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HOUSING AND COMMUNITY SERVICES DEPARTMENT
DIVISION 70
HOME IMPROVEMENT LOAN PROGRAM
813-070-0005
Purpose and Objectives
The rules of OAR chapter 813, division 70 are established to administer and enforce ORS 456.515 through 456.720, specifically ORS 456.690. These rules, together with the Program's Procedural Guide, shall implement the Home Improvement Loan Program. The Program's objective is to provide funds to finance the rehabilitation or improvement of residential housing, thereby providing adequate, safe and sanitary residential housing for occupancy by moderate and lower-income persons in Oregon. Through the Home Improvement Loan Program, the agency increases the availability of funds for such housing by making commitments to financial institutions to purchase, and by purchasing pursuant to such commitments, loans which meet the standards set forth in these rules and the Program's Procedural Guide.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0010
Definitions
(1) All terms are used in OAR Chapter 813, Division 70 as defined in the Act, and as provided in OAR 813-005-0005 or herein.
(2) As used in these rules, unless otherwise indicated by the context:
(a) "Income" means the total of the gross annualized income, from any source and before taxes and withholding, of all non-minor persons who will occupy a Residential Dwelling, except for non-owner occupants of a two-to-four family dwelling;
(b) "Participating Local Government" means the cities and counties located in the state which meet the requirements of the Home Improvement Loan Program and which agree to participate in the Program pursuant to the Procedural Guide and the conditions set forth in these rules;
(c) "Reinvestment Neighborhood" means a geographical area in Oregon, as designated by the related Participating Local Government;
(d) "Residential Dwelling" means a residential unit designed for occupancy by one to four households, and the property on which it is located. This shall be real property located in Oregon. This may include a site-built or manufactured detached residence, or one unit in an attached or multi-unit structure. One unit of such dwelling shall be occupied by the owner of the property.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0015
Allocation of Funds to Approved Lenders
Under the Home Improvement Loan Program, the Department may rely on a commitment system or a first-come first-served reservation system to solicit and monitor participation by Approved Lenders when funds become available from the proceeds of Bonds or other sources. The Department solicits commitment requests or participation in the Program by Approved Lenders when the Department determines that the Home Improvement Loan Program will serve to carry out the purposes of the Act and funds may be available.
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; Sections (2), (3) & (4); Renumbered to 813-070-0016; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0016
Commitment System
Under the commitment system, the Department shall solicit commitment requests by mailing a commitment invitation form to each Approved Lender at the address listed in the records of the Department. The Department shall seek commitment requests before the sale of Bonds or when funds are otherwise expected to become available.
(1) The commitment invitation form shall specify the terms on which the Department will accept commitment requests from Approved Lenders, including:
(a) The minimum commitment amount, if any, which Approved Lenders may request;
(b) The maximum interest rate applicable to Program Loans under the commitment;
(c) The price the Department shall pay for such Program Loans and the origination fees, discounts, appraisal fees, inspection fees, and other expenses which may be charged in connection with Program Loan origination;
(d) The period during which the Department will purchase Program Loans;
(e) The commitment fee the Department shall charge Approved Lenders in connection with commitment requests;
(f) The servicing fees the Department shall pay for Program Loan servicing; and
(g) Such other similar terms as the Department may deem advisable. The Department shall consider:
(A) The cost of borrowing the funds required to carry out the Home Improvement Loan Program;
(B) The estimated cost of improvements to Residential Dwellings within Oregon;
(C) The interest rates the Department estimates Eligible Borrowers can afford to pay when financing improvements of such Residential Dwellings;
(D) The availability and cost to Eligible Borrowers of alternative borrowing sources; and
(E) Other similar factors the Department considers appropriate to increase the availability of funds for financing improvements of Residential Dwellings by Eligible Borrowers and to ensure the security for and the ability of the State to repay the Bonds.
(2) The Department may accept commitment requests as specified in the commitment invitation form. If the Department does not accept any request, the Approved Lender shall be notified promptly.
(3) The Department shall allocate funds, taking into account the following factors:
(a) Geographic area in which the Approved Lender is engaged in residential lending;
(b) Other participants in such area;
(c) Capacity of the Approved Lender to accomplish Program objectives;
(d) Availability of funds to the Department;
(e) Prior experience with the Approved Lender; and
(f) Participation by the Approved Lender in previous Programs.
(4) No allocation to an Approved Lender shall exceed the amount of funds for which the Approved Lender applied, but may be less than the amount requested. The Department's allocation of funds shall be conclusive. However, Approved Lenders may assign allocations to other Approved Lenders with the Department's written consent.
(5) To assure that Approved Lenders perform their obligations under commitments entered into with the Department and to defray costs associated with processing and administering commitment requests and commitments, the Department may establish commitment fees in connection with commitment requests under the Home Improvement Loan Program. Commitment fees may be refunded or reduced in accordance with the terms and conditions of the Program Loan purchase agreement.
(6) Disbursements under the commitment shall be subject to availability of Bond proceeds or other funds. Thereafter, the Department shall disburse funds to purchase Program Loans as specified in the commitment invitation form and the Program's Procedural Guide. The Approved Lender shall submit the Program Loan, related documents and a submission report for the Department's review before loan purchase. The purchase of any Program Loan is subject to the legal, sufficient and proper form of the loan documents, and adequate evidence the Program Loan satisfies all the criteria provided in the Act, the Program rules and the Program's Procedural Guide.
(7) Approved Lenders shall report periodically during the commitment term. If, in the judgment of the Department, the Approved Lender will not use the amount of the commitment within the commitment, period, the Department may reallocate the remaining balance.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; Sections (2), (3) & (4) renumbered to 813-070-0015; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0017
Reservation System
(1) Under the reservation system, the Department purchases Program Loans pursuant to first-come first-served reservations made by Approved Lenders, and in compliance with the Program's Procedural Guide. The Department shall solicit participation in the Program by mailing a reservation invitation and request form to each Approved Lender at the address listed in the records of the Department. The Department shall solicit participation in the Program before the sale of Bonds or when funds are otherwise expected to become available.
(2) The reservation invitation form specifies the terms on which the Department will accept participation in the Program by Approved Lenders, including:
(a) The date by which requests to participate must be received by the Department;
(b) The term during which Program Loan fund reservations may be placed and during which Program Loans may be purchased by the Department;
(c) The maximum interest rate which Program Loans purchased shall bear;
(d) Any fees payable by an Approved Lender to the Department;
(e) The price the Department shall pay for such Program Loans and the origination fees, discounts, and other expenses which may be charged in connection with Program Loan origination;
(f) The servicing fees the Department shall pay for Program Loan servicing; and
(g) Any special terms or conditions of the Program.
(3)(a) The Department may accept requests to participate as specified in the reservation invitation and request form. With each Program, the Department may take into consideration the following factors:
(A) Geographic area of the Approved Lender's residential lending;
(B) Other participants in the area;
(C) Capacity of the Approved Lender to accomplish Program objectives;
(D) Availability of funds to the Department;
(E) Prior experience with the Approved Lender; and
(F) Participation by the Approved Lender in previous Programs.
(b) If the Department does not accept any request, the Approved Lender shall be notified promptly.
(4)(a) Program Loan funds shall be reserved on a first-come first-served loan by loan basis. Approved Lenders must place reservations as instructed in the invitation, and must provide the applicant's name, property address, loan amount and any other information the Department deems necessary. The Department shall confirm each reservation with the Approved Lender in a timely manner;
(b) As needed, the Department shall maintain a list of standby reservations to be moved to the active reservation list on a first-come first-served basis in the event any confirmed reservation is cancelled by an Approved Lender.
(5) An Approved Lender may assign a reservation to another Approved Lender with the written consent of both Approved Lenders and approval by the Department.
(6) The Department may charge a non-refundable reservation fee to the Approved Lender in connection with each reservation. The Department shall specify the reservation fee rate and remittance instructions in connection with each Program in the invitation.
(7) The Approved Lender shall submit the Program Loan, related documents and a submission report for the Department's review before loan purchase. The purchase of any Program Loan is subject to the legal, sufficient and proper form of the loan documents, and adequate evidence that the Program Loan satisfies all the criteria provided in the Act, the Program rules and the Program's Procedural Guide.
(8) Approved Lenders shall report periodically during the Program term on a form designated by the Department. The Approved Lender shall report and confirm to the Department for each reservation, the correct borrower name, property address, loan amount, and the dates on which the loan was cancelled or approved and closed.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0020
Approved Lenders
(1) Any commercial bank, savings and loan association, savings bank, mortgage banker or other Person legally authorized to engage in the business of making secured loans for residential housing may apply to become an Approved Lender. An applicant wishing to become an Approved Lender shall submit for the Department's review:
(a) An application in the form prescribed by the Department;
(b) Counsel's opinion regarding power and authority of the applicant to enter into a purchase agreement with the Department;
(c) List and signatures of authorized officers;
(d) Most recent audited financial statements;
(e) Documentation evidencing applicant's bond and insurance coverage; and
(f) $25 application fee.
(2) An applicant may qualify as an Approved Lender if the Department determines that the applicant has the capability and resources to originate Program Loans in a sound and professional manner. The Department shall consider such factors as:
(a) The number and experience of employees available to originate Program Loans;
(b) The applicant's financial capability to originate Program Loans;
(c) The applicant's qualifications as holder of a valid Contract of Insurance under Title I of the National Housing Act;
(d) Whether the applicant's deposits are insured by the Federal Deposit Insurance Corporation;
(e) The applicant's reputation, experience and performance in the area of residential lending and any other area of the applicant's business; and
(f) The applicant's geographical service area. Each Approved Lender shall make loans for the improvement of Residential Dwellings in the regular, usual and normal course of business.
(3) To qualify as an Approved Lender, an institution shall enter into an agreement with the Department providing for the manner and terms of sale of Program Loans. This purchase agreement shall be in the standard form prescribed by the Department for all Approved Lenders. Approved Lenders shall carry out such agreement in accordance with procedures set forth in the agreement and the Program's Procedural Guide. The Department may revise these procedures from time to time. Any such revisions shall not affect the eligibility of any Approved Lender or the terms of sale of Program Loans for any commitment previously made by the Department. The Department may terminate its agreement with an Approved Lender at any time on the terms and conditions stated in such agreement and the Program's Procedural Guide.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0025
Program Loans
(1) To be eligible for purchase by the Department pursuant to a commitment to or agreement with an Approved Lender, a Program Loan shall be made by the Approved Lender during the term of the Program. The Program Loan shall comply with the terms of such commitment or agreement, the requirements set forth in the purchase agreement between the Department and the Approved Lender and the conditions set forth in the Program rules and the Program's Procedural Guide.
(2)(a) Each Program Loan shall have a final maturity at least 24 months and not more than fifteen years and 32 days from the date of its making;
(b) The Program Loan shall be secured by a recorded deed of trust granted by the Eligible Borrower and any additional persons in title, on the Residential Dwelling for which improvements are being financed. Title shall be held by the Eligible Borrower in fee simple, life estate or under a contractual interest. Program Loans shall only be made to finance alterations, repairs or improve-ments which substantially protect or improve the basic livability or energy efficiency of a Residential Dwelling;
(c) Such Residential Dwelling shall be used as a permanent, primary residence of the Eligible Borrower; and
(d) No Program Loan shall be made to refinance an existing loan unless such loan was a temporary loan for the improvement of a Residential Dwelling. Such loan shall have been made during the commitment under which the Program Loan is sold to the Department.
(3) Each Program Loan shall:
(a) Be executed on forms approved by the Department;
(b) Be originated according to normal lending procedures;
(c) Meet the standards set forth in the Program rules; and
(d) Comply with applicable rules and regulations for Title I insurance.
(4) There shall be no penalties or charges for prepayment of a Program Loan.
(5) Interest on each Program Loan shall be at the rate stated in the applicable commitment. To establish the interest rate for Program Loans, the Department shall consider the rates of interest on the Bonds, prevailing rates for similar loans and the ability of Eligible Borrowers to afford such rates. The Department shall also take into account the community development objectives of the Participating Local Governments. Interest or other charges established for any Program Loan shall not exceed the limits imposed by any applicable usury laws.
(6) The principal amount of a Program Loan shall not exceed $15,000.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0030
Permissible Use of Property Improved by a Program Loan
(1) Borrower shall continuously occupy the Residential Dwelling improved by a Program Loan as a permanent and primary residence during the time the Program Loan is outstanding. Borrower shall not sell, transfer, or otherwise dispose of (and may not be a party to any formal or informal arrangement to sell, transfer or otherwise dispose of) the Residential Dwelling improved by a Program Loan before repaying the Program Loan in full.
(2) Program Loans shall not be assumed by a subsequent purchaser but shall be due upon sale or transfer of the property.
(3) If the Borrower does not comply with the provisions of this rule, at the request of the Department the Approved Servicer may, at any time and without prior notice, accelerate all payments due under the Program Loan and exercise any other remedy allowable by law.
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0035
Eligible Borrowers
(1) To be eligible to receive a Program Loan, an Eligible Borrower shall, on the date of application:
(a) Be a resident of Oregon, and, unless otherwise approved by the Department, a resident of a Reinvestment Neighborhood designated by the relevant Participating Local Government, or a resident of a Target Area;
(b) Be a person whose total household Income does not exceed the lesser of:
(A) Median family income in the area where the housing is to be provided, as established by the Department pursuant to the Act; or
(B) The maximum established by the relevant Participating Local Government for Eligible Borrowers residing in a Reinvestment Neighborhood.
(c) Possess the legal capacity to incur the obligations of the Program Loan;
(d) Have a credit standing acceptable to the Department;
(e) Have at least a one-third interest in one of the following types of ownership in the property to be improved:
(A) A fee title;
(B) A life estate;
(C) A fee title or life estate subject to a mortgage, deed of trust, or other lien securing a debt; or
(D) A mutually binding contract for the purchase of the property where the Borrower is rightfully in possession and has the benefits and burdens of ownership of the property, and the purchase price of which is payable in installments.
(f) Agree to occupy the property to be improved as a principal residence by the date of completion of the improvements or 60 days from the date of the note, whichever is earlier;
(g) Meet requirements established by Section 143 of the Internal Revenue Code of 1986, as amended, which requirements are described in OAR 813-070-0065; and
(h) Not have a prior outstanding Program Loan.
(2) Applications for Program Loans shall be made on forms prepared or approved by the Department. Approved Lenders shall provide such forms to prospective applicants and take normal and appropriate measures to verify the information given. Subject to the provisions of OAR 813-070-0050 regarding refusals of Program Loans, the Approved Lender shall determine qualifications of an applicant as an Eligible Borrower.
(3) The acceptability of the applicant's credit standing shall be determined after thoroughly evaluating the applicant's credit, taking into account such factors as:
(a) The ratio between the applicant's stable monthly income and estimated housing expenses, including repayment of the Program Loan;
(b) The ratio between the applicant's stable monthly income and the estimated monthly payments on all indebtedness of the applicant, including the Program Loan;
(c) The applicant's ability to accumulate wealth or equity in real property;
(d) The history of the applicant's previous ability to meet debt service requirements; and
(e) Any other factors commonly considered by prudent institutional mortgage investors, such as prior bankruptcy of the applicant, history of slow payments on previous obligations, job tenure, frequent changes of residence and the existence of lawsuits, judgments or foreclosures involving the applicant.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0040
Eligible Residential Dwellings
A Residential Dwelling for a Program Loan shall:
(1) Be located in Oregon and, unless otherwise designated by the Department, in a Reinvestment Neighborhood or a Target Area.
(2) Be a permanent structure used primarily for year-round residential use.
(3) If two or more units, have been constructed and initially occupied as a residence five years before the closing of the Program Loan.
(4) Be structurally sound and functionally adequate upon completion of improvements to be financed with the proceeds of a Program Loan, and meet all applicable zoning requirements, rehabilitation codes, housing codes and similar requirements.
(5) Have no more than 15 percent of the total living area of the residence be of a character subject to being rented for or used in the operation of a trade or business conducted on any part of the land or improvements (i.e., any use which would qualify as a deduction for federal income tax purposes under Section 208A of the Internal Revenue Code).
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0045
Mortgage Insurance
All Program Loans to be purchased by the Department under the Home Improvement Loan Program shall be insured under the Title I Property Improvement Loan Insurance Program of the Federal Housing Administration (FHA). The designated Trustee, on behalf of the Department, shall be named as the insured. The Approved Lender shall be responsible for reporting the loan to FHA for insurance, and shall originate and process the Program Loan in compliance with the Program's Procedural Guide, the Program rules, and rules and regulations of FHA to ensure that the Trustee will receive FHA insurance on the Program Loan.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0050
Refusal of Program Loans; Disclosure
(1) An Approved Lender shall proceed in good faith to process a Program Loan application and make the Program Loan if:
(a) Loan funds are available;
(b) The application is complete;
(c) The application appears to comply with the Program rules, the Program's Procedural Guide, and the rules and regulations of the Federal Housing Administration; and
(d) The applicant appears to be an Eligible Borrower.
(2) Any person who is refused a Program Loan by an Approved Lender may, in writing, demand a written explanation as to the specific reasons for the refusal. The Approved Lender shall comply with such demand within thirty business days.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0055
Approved Servicer
(1) Any commercial bank, savings and loan association, savings bank, mortgage banker or other Person legally authorized to engage in the business of servicing loans for residential housing may apply to become an Approved Servicer. An applicant wishing to become an Approved Servicer shall submit the following information for the Department's for review:
(a) An application in the form prescribed by the Department;
(b) Counsel's opinion regarding power and authority of the applicant to enter into a Loan servicing agreement with the Department;
(c) List and signatures of authorized officers;
(d) Most recent audited financial statements;
(e) Documentation evidencing bond and insurance coverage; and
(f) $25 application fee.
(2) To qualify as an Approved Servicer and continue as such, a financial institution shall demonstrate to the Department's satisfaction that:
(a) One of its principal functions is servicing loans secured by residential real estate;
(b) Such servicing is a customary and regular business activity of the applicant;
(c) It holds a valid Title I Contract of Insurance;
(d) It will maintain servicing facilities adequately staffed with trained personnel familiar with all rules, regulations and requirements pertaining to or affecting Program Loans; and
(e) It deposits funds to accounts in depositories which comply with the requirements of ORS 295.005, 295.015 to 295.018 and 295.025 which are insured to the full extent legally possible by the Federal Deposit Insurance Corporation or other similar federal insuring department.
(3) The Department shall adopt uniform servicing rates as specified by the Department in the Procedural Guide which shall apply to the servicing of Program Loans by all Approved Servicers. In setting these rates, the Department shall consider the estimated costs of servicing Program Loans and prevailing rates for similar services.
(4) The Department may allocate Program Loans to Approved Servicers after considering the area in which the mortgaged property is located. To encourage participation in the Program and for convenience, the Department ordinarily requests that the Approved Lender originating a Program Loan continue to service the Program Loan for the Department.
(5) Approved Servicers shall service Program Loans in accordance with the servicing agreement, the Program rules, and the Program's Procedural Guide. The servicing agreement is subject to termination as provided for in such agreement. Any compensation for termination will be provided in accordance with the terms of the agreement.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 295 & ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 8-1990, f. & cert. ef. 5-2-90; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
813-070-0065
Federal Eligibility Requirements
(1) Section 143 of the Internal Revenue Code of 1986, as amended, requires the Department to meet certain requirements in order to preserve the federal tax exemption for Bonds issued to finance Program Loans. These requirements:
(a) Require the Residential Dwelling to be improved to be owned and occupied by the Eligible Borrower as a principal residence;
(b) Require that the proceeds of a Program Loan be used to finance alterations, repairs and improvements of a Residential Dwelling which substantially protect or improve the basic livability or energy efficiency of such dwelling; and
(c) Limit the maximum amount of a Program Loan to $15,000.
(2) The Department is required to make available for qualified loans in Targeted Areas a specified portion of the lendable proceeds of Bonds sold. Certain census tracts are designated as Targeted Areas by Section 143 of the Internal Revenue Code of 1986, as amended. The Department may apply for approval of additional or revised Targeted Areas after taking into account certain statutory variables. In designating such areas, the Department shall solicit requests from all cities within the state, and apply certain criteria specified by the United States Department of Housing and Urban Development for such purpose to other urban and non-urban areas. The Housing Division shall submit its findings for approval by the Secretary of the United States Department of Housing and Urban Development and the Secretary of the United States Treasury. The Department shall retain a current list of designated Targeted Areas.
(3) The Department is required to establish procedures which ensure compliance with the requirements of Section 143 of the Internal Revenue Code of 1986, as amended. Any failure to meet these requirements shall be corrected within a reasonable time. The Department shall grant no exceptions or waivers unless allowed by federal law.
(4) Where required by federal law, the Department shall calculate and rebate certain amounts, if any, to the United States Treasury.
Stat. Auth.: ORS 90.800 - ORS 90.840, ORS 91.886, ORS 183, ORS 456.515 - ORS 456.723 & ORS 458.210 - ORS 458.650
Stats. Implemented: ORS 456.690
Hist.: 1HD 5-1983, f. & ef. 9-2-83; 1HD 12-1984, f. & ef. 9-4-84; HSG 3-1989(Temp), f. & cert. ef. 6-8-89; HSG 16-1989, f. & cert. ef. 11-3-89; HSG 2-1991(Temp), f. & cert. ef. 8-7-91; HSG 8-1991, f. & cert. ef. 12-23-91
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