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H0425...............................................by REVENUE AND TAXATION
REVERSE MORTGAGES - Amends existing law to authorize the Idaho Housing and
Finance Association, banks, insurance companies, savings and loan
associations and credit unions to make and undertake commitments to make or
participate in the making of mortgage loans to persons over 62 years of age
to pay property taxes and other expenses on the person's residential
property.
01/19 House intro - 1st rdg - to printing
01/20 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 425
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO REVERSE MORTGAGES; AMENDING SECTION 67-6206, IDAHO CODE, TO ALLOW
3 THE IDAHO HOUSING AND FINANCE ASSOCIATION TO MAKE AND UNDERTAKE COMMIT-
4 MENTS TO MAKE OR PARTICIPATE IN THE MAKING OF MORTGAGE LOANS TO PERSONS
5 OVER SIXTY-TWO YEARS OF AGE TO PAY PROPERTY TAXES AND OTHER EXPENSES ON
6 THE PERSON'S RESIDENTIAL PROPERTY AND TO MAKE TECHNICAL CORRECTIONS;
7 AMENDING SECTION 41-210, IDAHO CODE, TO AUTHORIZE THE DIRECTOR OF THE
8 DEPARTMENT OF INSURANCE TO PROMULGATE RULES AUTHORIZING INSURERS TO MAKE
9 AND UNDERTAKE COMMITMENTS TO MAKE OR PARTICIPATE IN THE MAKING OF MORTGAGE
10 LOANS TO PERSONS OVER SIXTY-TWO YEARS OF AGE TO PAY PROPERTY TAXES AND
11 OTHER EXPENSES ON THE PERSON'S RESIDENTIAL PROPERTY; AND AMENDING SECTION
12 67-2701, IDAHO CODE, TO AUTHORIZE THE DIRECTOR OF THE DEPARTMENT OF
13 FINANCE TO PROMULGATE RULES AUTHORIZING BANKS, SAVINGS AND LOAN ASSOCIA-
14 TIONS AND CREDIT UNIONS TO MAKE AND UNDERTAKE COMMITMENTS TO MAKE OR
15 PARTICIPATE IN THE MAKING OF MORTGAGE LOANS TO PERSONS OVER SIXTY-TWO
16 YEARS OF AGE TO PAY PROPERTY TAXES AND OTHER EXPENSES ON THE PERSON'S RES-
17 IDENTIAL PROPERTY AND TO MAKE TECHNICAL CORRECTIONS.
18 Be It Enacted by the Legislature of the State of Idaho:
19 SECTION 1. That Section 67-6206, Idaho Code, be, and the same is hereby
20 amended to read as follows:
21 67-6206. POWERS OF ASSOCIATION. The housing and finance association is an
22 independent public body corporate and politic, exercising public and essential
23 governmental functions, and having all the powers which are hereby declared to
24 be public purposes necessary or convenient to carry out and effectuate the
25 purposes and provisions of this act, including the following powers in addi-
26 tion to others herein granted:
27 (a) To sue and to be sued; to have a seal and to alter the same at pleas-
28 ure; to have perpetual succession; to make and execute contracts and other
29 instruments necessary or convenient to the exercise of the powers of the asso-
30 ciation; and to make and from time to time amend and repeal bylaws, rules, not
31 inconsistent with this act, to carry into effect the powers and purposes of
32 the association.
33 (b) To conduct its operations within any or all of the counties of the
34 state.
35 (c) To cooperate with housing authorities throughout Idaho in the devel-
36 opment of housing projects.
37 (d) To assign priorities for action and revise or modify said priorities
38 from time to time.
39 (e) To make and execute agreements, contracts and other instruments nec-
40 essary or convenient in the exercise of the powers and functions of the asso-
41 ciation under this act, including contracts with any housing sponsor, mortgage
42 lender, person, firm, corporation, governmental agency, or other entity; and
43 to include in any contract let in connection with a project, stipulations
2
1 requiring that the contractor and any subcontractors comply with requirements
2 as to minimum wages and maximum hours of labor, and comply with any conditions
3 which the federal government may have attached to its financial aid of the
4 project and to designate mortgage lenders to act for and in behalf of the
5 association, with respect to originating or servicing and processing mortgage
6 loans of the association, and to pay the reasonable value of service rendered
7 to the association by such mortgage lenders pursuant to contracts with mort-
8 gage lenders.
9 (f) To lease, sell, construct, finance, reconstruct, restore, rehabili-
10 tate, operate or rent any housing projects, nonprofit facilities or any dwell-
11 ings, houses, accommodations, lands, buildings, structures or facilities
12 embraced in any housing project or nonprofit facilities and, subject to the
13 limitations contained in this act, to establish and revise the rents or
14 charges therefor.
15 (g) To own, hold and improve real or personal property; to purchase,
16 lease, obtain options upon, acquire by gift, grant, bequest, devise, eminent
17 domain or otherwise, any real or personal property or any interest therein.
18 (h) To acquire any real property; to sell, lease, exchange, transfer,
19 assign, pledge or dispose of any real or personal property or any interest
20 therein.
21 (i) To insure or provide for the insurance of any real or personal prop-
22 erty or operation of the association against any risks or hazards, and to pro-
23 cure or agree to the procurement of insurance or guarantees from the federal
24 government or other source for the payment or purchase of any bonds or parts
25 thereof issued by the association, including the power to pay for any such
26 insurance or guarantees.
27 (j) To invest any funds held in reserves or sinking funds, or any funds
28 not required for immediate disbursement, in property or securities in which a
29 bank, as defined in the "bank act," title 26, Idaho Code, may legally invest
30 funds including without limitation, to agree to purchase the obligations of
31 any federal, state or local government upon such conditions as the association
32 may determine to be prudent and in its best interest.
33 (k) Within its area of operation: to investigate into living, dwelling
34 and housing conditions and into the means and methods of improving such condi-
35 tions; to determine where slum areas exist or where there is a shortage of
36 adequate, safe and sanitary dwelling accommodations for persons of low-income
37 low income; to make studies and recommendations relating to the problem of
38 clearing, replanning and reconstruction of slum areas and the problem of pro-
39 viding dwelling accommodations for persons of low-income low income, and to
40 cooperate with the city, the county, the state or any political subdivision
41 thereof in action taken in connection with such problems; and to engage in
42 research, studies and experimentation on the subject of housing.
43 (l) To participate in cooperative ventures with any agencies, organiza-
44 tions and individuals in order to undertake the provision of housing for per-
45 sons of low-income low income, to undertake the provision of nonprofit facili-
46 ties or agricultural facilities.
47 (m) To provide research and technical assistance to eligible agencies,
48 organizations and individuals eligible to develop low cost housing and to
49 research new low cost housing development and construction methods.
50 (n) To make and undertake commitments to make or participate in the mak-
51 ing of mortgage loans to persons of low-income low income and to housing spon-
52 sors, including without limitation federally insured mortgage loans, and to
53 make temporary loans and advances in anticipation of permanent loans to hous-
54 ing sponsors; said mortgage loans to housing sponsors shall be made to finance
55 the construction, improvement, or rehabilitation of housing projects for per-
3
1 sons of low-income low income, and/or mixed income housing projects upon the
2 terms and conditions set forth in this act; provided, however, that such loans
3 shall be made only upon the determination by the association that mortgage
4 loans are not otherwise available, wholly or in part, from private lenders
5 upon reasonably equivalent terms and conditions.
6 (o) To purchase, or make commitments to purchase or participate in the
7 purchase of mortgage loans from mortgage lenders which loans have been made
8 for the construction, improvement, or rehabilitation of housing projects for
9 persons of low-income low income and/or mixed income housing projects or loans
10 which have been made to persons of low-income low income for residential hous-
11 ing, upon terms set forth in this act; provided, however, that any such pur-
12 chase shall be made only upon the determination by the association that the
13 mortgage loans to be made are not otherwise being made by mortgage lenders
14 upon reasonably equivalent terms and conditions. Also, to purchase, or make
15 commitments to purchase or participate in the purchase of mortgage loans from
16 mortgage lenders whether or not said loans were made to persons of low-income
17 low income, upon terms set forth in this act; provided, however, that the pro-
18 ceeds from such purchase or the equivalent thereof shall be reinvested in
19 obligations of the association, in mortgage loans to persons of low-income low
20 income or in mortgage loans for housing projects for persons of low-income low
21 income and/or mixed income housing projects, and provided that any such pur-
22 chase shall be made only upon the determination by the association that the
23 mortgage loans to be made are not otherwise being made by mortgage lenders
24 upon reasonably equivalent terms and conditions.
25 (p) To provide interim financing for housing projects including mixed
26 income housing projects approved by the association, provided that the associ-
27 ation has determined that such financing is not otherwise available from mort-
28 gage lenders upon reasonably equivalent terms and conditions.
29 (q) To prescribe rules and policies in connection with the performance of
30 its functions and duties.
31 (r) To do all other things deemed necessary and desirable to accomplish
32 the objectives of this act.
33 (s) To borrow money and issue bonds and notes or other obligations, to
34 invest the proceeds thereof in any lawful manner and to fund or refund the
35 same, and to provide for the rights of the holders of its obligations as pro-
36 vided in this act and in connection therewith, to waive, by resolution or
37 other document of the association, the exemption from federal income taxation
38 of interest on any of the association's obligations under existing or future
39 federal law and to establish, maintain and preserve the association's general
40 obligation rating and any rating on its bonds, notes or other obligations.
41 (t) To receive and accept aid or contributions from any source.
42 (u) To employ architects, engineers, attorneys, accountants, housing con-
43 struction and financial experts and such other advisors, consultants and
44 agents as may be necessary in its judgment and to fix their compensation.
45 (v) To insure mortgage payments of any mortgage loan made for the purpose
46 of constructing, rehabilitating, purchasing, leasing, or refinancing housing
47 projects upon such terms and conditions as the association may prescribe.
48 (w) To fix and revise from time to time and charge and collect fees and
49 charges in connection with loans made or other services provided by the asso-
50 ciation pursuant to this act, and to make and publish rules respecting the
51 making and purchase of mortgage loans.
52 (x) To organize a nonprofit corporation to assist the association in pro-
53 viding for housing projects.
54 (y) To enter upon and inspect any housing project, including housing
55 projects undertaken by housing sponsors, for the purpose of investigating the
4
1 physical and financial condition thereof, and its construction, rehabilita-
2 tion, operation, management and maintenance, and to examine all books and
3 records with respect to capitalization, income and other matters relating
4 thereto.
5 (z) To order such alterations, changes or repairs as may be necessary to
6 protect the security of its investment in a housing project or the health,
7 safety, and welfare of the occupants thereof.
8 (aa) To make or purchase secured loans for the purpose of providing tempo-
9 rary or permanent financing or refinancing of all or part of the project costs
10 of any nonprofit facility or agricultural facility, including the refunding of
11 any outstanding obligations, mortgages or advances issued, made or given by
12 any person for the project costs of a nonprofit facility or agricultural
13 facility; and to charge and collect interest on the loans for the loan pay-
14 ments upon such terms and conditions, including without limitation bond rating
15 and issuance conditions, as the board of commissioners considers advisable
16 which are not in conflict with this chapter.
17 (bb) As security for the payment of the principal of and interest on any
18 revenue bonds issued and any agreements made in connection therewith, to mort-
19 gage, pledge, or otherwise encumber any or all of nonprofit facilities or
20 agricultural facilities or any part or parts thereof, whether then owned or
21 thereafter acquired, and to assign any mortgage and repledge any security con-
22 veyed to the association, to secure any loan made by the association and to
23 pledge the revenues and receipts therefrom.
24 (cc) To issue bonds for the purpose of financing all or part of the proj-
25 ect cost on any nonprofit facility or agricultural facility and to secure the
26 payment of the bonds as provided in this chapter.
27 (dd) To purchase or sell by installment contract or otherwise, and convey
28 all or any part of any nonprofit facility or agricultural facility for such
29 purchase price and upon such terms and conditions as this board of commission-
30 ers considers advisable which are not in conflict with this chapter.
31 (ee) To lease all or any part of any nonprofit facility or agricultural
32 facility for such rentals and upon such terms and conditions, including
33 options to purchase, as the board of commissioners considers advisable and not
34 in conflict with this chapter.
35 (ff) To construct and maintain one (1) or more nonprofit facilities or
36 agricultural facilities, provided that the association shall not operate any
37 nonprofit facility or agricultural facility as a business other than as les-
38 sor, seller or lender. The purchase, holding and enforcing of mortgages, deeds
39 of trust, or other security interests and contracting for any servicing
40 thereof is not considered the operation of a nonprofit facility or agricul-
41 tural facility as a business.
42 (gg) To act as the designated housing resource clearinghouse in the state
43 for matters relating to affordable housing.
44 (hh) To coordinate the development and maintenance of a housing policy for
45 the state.
46 (ii) To enter into agreements or other transactions and accept grants,
47 reimbursements or other payments, with the cooperation of the United States or
48 any agency thereof or of the state of Idaho or any agency thereof or munici-
49 pality of the state in furtherance of the purposes of this act, including, but
50 not limited to, the development, maintenance, operation and financing of any
51 transportation project and to do any and all things necessary in order to
52 avail the association of such aid and cooperation.
53 (jj) To borrow money and issue bonds and notes or other evidences of
54 indebtedness thereof as hereinafter provided to finance transportation proj-
55 ects approved and recommended by the transportation board.
5
1 (kk) To make and undertake commitments to make or participate in the mak-
2 ing of mortgage loans to persons over sixty-two (62) years of age to pay prop-
3 erty taxes and other expenses on the person's residential property.
4 SECTION 2. That Section 41-210, Idaho Code, be, and the same is hereby
5 amended to read as follows:
6 41-210. GENERAL POWERS, DUTIES. (1) The director shall enforce the provi-
7 sions of this code, and shall execute the duties imposed upon him by this
8 code.
9 (2) The director shall have the powers and authority expressly conferred
10 upon him by or reasonably implied from the provisions of this code.
11 (3) The director may conduct such examinations and investigations of
12 insurance matters, in addition to examinations and investigations expressly
13 authorized, as he may deem proper to determine whether any person has violated
14 any provision of this code or to secure information useful in the lawful
15 administration of any such provision. The cost of such additional examinations
16 and investigations shall be borne by the state.
17 (4) For any document required to be filed with the director or the
18 department of insurance under the laws of this state, the director may specify
19 the place and manner of filing of the document, including whether an elec-
20 tronic or paper filing is required or acceptable.
21 (5) The director shall have such additional powers and duties as may be
22 provided by other laws of this state.
23 (6) The director shall promulgate rules authorizing insurers to make and
24 undertake commitments to make or participate in the making of mortgage loans
25 to persons over sixty-two (62) years of age to pay property taxes and other
26 expenses on the person's residential property.
27 SECTION 3. That Section 67-2701, Idaho Code, be, and the same is hereby
28 amended to read as follows:
29 67-2701. DEPARTMENT OF FINANCE -- CREATION -- DIRECTOR -- ORGANIZATION --
30 POWERS AND DUTIES. (a1) There is hereby created the department of finance. The
31 department shall, for the purposes of section 20, article IV, of the constitu-
32 tion of the state of Idaho, be an executive department of state government.
33 The governor shall appoint, with the advice and consent of the senate, a
34 director of the department of finance who shall serve at the pleasure of the
35 governor. The director shall have had at least five (5) years practical expe-
36 rience in the banking business, or shall have served for a like period in the
37 banking division of this or some other state. Neither the director of the
38 department nor any administrator of a division in the department shall be the
39 owner of or financially interested either directly or indirectly in any bank-
40 ing or insurance corporation subject to the supervision of the department.
41 (b2) The department of finance shall be composed of such divisions as are
42 established by law and such other units as may be administratively estab-
43 lished. The director of the department shall appoint, subject to the approval
44 of the governor, an administrator for such divisions as may be established.
45 The director shall, subject to the approval of the governor, fix the salary of
46 each administrator.
47 (c3) The director of the department of finance shall have power:
48 1.(a) To exercise the rights, powers and duties vested by law in the
49 department or in the director.
50 2.(b) To execute the laws relating to banks and banking.
51 (c) To promulgate rules to allow banks, savings and loan associations and
6
1 credit unions to make and undertake commitments to make or participate in
2 the making of mortgage loans to persons over sixty-two (62) years of age
3 to pay property taxes and other expenses on the person's residential prop-
4 erty.
STATEMENT OF PURPOSE
RS 15512
This legislation authorizes the Idaho Housing and Finance
Association, Director of the Department of Insurance and the
Director of the Department of Finance to promulgate rules
authorizing their respective participants to engage in the
issuance of reverse mortgages to persons over 62 years of age for
the purpose of paying property taxes that they otherwise may not
be able to afford.
It is anticipated that there will not be wide spread use of the
this vehicle, but for certain low income individuals living in
homes located on land that is rapidly increasing in value, this
will be important legislation.
FISCAL IMPACT
None, except for the cost of promulgating rules.
Contact
Name: Rep. Lake
Phone: 332-1000
Sen. Keough
STATEMENT OF PURPOSE/FISCAL NOTE H 425