HB530 Construction Loan Fund
(revised 4.21.05)

The HB530 Construction Loan Fund was established by the State of Mississippi in collaboration with Fannie Mae (FNMA), the Mississippi Development Authority (MDA), and the Mississippi Home Corporation (MHC), to provide financing for the construction of low-to-moderate income Single-Family Eligible Residential Housing Units within the state of Mississippi.

Eligible Borrowers:
Nonprofit Corporations, Partnerships, For-Profit Corporations, Public Housing Authorities, Planning and Development Districts, and Limited Equity Cooperatives. Individuals are not eligible.

Use of Funds:
Construction of single-family residential housing units to be owner-occupied.

Program Priorities:
The following development types are given priority under the HB530 program:

  • Projects involving combination of nonprofit organizations with for-profit partners and investors.
  • Projects that empower poor families through resident management, self-help housing, self-sufficiency activities designed to increase household incomes, or similar programs meeting critical housing needs.
  • Projects designed to access FNMA, FHLMC , or other secondary mortgage markets and requiring commitment of funds from the HB530 for two (2) years or less.
  • Projects that address the needs of the elderly.
  • Projects located in targeted counties or census tracts under the Mortgage Revenue Bond Program or in areas identified as "Difficult to Develop, Qualified Census Tracts, or Areas of Economic Distress" under the Housing Tax Credit Program.
  • Projects that provide for long-term affordability provisions of 15 years or more, enforced by deed of trust, deed restriction, restrictive covenant, or other methods to insure long-term affordablility.

HB530 Development Construction Sign Specifications and Corporate Logo

Line of Credit:

Applying for the HB530 Program is a two-step process. First, Borrower must be approved for a Line of Credit. Once a Line has been established and a home site has been selected, a loan application may be submitted for each home built under the Line.

  • The maximum amount of any Line of Credit is $750,000.
  • The maximum number of homes a borrower can have outstanding under a Line of Credit is six (6).
  • Line of Credit is effective for twelve months. Borrower must provide updated financials annually for re-evaluation.

Loan Terms and Conditions:

Loan Amount - Loan Amount will be based on 80% of appraised value or sales price of home (whichever is less). Maximum loan amount for any one loan is $125,000.
Interest Rate - Typically below market rate.
Term - Terms may range from 6 months to 2 years.
Repayment - Interest payable monthly on the outstanding principle balance of each loan.
Security - MHC must have a first lien position on property.
Recourse - Full recourse to Borrower.
Income Restrictions - Families whose annual income is at or below 115% of the Internal Revenue Service (IRS) limits established by the Mississippi Mortgage Revenue Bond Program.
Long-Term Affordability - MHC requires its borrowers to ensure long-term affordability through the use of restrictive covenants. Covenants will be filed on the property for seven years.

Fees:
All fees are NON-REFUNDABLE.

Line of Credit Application Fee
$350.00
Loan Application Fee
$250.00*
Annual Builder Re-Approval Fee
$100.00
Inspection Fees
$ 90.00**
Loan Extension Fee (3 months)
$250.00
*per loan request
**no charge for the first three inspections

Builder Participation Incentives:
In accordance with legislation, MHC will act to originate loans to create decent, safe, and affordable housing for persons of low-to-moderate income. The interest rate savings created by the lower construction interest rate will be retained by the builder and will serve as both an incentive to build in areas that need decent, safe, and affordable housing and to offset market absorption risks that may be faced by the homebuilder. A restriction may be included on the construction loan that would provide assurances that persons of low and moderate income will be the ultimate purchasers of the newly constructed homes. These deed restrictions could be waived after a certain period of time of ownership, thereby allowing for adjustments in the home buying patterns in these particular communities.

Applications may be submitted to:

Mississippi Home Corporation
Attention: Lending Department
PO Box 23369
Jackson, MS 39225-3369

All applications are subject to approval by Mississippi Home Corporation,
Fannie Mae, and The Mississippi Development Authority.

 

For more information contact: Charlotte Baker or Chuck Morris