The AMF`s Department of Housing Development provided the following two examples of Land Use Limitation Agreements (LRAs) to allow developers to see the types of restrictions that may occur when securing AMF funding. The first is a rental loan from the New Mexico Housing Trust (HTF), the second is an HTF housing development project. These models are updated from time to time and may not be the exact form currently used. LURA — The owner`s land use restriction agreement at the time of purchase, which sets out the owner`s obligation to comply with the occupancy, tenancy and resale restrictions on the owner`s property. All LRAs contain standard LIHTC rental restrictions that contain an owner who sets aside at least 40% of project units for residents earning less than 60% of median surface income (AMI) or at least 20% of project units for residents earning less than 50% of median surface income. These are called 40/60 and 20/50 tests. These restrictions should normally last at least 15 years. The restrictions imposed by the LRA can be defined by the period of compliance and the extension of the period of use. For example, the compliance period is 15 years and 15 years for the extended use period. The initial 15-year compliance period is imposed by IRS, HUD or other housing authorities, and any additional life extension is imposed by the actions taken by each national housing agency in which the apartment building is located.
What is a Land Use Agreement (LURA) A Land Use Restriction Agreement (LURA) subjects multi-family real estate to a land use restriction contract (LURA) in which the owner waives part of his land use rights in exchange for the commitment of future tax credits, restrictions on tenant income, rental restrictions for lower-income tenants and other accessibility restrictions. Restrictions on land use are recorded in the ARUA, which is registered in the public registration and works with the country (i.e. the restriction of actions). As the LURA works with the land, if an apartment building is sold during the term of the contract, the LURA restrictions are mandatory for the purchaser.