No. 38788 (Amendment): Section R460-3-1. Single-Family Mortgage Program

(Amendment)

DAR File No.: 38788
Filed: 08/15/2014 03:50:44 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the amendment is to add verbiage to clarify that the Utah Housing Corporation (UHC) not only offers single family mortgages but may also offer mortgage credit certificates (MCC) to qualifying individuals or households.

Summary of the rule or change:

Section R460-3-1 is amended to: 1) remove references to the term "mortgage" where such verbiage denoted that UHC's single-family program pertained only to mortgages; 2) add reference to mortgage credit certificates (MCC) and related program documents; and 3) add language regarding when an MCC may be obtained and circumstances where a priority may be granted for the allocation of MCC amounts.

State statutory or constitutional authorization for this rule:

• Subsection 35A-8-711(1)

Anticipated cost or savings to:

the state budget:

The purpose for this amendment is to clarify that UHC's single family programs are not strictly relegated to mortgages. Because of this, there is no anticipated cost or savings because Subsection 35A-8-702(3)(b) states that UHC is a "financially independent body" and therefore, receives no state appropriation. Furthermore, the changes made to this rule are clarifying in nature and do not entail any additional requirements.

local governments:

The purpose for this amendment is to clarify that UHC's single family programs are not strictly relegated to mortgages. Because of this, there is no anticipated cost or savings to any local government because of these changes.

small businesses:

The purpose for this amendment is to clarify that UHC's single family programs are not strictly relegated to mortgages. Because of this, there is no anticipated cost or savings to any small business because of these changes.

persons other than small businesses, businesses, or local governmental entities:

The purpose for this amendment is to clarify that UHC's single family programs are not strictly relegated to mortgages. Because of this, there is no anticipated cost or savings to persons other than small business, business, or local government entities because of these changes.

Compliance costs for affected persons:

The purpose for this amendment is to clarify that UHC's single family programs are not strictly relegated to mortgages. Because of this, there are no anticipated additional compliance costs (in excess of existing compliance costs) for affected persons.

Comments by the department head on the fiscal impact the rule may have on businesses:

The purpose for this amendment is to clarify that UHC's single family programs are not strictly relegated to mortgages. The mortgage credit certificate program has been thoroughly reviewed and there is no demonstrable fiscal impact on businesses with whom UHC conducts regular business activities.

Grant S. Whitaker, President and CEO

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Housing Corporation (Utah)
Administration
2479 LAKE PARK BLVD
WEST VALLEY CITY, UT 84120

Direct questions regarding this rule to:

• Jonathan Hanks at the above address, by phone at 801-902-8221, by FAX at 801-902-8321, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/01/2014

This rule may become effective on:

10/08/2014

Authorized by:

Grant Whitaker, President and CEO

RULE TEXT

R460. Housing Corporation, Administration.

R460-3. Programs of UHC.

R460-3-1. Single-Family [Mortgage ]Program.

(1) Eligible mortgage lender.

(a) To be eligible to participate in the single-family [mortgage ]program, a mortgage lender must have as one of its principal purposes the origination of mortgage loans in its usual and regular course of business.

(b) UHC may establish criteria that mortgage lenders must meet relating to approved mortgagee status by the Federal Housing Administration, Rural Housing Service or Department of Veterans Affairs, the financial condition of the mortgage lender, the number of mortgage loan originations during a period specified by UHC, the length of time a mortgage loan origination office has been maintained in the state, seller/servicer approval by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, and other criteria as UHC deems necessary to maintain a safe and sound program and to establish that mortgage loans are a part of a mortgage lender's usual and regular business activities and that the mortgage lender possesses the capability to make and to have adequate financial resources to fund mortgage loans.

(c) UHC may require that mortgage lenders, from time to time, furnish to UHC evidence as UHC may request to confirm a mortgage lender's eligibility to participate in the single-family [mortgage ]program.

(d) A mortgage lender shall employ and maintain qualified personnel to carry out the obligations arising under contracts with UHC.

(e) All transactions between a mortgage lender and UHC shall be subject to the relevant single-family [mortgage ]program contract documents which may include the following: participation agreement, selling supplement, mortgage credit certificate program guide, mortgage purchase agreement ("MPA"), mortgage credit certificate request and reservation ("MCC request"), notice of availability of funds, MPA request, and other documents deemed necessary by UHC ("Program Documents").

(2) Mortgage purchase agreement request; mortgage purchase agreement; mortgage credit certificate request and reservation.

(a) UHC may distribute to mortgage lenders via any electronic, digital, or written means, any interest rate and/or program changes affecting the single-family program.[mortgage loans.]

(b) Mortgage lenders may submit one or more mortgage purchase agreement or MCC requests to UHC via electronic, digital or written means as specified by UHC, in which an amount of funds is requested for a specific mortgage loan or MCC that the mortgage lender is processing.

(c) UHC may require that each mortgage purchase agreement or MCC request submitted by a mortgage lender be accompanied by an application or other fee in an amount specified by UHC in its Program Documents. The fee shall not be refunded or accrue interest payable by UHC, unless otherwise specified by UHC in the Program Documents.

(d) Upon receipt of a mortgage purchase agreement or MCC request, UHC may deliver to the mortgage lender 1) a mortgage purchase agreement confirming UHC's commitment to purchase the specified mortgage loan or 2) an MCC reservation confirming UHC's commitment to issue an MCC for the requested amount. The mortgage purchase agreement or MCC request shall terminate automatically if the mortgage lender fails to deliver all necessary Program Documents with respect to the mortgage loan or MCC to UHC on or prior to the date specified in the Program Documents.

(3) Single-family mortgage loans.

(a) From time to time, UHC may develop individualized single-family mortgage programs designed to meet the needs of certain populations. In such cases, UHC shall establish maximum fees that may be charged or collected, final mortgage delivery date, interest rate, and loan term. Fee requirements shall be uniformly applied to all mortgage lenders, without preference of one mortgage lender over another.

(b) All mortgage loans shall be made to finance single-family residential housing located in the state which conform to the requirements of the single-family mortgage program or any other requirements specified in the Program Documents.

(c) UHC may provide priority allocations to make mortgage financing available to persons qualified for any of UHC's single-family programs or in targeted, rural, inner city or other areas experiencing difficulty securing mortgage loans to make housing available to persons of low and moderate income.

(d) Each mortgage loan purchased by UHC shall conform to the credit underwriting, property valuation, hazard insurance, title insurance, mortgage insurance, security and collateralization, and all other requirements of the Program Documents. Closings or deliveries must occur on or before the date established in Program Documents. UHC shall have the right to decline to finance any mortgage loan if, in the reasonable opinion of UHC, the mortgage loan does not meet all requirements of the Program Documents.

(4) Income limits of borrowers.

UHC shall establish and may amend maximum income limits for low and moderate income persons eligible as borrowers. The limits shall not exceed 140% of median income as determined by UHC. UHC shall establish and may amend the limits in open public meetings of UHC for which UHC shall give public notice as required by state law. UHC shall make information concerning the limits available to interested persons, including potential borrowers, and shall incorporate the limits as terms of the Program Documents.

(5) Acquisition cost limits.

UHC shall establish and may amend maximum acquisition cost limits for residential housing qualified for UHC financing. The acquisition cost of residential housing is the cost of acquiring a completed residential housing unit and shall include all amounts paid in cash or in kind for all structures, fixtures, improvements, and land. UHC shall establish and may amend the limits in open public meetings of UHC for which UHC shall give public notice as required by state law. UHC shall make information concerning the maximum acquisition cost limits available to interested persons including loan applicants and potential mortgagors, and shall incorporate the limits as terms of the Program Documents.

(6) Mortgage Credit Certificates (MCC).

(a) From time to time, UHC may make available amounts to issue mortgage credit certificates to qualified applicants in conjunction with a mortgage loan obtained to purchase residential housing within the state of Utah.

(b) All MCCs issued by UHC shall only be done when an eligible mortgage loan shall be made to finance single-family residential housing in the state which conforms to the requirements of the single-family mortgage program or any other requirements specified in the Program Documents.

(c) UHC may provide priority allocations to make mortgage credit certificates available to persons qualified for any of UHC's single-family loan programs or in targeted, rural, inner city or other areas experiencing difficulty securing mortgage loans to make housing available to persons of low and moderate income. Furthermore, UHC may provide an allocation of MCCs to a particular development subject to certain conditions.

(d) Each MCC request reserved and issued by UHC shall conform to all requirements of the Program Documents. UHC shall have the right to decline to issue an MCC if, in the reasonable opinion of UHC, the MCC request does not meet all requirements of the Program Documents.

[(6)](7) Assumption of single-family mortgage loans.

(a) UHC shall establish and may amend conditions and requirements for the assumption of mortgage loans. The conditions and requirements for the assumption of mortgage loans may vary between the different series of bonds and mortgage insurers or guarantors under which the various mortgage loans have been purchased.

(b) Conditions and requirements for the assumption of mortgage loans may include the following: acquisition cost limits for the residential housing; income limits for the assuming purchaser; the establishment of a limit, expressed as a percentage of the assuming purchaser's income, of the purchaser's monthly housing expenses; a requirement that the purchaser not own any other properties financed under any other UHC program; and any other requirements and qualifications deemed necessary or advisable by UHC. Purchasers, who assume mortgage loans, shall generally be required to satisfy the same requirements that applied to the original borrower.

(c) UHC may impose limits on the maximum amount of assumption fees that may be charged in connection with the assumption of mortgage loans.

(d) UHC may require the continuing liability of the original borrowers in connection with the assumption of mortgage loans.

(e) The required documentation for the assumption of mortgage loans may include documents deemed necessary by UHC, applicable to the particular program.

[(7)](8) Limitation of frequency of loan applications.

UHC may establish limitations on the frequency with which a Mortgage Lender, on behalf of a particular mortgage applicant or co-applicant, may request a mortgage purchase agreement or otherwise apply for a reservation of mortgage loan funds if UHC deems a limitation to be necessary to ensure the efficient and equitable allocation of funds.

[(8)](9) Definitions.

(a) As used herein, "Mortgage Lender" shall mean a mortgage lender that UHC has determined to be an eligible mortgage lender in accordance with this Rule.

(b) As used herein, "Mortgage Loan" shall mean a loan secured by a deed of trust or mortgage on a single-family residence that UHC has determined to be an eligible mortgage loan in accordance with this Rule.

 

KEY: housing finance

Date of Enactment or Last Substantive Amendment: [October 22, 2010]2014

Notice of Continuation: September 28, 2012

Authorizing, and Implemented or Interpreted Law: 9-4-910; 9-4-911

 

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