15 AAC 151.660. Condominium stabilization program

(a) The Corporation will, in its discretion, take action under this section to help stabilize mortgage investments in specified types of residential housing, if the Corporation determines that applicable requirements and procedures established in 15 AAC 151.660(b) - (e) are satisfied. To accomplish the purposes of this section, the Corporation will, in its discretion:

(1) purchase a loan to provide low interest rate retail sales financing for Corporation-owned condominium and PUD units as provided for in 15 AAC 151.660(b) ;

(2) make, participate in the making, purchase, or participate in the purchasing of loans made to a homeowners association to finance common area improvements as provided for in 15 AAC 151.660(d) ; and

(3) take other actions necessary, convenient or desirable to accomplish the purposes of this section that are consistent with authority granted to the Corporation in AS 18.56.210 .

(b) The Corporation will, in its discretion and in accordance with the provisions of this subsection, purchase a loan to provide low interest rate retail sales financing for condominium and PUD units owned by the Corporation. To qualify for purchase under this subsection, the loan must meet the following criteria:

(1) the loan is secured by a condominium or PUD unit in a project designated by the Corporation that is presently owned by the Corporation or other institutional participant; the program described in this section is not available for units in other projects;

(2) the unit is owner occupied;

(3) the borrower has the financial ability to pay all of the borrower's debts;

(4) the borrower is not obligated on a mortgage loan financed by the Corporation, including any loans originally financed by the Department of Commerce, Community, and Economic Development and held by the Corporation;

(5) the loan-to-value ratio does not exceed 95 percent on conventional or VA-guaranteed loans or FHA requirements on FHA insured loans; and

(6) the maximum term of the loan does not exceed 30 years.

(c) In addition to the requirements listed in 15 AAC 151.660(b) , the following provisions apply to a loan purchased under 15 AAC 151.660(b) :

(1) the mortgage loan interest rate shall be at a rate determined by the Corporation; the state veterans preference interest rate is not available for a loan under 15 AAC 151.660(b) ;

(2) the loan is assumable to a qualified borrower under 15 AAC 151.910; and

(3) the project minimum owner-occupancy requirements under 15 AAC 151.020(e) (2) are waived.

(d) The Corporation will, in its discretion and in accordance with the provisions of this subsection, make, participate in the making, purchase, or participate in the purchasing of loans made to a homeowners association to finance improvements to the common elements of a condominium or PUD. To qualify for purchase under this subsection, the loan must meet the following criteria:

(1) the loan may be made for repairs, rehabilitation, and deferred maintenance;

(2) the association must demonstrate sound fiscal management practices;

(3) the loan may not exceed what is considered an acceptable risk to the Corporation as determined by an analysis of the Association's current and anticipated revenues, and the debt payment on the loan;

(4) the loan shall bear interest at the rate established by the Corporation. The Corporation will establish the interest rate for the loan based on factors the Corporation considers relevant, including, but not limited to, the source of money to the Corporation to provide funding for the loan and other considerations; and

(5) the term of the loan may not exceed 15 years.

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

History: Eff. 5/7/93, Register 130; am 9/23/97, Register 145

Authority: AS 18.56.088

AS 18.56.090

Editor's note: Before Register 130, July, 1994, the substance of 15 AAC 151.660 was contained in former 15 AAC 118.293. The history note for 15 AAC 151.660 does not reflect the history of the section under its former number.

As of Register 171 (October 2004), the regulations attorney made technical revisions under AS\n 44.62.125(b)(6) to reflect the name change of the Department of Community and Economic Development to the Department of Commerce, Community, and Economic Development made by ch. 47, SLA 2004 and the corresponding title change of the commissioner of community and economic development.

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