§4720.62. Definitions, home loans, bonds, powers, restrictions, presumptions

A. For the purpose of this Section unless the context clearly otherwise requires, the following definitions shall apply and be equally applicable to both the singular and plural forms of any of the defined terms:

(1) "Authority" means the New Orleans Redevelopment Authority in and for the city of New Orleans created pursuant to this Chapter.

(2) "Bond resolution" means a resolution authorizing the issuance of revenue bonds pursuant to this Section.

(3) "Development costs" means and includes the sum total of all reasonable or necessary costs incidental to the acquisition, construction, reconstruction, rehabilitation, repair, alteration, improvement, and extension of a residential development or other facility authorized pursuant to this Chapter, including without limitation the following: the cost of studies and surveys; plans and specifications; architectural and engineering services; underwriting fees; legal, accounting, marketing, and other special services relating to residential development or incurred in connection with the issuance and sale of bonds; necessary application and other fees to federal, state, and local government agencies for any requisite approvals for construction, for assisted financing, or otherwise; financing, acquisition, demolition, construction, equipment, and site development of new and rehabilitated buildings; the relocation of utilities, public ways, and parks; the construction of recreational, cultural, and commercial facilities; rehabilitation, reconstruction, repair, or remodeling of existing buildings and all other necessary and incidental expenses, including trustee and rating agency fees and an initial bond and interest reserve together with interest on bonds issued to finance a residential development to a date six months subsequent to the estimated date of completion; any premiums for mortgage insurance or insurance with respect to bonds, and such other expenses as the authority may deem appropriate to effectuate the purposes of this Section and this Chapter.

(4) "Home" means real property and improvements thereon located within a community improvement or community development area in the city of New Orleans, Louisiana, which may consist of single or multiple dwelling units, or condominium units, owned by one who occupies one of such units; however, newly constructed multiple dwelling units shall not exceed four units.

(5) "Home mortgage" means an interest-bearing loan to a mortgagor for the purpose of purchasing or rehabilitating, reconstructing, or improving a home, evidenced by a promissory note and secured by a mortgage on such home, but shall not include a loan primarily for the purpose of refinancing an existing loan.

(6) "Lending institution" means any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, government-approved nonprofit lending institution, mortgage banker, housing development corporation, or other financial institution, or governmental agency which customarily provides service or otherwise aids in the financing of mortgages on single-family residential housing or multifamily residential housing located in the city of New Orleans, Louisiana, or any holding company for any of the foregoing.

(7) "Mortgage program" means any program established under this Section to provide low-income loans, the proceeds of which shall be used to purchase, rehabilitate, or improve homes.

(8) "Mortgagor" means a person or persons whose adjusted gross aggregate income, together with the adjusted gross aggregate income of all persons who intend to reside with such person or persons in one dwelling unit, shall not have exceeded forty thousand dollars, or such lesser amount or amounts as shall be deemed by the authority to be in furtherance of its public purposes for the immediately preceding taxable year and who has received a home mortgage on a home.

(9) "Residential development" means the acquisition, construction, reconstruction, rehabilitation, repair, alteration, improvement, or extension of any land, interest in land, building, structure, facility, system, fixture, improvement, addition, appurtenance, machinery, or equipment or any combination thereof, all real and personal property deemed necessary in connection therewith, and all real and personal property or improvements functionally related and subordinate thereto, substantially for use by or occupied by persons for the purpose of decent, safe, and sanitary housing, and in connection therewith nonhousing facilities which are an integral part of or functionally related to such residential development not to exceed ten percent of the cost of such residential development in accordance with the terms contained in this Chapter. Any such residential development shall be located within a community improvement area.

(10) "Revenue bonds" means any bonds issued pursuant to this Section.

B. The authority is authorized and empowered to establish programs for residential development, including but not limited to low-interest rate home mortgage programs for qualified persons, by issuing mortgage revenue bonds to provide funds to persons to enable them to purchase or to rehabilitate, reconstruct, or improve single or multiple unit owner-occupied or rental family residences in community improvement or community development areas. In order to accomplish such purpose, the authority shall have and is hereby granted the following powers which shall be in addition to all other powers which it may have under this Chapter or general law:

(1) To plan, conduct research, study, develop, and promote the establishment of residential housing.

(2) To acquire, contract, and enter into advance commitments to acquire home mortgages owned by lending institutions at such purchase prices and upon other terms and conditions as shall be determined by the authority or such other person as it may designate as its agent, to make and execute contracts with nonprofit housing development corporations and lending institutions for the origination and servicing of home mortgages, and to pay the reasonable value of services rendered under those contracts.

(3) To make loans to government-approved nonprofit lending institutions and lending institutions under terms and conditions which, in addition to other provisions as determined by the authority, shall require the lending institutions to use substantially all of the net proceeds thereof, directly or indirectly, for the making of home mortgages in an aggregate principal amount substantially equal to the amount of such net proceeds.

(4) To establish, by rules or regulations, in resolutions relating to any issuance of revenue bonds or in any financing documents relating to such issuance, such standards and requirements applicable to the purchase of home mortgages or the making of loans to lending institutions as the authority deems necessary or desirable, including but not limited to:

(a) The location and other characteristics of homes to be financed by home mortgages.

(b) The terms and conditions of home mortgages to be acquired.

(c) The amounts and types of insurance coverage required on homes, home mortgages, and revenue bonds.

(d) The representations and warranties of lending institutions confirming compliance with such standards and requirements.

(e) Restriction as to interest rate or other terms of home mortgages or the return realized therefrom by lending institutions.

(f) Any other matters related to the purchase of home mortgages or the making of loans to lending institutions as shall be deemed relevant by the authority; however, in no such case shall any such lending institution charge and retain an origination fee in excess of three percent of the principal amount of any such home mortgage; and further provided that all such home mortgages shall bear a stated interest rate which, as of the business day immediately preceding the date of execution of a contract for the sale of the related revenue bonds, is at least one and one-half percent less than the stated interest rate being charged as of such day by such lending institution for its ninety-five percent loan-to-value mortgage loans, computed on a weighted average basis if such lending institution has more than one such rate, or if such lending institution does not regularly offer ninety-five percent loan-to-value mortgage loans, at least one percent less than the stated interest rate being charged as of such day by such lending institution for its eighty percent loan-to-value mortgage loans, computed on a weighted average basis if such lending institution has more than one such rate.

(5) To require from each lending institution from which home mortgages are purchased or to which loans are made the submission, at the time of such purchase or loan, of evidence satisfactory to the authority of the ability and intention of such lending institution to make home mortgages and the submission, within the time specified by the authority for making disbursements for home mortgages, of evidence satisfactory to the authority of the making of home mortgages and of compliance with any standards and requirements established by the authority, in connection therewith, the authority may inspect the books and records of such lending institutions.

(6) To issue revenue bonds to defray, in whole or in part, the development costs of any residential development; to issue its revenue bonds to defray, in whole or in part, the costs of purchasing, or funding the making of, mortgages for residential developments, including but not limited to the costs of studies and surveys, insurance premiums, underwriting fees, legal, accounting, and marketing services incurred in connection with the issuance and sale of such revenue bonds, including bond and interest reserve accounts, and trustee, custodian, and rating agency fees; and to designate appropriate names for such bonds. The authority need not acquire or hold title to or any interest in a residential development or home mortgage.

(7) To rent, lease, sell, or otherwise dispose of any residential development or home mortgages, in whole or in part, or to loan sufficient funds to any lending institution to defray, in whole or in part, the development costs of any residential development or the costs of purchasing home mortgages, so that the rents or other revenues to be derived with respect to the residential development or home mortgages, together with any insurance proceeds, reserve accounts and earnings thereon shall be designed to produce revenues and receipts at least sufficient to provide for the prompt payment at maturity of principal, interest, and redemption premium, if any, upon all revenue bonds issued to finance such costs.

(8) To pledge any revenues and receipts to be received from any residential development or home mortgages to the punctual payment of revenue bonds and the interest and redemption premiums, if any, thereof.

(9) To mortgage, pledge, or grant security interests in any residential development, home mortgages, notes, or other property in favor of the holders of revenue bonds issued therefor.

(10) To sell and convey any residential development or home mortgages, including, without limitation, the sale and conveyance thereof subject to a mortgage, pledge, or security interest, if any, as provided in the resolution or ordinance relating to the issuance of the revenue bonds for such prices and at such times as the governing body of the agency may determine.

(11) To issue its revenue bonds in accordance with this Section to refund in whole or in part at any time revenue bonds theretofore issued by the authority pursuant to this Section.

(12) To apply for and accept on its own behalf or on behalf of any person, advances, loans, grants, contributions, guarantees, rent supplements, mortgage assistance, and any other form of financial assistance from the federal government, the state of Louisiana, any parish or municipality, or any other public or quasi public body, corporation, or foundation, or from any other source, public or private, including any lending institution, for any of the purposes of this Chapter, and to include in any contract for financial assistance such conditions as it may deem reasonable and appropriate and which are not inconsistent with the purposes of this Chapter.

(13) To make and execute contracts and other instruments necessary or convenient to the exercise of any of the powers granted herein.

C. No lending institution undertaking transactions contemplated by this Chapter shall discriminate against any person on the basis of race, color, religion, sex, creed, ancestry, national origin, or physical or mental disability in connection with such transactions.

D.(1) The authority shall authorize revenue bonds by one or more bond resolutions adopted by a majority of its commissioners. Any bond resolution shall be published one time in the official journal of the city of New Orleans, Louisiana; however, it shall not be necessary to publish any exhibits to such bond resolution if the same are available for public inspection and such fact is stated in the publication. For thirty days after the date of publication, any person in interest may contest the legality of the bond resolution, any provision of the revenue bonds to be issued pursuant to it, the provisions therein made for the security and payment of the revenue bonds, and the validity of all other provisions and proceedings relating to the authorization and issuance of such bonds. After that time, no person may contest the regularity, formality, legality, or effectiveness of the bond resolution, any provisions of the revenue bonds to be issued pursuant to it, the provisions for the security and payment of the revenue bonds, and the validity of all other provisions and proceedings relating to their authorization and issuance, for any cause whatever. Thereafter, it shall be conclusively presumed that the revenue bonds are legal and that every legal requirement for the issuance of the revenue bonds has been complied with. No court shall have authority to inquire into any of these matters after the thirty days.

(2) The bond resolution shall authorize the program to be financed and, in addition, may contain provisions which shall be a part of the contract with the holders of such issue of revenue bonds, as to:

(a) Pledging all or any part of revenues received or to be received, and agreements to secure the payment of such issue of revenue bonds.

(b) Rates, fees, rentals, or other charges to be established, maintained, and collected, and the use and disposition of revenues, gifts, and funds received or to be received.

(c) The setting aside of reserves or bond retirement funds and the regulation and disposition thereof.

(d) The custody, collection, securing, investment, and payment of any monies held in trust or otherwise for the payment of revenue bonds or in any way to secure the payment of revenue bonds, including the establishment and maintenance of revenue, reserve, or other funds as trust funds.

(e) Limitations or restrictions on the purposes to which the proceeds of sale of any revenue bonds then or thereafter to be issued may be applied.

(f) Limitations or restrictions on the issuance of additional revenue bonds; the terms upon which additional revenue bonds may be issued and secured, or the refunding of outstanding or other revenue bonds, or both.

(g) Vesting in one or more trustees or fiscal agents such property, rights, powers, and duties in trust as the authority may determine.

(h) The acquisition and disposition of property.

(i) The rights and remedies available to the bondholders in the event of default.

(j) Provisions for insurance and for accounting reports and the inspection and audit thereof.

(k) The replacement of mutilated, destroyed, stolen, or lost revenue bonds.

(l) Any other matters of like or different character which in any way affect the security or protection of the revenue bonds.

(3) All revenue bonds issued pursuant to a bond resolution shall be equally and ratably secured by a pledge, charge, and lien upon revenues provided for in the bond resolution. Any pledge made by the authority pursuant to this Section shall be valid and binding from the time when the pledge is made. The revenues, securities, and other monies so pledged and then held or thereafter received by the authority or any fiduciary shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the authority, whether or not such parties have notice thereof.

(4) The bond resolution by which a pledge is created need not be filed or recorded except in the official minutes of the authority and of the State Bond Commission.

(5) The revenue bonds shall be of such series, bear such date or dates, be serial or term bonds, mature at such time or times, bear interest at such rate or rates payable on such date or dates, be in such denominations, be in such form, either coupon or fully registered without coupons, carry such registration and exchangeability privilege, be payable in such medium of payment and at such place or places, be subject to such terms of redemption, and be entitled to such priorities on the revenues of the authority as the bond resolution may provide.

(6) The revenue bonds shall be sold by the authority in such manner and at such prices, at public or private sale, as it may determine. If the authority sells the bonds at public sale, notice of such sale upon sealed proposals shall be published at least once not less than seven days prior to the date of such sale in a publication carrying municipal bond notices and devoted primarily to financial news or to the subject of state and municipal bonds, published in the city of New York, New York, and in a newspaper of general circulation published in the city of New Orleans, Louisiana.

(7) The revenue bonds and coupons attached thereto shall be executed in the name of the authority by the manual or facsimile signatures of such official or officials as may be designated in the bond resolution. If any officer whose manual or facsimile signature appears on any revenue bond or coupon ceases to be such officer before the delivery of such revenue bonds, such signature nevertheless shall be valid and sufficient for all purposes as if he had remained in office until such delivery. The bond resolution may provide for authentication of the revenue bonds by the trustees or fiscal agent thereunder.

E. Pending the preparation of definitive revenue bonds, the authority may issue interim receipts or temporary revenue bonds, with or without coupons, exchangeable for definitive revenue bonds when such bonds have been executed and are available for delivery.

F. No commissioner or officer of the authority, and no officer or member of the city of New Orleans or its governing body, or any person executing such revenue bonds shall be liable personally on such revenue bonds.

G. The authority shall have power to purchase its revenue bonds out of any funds available therefor under the bond resolution. It may hold, cancel, or resell such bonds, subject to and in accordance with agreements with holders of its revenue bonds.

H. All revenue bonds and interest coupons appertaining thereto issued pursuant to this Section shall be and are hereby made negotiable instruments within the meaning of and for all of the purposes of the negotiable instruments law of Louisiana, subject only to the provisions of the revenue bonds for registration.

I. All revenue bonds and the income therefrom shall be exempt from all taxation by the state of Louisiana or any political subdivision thereof. The revenue bonds shall be legal and authorized investments for banks, savings banks, insurance companies, homestead and building and loan associations, trustees, and other fiduciaries and may be used for deposit with any officer, board, municipality, or other political subdivision of the state of Louisiana, in any case where, by present or future laws, deposit or security is required.

J. The holders of any revenue bonds issued hereunder shall have such rights and remedies as may be provided in the bond resolution, including, but not by way of limitation, acceleration of payment, appointment of a trustee for bondholders, appointment of a receiver for the redevelopment project or the revenue bond program financed with the proceeds of the revenue bonds or the revenues from such program, or both, and any other available civil action to compel compliance with the terms and provisions of the revenue bonds and the bond resolution.

K. The revenue bonds shall be limited obligations of the authority. The principal of and interest on the revenue bonds shall not be payable from the general funds of the authority nor shall they constitute a pledge, charge, lien, or encumbrance upon any of its property or upon any of its income, receipts, or revenues except the revenues, agreements, and funds pledged under the bond resolution. Neither the credit nor the taxing power of the city of New Orleans or the state of Louisiana shall be pledged for the payment of such principal or interest, and no holder of revenue bonds shall have the right to compel the exercise of the taxing power by the city of New Orleans or the forfeiture of its property in connection with any default thereon. Every revenue bond shall recite in substance that the principal of and interest on such bond is payable solely from the revenues pledged to its payment and the authority is not obligated to pay such principal or interest except from such revenues. The revenue bonds issued under the provisions of this Section shall not constitute a debt of the state of Louisiana or the city of New Orleans, are not subject to any constitutional or statutory debt limitation or restriction and shall not be subject to the provisions of the charter of the city of New Orleans relating to the authorization, issuance, or sale of bonds, and the state of Louisiana shall not be liable thereon.

L. Subject to agreements with the holders of revenue bonds, all proceeds of revenue bonds and all revenue pledged under a bond resolution shall be set aside as received and shall be deposited and held in trust by a trustee appointed by the authority in a fund or funds separate and apart from all other funds of the authority. Subject to the bond resolution, the trustee shall hold the same for the benefit of the holders of the bonds for the application and disposition thereof solely to the respective uses and purposes in such bond resolution.

Acts 2004, No. 349, §1; Acts 2005, No. 437, §1, eff. July 11, 2005; Acts 2014, No. 811, §17, eff. June 23, 2014.