15 AAC 155.270. Application for subsidy; commitment contract; payment

(a) To apply for a loan subsidy, an eligible homeowner must complete the application for subsidy, made available by the Corporation to the lender, and must certify upon it his or her ownership, occupancy, and other required statements. When the participating lender approves the loan, the lender shall complete that form and forward it to the Corporation, with any supporting attachments required by the Corporation, for its approval of the subsidy.

(b) The Corporation will review the application for subsidy and the commitment contract, and will ensure that the following conditions are met:

(1) all information requested by the form has been provided;

(2) in the case of a product purchase application, copies of invoices or bids are attached;

(3) for a loan buy-down application for new construction, a copy of the energy rating is attached;

(4) for a loan buy-down application for an existing dwelling unit, a copy of the energy rating and copies of bids and invoices are attached;

(5) in the case of a product purchase application, the product is new and not yet purchased, and, in the case of a loan buy-down application, the purchase agreement or construction bid is not more than 90 days old, unless the Corporation waives the 90-day limit in writing;

(6) the interest subsidy or principal buy-down amount is correct;

(7) the lender's interest rate and closing fees are those that a knowledgeable and prudent lender would charge for a loan of a similar nature and character;

(8) a current owner of the building has not received a previous subsidy under this program;

(9) the dwelling unit has not received a previous subsidy under this program;

(10) the borrower is an eligible homeowner; and

(11) the dwelling unit is eligible.

(c) The Corporation will provide the participating lender with a copy of each application for subsidy and commitment contract that it has approved, and, if applicable, written reasons for the Corporation's rejection or alteration of any commitment contract. The Corporation will approve applications on a first-come, first-serve basis until the program money is exhausted. Participating lenders will be notified when $50,000 or less in program money is available.

(d) For a lender to receive payment on the subsidy, an eligible product must be certified by its installer and by the homeowner as installed, or the completion of a new home or home improvement must be verified with a final energy rating sheet.

(e) The appropriate verification of installation or completion shall be attached by the lender to a payment request, and sent to the Corporation. The amount of an interest rate subsidy to be paid on behalf of the homeowner is the amount set under 15 AAC 155.270, discounted to its present value using the lender's original interest rate as stated in the application form submitted under (a) of this section. In order to ensure accuracy and consistency, the Corporation will provide to lenders:

(1) tables that show the interest rate subsidy amount for various loan amounts, terms, and lender interest rates; and

(2) computer programs to calculate all potential subsidy amounts, designed to be used with common and available computer systems.

(f) The participating lender shall apply a loan buy-down subsidy to the loan, closing costs, or down payment effective the date of receipt of the subsidy. The lender shall apply an interest rate subsidy according to the same criteria the lender uses to apply interest to the loan and in accordance with applicable regulations. If a loan is defaulted upon or the principal is paid off before the term of the loan, the participating lender need not return to the Corporation any unearned interest subsidy remaining.

(g) The participating lender will, at the Corporation's discretion, be required to complete, annually or semi-annually, a check-off type report, on a form prepared by the Corporation, to indicate the status of a loan.

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

Authority: AS 18.56.088

AS 18.56.410

AS 18.56.850

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