The restrictions set out in the LURA can be defined by the compliance period and the extended use period. For example, the compliance period is set at 15 years, with an additional 15 years for the extended use period. The initial 15-year period of compliance is implemented by the rules of the IRS, HUDs or other housing authorities, and any further extension of the lifespan is implemented by the measures taken by each Member State in which the building is located. 3. The HFA will enforce the regulatory agreement and take action against all mortgagors that violate its provisions. Such measures may involve a declaration of delay and a request for performance of the contract to each jurisdiction. What is a Land Use Restriction Agreement (LURA) A Land Use Limitation Agreement (LURA) subjects multi-family ownership to a Land Tenure Restriction Agreement (LURA) in which the owner waives some of his land use rights in exchange for the promise of future tax credits, rental income restrictions, one-time allowances to rent to low-income tenants and other accessibility restrictions. Restrictions on land use are documented in the LURA, which is registered in the public registration and works with the country (i.e. the restricted act). Since the LURA works with the land, if a building is sold during the term of the contract, the restrictions of the LURA are binding on the buyer. The objective of an LURA is to provide affordable housing to low-income households by limiting the maximum rent that can be calculated for one unit and by requiring that some or all units be only households whose income is less than a percentage (e.g. 40%, 60%, 80% of the average median income). LIHTC Tax Credits In exchange for the omission of land use restrictions, the owner of the LIHTC multifamily building receives a series of tax credits that offer dollar-for-dollar reductions in their federal income taxes.
LIHTC real estate receives tax credits each year for the first 10 years of the agreement. Tax credits are paid to the owner solely because of his ownership of the property in question. Tax credits cannot be separated individually from the property, that is: You cannot sell tax credits. Since the tax credits remain on the property, an interest in the property can be sold, so the buyer gets the tax credits. Termination of the LURA under LIHTC During the limitation period of the LIHTC program, land use restrictions remain and limit the operation of the building. The exact duration to which the restrictions apply is set by the LURA. LURA restrictions end in one of three ways: 1) through the qualified dismissal process; (2) by seizure procedures of the lender; 3) by the natural course of time (30 years or more). Impact on multifamily financing Real estate with a LURA or any other regulatory agreement (HAP contract) that limits rents and/or income are subscribed to and treated differently from traditional market real estate. In addition, credit terms, costs and interest rates may differ from those of a market-compliant property. Most multi-family lenders process real estate with a restrictive agreement under an affordable housing program, where a team of professionals specially trained in affordable housing take out, process and close loans. CONSIDERING THAT: that the Board of Directors of the Hospital (i) has reviewed and considered the economic costs and benefits of the Project, (ii) the application, in particular the attached feasibility study of 12 February 2016, carried out by Dixon Hughes Goodman LLP (the “Feasibility Study”), and (iii) the form of the HUD Regulatory Agreement and the required model agreements attached to this Resolution as Annex 1 and its impact on the Hospital. .