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History: Eff. 5/7/93, Register 130; am 6/11/96, Register 139; am 5/3/2001, Register 159; am 5/14/2014, Register 212

Authority: AS 18.56.088

AS 18.56.099

Editor's note: Before Register 130, July, 1994, the substance of 15 AAC 151.610 was contained in former 15 AAC 118.286. The history note for 15 AAC 151.610 does not reflect the history of the section under its former number.

15 AAC 151.620. Refinance program

(a) The Corporation will, in its discretion and in accordance with procedures outlined in the sellers' guide and the servicers' guide, refinance any loan owned by the Corporation that the Corporation originally made or purchased under a program described in this chapter if:

(1) all loans are current and the borrower's payment record has been satisfactory;

(2) the mortgage loan owned by the Corporation is secured by a first or second lien of the residence for which it was made, and the refinance loan will be in the same or in a higher lien position as the existing loan and any other liens previously attached to the property will be subordinated or paid in full; and

(3) the residence securing the refinance mortgage loan is a single-family dwelling, a duplex, a triplex, a four-plex, or a Type I or Type II mobile home.

(b) A refinance mortgage loan under 15 AAC 151.620(a) or (e) is also subject to the following terms and conditions:

(1) the principal amount of the refinance mortgage loan may not exceed the sum of:

(A) the principal amount of the mortgage loan or loans being refinanced;

(B) the amount of the closing costs borne by the borrower and approved by the Corporation; and

(C) excess subsidy owned to the Corporation by the borrower pursuant to the Home Ownership Fund program described in 15 AAC 151.300 - 15 AAC 151.340 if the refinance loan will not be subsidized under that program;

(2) the mortgage loan must be insured or guaranteed as provided in 15 AAC 151.020(a) (3) and (a)(4);

(3) if the monthly payment on the loan owned by the Corporation is subsidized under the Home Ownership Fund program described in 15 AAC 151.300 - 15 AAC 151.340, the amount of the monthly subsidy may continue to be paid by the Corporation to subsidize payments for the refinanced loan; however, the monthly subsidy may not exceed the subsidy amount as established in 15 AAC 151.330 or the amount of the subsidy currently being paid by the Corporation, whichever is less;

(4) the loan-to-value ratio on a refinance loan shall not exceed limits established by FNMA or FHLMC for similar refinance loans;

(5) if the property is also encumbered by a subordinate FNMA or FHLMC loan, the combined balances of all encumbrances may not exceed the Corporation's loan limits for conventional first mortgages;

(6) the maximum term of the loan will be 30 years for first lien loans; 15 years for second lien loans; and the remaining term on the existing loan or the terms outlined in the sellers' guide for Type II mobile homes, whichever is longer, if acceptable to the insurer/guarantor.

(c) The refinance loan may include improvements to the property subject to the following:

(1) the loan amount may not exceed the balance on the existing loan owned by the Corporation plus the cost of improvements and allowable closing costs;

(2) loans for which the Corporation then provides Home Ownership Fund assistance under 15 AAC 151.300 - 15 AAC 151.340 and Type II mobile home loans are not eligible under the home improvement refinance option;

(3) the improvements to the mortgaged premises may be for energy conservation, solar installation, rehabilitation, modernization and addition and must either enhance the structural integrity of the building, add to its square footage, increase its appraised value, or constitute a fixture.

(d) The Corporation will, in its discretion, refinance more than one loan held by the Corporation which are secured by the same property if each loan being refinanced satisfies the requirements of this section.

(e) The Corporation will, in its discretion, refinance one or more loans held by the Corporation and one or more loans not held by the Corporation which are secured by the same property if the refinance mortgage loan satisfies the requirements of 15 AAC 151.625.

History: Eff. 5/7/93, Register 130; am 6/11/96, Register 139; am 5/3/2001, Register 159

Authority: AS 18.56.088

AS 18.56.098

Editor's note: Before Register 130, July 1994, the substance of 15 AAC 151.620 was contained in former 15 AAC 118.287. The history note for 15 AAC 151.620 does not reflect the history of the section under its former number.

15 AAC 151.625. Refinance program of non-corporation loans

(a) The Corporation will, in its discretion and in accordance with procedures outlined in the sellers' guide and the servicers' guide, refinance eligible loans not owned by the Corporation if:

(1) all loans are current and the borrower's payment record has been satisfactory;

(2) the refinance mortgage loan is secured by a first lien of the residence for which it is made, and any previous financing or lien relating to that property not included in the refinance subordinated to the lien of the refinance mortgage loan made by the Corporation; and

(3) the residence securing the refinance mortgage loan is a single-family dwelling, a duplex, a triplex, a four-plex, or a Type I mobile home.

(b) A refinance mortgage loan under this section is also subject to the following terms and conditions:

(1) the principal amount of the refinance mortgage loan will not exceed the sum of:

(A) the principal amount of the mortgage loan or loans being refinanced; and

(B) the amount of the closing costs borne by the borrower and approved by the Corporation.

(2) the mortgage loan must be insured or guaranteed as provided in 15 AAC 151.020(a) (3) and (a)(4);

(3) the mortgage loan will bear interest at a rate determined by the Corporation to compensate the Corporation for the cost of funds used by the Corporation to purchase the mortgage loan without state Veteran or HOF options;

(4) the loan-to-value ratio on a refinance loan shall not exceed limits established by FNMA or FHLMC for similar refinance loans;

(5) if the property is also encumbered by a subordinate FNMA or FHLMC loan, the combined balances of all encumbrances may not exceed the Corporation's loan limits for conventional first mortgages; and

(6) the maximum term of the loan will be 30 years.

(c) The refinance mortgage loan may include improvements to the property subject to the following:

(1) the loan amount may not exceed the balance on the existing loan or loans being refinanced plus the cost of improvements and allowable closing costs; and

(2) the improvements to the mortgaged premises may be for energy conservation, solar installation, rehabilitation, modernization, and addition and must either enhance the structural integrity of the building, add to its square footage, increase its appraised value, or constitute a fixture.

History: Eff. 5/7/93, Register 130; am 6/11/96, Register 139; am 5/3/2001, Register 159

Authority: AS 18.56.088

AS 18.56.098

15 AAC 151.630. Streamlined refinance

(a) The Corporation will, in its discretion and in accordance with procedures established under this section, refinance eligible mortgage loans owned by the Corporation if the Corporation determines that the requirements established in this section have been satisfied. The Corporation will not refinance under this section mortgage loans that it made or purchased

(1) pursuant to a rental refinance program, unless the borrower meets the qualifications set out in 15 AAC 151.015(a) ;

(2) pursuant to the REO financing program described in 15 AAC 151.650, except that the Corporation will, in its discretion, refinance a mortgage loan described in this clause if the loan contains a call or balloon payment provision; or

(3) pursuant to a rural, non-owner occupied loan program.

(b) To qualify for the refinance of a mortgage loan owned by the Corporation, the borrower of the mortgage loan must demonstrate to the Corporation that:

(1) the mortgage loan owned by the Corporation is secured by a first or second priority lien on the residence for which it was made; and

(2) the residence for which the mortgage loan was made is a single-family dwelling, duplex, type I mobile home, type II mobile home, tri-plex, or four-plex.

(c) A loan which the Corporation refinances under this section is subject to the following terms and conditions:

(1) the principal amount of the loan will not exceed the sum of:

(A) the outstanding balance of the mortgage loan owned by the Corporation which is being refinanced;

(B) up to 30 days interest on the existing loan;

(C) for an FHA insured loan, the amount of the upfront mortgage insurance premium; or for a VA guaranteed loan, the VA funding fee; and

(D) up to $5,000 in closing costs.

(2) if the existing loan is subject to mortgage insurance or guaranty, the Corporation may determine that coverage must be continued by all insurers or guarantors of the loan;

(3) the priority of the lien securing the loan must not be changed for the refinance;

(4) the maximum term of the loan will be:

(A) 30 years for first lien loans;

(B) 15 years for second lien loans; or

(C) the remaining term on the existing loan for Type II mobile homes;

(5) if the monthly payment on the loan owned by the Corporation is subsidized under the Home Ownership Fund program under 15 AAC 151.300 - 15 AAC 151.340, the amount of the monthly subsidy may continue to be paid by the Corporation to subsidize payments for the refinanced loan; however, the monthly subsidy may not exceed the subsidy amount as established in 15 AAC 151.330 or the amount of subsidy currently being paid by the Corporation whichever is less; and

(6) the loan must be current at closing.

(d) A state veteran rate is not available for a refinancing loan purchased under this section. The Corporation will establish the interest rate on a refinancing loan purchased under this section as follows:

(1) the interest rate shall be two percent less than the cost to the Corporation of the money used to purchase the refinancing mortgage loan, except that if the cost of money;

(A) is 10 percent or less, the interest rate is equal to the cost of money; or

(B) is more than 10 percent, the interest rate may not be less than 10 percent;

(2) the Corporation will, in its discretion, determine the cost of money applicable to a refinancing mortgage loan by taking into consideration one or more actual or proposed taxable or tax-exempt financings, the proceeds of which are expected to be used for purposes of funding the acquisition of refinancing mortgage loans; in considering proposed financings, the Corporation will, in its discretion, estimate the cost of money;

(3) if refinancing mortgage loans are, or are expected to be, purchased other than from the proceeds of taxable or tax-exempt bonds, the Corporation will, in its discretion, determine the cost of money from time to time based upon estimates and references to credit market levels; and

(4) cost of money may include the actual or estimated interest rate on debt, costs of issuing the debt, original issue discounts applicable to the debt, and ongoing program operation costs such as loan servicing fees, debt trustee fees, credit enhancement fees, loan guarantee or insurance fees, and other direct or allocable administrative costs of the Corporation.

(e) The Corporation will establish procedures for application for refinance of a mortgage loan under this section and for other matters pertaining to this section in the sellers' guide.

History: Eff. 5/7/93, Register 130; am 5/5/98, Register 147

Authority: AS 18.56.088

AS 18.56.090

AS 18.56.108

15 AAC 151.635. Second mortgage program for health and safety repairs

Repealed.

History: Eff. 5/7/93, Register 130; repealed 5/25/2011, Register 204.

Editor's note: Before Register 130, July, 1994, the substance of 15 AAC 151.635 was contained in former 15 AAC 118.291. The history note for 15 AAC 151.635 does not reflect the history of the section under its former number.

Even though the repeal of 15 AAC 151.635 was effective 5/25/2011, it was not published until Register 204, January 2013.

15 AAC 151.640. Second mortgage program

(a) The Corporation may, in accordance with procedures outlined in the sellers' guide, purchase mortgage loans made to finance

(1) the purchase of a residence that is subject to an existing mortgage held by the corporation; or

(2) permanent improvements to the mortgaged premises including energy conservation, solar installation, rehabilitation, modernization, and addition.

(b) The proceeds of a loan purchased under this section may be used to pay reasonable and customary closing costs associated with the improvements financed by the loan.

(c) To qualify for a loan under this section, the borrower must demonstrate to the satisfaction of the corporation that

(1) the mortgaged premises is or will be occupied as the borrower's primary residence;

(2) the loan is secured by a single-family residence, duplex, triplex, four-plex, or Type I mobile home;

(3) if the loan is for improvements to a unit in a condominium project, the proceeds of the loan will be used only to finance improvements to that unit that are allowable within the project's constituent documents and will not be used to improve common elements or areas; and

(4) the borrower does not have an outstanding loan made under this section.

(d) The loans purchased by the corporation under this section shall have a term not to exceed 15 years.

(e) The maximum loan-to-value ratio, when the second mortgage loan is combined with a first mortgage loan, if any, will not exceed

(1) for loans made under (a)(1) of this section,

(A) 90 percent for single-family residences and duplexes; and

(B) 80 percent for all triplexes and four-plexes; or

(2) for loans made under (a)(2) of this section,

(A) 90 percent for single-family residences and duplexes;

(B) 80 percent for all triplexes and four-plexes; and

(C) 75 percent when value is determined by any method other than a new appraisal as defined in 15 AAC 150.900(a) .

(f) The maximum loan amount will not exceed the lowest of

(1) 50 percent of FNMA's conventional first mortgage limit for a single-family dwelling in Alaska;

(2) for loans made under (a)(1) of this section, if the corporation owns an interest in the first mortgage, the corporation's limit for a conventional first mortgage reduced by the original balance of the first mortgage; or

(3) $100,000 for loans made under (a)(2) of this section when value is determined by any method other than an appraisal as defined in 15 AAC 150.900(a) .

(g) The loan must be subject only to permitted encumbrances and a first lien mortgage loan. Any other liens must be subordinated to this loan.

(h) The interest rate shall be determined by the corporation.

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