Section 15.151.680. Interest rate reduction for low-income borrowers.

	(a)  The Corporation will, in its discretion, reduce the interest rate on a first deed of trust under any Corporation loan program which finances the purchase or construction of a single-family residence, including units in Corporation approved condominium projects and planned unit developments, if the borrower meets the requirements of this section.  
	(b)  To qualify for an interest rate reduction under this section, the borrower:  
		(1) must comply with all income, credit and property underwriting standards for the applicable program under which the loan is made;  
		(2) must complete a pre-purchase homebuyer counseling class approved by the Corporation;  
		(3) may not have a family income which exceeds 80% of the median income based on family size as determined by the Corporation and set forth in the Seller's Guide; and  
		(4) may not have had an ownership interest in a primary residence at any time during the three-year period prior to the date the mortgage is executed unless:  
			(A) the borrower is at least 60 years of age and will have disposed of that primary residence before the loan closing;  
			(B) the borrower has suffered a significant reduction in income due to the death or permanent disability of a family wage earner and the borrower has disposed of, or will dispose of, that primary residence to reduce housing expenses or to accommodate the needs of the disabled family member; or  
			(C) the borrower lost any ownership interest in that primary residence as the result of a divorce or dissolution of marriage and, at the time of closing, is not obligated on any debt related to the prior residence;  
	(c)  The interest rate on a loan which qualifies for an interest rate reduction under this section shall be the interest rate in effect for the applicable loan program reduced by a percentage based on family income as determined by the Corporation.  
	(d)  If a loan that has received an interest rate reduction under this section is assumable under the provisions of the applicable loan program, the loan may be assumed at a reduced interest rate if the assuming borrower meets the eligibility requirements of this section at the time the loan is assumed. The interest rate of the assuming borrower shall be the interest rate of the applicable loan program at the time of loan origination reduced by the amount of the percentage reduction for which the assuming borrower qualifies under (c) of this section. If the assuming borrower does not meet the eligibility requirements of this section, the interest rate on the loan shall be modified at the time of assumption to the rate of interest that would have been in effect at the time of origination without the interest rate reduction provided to the original borrower.   
	(e)  In this section:  
		(1) "Family" means, with respect to an individual, that individual's brothers and sisters (whether by whole or half blood), spouse, ancestors, and lineal descendants;  
		(2) "Family Income" is defined as the gross monthly income of the mortgagor or mortgagors, family members over the ages of 21 who occupy the dwelling on a permanent basis, and other individuals over the age of 18 who occupy the dwelling on a permanent basis, multiplied by twelve, and "gross monthly income" is the sum of monthly income items set forth in the Seller's Guide.  

Authorities

18.56.088;18.56.090

Notes

Authority

AS 18.56.088 AS 18.56.090 ________________________

History

Eff. 4/2/97, Register 142; am 5/14/97; am 6/25/97, 9/23/97, Register 145; am 9/16/98, Register 148; am 2/24/99, Register 149; am 9/22/99, Register 152; am 5/3/2001, Register 159