At an executive session held Monday, March 15, the Joint Committee on Local Affairs did not report out the Land Use Reform Act (S-1174/H-4103). This bill is a comprehensive revision of the Massachusetts Zoning Code. The committee indicated that it intends to establish a working group that will meet over the course of the next few weeks for the purposes of crafting a compromise bill that will then be reported by the committee. The working group will consist of committee members and representatives from some of the interested groups. The committee said that section 3 of the bill, the one that would change current law regarding the educational exemption, the so-called Dover Amendment, was one of the areas that required further analysis.

Although many groups, including CHAPA, support much of what is included in the bill, concerns have been raised that some of the changes might inadvertently make it more difficult to build housing, particularly affordable housing. In addition to the educational exemption changes, the bill would also impose impact fees on most affordable housing developments. Although the bill contains a limited exemption from the fees, the exemption would not apply to developments built under Chapter 40B. Additionally, language in the bill that would allow for inclusionary zoning would serve families making up to 120% of the area median income as affordable rather than the generally accepted 80% of median income. CHAPA members who have concerns about the bill should contact members of the committee. A complete list of committee members can be found on the web at www.state.ma.us/legis/comm/j10.htm

Anti-Predatory Lending Bill Moves Forward

An anti-predatory lending bill, supported by ACORN, the Massachusetts Affordable Housing Alliance, CHAPA, and many others, received a favorable report yesterday from the Joint Committee on Banks and Banking. The bill does not prohibit high cost loans, but it defines such loans and includes various restrictions and requirements that must be met before a high cost loan is signed. The bill also includes various changes that would apply to all mortgage loans issued in Massachusetts. The committee held a press conference to review the highlights of the bill. Some of the key provisions include:

For High-Cost Home Mortgage Loans -
Defined as a loan with an annual percentage rate that exceeds the treasury rate by more than 6% for first mortgages and 7% for subordinate mortgages or a loan whose points and fees exceed the greater of 5% of the total loan amount or $400.

Borrowers must complete an accredited credit counseling program before entering into a high cost loan; however, as released, the bill allows that counseling program to be conducted in whole or in part by telephone.

The lender must reasonably believe that the borrower can make the scheduled payments. A borrower is presumed to be able to make the payments if PITI does not exceed 45% of the borrower's monthly gross income.

The loan may not include prepayment fees or penalties.

The loan may not include financing of points and fees in excess of 5% of the total loan amount or $800, whichever is greater.

The loan documents may not permit an interest rate increase as a result of default.

The lender may not charge a fee to modify, renew, or extend or amend a high cost home mortgage loan.

Mandatory arbitration clauses are prohibited for high cost home mortgage loans.

Limits the ability of the lender to directly pay a home improvement contractor from the loan proceeds.

All Loans -
Refinancing must be in the borrower's interest, and the legislation includes factors to determine whether the loan is in the borrower's interest.

Limits prepayment fees and penalties that may be charged within the first 36 months and prohibits such fees and penalties after 36 months.

Prohibits, except in the case of reverse mortgages, negative amortizing home loans.

House and Senate leadership have indicated support for the legislation and appear to have placed it on a fast track.

Bill Filed to Extend State Low Income Housing Tax Credit

The Massachusetts Low Income Housing Tax credit, created in 1999, is set to expire at the end of next year and CHAPA has made it a priority to continue this important program. The program has committed nearly all of its funds and has assisted 13 developments in nine communities. The funded developments include nearly 1,800 homes, approximately 1,100 of which are affordable.

The bill, filed by Senator Jarrett Barrios (D-Cambridge), Peter Larkin (D-Pittsfield), and more than 40 of their colleagues, would remove the sunset clause from the 1999 legislation and allow the program to continue. The bill has been filed with the House and Senate Clerks and is expected to be referred to the Joint Committee on Taxation. CHAPA is also advocating that the provisions be included in the FY '05 state budget.

Supplemental Budget Prevents Cuts to EAEDC and TAFDC

Earlier this month, Governor Romney signed a supplemental budget that provides $2.9 million for the Emergency Aid to the Elderly, Disabled and Children (EAEDC) program and $2.6 million for the Transitional Aid to Families with Dependent Children (TAFDC) program. The new funding means that the Department of Transitional Assistance (DTA) will not have to move forward with the cuts that it proposed to these programs.

Federal Home Loan Bank of Boston Creates Project Listing Service

The Federal Home Loan Bank of Boston (FHLBB) has created a new, free, online service. According to FHLBB, the purpose of the Project Listing Service is to "enhance funding opportunities for New England nonprofit and for-profit developers, businesses, and commercial property owners"

The service allows developers to list housing, commercial, or economic development projects that require funding. The list will be made available to FHLBB member financial institutions. The members can review the projects and respond. Members can also be notified automatically when listings are posted in a specific geographic area. The service was scheduled to begin operation on March 15. The listing form is available online at www.fhlbboston.com/pls. For more information contact John Eller at john.eller@fhlbboston.com or Mary Ellen Jutras at mjutras@fhlbboston.com.