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15 AAC 151.020. Loan terms

(a) Each loan purchased by the Corporation as part of the special mortgage loan purchase program, except as otherwise provided in (f) of this section for loans to members of the Alaska delegation to Congress, must:

(1) be serviced by a servicer approved by the Corporation;

(2) constitute a first or second lien on real estate in fee simple or on a leasehold estate and (A) if a first lien, be subject only to permitted encumbrances, or (B) if a second lien, be subject only to permitted encumbrances including a first lien mortgage loan;

(3) if the loan is a first lien and if the loan-to-value ratio of the property exceeds 80 percent, be the subject of private mortgage insurance, federal insurance, federal guarantee, or insurance described in AS 18.56.093 , with benefits in each case payable to the Corporation;

(4) Repealed 8/27/2014.

(5) be for the purchase or refinancing of completed, owner-occupied residential housing, the improvement or rehabilitation of owner-occupied residential housing, or the purchase or refinancing of owner-occupied residential housing together with improvement or rehabilitation of the housing, which in any case is eligible for purchase by the Corporation under the program; and

(6) be insured by a mortgagee's policy of title insurance, issued by a title insurance company qualified to do business in the area in which the residence is located and acceptable to the Corporation, insuring the enforceable mortgage, subject only to permitted encumbrances or in the case of a second lien mortgage, subject only to permitted encumbrances and the first lien mortgage.

(b) The provisions of this section apply to first lien mortgage loans and to second lien mortgage loans. The Corporation will compute the maximum amount of a second lien mortgage loan so that the outstanding amount of the first lien mortgage loan plus the maximum amount of the second lien mortgage loan does not exceed the applicable loan-to-value ratio. Notwithstanding any of the other provisions of this section to the contrary, all loan-to-value ratios and maximum loan amounts shall be reduced if and to the extent that any applicable GNMA, FNMA, FHLMC, VA, FHA, HUD, or RD loan-to-value ratio or maximum loan limits are reduced for Alaska.

(c) The loan-to-value ratio and the loan amounts on first lien mortgage loans purchased by the Corporation under the program shall be as follows:

(1) other than as provided in paragraphs (3), (5), (6), and (7) of this subsection, the loan-to-value ratio on a mortgage loan for the purchase of a single family or duplex residence shall not exceed 95 percent and the loan-to-value ratio on a mortgage loan for the purchase of a triplex or four-plex residence shall not exceed 90 percent;

(2) the loan amount on a mortgage loan for a residence shall not exceed the applicable FNMA or FHLMC maximum loan amount for the same type of property by more than 10 percent;

(3) the amount of the guarantee plus the down payment on a mortgage loan guaranteed by the Veterans Administration must equal 25 percent of the value of the residence based on the lesser of sales price or appraisal; and the VA guarantee must equal the maximum guarantee possible under the VA program;

(4) the loan amount on a mortgage loan insured or guaranteed by FHA, HUD, or RD for a residence shall not exceed the applicable limits established by FHA, HUD, or RD;

(5) the down payment and loan-to-value ratios of mortgage loans insured or guaranteed by FHA, HUD, or RD shall be as required by FHA, HUD, or RD;

(6) the loan-to-value ratio of a mortgage loan made to an education professional or a health care professional for owner occupied, single family housing, shall not exceed 100 percent; and

(7) the loan-to-value ratio on a refinancing loan shall not exceed limits established by FNMA, FHLMC, FHA, HUD, VA, or RD for similar refinance loans.

(d) Repealed 9/28/95.

(e) A residential mortgage loan purchased by the Corporation under the program to finance a unit in a condominium project or in a planned community (PC) project shall be subject to the following terms and conditions:

(1) the living units of the condominium or PC project must be within the same structure or a reasonably contiguous structure, and the common elements of the project must have been completed before the purchase of the loan by the Corporation; and

(2) prior acceptance procedures, warranties, and provisions relating to the sale and occupancy of units which are reasonable and customary in mortgage lending shall apply as prescribed in the Common Interest Communities guide.

(f) The Corporation will purchase a loan under the program to finance a residence for members of the Alaska delegation to Congress only if the residence is located in the District of Columbia or within 50 miles of the District of Columbia.

History: Eff. 5/7/93; am 12/16/93, Register 130; am 9/28/95, Register 136; am 6/11/96, Register 139; am 4/2/97, Register 142; am 5/3/2001, Register 159; am 8/20/2003, Register 169; am 11/9/2004, Register 179; am 6/18/2008, Register 187; am 8/27/2014 Register 212

Authority: AS 18.56.088

AS 18.56.098

AS 18.56.109

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Article 2
Qualified Mortgage Bonds

Section

100. Qualified mortgage bond program.

105. Eligibility.

110. Single-family residence.

115. Ownership requirements.

120. Income limits.

125. Purchase price requirements.

130. Assumption requirements.

135. (Repealed).

140. (Repealed).

145. Qualified mortgage loans.

Editor's note: Before Register 130, July, 1994, the substance of 15 AAC 151.100 - 15 AAC 151.145 appeared in former 15 AAC 118.400 - 15 AAC 118.430. The history notes for 15 AAC 151.100 - 15 AAC 151.145 do not reflect the history of the sections under their former numbers.

15 AAC 151.100. Qualified mortgage bond program

The provisions of 15 AAC 151.100 - 15 AAC 151.150 relate to the issuance by the Corporation of qualified mortgage bonds as described in Section 103A(c)(1) and (c)(2) of the Internal Revenue Code of 1954, as amended, and Section 143(a) of the Internal Revenue Code of 1986, as amended, and define and describe mortgages eligible to be financed with the proceeds of qualified mortgage bonds as part of the program. These sections are intended to establish procedures to ensure compliance with the mortgage eligibility provisions contained in the Code.

History: Eff. 5/7/93, Register 130

Authority: AS 18.56.088

AS 18.56.098

15 AAC 151.105. Eligibility

A person may finance the purchase of an owner-occupied residence with proceeds of qualified mortgage bonds issued by the Corporation pursuant to the Code and 15 AAC 151.100 - 15 AAC 151.150 if the purchase is eligible for financing with proceeds of those bonds.

History: Eff. 5/7/93, Register 130

Authority: AS 18.56.088

AS 18.56.098

15 AAC 151.110. Single-family residence

A person is eligible under the program for a residential mortgage loan which is eligible for purchase by the Corporation under the act to finance the purchase of a residence. As used in 15 AAC 151.100 - 15 AAC 151.250, "residence" includes a duplex only if one unit of the duplex is occupied by the owner of the duplex and the duplex was first occupied as a residence at least five years before the mortgage is executed. The residence must be a single-family residence which, at the time the mortgage is executed by the mortgagor, can reasonably be expected by the Corporation to become the principal residence of the mortgagor within a reasonable time after the financing is provided. The residence must be located within the state or otherwise be described in 15 AAC 151.020(f) . The Corporation will prescribe the form of an affidavit to be signed by each mortgagor of his or her intent to use the residence as his or her principal residence within a reasonable time, not exceeding 60 days, after the financing is provided and will establish other procedures to ensure that the requirement is met. Whether a residence is used as a principal residence will depend on all the facts and circumstances of each case, including the good faith of the mortgagor. Except for duplexes, a residence which can reasonably be expected to be used in a trade or business, as an investment property, or as a recreational home, will not be considered a principal residence. The term "residence" does not include property, such as an appliance, a piece of furniture, or a radio, which under Alaska law is not a fixture. The Corporation will consider land appurtenant to a residence as part of the residence only if the land reasonably maintains the basic livability of the residence and does not provide, other than incidentally, a source of income to the mortgagor. Land appurtenant to a residence is not included in the definition of "residence" if the land may be further subdivided under zoning or platting regulations in effect at the time of the making of the mortgage loan.

History: Eff. 5/7/93, Register 130

Authority: AS 18.56.088

AS 18.56.098

15 AAC 151.115. Ownership requirements

(a) Except as provided in (d) of this section, each of the mortgagors to whom financing to acquire a residence under 15 AAC 151.110 is provided must meet the requirements of this subsection. A mortgagor meets the requirements of this subsection only if the mortgagor had no present ownership interest in a principal residence located anywhere at any time during the three-year period prior to the date on which the mortgage is executed. For purposes of the preceding sentence, the Corporation will not take into account the mortgagor's interest in the residence with respect to which the financing is being provided. In the event there is more than one mortgagor with respect to a particular residence, each of the mortgagors must meet the three-year requirement. A person who is liable under a note secured by a mortgage, but who does not have a present ownership interest in a residence subject to the mortgage, need not meet the three-year requirement. For example, where a parent takes no interest in the residence, it is not necessary that the parent meet the three-year requirement since the parent is not a mortgagor of the residence. Examples of interests which constitute a present ownership interest are the following:

(1) a fee simple interest;

(2) a joint tenancy, a tenancy in common, or a tenancy by the entirety;

(3) a life estate;

(4) a land contract (.i.e., a contract pursuant to which possession and the benefits and burdens of ownership are transferred although legal title is not transferred until some time later); and

(5) an interest held in trust for the mortgagor (whether or not created by the mortgagor) that would constitute a present ownership interest if held directly by the mortgagor.

(b) Examples of interests which do not constitute present ownership interests for purposes of 15 AAC 151.115(a) are the following:

(1) a remainder interest;

(2) a lease with or without an option to purchase;

(3) a mere expectancy to inherit an interest in a principal residence;

(4) the interest that a purchaser of a residence acquires on execution of a purchase contract; and

(5) an interest in other than a principal residence during the previous three years.

(c) The Corporation will require proof by affidavit of mortgagors of eligibility and compliance with the requirements of this section and will establish other procedures to ascertain eligibility and compliance with the requirements.

(d) The Corporation will not use proceeds of qualified mortgage bonds to purchase a loan made to a mortgagor who does not meet the qualifications described in 15 AAC 151.115(a) except to the extent permitted under the applicable provisions of the Code.

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