SECTION 1. For purposes of this act, the following terms shall have the following meanings:-

“Authority”, the Melrose housing authority established under chapter 121B of the General Laws.

“Department”, the department of housing and community development.

“Disposition properties”, those 2 parcels located in the city of Melrose known and numbered 165 Trenton Street and 499-501 Lebanon Street.

“Invested disposition proceeds”, any of the net sale proceeds received by MAHC from a sale of the disposition properties and subsequently invested by MAHC in the acquisition or development of MAHC-owned low and moderate income housing in the city of Melrose.

“Low or moderate income housing”, any housing subsidized by the federal or state government under any program to assist the construction of low or moderate income housing as defined in the applicable federal or state statute, whether built or operated by any public agency or any nonprofit or limited dividend organization.

“MAHC”,  the Melrose Affordable Housing Corp., a non-profit corporation organized under chapter 181 of the General Laws.

SECTION 2.  Notwithstanding chapters 30B and 121B of the General Laws or any other general or special law or any rule or regulation to the contrary, the authority may convey fee ownership of the disposition properties to MAHC for $1.00 and such transfer of ownership shall terminate any restrictions on use or transferability that may encumber any of the disposition properties in any way because of the authority’s having been the record owner of the disposition properties.  Repayment to the commonwealth of outstanding state housing bond funds, the proceeds of which were invested in the disposition properties, shall not be a condition of a conveyance to MAHC or of a subsequent conveyance of either or both of the disposition properties by MAHC so long as the net proceeds from the sales of the disposition properties are used for the purposes described in section 3.

SECTION 3. (a)  If the disposition properties are conveyed from the authority to MAHC under section 2, MAHC shall actively market the disposition properties for sale and may convey the disposition properties through 1 or more sales to any arms-length third party at a sale price to be approved in writing by the authority; provided, however, that the first $379,763 of the net proceeds or 50 per cent of net proceeds generated by such sale of the disposition properties, whichever figure is greater, shall be remitted to the authority.   The authority shall deposit the remitted funds into an interest-bearing account separate from other state or federal program accounts. The authority shall use such funds solely for the repair of its state-assisted chapter 705 low income family housing units under a capital improvement plan approved by the department. 

(b) The net proceeds from any sales by MAHC of the disposition properties not remitted to the authority shall be used by MAHC for the acquisition or development by MAHC of 1 or more properties as low and moderate income housing to increase the number of low and moderate housing units owned by MAHC within the city of Melrose; provided, however, that MAHC may at any time remit all or a portion of the remaining net sale proceeds from the sale of the disposition properties back to the authority and the authority shall utilize such additional remitted proceeds in the manner described in subsection (a).

SECTION 4. (a)  Any agreement to convey the disposition properties from the authority to MAHC shall be in writing, incorporate the requirements of this act and be pre-approved by the department to confirm compliance with this act. 

(b)  If MAHC uses any invested disposition proceeds to acquire or develop a property, MAHC and the authority shall enter into a recorded affordability restriction which  restricts the use of such property solely for low and moderate income housing in perpetuity.  The restriction shall be on a form approved by the department to ensure compliance with this act, enforceable by the authority for each such property and shall provide that if any of the units in such property fails to be maintained for occupancy for low or moderate income families only, any of the invested disposition proceeds used in relation to such property shall be repaid to the authority.

(c)  The authority shall grant to any state or federally chartered bank, credit union or lending agency holding a mortgage on any disposition property, in connection with a foreclosure or deed-in-lieu of foreclosure of such mortgage, a release of the affordability restriction on such property, conditional upon payment of the amount of invested disposition proceeds that MAHC has invested in such property to the authority.

SECTION 5. This act shall take effect upon its passage.