Section 0770-01-04-.02 - DEVELOPMENT PROPOSAL AND FEASIBILITY PROCEDURE(1) Sponsors interested in financing housing developments through the Agency are encouraged to arrange a preapplication conference with the Agency prior to preparing the preliminary proposal. A check list of items which should be prepared for the preapplication conference should be obtained when arranging the initial meeting with the Agency.(2) Each preliminary proposal shall include or indicate the following:(a) Identification of the proposed site, including a map showing the location of the site and the racial composition of the neighborhood, sketch of site plan, dimensions, unusual site features, if any; (The site shall be free from adverse environmental conditions, natural or manmade, such as instability, flooding, septic tank backups, sewage hazards, or mudslides; harmful air pollution, smoke or dust; excessive noise, vibration, or vehicular traffic; rodent or vermin infestation; or fire hazards. The neighborhood must not be one which in the opinion of the Agency is seriously detrimental to family life or in which any sub-standard dwellings or other undesirable elements predominate, unless there is actively in progress a concerted program to remedy the undesirable conditions);(b) A copy of the site option agreement(s), contract(s) of sale, or other document(s) which evidence(s) the sponsor's effective control of the site;(c) A description of the proposed housing development including number and type of structures, number of stories, structural system, exterior finish, heating and air-conditioning system, number of units by size (number of bedrooms), living area and composition for each size of unit, and special amenities or features, if any; and design development plan;(d) On forms supplied by the Agency the identity of the sponsor, developer, builder, and the architect (if known); the qualifications and experience of each; and the names of officials and principal members, shareholders and investors (of developer or builder only) and other parties having substantial interest, and the prior participation of each in housing programs for low and moderate income citizens;(e) Whether the proposed sponsor intends to provide management services or to contract with a managing agent. In the latter case, provide the identity of the managing agent, if known, and the other information as required in paragraph (d) of this section;(f) Evidence (i) that the proposed construction is permissible under the applicable zoning, building, housing and other codes, ordinances or regulations, or a statement of the proposed action to make the construction permissible and that such action will be successfully completed prior to the architect's certification required in Rule 0770-1-4-.02(4) and (ii) of utility and availability;(g) The monthly rental per unit, by size and structure type;(h) The equipment to be included in the contract rent;(i) A financial analysis of the proposed housing development, which shall establish the initial schedule of rents, a monthly budget for the initial year of operation of the housing development and a schedule of the use of the proceeds of the Agency mortgage loan;(j) The utilities and services to be included in the monthly rental and those utilities and services not so included. For each utility and service not included in the rental, an estimate of the average monthly cost (for the first year of occupancy) to the occupants by unit size and structure type;(k) Whether the proposed housing development will displace site occupants. If so, the proposal shall state the number of families, individuals, and business concerns to be displaced (identified by race or minority group status, and whether they are owners or renters), and shall show that there is a feasible plan for relocation and how necessary relocation payments, if any, will be funded; (l) The anticipated time required for completion of the housing development after the loan commitment is made;(m) A tenant selection plan (See Rule 0770-1-4-.08);(n) The proposed organizational documents of the sponsor which the Agency will review in accordance with Rule 0770-1-4-.04;(o) A cashier's check for an application fee in an amount determined from time to time by the Agency in its Rules of Practice. The fee may be refunded only on a case-by-case basis depending on the extent of processing incurred and reason for termination.(p) Indication of type mortgage insurance, if any, proposed to be used. The Agency may request additional information from the sponsor where it deems necessary.(3) After receipt of an Agency mortgage loan application and the preliminary proposal provided in Rule 0770-1-4-.02 (2) and the preliminary processing thereof by the Agency staff in accordance with these Rules and Regulations, and the Agency's Rules of Practice, the Agency staff shall make recommendations to the Executive Director as to the feasibility of an Agency mortgage loan for the proposed housing development. If the proposed housing development is preliminarily determined to be feasible for financing with an Agency mortgage loan, the Executive Director will issue to the housing sponsor the Agency's Feasibility Letter. Such a Feasibility Letter may be issued for a term not to exceed ninety (90) days, subject to extension of such term by the Agency for good cause shown. Such a Feasibility Letter shall not constitute a commitment to loan on behalf of the Agency, but shall constitute a determination by the Agency staff that the proposed housing development is feasible for financing with an Agency mortgage loan on the basis of the preliminary review and analysis of the proposed site, market, legal requirements, community services, design, engineering, development costs, operating budget and the housing sponsor's qualifications, upon the terms and conditions contained in such Feasibility Letter. (4) In every instance the Feasibility Letter in Rule 0770-1-4-.02(3) shall include as one of its terms and conditions the requirement for submission of working drawings and specifications for the proposed housing development. The working drawings and specifications shall be accompanied by a certification by a licensed architect that in his judgement (a) said drawings and specifications are consistent with the descriptions and sketches submitted in the preliminary proposal pursuant to Rule 0770-1-4-.02(2) (c) and (b) said housing development satisfies the requirement of Rule 0770-1-4-.02(2)(f). Where mortgage insurance is required, the Feasibility Letter shall also include as one of its terms and conditions the requirements of evidence of qualification for conditional or firm commitment for mortgage insurance.(5) Upon payment of the commitment fee established by the Agency's Rules of Practice and satisfaction of the terms and conditions contained in a Feasibility Letter, satisfactory completion of the processing of such application by the Agency staff, and approval of the application by the Executive Director, the Agency staff will present its analysis and recommendation regarding the mortgage loan application for the proposed housing development to the Agency Board for action on authorizing a commitment for an Agency mortgage loan.Tenn. Comp. R. & Regs. 0770-01-04-.02
Original rule filed September 19, 1975, effective October 19, 1975.Authority: T.C.A. § 13-23-115(18).