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The terms for the interest rate and payment subsidy under the home ownership fund program are as follows:
(1) mortgage payments may be partially subsidized by the home ownership fund in an amount not to exceed the lesser of the following amounts:
(A) for loans where the borrowers first executed a home ownership assistance agreement prior to February 1, 1983:
(i) the sum necessary to reduce the borrower's monthly payments of principal and interest on the mortgage loan to the amounts payable as if the mortgage loan were a level debt service loan bearing interest at the rate of six percent a year; or
(ii) the sum necessary to reduce the borrower's monthly payments of principal and interest on the mortgage, together with taxes, hazard insurance, mortgage insurance and homeowner association fees (less any utility expenses included in those fees) if any with respect to the property, to 25 percent of gross family income;
(B) for loans where the borrowers first executed a home ownership assistance agreement between February 1, 1983, and June 30, 1992:
(i) the sum necessary to reduce the monthly payments of principal and interest on the mortgage loan to the amounts payable as if the mortgage loan were a level debt service loan bearing interest at the rate of six percent a year; or
(ii) the sum necessary to reduce the monthly payments of principal and interest on the mortgage loan, together with taxes, hazard insurance, mortgage insurance, credit insurance, space rent, and any homeowner association fees (less any utility expenses included in those fees) with respect to the property, to 28 percent of gross family income;
(C) for borrowers who first executed a home ownership fund assistance agreement on or after July 1, 1992:
(i) the sum necessary to reduce the monthly payments of principal and interest on the first $50,000 of the mortgage loan to the amounts payable as if the first $50,000 of the mortgage loan were a level debt service loan bearing interest at the rate of six percent a year; or
(ii) the sum necessary to reduce the monthly payments of principal and interest of the mortgage loan, together with taxes, hazard insurance, mortgage insurance, credit insurance, space rent, and any homeowner association fees (less any utility expenses included in those fees) with respect to the property, to 28 percent of gross family income.
(D) for a refinance loan, the subsidy may not exceed that currently being paid by the Corporation.
(2) the term for a mortgage loan with respect to which there is a home ownership assistance agreement must be the maximum term allowed under the Corporation's program providing financing for the home on the remaining economic life of the property, whichever is less; and
(3) the loan-to-value ratio for a mortgage loan with respect to which there is a home ownership assistance agreement shall not exceed the maximum percent allowable by statute.
History: Eff. 5/7/93, Register 130
Authority: AS 18.56.091
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Last modified 7/05/2006