Section 15 AAC 151.640 - Second mortgage program(a) The Corporation may, in accordance with procedures outlined in the sellers' guide, purchase mortgage loans made to finance (1) the purchase of a residence that is subject to an existing mortgage held by the corporation; or(2) permanent improvements to the mortgaged premises including energy conservation, solar installation, rehabilitation, modernization, and addition.(b) The proceeds of a loan purchased under this section may be used to pay reasonable and customary closing costs associated with the improvements financed by the loan.(c) To qualify for a loan under this section, the borrower must demonstrate to the satisfaction of the corporation that (1) the mortgaged premises is or will be occupied as the borrower's primary residence;(2) the loan is secured by a single-family residence, duplex, triplex, four-plex, or Type I mobile home;(3) if the loan is for improvements to a unit in a condominium project, the proceeds of the loan will be used only to finance improvements to that unit that are allowable within the project's constituent documents and will not be used to improve common elements or areas; and(4) the borrower does not have an outstanding loan made under this section.(d) The loans purchased by the corporation under this section shall have a term up to 30-years. If there is a first mortgage, the term of the second mortgage is not to exceed the remaining term of the first mortgage.(e) The maximum loan-to-value ratio, when the second mortgage loan is combined with a first mortgage loan, if any, will not exceed (1) for loans made under (a)(1) of this section,(A) 90 percent for single-family residences and duplexes; and(B) 80 percent for all triplexes and four-plexes; or(2) for loans made under (a)(2) of this section,(A) 90 percent for single-family residences and duplexes;(B) 80 percent for all triplexes and four-plexes; and(C) 75 percent when value is determined by any method other than a new appraisal as defined in 15 AAC 150.900(a).(f) The maximum loan amount will not exceed the lowest of (1) 50 percent of FNMA's conventional first mortgage limit for a single-family dwelling in Alaska;(2) for loans made under (a)(1) of this section, if the corporation owns an interest in the first mortgage, the corporation's limit for a conventional first mortgage reduced by the original balance of the first mortgage; or(3) $100,000 for loans made under (a)(2) of this section when value is determined by any method other than an appraisal as defined in 15 AAC 150.900(a).(g) The loan must be subject only to permitted encumbrances and a first lien mortgage loan. Any other liens must be subordinated to this loan.(h) The interest rate shall be determined by the corporation.Eff. 5/7/93, Register 130; am 2/24/99, Register 149; am 5/25/2011, Register 204; am 6/28/2023, Register 247, October 2023Authority:AS 18.56.088
AS 18.56.096