(a) As used in this section, “nonprofit corporation” means a nonprofit corporation incorporated pursuant to chapter 602 or any predecessor statutes thereto, having as one of its purposes the construction, rehabilitation, ownership or operation of housing.

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(b) The Commissioner of Housing shall establish a pilot program of financial assistance in the form of loans, deferred loans and grants-in-aid to nonprofit corporations for not more than five developments of rental, mutual or limited equity cooperative housing for low and moderate income persons and families. Financial assistance provided under this section shall be on such terms and conditions as prescribed by the commissioner and shall be in an amount equal to one hundred per cent of the cost incurred for the acquisition of land and buildings, construction and any other costs determined by the commissioner to be reasonable and necessary. Financial assistance shall be for permanent financing only and shall not be used for construction financing. Any development receiving financial assistance under this section shall not be eligible for construction financing under any program operated by the Department of Housing or the Connecticut Housing Finance Authority. Financial assistance shall be released upon (1) completion of a development in accordance with plans and specifications approved by the commissioner and final inspection by the commissioner, (2) issuance of a certificate of occupancy by the building official of the municipality in which the housing is located, and (3) the signing of leases for eighty per cent of the units in the development. The commissioner may enter into an agreement with a nonprofit corporation for financial assistance under this section upon approval of the development by the State Bond Commission. Applicants receiving financial assistance under this section may retain not more than ten per cent of such assistance as a developer’s administrative fee. The commissioner, upon request of the developer of an approved development, may advance financial assistance to reimburse such developer for costs incurred prior to a construction loan closing, provided such costs were included in the development budget approved by the commissioner. Any loan or deferred loans made under this program shall bear interest at a rate not exceeding three per cent per annum and shall be for a term of not less than twenty-five but not more than forty years.

(c) To be eligible for financial assistance under this section a development shall: (1) Consist of not more than thirty units per development and may have from one to four bedrooms per unit, with priority being given to units with three or four bedrooms; (2) be in conformance with all local zoning and other applicable land use requirements; (3) be within total development cost limits based on annual high cost limits for housing established by the United States Department of Housing and Urban Development under the Section 221d(3) program as described in 12 USC 1715l; (4) be occupied not more than eighteen months after the date of approval by the State Bond Commission; (5) be marketed pursuant to an affirmative fair housing marketing plan; and (6) be consistent with the criteria of the state comprehensive housing affordability strategy adopted under the Cranston-Gonzalez National Affordable Housing Act (42 USC 12705).

(d) The commissioner shall select developments for funding by a competitive process based on consideration of the following: (1) The record of the applicant in providing housing for low and moderate income persons and families; (2) total development costs based on unit size relative to such costs in other applications; and (3) the number of three or four bedroom units in the proposed development.

(e) Applicants shall provide the commissioner with the following: (1) Evidence of zoning compliance and of site control; (2) a letter of interest from a construction financing source; (3) a statement showing sources of funding and that development costs are within costs limits established for financial assistance under this section; (4) an operating statement showing rents or carrying costs and operating costs, including taxes and debt service; (5) a letter of interest from a general contractor that includes a construction price; (6) a construction cost budget; (7) architectural plans and outline specifications; (8) evidence of the marketability of the units in the developments at the proposed rent; (9) a projected time frame for the completion of the development until occupancy; and (10) any other reasonable documentation requested by the commissioner to verify the feasibility of the development.

(f) Notwithstanding the provisions of the general statutes, any requirement that state-assisted rental housing be limited to families whose total housing cost is less than a specific per cent of their adjusted gross income shall not apply to projects receiving financial assistance under this section unless the occupant is receiving federal or state rental assistance or the project was constructed under a federal program requiring such limitations.

(g) The commissioner may monitor each project receiving financial assistance under this section after completion and occupancy. The commissioner may require the applicant to submit periodic reports on the development concerning operation and financial status, including a description of rents.

(h) Notwithstanding the provisions of the general statutes, an applicant receiving financial assistance under this section shall not be required to comply with the provisions of the general statutes or regulations adopted thereunder concerning (1) competitive bidding; (2) procedures for the selection of a contractor, architect, engineer, appraiser or lawyer; and (3) design review standards. The selection of any professional services shall be at the discretion of the applicant and subject to the approval of the construction financing source.

(i) On or before January 1, 1995, the commissioner shall submit a report to the select committee of the General Assembly on housing on the program established under this section.