Section 825-RICR-20-00-1.7 - QUALIFIED MORTGAGE LOANSA. Mortgage Loan Terms. Mortgage Loans purchased by the Corporation shall comply with the terms of the Mortgage Purchase Agreement and any requirements set forth in any Program Bulletin. The Mortgage Purchase Agreement may contain provisions concerning the security for the loan, insurance, escrow payments, late charges, prepayment penalties, if any, deficiencies, defaults, priority of liens, maintenance of the Dwelling and such other terms and conditions as are customary to protect the interests of institutions engaged in making residential mortgage loans and as the Corporation may deem prudent to ensure compliance with the Act, the Tax Act and this Part. In addition, Mortgage Lenders shall comply with truth-in-lending, equal opportunity and other applicable state and federal laws and regulations. In order to ensure that the benefits of the Program are limited to eligible Borrowers, the Corporation may, in Mortgage Loan documents, establish limitations on the assumability of Mortgage Loans, prevent the assumption of Mortgage Loans, provide for acceleration in the event the Borrower ceases to use the Dwelling as a primary permanent residence, restrict the transfer of shares or membership certificates owned by members of a cooperative housing corporation and/or of real estate owned by a cooperative housing corporation receiving financing under this Part and require the recording of charges and restrictions on real estate securing a Mortgage Loan.B. Right to Demand Explanation. Any person who is refused a Mortgage Loan by a Mortgage Lender may, in writing, demand a written explanation from the Mortgage Lender as to the specific reasons for the refusal. The Mortgage Lender shall comply with such demand within thirty (30) days after the date of receipt of such demand.C. Interest Rate. 1. The interest rate on Qualified Mortgages for each Program shall be determined from time to time by the Board of Commissioners taking into consideration the cost of funds, prevailing market conditions, the need to provide funds to subsidize the interest rates for particular Mortgage Loans and the ability of Borrowers to make payments on Mortgage Loans applied for. The Corporation may also offer write-downs from the established interest rate for Qualified Mortgages made in Targeted Areas or to otherwise carry out the purposes of the Act.2. In accordance with the terms of the Qualified Mortgage loan documents, where the Corporation has written down the interest rate on a Qualified Mortgage, the Corporation may require a Borrower to reimburse the Corporation for the difference between the write-down and the prevailing Program interest rate if the Dwelling is sold, conveyed or otherwise transferred within four (4) years after the Closing of the Mortgage Loan.D. Amortization Period. Except to the extent provided in § 1.7(C) of this Part, each Qualified Mortgage shall amortize over such period of time or times as shall be determined by the Board of Commissioners.E. Maximum Loan to Value Ratio. For each Program, the maximum principal amount of each Qualified Mortgage shall not exceed such percentages of the Fair Market Value of the improvements and real property securing the same as may be established by the Board of Commissioners and made available by Program bulletin.F. Private Mortgage Insurance. The Corporation may require that Qualified Mortgages be the subject of a mortgage insurance policy issued by a private mortgage insurance company qualified to do business in the State and to provide insurance on mortgages purchased by the FNMA or the FHLMC. The required amount of private mortgage insurance coverage will be established by the Corporation from time to time in accordance with the requirements of its financial guarantees and as the Corporation determines prudent to protect its financial soundness. If required to protect the credit standing of the Corporation's obligations, the Corporation will establish a specific list of approved mortgage insurance companies. Alternatively, the Corporation may establish by itself or through any subsidiary or affiliated entity a program of self insurance on such terms and conditions as the Corporation may from time to time determine.G. Pool and Portfolio Insurance. Depending upon the needs of its financial guarantees and the agencies rating the bonds of the Corporation issued pursuant to a Program, the Corporation may require that a Mortgage Loan be the subject of insurance pursuant to a mortgage pool insurance policy. Alternatively, the Corporation may by itself or through any sub-sidiary or affiliated entity insure its portfolio or use funds maintained in the Mortgage Lender's Reserve Account against risk of lossH. Special Housing Assistance. The Corporation may in its discretion loan or grant to Borrowers in such amounts and on such terms and conditions as it shall determine, funds to be used by the Borrower for down payment assistance, legal expenses, recording fees, document preparation fees, origination or commitment fees, and title examination fees and title insurance.825 R.I. Code R. 825-RICR-20-00-1.7