CHAPTER 357

FORMERLY

HOUSE BILL NO. 633

AS AMENDED BY HOUSE AMENDMENT NOS. 1 AND 2

AN ACT TO AMEND TITLES 29 AND 31 OF THE DELAWARE CODE RELATING TO THE DELAWARE STATE HOUSING AUTHORITY

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Any previous Act inconsistent with the provisions of this Act is hereby repealed to the extent of such inconsistency.

Section 2. Amend Chapter 50, Title 29 of the Delaware Code by deleting §5005(15) in its entirety.

Section 3. Amend Chapter 50, Title 29 of the Delaware Code by deleting Subchapter 1-A (§§5020 through 5026) in its entirety.

Section 4. Amend Chapter 79, Title 29 of the Delaware Code by transferring Subchapter VII of Chapter 40, Title 31 of the Delaware Code (§§4091 through 4099) to Chapter 79, Title 29 as "Subchapter V. Minimum Standards for Congregate Housing Facilities for the Homeless" and renumbering the sections as §§7960 through 7968.

Section 5. Amend Title 29 by adding Chapter 86 thereto as follows:

"Chapter 86. THE DELAWARE STATE HOUSING AUTHORITY

§8601. Delaware State Housing Authority.

There is hereby established in the Executive Department the Delaware State Housing Authority, hereinafter referred to as "DSHA", with the powers and duties specified in this Chapter and Chapter 40 of Title 31.

§8602. Powers, duties and functions.

The Delaware State Housing Authority is established having the powers, duties and functions as follows:

(a) DSHA shall serve as the Governor's staff agency in all general housing and community development matters.

(b) DSHA shall harmonize its activities with similar activities of other departments, boards, commissions, agencies or instrumentalities of federal, state, county or municipal government, and shall coordinate its activities, to the extent feasible, with nonprofit and limited profit housing sponsors.

(c) DSHA shall be responsible for the fulfillment of all duties and functions, and shall be vested with all powers, specified in Chapter 40 of Title 31.

§8603. Housing Director.

(a) The administrator and head of DSHA shall be the Housing Director. The Housing Director shall be appointed by the Governor, with the advice and consent of the Senate, and shall serve at the Governor's pleasure. The Housing Director shall be a person qualified by training and experience to perform the duties of the office, and preference shall be given to a resident of this State, provided that resident is acceptable and equally qualified. If the Housing Director is not a resident of Delaware at the time of appointment to the position, the Director must become a resident within 6 months of appointment. The Housing Director shall be paid an annual salary established by the Governor within the limitation of the funds appropriated therefor.

(b) In the event of the death, resignation, temporary incapacity or removal of the Housing Director, and prior to the appointment of a successor, the Governor may appoint any qualified employee of DSHA to serve as Acting Housing Director. The Housing Director may, during an absence from the State, appoint any qualified employee of DSHA or any of its subdivisions to serve as Acting Housing Director dining such absence. In either case, the Acting Housing Director shall have all the powers and shall perform all the duties and functions of the Housing Director during absence or incapacity or until a successor is duly appointed.

(c) The Housing Director shall be the Chairperson and issuing officer of DSHA. The powers of DSHA, as specified in Chapter 40 of Title 31 shall be vested in the Housing Director.

() The Housing Director shall not be subject to Chapter 59 of this title.

Section 6. Amend Chapter 40, Title 31 of the Delaware Code by deleting the same in its entirety and in lieu thereof providing:

"CHAPTER 40. THE DELAWARE STATE HOUSING AUTHORITY

Subchapter I. Definitions, Purpose and Powers.

§ 4001. Definitions. As used in this chaplet, unless a different meaning appears from the context:

(1) "Area" means the State of Delaware.

(2) "Authority" means a public body corporate or politic, organized in accordance with the provisions of Chapter 43 or 45 of Title 31 for a purpose, with the powers and subject to the restrictions set forth in those chapters, including a community exercising the powers and duties of a slum clearance and redevelopment authority; provided, however, that "Authority" shall not mean the Delaware State Housing Authority.

(3) "Bonds" mean any bonds (including refunding bonds), notes, interim certificates, debentures or other obligations issued by DSHA pursuant to this chapter.

(0) "Council" means the State Council on Housing.

(1) "Community" means any municipality or county in this State.

(0) "Community facilities" include lands, buildings and equipment for recreation or social assembly, for educational, health or welfare activities and other necessary utilities primarily for use and benefit of the occupants of housing accommodations to be constructed and operated under this chapter.

(1) "Conservation" means the preservation of any area or section of a community and the supervision and care of such area or section, to prevent the reoccurrence or spread of slum conditions or conditions of blight,

(2) ''DSHA" means the Delaware Stale Housing Authority created by § 4010 of this title.

(0) "Federal Government" means the United States or any agency or instrumentality, corporate or otherwise, of the United States.

(1) "Federally insured mortgage" means a mortgage loan for land development or for residential housing insured or guaranteed by the United States or an instrumentality thereof, or a commitment by the United States or an instrumentality thereof to insure such a mortgage.

(11) "Federal mortgage" means a mortgage loan for land development or for residential housing made by the United States or an instrumentality thereof to make such a mortgage loan.

(12) "Fiscal year" means, in the case of DSHA, a period of 12 calendar months beginning and ending on such dates as DSHA shall determine prior to the issuance of its , bonds, notes or other obligations pursuant to this chapter, and in the case of the State. shall mean the fiscal year of the State as may at any time be provided by law.

(0) "Governing body" means the city council, town council, commissioners or other legislative body charged with governing the municipality, or county council or Levy Court commissioners or other legislative body charged with governing the county.

(14) "Government" includes the State and federal governments and any subdivision, agency or instrumentality, corporate or otherwise, of either of them.

(15)"Housing development" means living accommodations provided or to be provided pursuant to this chapter for two or more families by a housing sponsor.

(16)"Housing development costs" means the sum total of all costs incurred in the development of a housing development, which are approved by DSHA as reasonable and necessary, which costs shall include, but are not necessarily limited to: (i) cost of and acquisition and any building thereon, including payments for options, deposits, or contracts to purchase properties on the proposed housing site or payments for the purchase of such properties; (ii) cost of site preparation, demolition and development; (iii) architectural, engineering, legal, accounting, DSHA and other fees paid or payable in connection with the planning, execution, and financing of the housing development; (iv) cost of necessary studies, surveys, plans and permits; (v) insurance, interest, financing, tax and assessment costs and other operating and carrying costs during construction; (vi) cost of construction, rehabilitation, reconstruction, fixtures, furnishings, equipment, machinery and apparatus related to the real property; (vii) cost of land improvements including, without limitation, landscaping and offsite improvements, whether or not such costs have been paid in cash or in a form other than cash; (viii) necessary expenses in connection with initial occupancy of the housing development; (ix) a reasonable profit and risk fee, in addition to job overhead to the general contractor and, if applicable, a limited profit housing sponsor; (x) an allowance established by DSHA for working capital and contingency reserves, and reserves for any anticipated operating deficits during the first 2 years of occupancy; (xi) the cost of such other items, including tenant relocation, as DSHA shall determine to be reasonable and necessary for the development of the housing development, less any and all net rents and other net revenues received from the operation of the real and personal property on the development site during construction.

(17)"Housing Director" means the Housing Director appointed pursuant to §8603 of Title 29 of this Code.

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

(19)"Issuing officer" means the Housing Director.

(20)"Land development" means the process of acquiring land for residential housing construction, and of making, installing or constructing nonresidential housing improvements including, without limitation, waterlines and water supply installations, sewer lines and sewage disposal installations, steam, gas and electric lines and installations, roads, streets, curbs, gutters, sidewalks, whether on or off the site, which DSHA deems necessary or desirable to prepare such land for residential housing within this State.

(21) "Local authority or local housing authority" means a housing authority constituted under the provisions of Chapter 43 of this title.

(0) "Mortgage" means any instrument which secures an obligation and constitutes a lien on real property or on a leasehold under a lease having a remaining term, at the time such mortgage is acquired, which does not expire for at least that number of years beyond the maturity date of the obligation secured by such mortgage as is equal to the number of years remaining until the maturity date of such obligation.

(23) "Mortgage lender" means any bank or trust company, savings bank, national banking association, savings and loan association, Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, approved mortgage banker, building and loan association or any insurance company authorized to transact business in the State.

(24) "Mortgage loan" means an interest-bearing obligation secured by a mortgage, and a note or bond which is a first lien on land and improvements in the State constituting single family or multi-family units.

(25) "Municipality" means any city, town, or county in the State.

(26) "Obligee includes any bondholder, agents or trustees for any bondholders or lessor demising to the property of DSHA used in connection with a project, or any assignee or assignees of such lessor's interest or any part thereof, and the federal government when it is a party to any contract with DSHA.

(0) "Persons of low- or moderate-income" means persons or families who lack the amount of income which is necessary, as determined by DSHA or the local authority undertaking a project, to enable them without financial assistance to live in decent, safe and sanitary dwellings, without overcrowding.

(1) "Public body" means the State or any municipality, county, township, board, commission, authority, district, or any other subdivision or public body of this State.

(2) "Real property" includes all lands, including improvements and fixtures thereon, and property of any nature appurtenant thereto or used in connection therewith, and every estate, interest and right, legal or equitable, therein, including terms for years and liens by way of judgment, mortgage or otherwise and the indebtedness secured by such hens.

(3) "Workable program" means an official community plan of action for using local public and private resources to eliminate and prevent slums and blight and to guide the community's orderly growth and development.

§4002. Purpose.

(a) It is the purpose of this chapter that DSHA have the authority and capacity to:

(1)efficiently provide, and to assist others to provide, quality affordable housing opportunities and appropriate supportive services to responsible low- and moderate-income Delawareans;

(2)encourage persons and families benefitting from activities authorized in this chapter, to the maximum extent feasible, to become economically self-sufficient by assisting in the delivery of social, educational, and other supportive services and programs which develop self-sufficiency and by facilitating economic and employment opportunities and similar benefits for persons assisted under this chapter;

(3)coordinate the housing and redevelopment activities of state agencies and other public agencies and private bodies with such responsibilities within the State;

(4) provide assistance in the rehabilitation of distressed or substandard housing in an effort to preserve current housing stock and strengthen communities;

(5) serve as a resource where the housing and construction industries, local governments and the public may obtain information on affordable housing and community development programs, data and trends, including coordinating and promoting assistance to nonprofit housing sponsors who develop affordable housing opportunities for persons of low and moderate income;

(6) assist the Office of State Planning and other state, local and regional planning authorities in the preparation and implementation of comprehensive plans and programs for rural and urban housing and improvement of housing within the State, especially regarding the planning and development of affordable housing;

(7) confront adverse social conditions and to lessen the effects of drug and crime problems for residents of DSHA housing for low- and moderate-income persons and families by establishing and implementing policies and taking practical steps to mitigate such conditions and eliminate drug and crime problems;

(0) carry out and enforce the provisions of the State Housing Code;

(1) advise and inform the Governor and the public on the affairs and problems relating to housing and community development and revitalization, and make recommendations to the Governor for proposed legislation pertaining thereto; and

(10) operate DSHA's financial affairs in a prudent and sound manner.

(b) This section shall be construed according to the fair import of its terms and shall be liberally construed to further the general purposes stated in this section and the special purposes of the particular provisions involved.

§4003. Housing Director.

The administrator and head of DSHA shall be the Housing Director as provided in Chapter 86 of Title 29 of this Code.

§4004. Powers and duties of the Housing Director.

(a) The Housing Director is responsible for the fulfillment of the purposes outlined in Title 31 § 4002 of this Code.

(b) The Housing Director shall:

(1) employ, in the Housing Director's discretion, planning, architectural and engineering consultants, attorneys, accountants, construction and financial experts and consultants, superintendents, managers, and such other officers, employees and agents as may be necessary in the Housing Director's judgment;

(2) call to the assistance of the Council the services of such employees of any federal or state agency as it may require to conduct its investigative powers and as may be available for such purpose;

(3) delegate any of the Housing Director's powers and duties, except those of an issuing officer, to employees of DSHA;

(4) create and appoint members of advisory boards;

(5) supervise the activities of the Council;

enter into any and all agreements or contracts on behalf of the State or DSHA, execute any and all instruments and do and perform any and all acts or things necessary, convenient or desirable for the implementation or the purposes of this chapter or to carry out any power or duty given in this chapter;

(7) make an annual report to the Governor and the General Assembly regarding DSHA's operations and render such other reports as may be required by law;

(0) make and enforce regulations to effectuate the purposes of this chapter, provided however, that no such regulation shall extend, modify or conflict with any laws of this State, or the reasonable implications thereof;

(1) determine the terms and conditions for the allocation and grant of state funds authorized by this chapter,

(0) coordinate with the federal government to implement and manage federally funded programs;

(0) be the issuing officer for DSHA; and

(0) advise the Governor on issues concerning housing and community development.

§4005. Additional powers of Housing Director.

Whenever the Housing Director determines that the purposes of this chapter and Chapter 43, Title 31, will be better accomplished by a revision of the area of operations of any authority or by the consolidation of 2 or more authorities or by the performance of the functions of an authority by DSHA, the Housing Director may after due notice to all authorities affected and subsequent to a public hearing thereon and with the concurrence of the local governing bodies, make such revision, consolidation or perform such functions, provided that adequate provision shall be made by the Housing Director for the protection of such authority, its creditors, contracting parties and tenants.

Subchapter II. Delaware State Housing Authority

§4010. Creation.

In accordance with Chapter 86, Title 29, there is created in the Executive Department a public corporation of perpetual duration to be called the "Delaware State Housing Authority", hereinafter referred to as "DSHA". Chapter 43 of this title shall apply to DSHA and to its projects as fully as such provisions apply to a housing authority created by § 4303 of this title and to its housing projects, provided, however, that DSHA shall not be subject to §§ 4303, 4304, 4306, 4307, 4314 and 4317 of this title.

§4011. DSHA to contract for labor or materials.

DSHA shall contract for labor or materials (except labor or materials used in the maintenance or operation of projects) pursuant to the manner pre scribed in Chapter 69 of Title 29, for departments and other agencies of the state government.§4012. Seal of DSHA.

§4012. Seal of DSHA.

§4013. Powers of DSHA

DSHA shall have a corporate seal in the form of a circle bearing the arms of the State in the center and the name of DSHA in the border. All deeds, contracts or other obligations, certificates or other instruments executed, including bonds which are provided for in § 4017 of this title, made or issued on behalf of DSHA, shall bear the signature of the Housing Director and have impressed or imprinted thereupon the seal of DSHA, or facsimile thereof, and when so appearing shall be conclusively presumed in any judicial action or proceeding the valid act and deed of DSHA. The presumptions set forth in this provision shall also apply to all bonds executed pursuant to § 4016 of this title.

In addition to its other powers, DSHA is hereby granted, has and may exercise all powers necessary or appropriate to carry out and effectuate its corporate purposes, including, without limitation, the following:

(1) to sue and be sued in its own name;

(2) to have perpetual succession;

(3) to maintain an office at such place or places within this State as it may designate;

(4) to adopt and from time to time, amend and repeal bylaws, rules and regulations, not inconsistent with this chapter, to carry into effect the powers and purposes of DSHA and the conduct of its business;

(5) to acquire real or personal property, or any interest therein, on either a temporary or long-term basis in the name of DSHA by gift, purchase, transfer, in the manner prescribed by Chapter 61 of Title 10, foreclosure, lease or otherwise, including rights or easements; to hold, sell, assign, lease, encumber, mortgage or otherwise dispose of any real or personal property, or any interest therein, or mortgage lien interest owned by it or under its control, custody or in its possession and release or relinquish any right, title, claim, lien, interest, easement or demand, however acquired, including any equity or right of redemption in property foreclosed by it; and, to do any of the foregoing by public or private sale, with or without public bidding, notwithstanding any other law;

(6) to make mortgage loans on such terms and conditions as may be determined by the Housing Director, and in accordance with this chapter, for the construction, financing, refinancing or rehabilitation of housing for low- and moderate-income persons and families;

(7) to insure mortgage loans to finance the building or rehabilitation of housing designed and planned to be available by sale or lease to low- or moderate-income persons and families;

(8) to build or rehabilitate housing designed and planned to be sold or rented at prices which low- and moderate-income persons and families can afford, and to rent or otherwise dispose of such housing to persons and families of low- and moderate-income or to housing sponsors for the purpose of renting or selling such property to such persons and families;

(9) to charge rents for the use of residential housing facilities in the amounts sufficient to comply with any agreements of DSHA, whether in connection with the issuance of bonds or otherwise including, but not limited to, reimbursement of all costs of financing by DSHA and such service charges as DSHA shall determine to be reasonable, and, in connection with its authorized programs, to make and collect such charges including, but not limited to, reimbursement of all costs of financing by DSHA and such service charges and insurance premiums as DSHA shall determine to be reasonable;

(10) to lease or rent any dwellings, houses, accommodations, lands, buildings, structures or facilities from private or public parties to effectuate the purposes of this chapter;

(11) to enter into agreements with the State or any agency thereof, municipalities of the State, the United States, public corporations or bodies and private corporations or individuals and to make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions including contracts or agreements with qualified mortgage lenders for the servicing and processing of mortgage loans pursuant to this chapter and to accept grants and the cooperation of the United States or any agency thereof or of the State or any agency thereof, or any public corporation or municipality in furtherance of the purposes of this chapter;

(12) to provide, contract or arrange for consolidated processing of any aspect of a housing development in order to avoid duplication thereof by either undertaking the processing in whole or in part for any department, agency, or instrumentality of the United States or of this State, or, in the alternative, to delegate the processing in whole or in part to any such department, agency or instrumentality;

(13) to provide advice, technical information (including assistance in obtaining federal and state aid), training and educational services, as will assist the planning, construction, rehabilitation, and operation of housing developments for persons and families of low- and moderate-income, including, but not limited to, assistance in community development and organization, home management and advisory services for the residents of housing developments and to encourage community organizations to assist in developing the same;

(0) to encourage research and demonstration projects in order to develop new and better techniques and methods for increasing the supply of housing for 'persons and families of low- and moderate-income, and to engage in such research and demonstration projects and to receive and accept contributions, grants or aid, from any source, public or private, including, but not limited to the United States and this State, for carrying out this purpose;

(1) to employ architects, engineers, attorneys, accountants, housing, construction and financial experts and such other advisors, consultants and agents as may be necessary in its judgment and to fix their compensation;

(2) to procure insurance against any loss in connection with its property and other assets, including mortgages and mortgage loans, in such amounts and from such insurers as it deems desirable;

(3) to invest any funds not needed for immediate use or disbursement including any funds held in reserve M the following:

a. Any bonds or other obligations which as to principal and interest constitute direct obligations of, or obligations guaranteed by, the United States or the State;

b. Obligations of the Federal National Mortgage Association;

c. Obligations of the Federal Intermediate Credit Corporation;

d. Obligations of Federal Land Banks;

e. Obligations of Federal Home Loan Banks;

f. Certificates of deposit of banks or trust companies, including the Trustee, organized under the laws of the United States or any state thereof which have a combined capital and surplus of at least $15,000,000;

g. Bankers Acceptances;

h. Commercial paper, which has been classified for rating purposes by Dunn & Bradstreet, Inc., as Prime-I, or by Standard & Poor's Corporation, as A-1;

i. Bonds, debentures, notes or other obligations issued by any of the following: Bank for Cooperatives, Export-Import Bank of the United States, Government National Mortgage Association, Federal Financing Bank, Small Business Administration or any other agency or instrumentality of the United States of America, created by an Act of Congress (substantially similar to the foregoing in its legal relationship to the United States of America);

j. Contracts for the purchase and sale of obligations described in paragraphs a.-c. and in paragraph i, of this subdivision;

k. Interest-bearing notes issued by a bank, trust company, national banking association or other depository institution or by a bank holding company, an insurance company or other financial institution;

l. Shares of any investment company that: (i) is registered under the Investment Company Act of 1940, as amended [15 U.S.C. § 80a- l et seq.1; (ii) invests substantially all of its assets in short-term high-quality money-market instruments; (iii) maintains a constant net asset value per share; and (iv) maintains a rating at least as high as DSHA's bonds;

m. Other investment arrangements made pursuant to an investment agreement authorized by a resolution of DSHA; and

n. Corporate debt obligations, rated at least as high as DSHA's bonds, which have a fixed par value and/or whose terms promise a fixed dollar amount at maturity or call date;

(18) to borrow money and issue bonds and notes or other evidence of indebtedness as hereinafter shown without regard to the treatment of interest thereon for federal income tax purposes, provided, however, that DSHA shall not issue bonds and notes to exceed 5350,000,000 without General Assembly approval with respect to bonds and notes subject to the Capital Reserve Fund established under § 4020 of this title;

(19) to the extent permitted under its contract with the holders of bonds, bond anticipation notes and other obligations of DSHA, to consent to any modification with respect to rate of interest, time and payment of any installment of principal or interest security or any other term of any contract, mortgage, mortgage loan, mortgage Loan commitment, contract or agreement of any kind to which DSHA is a party;

(20) to the extent permitted under its contract with the holders of bonds, bond anticipation notes and other obligations, to enter into contracts with any mortgagor containing provisions enabling such mortgagor to reduce the rental or carrying charges to persons unable to pay the regular schedule of charges where, by reason of other income or payment from any department, agency or instrumentality of the United States or this State, such reductions can be made without jeopardizing the economic stability of housing being financed;

(0) to procure or agree to the procurement of insurance or guarantees from the federal government of the payment of any bonds or notes or any other evidence of indebtedness thereof issued by DSHA including the power to pay premiums on any such insurance;,

(1) to acquire, lease, purchase, manage, operate, hold and dispose of real and
personal property in the State, take assignments of leases and rentals, sell and convey such property on any terms, proceed with foreclosure actions, and enter into contracts, leases and other arrangements necessary or incidental to the performance of its corporate duties;

(23) to exercise any or all of the powers conferred upon it, either generally or
with respect to any specific housing project or projects, through or by an agent or agents which it may designate including any corporation or corporations which are or shall be formed under the laws of this State, and for such purposes, DSHA may cause 1 or more corporations to be incorporated under the laws of this State or may acquire the capital stock of any corporation or corporations. Any corporate agent, all of the stock of which shall be owned by DSHA or its nominee or nominees, may to the extent permitted by the law, exercise any of the powers conferred by this 'chapter upon DSHA, or as shall be conferred upon it by DSHA, as agent;

(24) fund the operation of any agents it may designate or any authority by
advancing moneys appropriated pursuant to § 4030 of this title;

(25) to do any act necessary or convenient to the exercise of the powers hereingranted or reasonably implied including all powers presently or hereafter granted to local housing authorities under Chapter 43 of this title;

(26) to agree to make such payments to the State or any political subdivisions thereof (which payments such bodies may accept) as DSHA finds consistent with the maintenance of the tow- and moderate-income rent character of housing projects or the achievement of the purposes of this chapter;

(27) to establish and implement policies, and to take all actions deemed appropriate to mitigate adverse social conditions and to eliminate drug and crime problems at DSHA's sites; and

(28) to provide housing assistance as a benefit, not an entitlement, and to require the beneficiaries to recognize their responsibilities to DSHA and to their neighbors as conditions of continued assistance. ,

§4014. Liberal construction.

Neither this chapter nor anything herein contained is or shall be construed as a restriction or limitation upon any powers which DSHA might otherwise have under any laws of this State, and this chapter is cumulative to any such powers. This chapter shall be regarded as supplemental and additional to powers conferred by other laws. However, the issuance of bonds, notes and other obligations and refunding bonds under this chapter need not comply with the requirements of any other state law applicable to the issuance of bonds, notes and other obligations and contracts for the construction and acquisition of any housing developments undertaken pursuant to this chapter need not comply with any other state law applicable to contracts for the construction and acquisition of state-owned property. No proceedings, notice or approval shall be required for the issuance of any bonds, notes and other obligations or any instrument as security therefor, except as to an issue of bonds subject to the requirements of § 4020 hereof relating to the Capital Reserve Fund, and the issuing officer of DSHA shall coordinate any other issuance with the state bond issuing officers.

§4015. Audit of books and accounts.

The office of Auditor of Accounts shall cause an annual audit of the books and accounts of DSHA. The selection of the firm to perform the annual audit of the books and accounts of DSHA shall be mutually agreed upon by the office of the Auditor of Accounts and the Housing Director who shall consult and cooperate with each other in the selection, contract, employment and scope of professional services to be rendered, provisions in Chapter 29 of Title 29 notwithstanding. The audit shall be performed by a certified public accountant of recognized national standing and shall conform in all respects to the covenants contained in all bond resolutions entered into by DSHA for the benefit of its bondholders. DSHA shall transfer funds, as requested by the office of Auditor of Accounts, to cover the cost of the audit.

§4016. Bonds.

(a) DSHA may, with the approval of the issuing officer and subject to the authorization (if any) required by § 7402 of Title 29, issue bonds (including refunding bonds for the purpose of paying or retiring bonds previously issued by DSHA) from time to time in such amounts as it may deem advisable for any of its corporate purposes. DSHA may issue such types of bonds as it may determine, including bonds on which the principal and interest are payable: (I) exclusively from the income and revenues of any undertaking financed in whole or in part with the proceeds of such bonds; (2) exclusively from the income and revenues of certain designated housing projects whether or not they were financed in whole or in part with the proceeds of such bonds; (3) from its revenues generally; or (4) by grants, subsidies or other payments from the federal government. Any of such bonds may be additionally secured by a pledge of any revenue or by a mortgage of any housing project, projects or other property of DSHA or any of its agents or designees.

(b) Neither the issuing officer nor any person executing the bonds shall be liable personally on the bonds.

§4017. Forms and terms of bonds; disposition of proceeds.

(a) All bonds issued under the authority of this chapter shall be dated, shall bear interest at such rate or rates payable semiannually or at such other time or times as shall be determined by resolution of DSHA, and shall mature at such time or times and may be made redeemable before maturity at such times and at such price or prices and under such terms and conditions as may be fixed by the issuing officer prior to the issuance of the bonds. The principal of and the interest upon such bonds may be made payable in any lawful medium. The issuing officer shall determine the form of the bonds, including any interest coupons to be attached thereto, and shall fix the denominations of the bonds. Both principal of and interest on the bonds shall be payable at such place or places as DSHA may designate.

(b) Bonds shall be signed by manual or facsimile signature of the Housing Director, and the seal of DSHA or a facsimile thereof shall be affixed thereto or imprinted thereon. In case any person whose signature or facsimile thereof shall appear on any bonds or coupons shall cease to be the Housing Director before the delivery of such bonds, such signature or facsimile shall, nevertheless, be valid for all purposes, the same as if the Housing Director had remained in office until delivery.

(c) All bonds issued under this chapter shall have and are declared to have all the qualities and incidents of negotiable instruments under the Uniform Commercial Code.

(d) Such bonds and the income therefrom shall be exempt from all taxation by this State or by any political subdivision, agency or authority thereof.

(e) The bonds may be issued in coupon or registered form, or both, as the issuing officer may determine, and provision may be made for the registration of any coupon bond as to principal alone or as to both principal and interest and for the reconversion of any bonds registered both as to principal and interest into coupon bonds.

(f) The issuing officer may sell such bonds, either at public or private sale, in such manner and for such price as they may determine to be for the best interest of DSHA.

(g) The proceeds of such bonds, exclusive of accrued interest, shall be used solely for the purposes specified in the resolution of DSHA authorizing the issuance thereof or as set forth in the indenture securing their payment, which purposes may include redemption premiums, interest on bonds to be refunded to the redemption date or date of maturity thereof and all legal and other expenses of their issuance and shall be disbursed under such restrictions, if any, as said resolution or trust indenture may provide.

(h) The proceeds of such bonds shall at no time revert to the General Fund of the State Treasury but shall at all times be available to DSHA for the aforesaid purposes, provided, however, that if the proceeds of the bonds of any issue shall exceed the amount required for the purpose or purposes for which such bonds arc authorized to be issued, the surplus may be used for any purpose of DSHA authorized in this chapter or for the payment of the principal of or interest on its outstanding bonds.

(i) Prior to the preparation of definitive bonds, the issuing officer may issue temporary bonds, with or without coupons, exchangeable for definitive bonds upon the issuance of the latter. The issuing officer may also provide for the replacement of any bond which shall become mutilated or be destroyed or lost. Such bonds may be issued without any other proceedings or conditions which are specified and required by this chapter.

§4018. Bonds as legal investments for institutions and fiduciaries and as legal deposit.

The bonds issued under the authority of this chapter are declared to be securities in which all state and municipal officers and administrative departments, boards and commissions of the State, all banks, bankers, savings banks, trust companies, savings and loan associations, investment companies and other persons carrying on a banking business, all insurance companies, insurance associations, and other persons carrying on an insurance business and all administrators, executors, guardians, trustees and other fiduciaries and all other persons whatsoever who now or may be authorized to invest in bonds or other obligations of this. State, may properly and legally invest any funds, including capital belonging to them or within their control and such bonds are declared securities which may properly and legally be deposited with and received by any state, county or municipal officer or agency of this State for any purpose for which the deposit of bonds or other obligations of this State is now or may hereafter be authorized by law.

§4019. Credit of State not pledged.

(a) Bonds issued under this chapter shall be payable exclusively, from the revenues and other funds of DSHA and shall contain the following statement on their face: The State of Delaware is not obligated to pay the principal of this bond nor the interest thereon, nor are the faith' and credit of the State pledged to the payment of the principal of, or interest on, this bond."

(b) The issuance of bonds under this chapter shall not directly or indirectly or contingently obligate the State to levy or pledge any form of taxation whatever therefor or to make any appropriation for their payment, and the bonds shall not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction; provided also that § 4020 of this title, relative to the Capital Reserve Fund shall not be deemed to constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction.

§4020. Capital Reserve Fund.

(a) DSHA shall create and establish a special fund to secure the bonds, herein referred to as Capital Reserve Fund, and shall pay into the Capital Reserve Fund: (1) any moneys appropriated and made available by the State for the purposes of such fund; (2) any proceeds of the sale of bonds, to the extent provided in the resolution of DSHA, authorizing the issuance thereof; and (3) any other moneys which may be made available to DSHA for the purpose of such fund from any other source or sources. All moneys held in the Capital Reserve Fund, except as hereinafter provided, shall be used solely for the payment of the principal of bonds of DSHA as the same mature, the redemption or purchase of bonds of DSHA, the payment of interest on such bonds of DSHA or the payment of any redemption premium required to be paid when such bonds are redeemed prior to the maturity. Moneys in the Capital Reserve Fund shall not be withdrawn therefrom at any time in such amount as would reduce the amount of the Fund to less than the maximum amount of principal and interest maturing and becoming due in any succeeding fiscal year on all bonds of DSHA then outstanding, except for the purpose of paying principal and interest on bonds of DSHA maturing and becoming due and for the payment of which other moneys of DSHA are not available. Any income or interest earned by, or increment to, the Capital Reserve Fund due to the investment thereof may be transferred by DSHA to any other fund of DSHA to the extent it does not reduce the amount of Capital Reserve Fund below the maximum amount of principal and interest maturing and becoming due in any succeeding fiscal year on all bonds of DSHA then outstanding.

(b) Except with respect to an issue, or portion of an issue, of bonds designated by resolution of DSHA as not being subject to the requirements and provisions of this section, DSHA shall not issue bonds at any time if the maximum amount of principal and interest maturing and becoming due in a succeeding fiscal year on the bonds then to be issued and on all other bonds of DSHA then outstanding will exceed the amount of the Capital Reserve Fund at the time of issuance unless DSHA, at the time of issuance of such bonds, shall deposit in the Fund from the proceeds of the bonds so to be issued, or otherwise, an amount which, together with the amount then in the Fund, will be not less than the maximum amount ,of principal and interest maturing and becoming due in any succeeding fiscal year on the bonds then to be issued and on all other bonds of DSHA then outstanding.

(c) To assure the continued operation and solvency of DSHA for the carrying out of the public purposes of this chapter, provision is made for the accumulation in the Capital Reserve Fund of an amount equal to the maximum amount of principal and interest maturing and becoming due in any fiscal year on all bonds of DSHA then outstanding. In order to assure further such maintenance of the Capital Reserve Fund, there may be annually appropriated and paid to DSHA for deposit in the Capital Reserve Fund such sum, if any, as shall be certified by the Housing Director to the Governor and Budget Director, as necessary to restore the Capital Reserve Fund to an amount equal to the maximum amount of principal and interest maturing and becoming due in any fiscal year on the bonds of DSHA then outstanding. In any case where a deficiency occurs in the Capital Reserve Fund, the Housing Director shall promptly make and deliver to the Governor and Budget Director a certificate stating the amount required to restore the Capital Reserve Fund, and the Governor shall, as soon as practicable during the current fiscal year, request an appropriation of such amount, and the amount so requested may be appropriated and paid to DSHA for deposit into the Capital Reserve Fund.

(d) In computing the amount of the Capital Reserve Fund for the purposes of this section, securities in which all or a portion of the fund is invested shall be valued in the manner provided in the resolution authorizing the issuance of the trust indenture securing such bonds.

(e) Calculations of the amount of principal and interest maturing and becoming due in any succeeding fiscal year shall be based upon the assumption that bonds of DSHA will, after said date of computation, cease to be outstanding by reason of the payment of such bonds at their respective maturities or the payment of all moneys required to be paid into a sinking fund on account of such bonds as may be required by the terms of any resolution or indenture pursuant to which such bonds have been issued and the application of such sinking fund to the retirement of bonds in accordance with their terms.

(f) For the purposes of this section, the term "bonds" shall mean all obligations of DSHA bearing a maturity date more than 2 years after the date thereof, except any bonds, notes or other obligations of DSHA which are designated by resolution of DSHA prior to the issuance thereof as being not subject to this section.

§4021. Provisions of bonds and mortgages.

In connection with the issuance of bonds or the incurring of any obligation under a lease and to secure the payment of such bonds or obligations, DSHA in addition to its other powers may:

(1) pledge all or any part of its rents, fees or revenues to which its right then exists or may thereafter come into existence;

(2) mortgage all or any part of its property, real or personal, then owned or thereafter acquired, including any of the public domain owned or acquired by it;

(3) covenant against mortgaging all or any part of its property, real or personal, then owned or thereafter acquired or against permitting or suffering any lien thereon;

(4) covenant with respect to limitations on its right to sell, lease or otherwise dispose of any project or any part thereof;

(5) covenant against pledging all or any part of its rents, fees and revenues to which its right then exists or may thereafter come into existence or against permitting, or suffering any lien thereon;

(6) covenant as to the bonds to be issued and as to the issuance of such bonds in escrow or otherwise and as to the use and disposition of the proceeds thereof:

(7)covenant as to what other or additional debts may be incurred by it;

(8)covenant that DSHA warrants the title to the premises;

covenant as to the rents and fees to be charged, the amount to be raised each year or other period of time by rents, fees and other revenues and as to the use and disposition to be made thereof;

covenant as to the use of any or all of its property, real or personal;

(11) create or authorize the creation of special funds segregating the proceeds of any loans or grants, the revenues of any project or projects, reserves for principal and interest on its bonds and for operating contingencies and other reserves and covenant as to the use and disposal of the moneys held in such funds;

redeem the bonds and covenant for their redemption and provide the terms and conditions thereof;

covenant against extending the time for the payment of its bonds or interest thereon;

prescribe the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto and the manner in which such consent may be given;

covenant as to the maintenance of its property, the replacement thereof, the insurance to be carried thereon and the use and disposition of insurance moneys;

(16)vest in an obligee, in the event of a default by DSHA, the right to cure any such default and to advance any moneys necessary for such purpose and covenant that the moneys so advanced become an additional obligation of DSHA with such interest, security and priority as may be provided in any mortgage, lease or contract;

(17) covenant and prescribe as to the events of default and terms and conditions upon which any or all of its bonds shall become or may be declared due before maturity and as to the terms and conditions upon which such declaration and its consequences may be waived;

(18) covenant as to the rights, liabilities, powers and duties arising upon the breach by it of any covenant, condition or obligation;

(19) covenant to surrender possession of a project or projects or parts thereof upon the happening of an event of default and vest in an obligee the right, upon such default and without judicial proceedings, to take possession and use, operate, manage and control such projects or any parts thereof and to collect and receive rents, fees and revenues arising therefrom in the same manner as DSHA itself might do and to dispose of the moneys collected in accordance with the agreement of such obligee with DSHA;

(20) vest in a trustee or trustees the right to enforce any covenant to secure or pay the bonds or otherwise relating to such bonds, provide for the powers and duties of such trustee or trustees, limit the liabilities thereof and provide the terms and conditions upon which the trustee or trustees or the holders of bonds or any proportion of them may enforce any such covenant;

(21) vest in a government or in a trustee the right, upon the happening of an event of default, to foreclose the mortgage securing any bonds held by such government, through judicial proceedings or through the exercise of a power of sale without judicial proceedings;

(22) Invest in other obligees the right, upon the happening of an event of default, to foreclose any mortgage through judicial proceedings;

(23) vest in any obligee the right to foreclose any such mortgage as to all or such part or parts of the property covered thereby as such obligee shall elect; the institution, prosecution and conclusion of any such foreclosure proceedings or the sale of any such parts of the mortgaged property shall not affect in any manner or to any extent the lien of the mortgage on the parts of the mortgaged property not included in such proceedings or not sold a aforesaid;

(24) make covenants other than, and in addition to, the covenants expressly authorized in this section of like or different character and execute all instruments necessary or convenient in the exercise of the powers granted in this chapter or in the performance of its covenants or duties, which may contain such covenants and provisions, in addition to those above specified, as the government or any purchaser of the bonds of DSHA may require;

(25) make such covenants and do any and all such acts and things as may he necessary or convenient or desirable in order to secure its bonds or in the absolute discretion. of DSHA, tend to make the bonds more marketable, notwithstanding that such covenants, acts or things may not be enumerated in this section.

§4022. Trust indenture.

(a) At the discretion of the issuing officer each and any issue of such bonds may be secured by a trust indenture by and between the issuing officer and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without this State.

(b) Such trust indenture may pledge or assign the revenues of DSHA but shall not create a security interest in or convey or mortgage any real property owned, operated or maintained by DSHA. Either the resolution providing for the issuance of the bonds or such trust indenture may contain such provisions specifying, defining, protecting and enforcing the rights and not in violation of law, include covenants setting forth the duties of DSHA in relation to the acquisition, construction, improvement, maintenance, operation, repair and insurance of any facilities or additions thereto, and the custody, safeguarding and application of all moneys.

() It shall be lawful for any bank or trust company incorporated under the laws of this State to act as such depository and to furnish such indenture bonds or to pledge such securities as may be required by DSHA. Such indenture may set forth the rights and remedies of the bondholders and of the trustee and may restrict the individual right of action of bondholders as is customary in trust indentures securing bonds and debentures of corporation.

(a) In addition to the foregoing, such trust indenture may contain such other provisions as the issuing officer may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of such trust indenture may be treated as a part of the cost of maintenance, operation and repairs of any facility to which such indenture is related or may be paid out of the revenues of DSHA.

§4023. Remedies of bondholders and trustees.

(a) Any holder of bonds issued under this chapter or any of the coupons attached thereto, and the trustee under the trust indenture, if any, except to the extent the rights given by this chapter may be restricted by resolution passed before the issuance of the bonds or by the trust indenture, may either at law or in equity by suit, action, mandamus or other proceedings protect _and enforce any and all rights under the laws of the United States or of this State or granted under this chapter or under such resolution or trust indenture, and may enforce and compel performance of all duties required by this chapter, or by such resolution or trust indenture, to be performed by DSHA or any officer thereof, including the fixing, charging and collecting of fares or charges for the use of any facility operated by DSHA.

Such resolution or trust indenture may contain provisions under which any holder of such bonds or the trustee under such trust indenture shall be entitled to the appointment of a receiver in the event of a default, and any receiver so appointed shall have and be entitled to exercise all the rights and powers of DSHA with respect to the facilities operated or maintained by OSHA and all of the appropriate rights and powers of a receiver in equity.

§4024. Moneys as trust funds.

All moneys received pursuant to the authority of this chapter, whether as proceeds from the sale of bonds or grants or other contributions from any person corporate or otherwise, or government, or as fees and revenues shall be deemed to be trust funds, to be held and applied solely as provided in this chapter. The issuing officer shall, in the resolution authorizing the issuance of bonds or in, the trust indenture, provide for the payment of the proceeds of the sale of the bonds and the fees and revenues to be received, to any officer, agency, bank or trust company who shall act as trustee of such funds, and shall hold and apply the same to the purposes of this chapter, subject to such regulations as this chapter and such resolution or trust indenture may provide.

§4025, Subordination of mortgage to agreement with government.

DSHA may agree in any mortgage made by it that such mortgage shall be subordinate to a contract for the supervision by a government of the operation and maintenance of the mortgaged property and the construction of improvements thereon. In such event, any purchase or purchasers at a Sale of the property of DSHA pursuant to a foreclosure of such mortgage or any other remedy in connection therewith shall obtain title subject to such contract.

§4026. Powers relative to purchase of and sale to financial institutions of mortgage loans; loans to mortgage lenders.

DSHA shall have all the powers necessary or convenient to carry out and effectuate the purposes of this chapter, including the following powers in addition to others herein granted:

(1) to invest in, purchase or to make commitments to purchase, and take assignments from mortgage lenders of notes and mortgages evidencing loans for the construction, rehabilitation, purchase, leasing or refinancing of housing for persons and families of low- and moderate-income in this State;

(2) to make loans to mortgage lenders upon terms and conditions requiring the proceeds thereof to be used by such mortgage lenders for the making of new residential mortgages, upon the terms set forth in § 4027 of this title;

(3) to make commitments to purchase, and to purchase, service and sell mortgages insured by any department, agency or instrumentality of the United States, and to make loans directly upon the security of any such mortgage, provided the underlying mortgage loans shall have been made and shall be continued to be used solely to finance or refinance the construction, rehabilitation, purchase or leasing of residential housing for persons and families of low- and moderate-income in this State;

(4)to sell, at public or private sale, with or without public bidding, any mortgage or other obligation held by ARIA;

(5) to enter into mortgage insurance agreements with mortgage lenders in connection with the lending of money by such institutions to persons and families of low-or moderate-income for the purchase of housing;

(6) subject to any agreement with bondholders or noteholders, to collect, enforce the collection of, and foreclose on any collateral securing its loans to mortgage lenders and acquire or take possession of such collateral and sell the same at public or private sale, with or without public bidding, and otherwise deal with such collateral as may be necessary to protect the interest of OSHA therein.

§4027. Terms and conditions of the purchase and sale to financial institutions of mortgage loans; loans to mortgage lenders.

(a) DSHA shall from time to time adopt, modify, amend or repeal rules and regulations governing the making of such loans to mortgage lenders and the application of the proceeds thereof.

Such rules and regulations shall be designed to effectuate the general purposes of this chapter and the following specific objectives: (i) the expansion of the supply of funds in the State available for new residential mortgages; (ii) the provision of the additional housing needed to remedy the shortage of adequate housing in the State and eliminate the existence of a large number of substandard dwellings; and (iii) the effective participation by mortgage lenders in the program authorized by this chapter and the restriction of the financial return and benefit thereto from such program to that necessary and reasonable to induce such participation.

(b) All new residential mortgages made as required by this section shall comply with the applicable provisions of the laws of the State, and, where federal law or the law of another jurisdiction governs the affairs of the mortgage lender, shall comply with applicable provisions of such law.

Subchapter III, Housing Development Fund and Financing of Housing Developments

§4030. Housing Development Fund.

(a) The "Housing Development Fund" shall be administered by the Housing Director as a revolving fund for carrying out the purposes of this chapter. Sums received from the General Fund, from dedicated sources of revenue, and in repayment of loans made under this chapter shall be deposited in such Fund. DSHA, with the approval of the Secretary of Finance and the Council on Housing, may borrow from the Fund for any lawful purpose with respect to any housing program or financing with respect thereto, undertaken by DSHA, or for the purpose of investing borrowed funds in accordance with § 4013(17) of this title; any such borrowing to be upon such terms and conditions, and with such security, as the Secretary of Finance and the State's Council on Housing shall direct.

(b) In addition to any further appropriations which may not be reflected in subsection (a) of this section, and in addition to accrued interest on loans, the Housing Development Fund shall retain any interest or other earnings which accrue on uncommitted balances remaining in the Fund undisbursed, and such accrued interest shall not be deposited in the General Fund.

() Any other law to the contrary notwithstanding, programs for the disbursement of funds from the Housing Development Fund, and disbursements pursuant to such programs, may include grants as well as loans, including grants to DSHA; provided, however, that any program including grants shall not cause the Fund to lose entirely its character as a revolving fund.

(a) In allocating the resources of the Housing Development Fund over time, any program mix or targeting of funds shall account for the demographics of the population in need of housing, should balance the programs appropriately between rental assistance and ownership, and should apportion the available resources statewide according to local need.

§4031. Powers relative to making mortgage loans and temporary construction loans to housing sponsors and persons and families of low and moderate-income.

(a) DSHA shall have all the powers necessary or convenient to carry out and effectuate the purpose and provisions of this chapter, including the following powers in addition to others herein granted:

(1) to make and undertake commitments to make mortgage loans, including, without limitation, federally insured mortgage loans and to make temporary loans and advances in anticipation of permanent loans to housing sponsors to finance the construction or rehabilitation of housing designed and planned for persons and families of low- and moderate-income upon the terms and conditions set forth in § 4033 of this title;

(2) to make and undertake commitments to make first mortgage loans to persons of low- or moderate-income who may purchase residential housing, including, without limitation, persons and families of low-and moderate-income who are eligible, or potentially eligible, for federally insured mortgage loans or federal mortgage loans. Such loans shall be made only after a determination by DSHA that long-term first mortgage loans are not otherwise available, wholly or in part, from private lenders upon reasonably(equivalent terms and conditions;

(3) to make and publish rules and regulations respecting the gram of mortgage loans pursuant to this section, the regulations of borrowers, the admission. of housing developments pursuant to this section, and the construction of ancillary commercial facilities;

(0) to enter into agreements and contracts with housing sponsors under the provisions of this section;

(1) to institute any action or proceeding against any housing sponsor receiving a loan under the provisions hereof, or owning any housing development hereunder in any court of competent jurisdiction in order to enforce this chapter, or to foreclose its mortgage, or to protect the public interest, persons and families of low- and moderate-income, stockholders or creditors of such sponsor. In connection with any such action or proceeding it may apply for the appointment of a receiver to take over, manage, operate and maintain the affairs of such housing sponsor and DSHA, through such agent as it shall designate, is hereby authorized to accept appointment as receiver of any such sponsor when so appointed by a court of competent jurisdiction.

(b) The reorganization of any housing sponsor shall be subject to the supervision and control of DSHA, and no such reorganization shall be had without the consent of DSHA. Upon any such reorganization the amount of capitalization, including therein all stocks, income debentures and bonds and other evidence of indebtedness shall be such as is authorized by DSHA, but not in excess of the fair value of the property received.

(c) In any foreclosure action involving a housing sponsor other than a foreclosure action instituted by DSHA, the municipality in which any tax exemption or abatement is provided, such housing sponsor and DSHA, shall, in addition to other necessary parties, be made parties defendant. DSHA and the municipality shall take all steps in such action necessary to protect the interest of the public therein, and no costs shall be awarded against DSHA or the municipality.

(d) Subject to the terms of any applicable agreement, contract or other instrument entered into or obtained pursuant to this chapter, judgment of foreclosure shall not be entered against a housing sponsor unless the court to which application therefor is made shall be satisfied that the interest of the lienholders or holders cannot be adequately secured or safeguarded except by the sale of the property; and in such proceeding the court shall be authorized to make an order increasing the rental or carrying charges to be charged for the housing accommodations in the housing development involved in such foreclosure, Or appoint a member of DSHA or any officer of the municipality in which any tax exemption or abatement with respect to the development is provided, as a receiver of the property, or grant such other and further relief as may be reasonable and proper, and in the event of a foreclosure or other judicial sale, the property shall be sold only to a housing sponsor which will manage, operate and maintain the housing development subject to this chapter, unless the court shall find that the interest and principal on the obligations secured by the lien, which is the subject of foreclosure, cannot be earned under the limitations imposed by this chapter, and that the proceeding was brought in good faith, in which event the property may be sold free of limitations imposed by this chapter or subject to such limitations as the court may deem advisable to protect the public interest.

(e) in the event of a judgment against any housing sponsor in any action not pertaining to the foreclosure of a mortgage, there shall be no sale of any of the real property included in any housing development hereunder of such housing sponsor except upon 60 days' written notice to DSHA. Upon receipt of such notice DSHA shall take such steps as in its judgment may be necessary to protect the rights of all parties.

§4032. Power to supervise housing sponsors.

DSHA shall have the power to supervise housing sponsors, including limited profit housing sponsors and their real and personal property, in the following respects:

(1) DSHA may prescribe uniform systems of accounts and records for housing sponsors and may require them to make reports and give answers to specific questions on such forms and at such times as may be necessary for the purposes of this chapter,

(2) Through its agents or employees, DSHA may enter upon and inspect the lands, buildings and equipment of a housing sponsor, including all parts thereof, and may examine all books and records with reference to capital structure, income, expenditures and other payments of a housing sponsor.

(3) DSHA may supervise the operation and maintenance of any housing development and may order such repairs as may be necessary to protect the public interest or the health, welfare or safety of the housing development occupants.

(4) DSHA may fix, and alter from time to time, a schedule of rents and charges for any housing development.

(5) DSHA may determine, for any housing development, standards for tenant selection by a housing sponsor.

(6) DSHA may require any housing sponsor to pay to DSHA such fees as it may prescribe in connection with the examination, inspection, supervision, auditing or other regulations of the housing sponsor,

(7) DSHA may order any housing sponsor to do, or to refrain from doing, such things as may be necessary to comply with the provisions of the law, the rules and regulations of DSHA, and the terms of any contract or agreement to which the housing sponsor may be a party.

(8) DSHA may regulate the retirement of any capital investment or the redemption of stock where any such retirement or redemption, when added to any dividend or other distribution, shall exceed in any 1 fiscal year 10% of the original face amount of any investment by any housing sponsor.

(9) DSHA may prescribe regulations specifying the categories of cost which shall be allowable in the construction or rehabilitation of a housing development. DSHA shall require any housing sponsor to certify the actual housing development costs upon completion of the housing development, subject to audit and determination by DSHA. Notwithstanding the provisions of this subdivision, DSHA may accept, in lieu of any certification of housing development costs, as provided herein, such other assurances of the said housing development costs, in any form or manner whatsoever, as will enable DSHA to determine with reasonable accuracy the amount of said housing development costs.

§4033. Loan terms and conditions.

Loans made by DSHA shall be subject to the following terms and conditions:

(1) No application for a loan for a housing development shall be processed unless the applicant is a housing sponsor as defined in § 4001 of this title.

The ratio of loan to total housing development cost, and the amortization period of loans made under this chapter which are insured by FHA, shall be governed by the FHA mortgage insurance commitment for each housing development but in no event shall such amortization period exceed 50 years.

In the case of a mortgage loan not insured by FHA, the amount of the loan to (i) limited profit housing sponsors shall not exceed 95% of the total housing development costs, as determined by DSHA, and (ii) other housing sponsors, shall not exceed 100% of the total development cost, as determined by DSHA, and the amortization period of such loans shall be determined in accordance with regulations formulated and published by DSHA; provided, however, that any such loan shall be subject to an agreement between DSHA and any such housing sponsor prohibiting the transfer of ownership or management responsibilities by such !lousing sponsor at any time prior to repayment of at least 5% of the original loan, unless the transfer of ownership or management responsibilities has been ordered by a court of competent jurisdiction to a different housing sponsor.

(3) A loan made hereunder may be prepaid to maturity after a period of 15 years with the consent of DSHA, provided DSHA finds that the prepayment of the on will not result in a material escalation of rents charged to persons and families of low- and moderate-income in the housing development.

(4) DSHA shall have authority to set from time to time the interest rates at which it shall make loans and commitments therefor. Such interest rates shall be established by DSHA at the lowest level consistent with DSHA's cost of operation, and its responsibilities to the holders of its bonds, bond anticipation notes and other obligations. In addition to such interest charges, DSHA may make and collect such fees and charges, including, but not limited to, reimbursement of DSHA's financing costs, service charges, insurance premiums and mortgage insurance premiums, as DSHA determines to be reasonable.

(5) In considering any application for a loan, DSHA shall give first priority to applications for housing developments which will be well-planned, well-designed and which will be a part of or constructed in connection with a major redevelopment program; and shall also give consideration to:

a. the comparative need for housing for persons of low-and moderate-income in the area to be served by the proposed development;

b. the ability of the applicant to construct, operate, manage and maintain the proposed housing development;

c. the existence of zoning or other regulations to protect adequately the proposed housing development against detrimental future uses which could cause undue depreciation in the value of the development; and

d the availability, where reasonably possible, of adequate parks, recreational areas, utilities, schools, transportation, parking, shopping facilities. churches and other community facilities.

(6) Each mortgage loan shall be evidenced by a mortgage note or bond and by a mortgage which shall be a lien on the housing development and which shall contain such terms and provisions and be in a form approved by DSHA. DSHA shall require the housing sponsor receiving a loan or its contractor to post performance and surety bonds in amounts related to the housing development cost as established by regulation and/or to execute such other assurances and guarantees as DSHA may deem necessary. It may also require the housing sponsors or the contractors to also execute such other assurances and guarantees as DSHA may deem necessary.

(7) Each loan shall be subject to an agreement between DSHA and the housing sponsor which will subject said sponsor and its principals or stockholders to limitations established by DSHA as to rentals and other charges, builders' and developers' profits and fees, and the disposition of its property and franchises to the extent more restrictive limitations are not provided by the law under which the borrower is incorporated or organized.

(8) As a condition of the loan, DSHA shall have the power at all times during the construction and rehabilitation of a housing development by a housing sponsor and the operation thereof:

a. to enter upon and inspect any housing development, including all parts thereof, for the purpose of investigating the physical and financial condition thereof, and its construction, rehabilitation, operation, management and maintenance, and to examine all books and records with respect to capitalization, income and other matters relating thereto and to make such charges as may be required to cover the cost of such inspections and examinations;

. to order such alterations, changes or repairs as may be necessary to protect the security of its investment in a housing development or the health, safety, and welfare of the occupants thereof;

a. to order any managing agent, housing development manager or owner of a housing development to do such acts as may be necessary to comply with the provisions of all applicable laws or ordinances of any agreement concerning the said development or to refrain from doing any acts in violation thereof and, in this regard, DSHA shall be a proper party to file a complaint and to prosecute thereon for any violations of laws or ordinances as set forth herein.

(9) A limited profit housing sponsor may not make distributions in any 1 year with respect to a housing development financed by DSHA in excess of 10% of a limited profit housing sponsor's equity in such development. Such sponsor's equity in a housing development shall consist of the difference between the mortgage and the total housing development cost. With respect to every housing development, DSHA shall, pursuant to regulations adopted by it, establish such sponsor's equity at the time of the making of the final mortgage advance and for purposes of this paragraph, that figure shall remain constant during the life of DSHA's mortgage on such development.

(10) Whenever any housing sponsor accumulates earned surplus, in addition to reserves for maintenance, operation and replacement, as DSHA may require in excess of 10% of the initial annual rent roll for the housing development, rents in the housing development shall be reduced to the extent necessary to lower the earned surplus accumulation to such 10 percent figure in the following fiscal year. Every 10 years the housing sponsor may seek the approval of DSHA for increases in said reserves. To the extent warranted DSHA may grant such approval, if in its judgment there have been increased price levels or unusual maintenance and repayment requirements.

§4034. Procedure prior to financing of housing developments undertaken by housing sponsors.

Notwithstanding any other provisions of this chapter, DSHA is not empowered to finance any housing development undertaken by a housing sponsor pursuant to §§ 4031, 4032 and 4033 of this title, unless prior to the financing of any housing development hereunder DSHA finds:

(1) that there exists a shortage of decent, safe and sanitary housing at rentals or prices which persons and families of low-income or moderate-income can afford within the general housing market area to be served by the proposed housing development;

(2) that private enterprise and investment have been unable, without assistance, to provide the needed decent, safe and sanitary housing at rentals or prices which persons or families of low- and moderate-income can afford or to provide sufficient mortgage financing for residential housing for occupancy by such persons or families;

(3) that the housing sponsor or limited-profit housing sponsor or sponsors undertaking the proposed housing development in this State will supply well-planned, well-designed housing for persons or families of low- and moderate-income and that such sponsors are financially responsible;

(4) that the housing development to be assisted pursuant to this chapter will be of public use and will provide a public benefit;

(5) that the housing development will be undertaken within the authority conferred by this chapter upon DSHA and the housing sponsor or sponsors.

Subchapter IV. Council on Housing

§4040. Council on Housing.

(a) The Council on Housing is continued and shall serve in an advisory capacity to the Housing Director and shall consider matters relating to housing in this State and such other matters as may be referred to it by the Governor or the Housing Director. The Council may study, research, plan and advise the ,Housing Director and the Governor on matters it deems appropriate to enable DSHA to function in the best possible manner.

(b) The Council on Housing may approve all programs proposed by DSHA for using the Housing Development Fund.

(c) The Council on Housing shall be composed of 9 members. The term of appointment to the Council shall be 3 years. Members shall be eligible for reappointment.

(d) At least 4, but no more than 5, members of the Council shall be affiliated with 1 of the major political parties and at least 3, but no more than 4, members shall be affiliated with the other major political party; provided, however, that there shall be no more than a bare majority representation of I major political party over the other major political party. Any person who declines to announce his political affiliation shall also be eligible for appointment as a member of the Council.

() Members of the Council shall serve without compensation, except that they may be reimbursed for reasonable and necessary expenses incident to their duties as members of the Council.

(a) A Chairperson of the Council shall be chosen by the members of the Council from among its members and shall serve in that capacity for a term of 1 year. The Chairperson shall be eligible for reelection but may not serve as Chairperson for more than three consecutive 1 year terms.

(b) Any appointment pursuant to this section to replace a member whose position becomes vacant prior to the expiration of his term shall be filled only for the remainder of that term. Any person appointed to serve out the remainder of an unexpired term shall be eligible for reappointment.

(c) The Chairperson of the Council shall direct the Council's operations and shall perform such other duties as the Housing Director may direct.

(d) The duties and responsibilities of the Council as more particularly set forth in this chapter shall be at all times exercised under, and subject to, the supervision and direction of the Housing Director. The Housing Director may assign to employment on behalf of the Council such secretarial, clerical and other assistants in DSHA as the internal operation of the Council shall require and for such purposes as the Housing Director shall consider necessary.

§4041. Investigative powers; power to compel assistance of witnesses and production of books.

(a) The Council may investigate the affairs of housing authorities and all urban renewal and rehabilitation activities by municipal, county and regional agencies and authorities and the dealings, transactions or relationships of such authorities with other persons. The Council may act through a committee of its members in conducting any of the investigations provided for in this chapter and the chairperson of any such committee shall have all the powers of the Council. Each member of the Council may administer oaths, take affidavits and make personal inspections of all places to which his or her duties relate. The Council may subpoena and require the attendance of witnesses and the production of books and papers pertaining to the investigations and inquiries authorized in this chapter and examine them in relation to any matter it has power to investigate and issue commissions for the examination of witnesses who are out of the State or unable to attend before the Council or are excused from attendance.

(b) The Council may hold hearings at such places and at such times as shall be determined by the Council to hear complaints on housing by any aggrieved person as contemplated by this chapter. The procedure outlined in subsection (a) of this section shall apply to such hearings. Written reports shall be rendered in all cases to the Housing Director within 10 days after such hearing. The notice of complaint by any aggrieved person shall be in writing stating the nature thereof and may be made to any member of the Council.

(c) Upon the failure of any person to comply with a subpoena duly issued by the Council, the Council may seek an order from the Superior Court of the county in which the person subpoenaed resides, has a place of business or can be found, to show cause why that person should not be held in contempt for failure to comply with the subpoena.

Subchapter V. Delaware Housing Insurance Fund

§4050. Delaware Housing Insurance Fund.

The Delaware Home Improvement Insurance Fund is renamed the Delaware Housing Insurance Fund. DSHA may insure upon such terms as it may prescribe, any mortgage consistent with the purposes of this chapter. Fees shall be established for said insurance in an amount sufficient to cover administrative costs accrued for this program as well as payments made where defaults on mortgages cause losses to lenders. DSHA, with approval of the Secretary of Finance and the Council on Housing, may borrow from the Delaware Housing Insurance Fund for any lawful purpose with respect to any housing program or financing with respect thereof.

Section 7. Amend §4301(6), Title 31, Delaware Code by deleting the words "Department" means the Department of Community Affairs and Economic Development" and substituting in lieu 'thereof the words ""DSHA" means the "Delaware State Housing Authority...

Section 8. Amend §4303, Title 31, Delaware Code by deleting the words the Department" in the first and third paragraphs and substituting in lieu thereof the word "DSHA".

Section 9. Amend §4315, Title 31, Delaware Code by deleting the words the Department of Community Affairs and Economic Development" from the title of the section and substituting in lieu thereof the word "DSHA".

Section 10. Amend §4315, Title 31, Delaware Code by deleting the words "Secretary of Community Affairs and Economic Development" from the first paragraph of the section and substituting in lieu thereof the words "Housing Director of DSHA".

Section 11. Amend §4315(2), Title 31, Delaware Code by deleting the word "Secretary" whenever the same appears in the subsection and substituting in lieu thereof the words "Housing Director".

Section 12. Amend §4315(4), Title 31, Delaware Code by deleting the word "Secretary's" and substituting in lieu thereof the words "Housing Director's...

Section 13 . Amend §4315(4), Title 31, Delaware Code by deleting the words "the Department" and substituting in lieu thereof the word "DSHA".

Section 14. Amend §4315(5), Title 31, Delaware Code by deleting the word "Secretary's" and substituting in lieu thereof the words "Housing Director's".

Section 15. Amend §4315(6), Title 31, Delaware Code by deleting the words "the Department" whenever the same appears in the subsection and substituting in lieu thereof the word "DSHA".

Section 16. Amend §4315(6), Title 31;Delaware Code by deleting the word "Secretary" whenever the same appears in the subsection and substituting in lieu thereof the words "Housing Director".

Section 17. Amend §4317, Title 31, Delaware Code by deleting the words "the Department" whenever the same appears in the section and substituting in lieu thereof the word "DSHA".

Section 18. Amend Title 31 of the Delaware Code by deleting §4322 in its entirety.

Section 19. This Act shall be effective upon its enactment into law, provided however that the current Housing Director shall remain in office until a duly qualified successor is appointed by the Governor in accordance with the terms of this Act.

Approved July 2, 1998