Section 15-165-18 - Loan documentation Each eligible loan file must contain the documents specified in the procedural guide and such other documents as the mortgage insurer shall require. The note and/or the mortgage evidencing the eligible loan or riders thereto must contain the following terms:
(1) Conditions which the corporation shall require in accordance with sections 2016-125 through 2016-130, HRS, or specifically with respect to a particular housing loan program and/or for a specified project or development, which have been approved and authorized by the board; and(2) Each note and mortgage or rider thereto shall provide that subject to the provisions of 12 U.S.C. 1701j-3 (which preempts state prohibitions on due-on-sale clauses) if all or any part of the real property securing the eligible loan is sold or transferred by the eligible borrower to another person who is not an eligible borrower, or if the eligible borrower no longer uses such real property as the eligible borrower's principal residence, the corporation or holder of the note and mortgage shall have the right to either: (A) Declare all amounts owing under the note and mortgage to be immediately due and payable in full; or(B) Increase the interest rate to the higher of (a) the prevailing market interest rate at the time the eligible loan was closed or (b) the average of the prevailing market interest rates for fixed rate home mortgages having a term of thirty years offered by no less than five financial institutions which are selected by the corporation and whose accounts are federally insured provided, however, that in no event shall the interest rate be less than the interest rate for the eligible loan at the time of closing. The note or mortgage instrument or both or a rider thereto shall disclose the prevailing market interest rate at the time the eligible loan closes. Provided, however, that the foregoing provision may be revised to conform to the requirements for mortgage insurance from the federal housing administration, veterans administration and farmers home administration.[Eff OCT 25 1999] (Auth: HRS § 2016-4, 2016-243) (Imp: HRS § 2016-144)