TITLE 67

STATE GOVERNMENT AND STATE AFFAIRS

CHAPTER 62

IDAHO HOUSING AND FINANCE ASSOCIATION

67-6207B.  Mortgage loans — Rules — Purchase. The association shall promulgate rules governing the various programs which it has authorized to be undertaken. In promulgating such rules it shall consider the following:

(a)  The association shall from time to time adopt, modify or repeal rules governing the making of loans to housing sponsors and the purchase and sale of mortgage loans from mortgage lenders and the application of the proceeds thereof, including rules as to any or all of the following:

(1)  Restrictions as to the interest rates on mortgage loans or the return realized therefrom by mortgage lenders;

(2)  Requirements as to disbursements and commitments by mortgage lenders with respect to mortgage loans;

(3)  Rules relative to the purchase and sale of mortgage loans shall be designed to effectuate the general purposes of this act and the following specific objectives:

(i)   the expansion of the supply of funds in this state available for mortgage loans for persons of low-income;

(ii)  the provision of the additional housing for persons of low-income needed to remedy the shortage of adequate housing in this state and eliminate the existence of a large number of substandard dwellings;

(iii)  the restriction of the financial return and benefit to that necessary to protect against the realization by mortgage lenders of an excessive financial return or benefit as determined by prevailing market conditions; and

(iv)  standards as to the number of dwelling units and housing projects and other characteristics of dwelling units for persons of low-income and housing projects to be financed by mortgage loans.

(b)  The ratio of loan to total housing project cost and the amortization period of loans made under this act which are insured by the federal housing administration (FHA) shall be governed by the FHA mortgage insurance commitment for each housing project; but in no event shall such amortization period exceed fifty (50) years. In the case of a mortgage loan not insured by FHA the amount of the loan to:

(1)  limited profit housing sponsors shall not exceed ninety-five percent (95%) of the total housing project cost as determined by the association, and

(2)  nonprofit housing sponsors shall not exceed one hundred percent (100%) of the total housing project cost as determined by the association.

The amortization period of such loan shall be determined in accordance with rules formulated and published by the association, but in no event shall such amortization period exceed fifty (50) years.

(c)  A mortgage loan made hereunder may be prepaid to maturity after such period of years and under such terms and conditions as shall be determined by the association.

(d)  No mortgage loan purchased from a mortgage lender shall be eligible for purchase or commitment to purchase by the association hereunder unless at or before the time of transfer thereof to the association such mortgage lender certifies:

(1)  That in its judgment the mortgage loan would in all respects be a prudent investment; and

(2)  That, except for mortgage loans purchased under a preexisting commitment with the association for the origination and purchase of such loans, the proceeds of sale or its equivalent shall be reinvested in obligations of the association or in mortgage loans to provide housing for persons of low-income within this state, or, if required by the association, invested in short term obligations pending the purchase of such association obligations or the making of such mortgage loans.

(e)  The association shall purchase mortgage loans at a purchase price equal to the outstanding principal balance; provided, however, that discount from the principal balance or the payment of a premium may be employed to effect a fair rate of return, as determined by the association, in its discretion, based upon the rate of interest payable by the association on its obligations issued to purchase such mortgages, its administrative expenses, and market conditions and any other relevant factors existing at the time of purchase.

(f)  Each mortgage loan to a housing sponsor for a newly constructed rental housing project shall be evidenced by a mortgage or deed of trust, note or bond and by a mortgage or deed of trust which shall be a lien on the housing project and on all of the real property constituting the site of or relating to such housing project and which shall contain such terms and provisions and be in a form approved by the association.

(g)  Each mortgage loan shall be subject to an agreement between the association and the housing sponsor which will subject said sponsor and its principals or stockholders to limitations established by the association as to rentals and other charges, builders’ and developers’ profits and fees, and the disposition of its property and on all of the real property constituting the site of or relating to such housing project.

(h)  The association shall require as a condition of each loan to a mortgage lender, and (except for mortgage loans to persons of low-income or for housing projects for persons of low-income and/or for mixed income housing projects which were made by a mortgage lender pursuant to a preexisting commitment with the association to purchase such mortgage loans) as a condition of the purchase or the making of a commitment to purchase mortgage loans from a mortgage lender, that such mortgage lender shall following the receipt of the loan proceeds or sale proceeds have entered into written commitments with the association to make, and shall thereafter proceed as promptly as practicable to make and disburse from such loan proceeds, mortgage loans to persons of low-income or mortgage loans for housing projects or to purchase obligations of the association in an aggregate principal amount equal to the amount of such prior loan; and the association shall not purchase nor make commitment to purchase such mortgage loans or obligations from a mortgage lender from which it has previously purchased such mortgage loans nor make a loan to a mortgage lender to which it has previously made a loan unless said mortgage lender has either restored or made commitments to restore to its portfolio of mortgage loans in this state, mortgage loans to provide residential housing for persons of low-income from the date thereof or has added to or made commitments to add to its portfolio of association obligations in an aggregate principal amount equal to the proceeds of prior sale to said mortgage lender.

(i)  To assure repayment loans from the association to mortgage lenders, the association shall require that loans made to mortgage lenders shall be secured as to payment of both principal and interest by a pledge of and lien upon collateral security, including without limitation direct obligations of, or obligations (including, without limitation, mortgages) guaranteed or insured as to payment of principal and interest by, the federal government or this state.

History:

[67-6207B, added I.C., sec. 67-6207B, as added by 1974, ch. 104, sec. 9, p. 1210; am. 1976, ch. 283, sec. 4, p. 976; am. 1977, ch. 326, sec. 3, p. 921; am. 1989, ch. 423, sec. 5, p. 1040; am. 1996, ch. 253, sec. 8, p. 811.]