Big News: OHCS Looking to Form Non Profit OR LLC
At the State Housing Council meeting today OHCS staff said they were exploring the formation of NEW OHCS offshoot which would be a NON PROFIT OR a LLC . This would be apparently in lieu of using an existing financial institution (including any of the currently approved CDFI's in Oregon ?) to receive funds for this program. While it is important to stress that nothing is final yet, this option IS being actively researched with the AG and other state government agencies (and may be occurring in some first round states who are getting closer to submitting their plans to Treasury).
The specific language from the 1st round guidance says this about the requirement for a financial institution:
The HFA Hardest-Hit Fund has been designated specifically for implementation by state HFAs. To receive funds, each recipient of funding from the HFA Hardest-Hit Fund (each, an “Eligible Entity”) must be a “financial institution,” as that term is defined in EESA. Specifically, Section 3(5) of EESA defines “financial institution” as:
“FINANCIAL INSTITUTION.—The term ‘‘financial institution” means any institution, including but not limited to a bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.”
Accordingly, an Eligible Entity must be a regulated entity that is incorporated separately from the state government itself, such as a corporation (private or public) or similar entity formed or incorporated under state law, which has the corporate power to receive funds from Treasury in respect of the HFA Hardest-Hit Fund and to work with the related state HFA in implementing that state’s HFA Proposal(s). Agencies of state governments are not considered Eligible Entities for purposes of the HFA Hardest-Hit Fund. The Eligible Entity may be an existing entity or it may be newly-formed for the purpose of implementing the HFA Hardest-Hit Fund. Prior to receiving funds through the HFA Hardest-Hit Fund, each Eligible Entity will need to be approved as a “financial institution” under EESA by Treasury in its sole discretion. Additionally, Eligible Entities will be required to enter into an agreement (“Participation Agreement”) with Treasury (or Treasury’s agent), which must qualify as a “financial instrument” under EESA by Treasury. The Participation Agreement will include, among other provisions, reporting and compliance requirements...”
Formal guidance to second round states is scheduled to be published by April 12th and the plans from first round states are due by April 16th, so more about what other states are proposing (both organizationally and programmatically ) should be available within a couple of weeks.
Once the guidance is received OHCS indicated they anticipated having about 6 weeks to submit an application, which would mean sometime in late May or early June. OHCS staff also indicated they were anticipating doing a series of community forums to gather input and focusing a significant amount of resources in the counties with the highest rates of unemployment.
I am sure there will be a LOT of future developments about this program, and I have added a new "Hardest Hit" keyword so that you can easily retrieve all postings on this subject.
Originally created and posted on the Oregon Housing Blog.
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