housing and Community Development and other terms and conditions set forth in this chapter.

"Residential housing" means a specific work or improvement within this Commonwealth, whether multi-family residential housing or single-family residential housing undertaken primarily to provide dwelling accommodations, including the acquisition, construction, rehabilitation, preservation or improvement of land, buildings and improvements thereto, for residential housing, and such other nonhousing facilities as may be incidental, related, or appurtenant thereto.

1988, c. 687; 2013, c. 754.

§ 36-142. Creation and management of Fund.

A. There is hereby established in the state treasury a special permanent, nonreverting fund, to be known as the "Virginia Housing Trust Fund." The Fund shall be established on the books of the Comptroller and consist of sums appropriated to the Fund by the General Assembly, all receipts by the Fund from loans made by it to housing sponsors and persons and families of low and moderate income, all income from the investment of moneys held in the Fund, and any other sums designated for deposit to the Fund from any source, public or private. The Fund shall also consist of such other sums as may be made available to it and shall include federal grants solicited and received for the specific purposes of the Fund and all interest and income from investment of the Fund. Any sums remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. All moneys designated for the Fund shall be paid into the state treasury and credited to the Fund.

B. The Department shall:

1. Work in collaboration with the HDA to provide loan origination and servicing activities as needed to carry out the purposes of the Fund. The costs of such services shall be considered an eligible use of the Fund; and

2. Use, through HDA, at least 80 percent of the moneys from the Fund to provide flexible financing for low-interest loans through eligible organizations. Such loans shall be structured to maximize leveraging opportunities. All such funds shall be repaid to the credit of the Fund. Loans may be provided for (i) affordable rental housing to include new construction, rehabilitation, repair, or acquisition of housing to assist low or moderate income citizens, including land and land improvements; (ii) down payment and closing cost assistance for homebuyers; and (iii) short-term, medium-term, and long-term loans to reduce the cost of homeownership and rental housing. Moneys required by the HDA to fund such loans and perform loan closing and disbursement services shall be transferred from the Fund to the HDA.

The Department may use up to 20 percent of the moneys from the Fund to provide grants through eligible organizations for targeted efforts to reduce homelessness, including (a) temporary rental assistance, not to exceed one year; (b) housing stabilization services in permanent supportive housing for homeless individuals and homeless families; (c) mortgage foreclosure counseling targeted at localities with the highest incidence of foreclosure activity; and (d) predevelopment assistance for permanent supportive housing and other long-term housing options for the homeless.

C. The Fund shall be administered and managed by the Department as prescribed in this chapter. In order to carry out the administration and management of the Fund, the Department is granted the power to contract with or employ officers, employees, agents, advisers and consultants, including, without limitation, attorneys, financial advisers, public accountants, engineers and other technical advisers and, the provisions of any other law to the contrary notwithstanding, to determine their duties and compensation without the approval of any other agency or instrumentality. The Department may disburse from the Fund its reasonable costs and expenses incurred in the administration and management of the Fund, including reasonable fees and costs of the HDA.

D. For the purposes of this section, eligible organizations include (i) localities, (ii) local government housing authorities, (iii) regional and statewide housing assistance organizations that provide assistance to low and moderate income or low income citizens of Virginia, and (iv) limited liability companies expressly created for the purpose of owning and operating affordable housing.

E. In any year prior to the expenditure of any general funds appropriated for the Fund for the next succeeding fiscal year, the Department, in conjunction with HDA, shall submit a plan outlining the proposed uses of such funds to the General Assembly. The plan shall be provided to the Chairmen of the House Committee on Appropriations and the Senate Committee on Finance and Appropriations no later than November 1 of each year.

1988, c. 687; 2013, c. 754.

§ 36-143. Deposit of money; expenditures; investments.

All money transferred to the control of the HDA from the Fund shall be deposited in an account or accounts in banks or trust companies organized under the laws of the Commonwealth or in national banking associations located in Virginia or in savings institutions located in Virginia organized under the laws of the Commonwealth or the United States. The money in these accounts shall be paid by check signed by the Executive Director of the HDA or other officers or employees designated by the Commissioners of the HDA. All deposits of money shall, if required by the Director of the Department of Housing and Community Development, be secured in a manner determined by the Director of the Department of Housing and Community Development to be prudent. All banks, trust companies and savings and loan associations are authorized to give security for the deposits. Money in the Fund shall not be commingled with other money of the HDA. Money in the Fund not needed for immediate use or disbursement may be invested or reinvested by the HDA at the direction and guidance of the Director of the Department of Housing and Community Development in obligations or securities which are considered lawful investments for public funds under the laws of the Commonwealth. All interest and earnings accrued from investments of moneys from the Fund shall be used to increase the amount available in the Fund.

1988, c. 687; 1996, c. 77; 2013, c. 754.

§ 36-144. Annual audit.

An independent certified public accountant selected by the HDA, shall annually audit the accounts of any portion of the Fund transferred to the control of the HDA, and the cost of such audit services shall be borne by the HDA and be paid from moneys designated for such purposes in the Fund. The audit shall be performed at least each fiscal year, in accordance with generally accepted auditing standards and, accordingly, include such tests of the accounting records and such auditing procedures as considered necessary under the circumstances. Such audit shall be reviewed by the Auditor of Public Accounts. The HDA shall furnish copies of the audit to the Governor and to the Board.

1988, c. 687; 2013, c. 754.

§ 36-145. Collection of money due Fund.

The HDA is empowered to collect, or to authorize others to collect on its behalf, amounts due to the Fund under any loan made to a housing sponsor or a person or family of low or moderate income and funded from the portion of the Fund transferred to its control in order to obtain payment of any amounts in default. Proceedings to recover amounts due to the Fund may be instituted by the HDA in the name of the Fund in the appropriate circuit court.

1988, c. 687; 2013, c. 754.

§ 36-146. Loans.

Except as otherwise provided in this chapter, money in the Fund shall be used to make loans to housing sponsors and to persons and families of low and moderate income to finance or refinance the acquisition, construction, improvement, ownership or occupancy of housing developments and residential housing for persons and families of low and moderate income.

Except as provided in this chapter, the Department of Housing and Community Development shall determine the terms and conditions of any loan from the Fund, including but not limited to the interest rate and repayment terms of each loan. All loans from the Fund shall be evidenced by appropriate notes of the loan recipient payable to the Fund. Any such loans made with respect to dwellings of residents of the Commonwealth shall be limited to dwellings occupied by persons or families of low and moderate income. The Director of the Department of Housing and Community Development is authorized to require in connection with any loan from the Fund any documents, instruments, certificates, legal opinions or other information it deems necessary or convenient.

1988, c. 687.

§ 36-147. Grants.

Subject to any restrictions which may apply to the use of money in the Fund, the Board in its discretion may approve the use of money in the Fund to make grants or appropriations to housing sponsors and persons and families of low and moderate income to provide assistance for the acquisition, construction, improvement, ownership or occupancy of housing developments and residential housing for persons and families of low and moderate income. Grants shall be disbursed from the Fund by the State Treasurer in accordance with the directions of the Director of the Department of Housing and Community Development.

1988, c. 687; 2013, c. 754.

§ 36-148. Pledge of assets to secure bonds of the HDA.

The HDA is empowered at any time and from time to time to transfer, upon the direction of the Director of the Department of Housing and Community Development, from the portion of the Fund under its control to banks or trust companies designated by the HDA any or all of the assets of the Fund to be held in trust as security for the payment of the principal of and premium, if any, and interest on any or all of the bonds of the HDA. The interests of the Fund in any assets so transferred shall be subordinate to the rights of the trustee under the pledge. To the extent funds are not available from other sources pledged for such purpose, any payments of principal and interest received on the assets transferred or held in trust may be applied by the trustee thereof to the payment of the principal of and premium, if any, and interest on such bonds of the HDA to which the assets have been pledged, and, if such payments are insufficient for such purpose, the trustee is empowered to sell any or all of such assets and apply the net proceeds from the sale to the payment of the principal of and premium, if any, and interest on such bonds of the HDA. Any assets of the Fund transferred in trust as set forth above and any payments of principal, interest or earnings received thereon shall remain part of the Fund but shall be subject to the pledge to secure the bonds of the HDA and shall be held by the trustee to which they are pledged until no longer required for such purpose by the terms of the pledge. On or before January 10 of each year, the HDA shall transfer, or shall cause the trustee to transfer, to the Fund any assets transferred or held in trust as set forth above which are no longer required to be held in trust pursuant to the terms of the pledge.

1988, c. 687; 2013, c. 754.

§ 36-148.1. Authorization of funding from HDA.

The HDA and the Department of Housing and Community Development, on behalf of the Fund, may enter into agreements whereby the Fund may obtain funding from the HDA for the financing of loans in accordance with this chapter, subject to such terms and conditions as shall be set forth therein. To the extent so provided by the terms of any such agreements, moneys in the Fund may be used to repay the HDA any amounts owed thereunder, and assets of the fund may be pledged to the HDA pursuant to such agreements to secure the repayment of such amounts. Any such agreements entered into by the HDA and the Department of Housing and Community Development prior to February 25, 1991, are hereby validated.

1991, c. 48.

§ 36-149. Formation of corporation.

For the purposes set forth in §§ 36-141 through 36-148, the HDA may form a corporation to administer and manage the portion of the Fund under its control in accordance with the provisions thereof and to exercise and perform any or all of the powers and duties provided therein. Such corporation shall be under the control and supervision of the HDA. Such corporation shall have such of the powers and duties of the HDA set forth in the above referenced sections as HDA shall delegate to such corporation and such other powers and duties as shall be provided by the documents and instruments creating and governing the corporation and by applicable state law. The provisions of the above referenced sections authorizing or requiring the HDA to exercise any power or to perform any duty shall be deemed to authorize or require such corporation to exercise any such power or to perform any such duty as shall be delegated by the HDA to such corporation.

1988, c. 687; 2013, c. 754.

§ 36-150. Reports.

On or before December 1 of each year, the Department shall report to the Secretary of Commerce and Trade, the Governor and the Chairmen of the House Committee on Appropriations and the Senate Committee on Finance and Appropriations and on such other matters regarding the Fund as the Department may deem appropriate, including the status of the former Housing Partnership Fund, or other items as may be requested by any of the foregoing persons to whom such report is to be submitted.

1988, c. 687; 2013, c. 754.

§ 36-151. Liberal construction of chapter.

The provisions of this chapter shall be liberally construed to the end that its beneficial purposes may be effectuated. Insofar as the provisions of this chapter are inconsistent with the provisions of any other law, general, special or local, the provisions of this chapter shall be controlling.

1988, c. 687.