The Arkansas Development Finance Authority (ADFA) has adopted emergency rules for projects funded by the Tax Credit Assistance Program (TCAP) and Section 1602 Exchange Program, effective immediately. These include:
- A payment and performance bond, or letter of credit in lieu thereof, in the amount of 40% of the construction contract amount must be obtained by the construction contractor on each development funded by TCAP or Exchange funds, for the protection of the federal funds awarded by ADFA to each such development from potential loss through recapture. Such payment and performance bond, or letter of credit, document must be delivered to ADFA prior to closing.
- The recipient must provide copies of title insurance policies for the amount of the TCAP funds, the amount of the Exchange Funds, and the amount of HOME Program funds if any, evidence of insurance, and a certificate evidencing the contractor’s worker’s compensation insurance. Post-closing, the recipient must provide ADFA with a copy of the Mortgagor’s property hazard and general liability insurance policies.
