15 AAC 151.620 - Refinance program

(a) The Corporation will, in its discretion and in accordance with procedures outlined in the sellers' guide and the servicers' guide, refinance any loan owned by the Corporation that the Corporation originally made or purchased under a program described in this chapter if:

(1) all loans are current and the borrower's payment record has been satisfactory;

(2) the mortgage loan owned by the Corporation is secured by a first or second lien of the residence for which it was made, and the refinance loan will be in the same or in a higher lien position as the existing loan and any other liens previously attached to the property will be subordinated or paid in full; and

(3) the residence securing the refinance mortgage loan is a single-family dwelling, a duplex, a triplex, a four-plex, or a Type I or Type II mobile home.

(b) A refinance mortgage loan under 15 AAC 151.620(a) or (e) is also subject to the following terms and conditions:

(1) the principal amount of the refinance mortgage loan may not exceed the sum of:

(A) the principal amount of the mortgage loan or loans being refinanced;

(B) the amount of the closing costs borne by the borrower and approved by the Corporation; and

(C) excess subsidy owned to the Corporation by the borrower pursuant to the Home Ownership Fund program described in 15 AAC 151.300 - 15 AAC 151.340 if the refinance loan will not be subsidized under that program;

(2) the mortgage loan must be insured or guaranteed as provided in 15 AAC 151.020(a) (3) and (a)(4);

(3) if the monthly payment on the loan owned by the Corporation is subsidized under the Home Ownership Fund program described in 15 AAC 151.300 - 15 AAC 151.340, the amount of the monthly subsidy may continue to be paid by the Corporation to subsidize payments for the refinanced loan; however, the monthly subsidy may not exceed the subsidy amount as established in 15 AAC 151.330 or the amount of the subsidy currently being paid by the Corporation, whichever is less;

(4) the loan-to-value ratio on a refinance loan shall not exceed limits established by FNMA or FHLMC for similar refinance loans;

(5) if the property is also encumbered by a subordinate FNMA or FHLMC loan, the combined balances of all encumbrances may not exceed the Corporation's loan limits for conventional first mortgages;

(6) the maximum term of the loan will be 30 years for first lien loans; 15 years for second lien loans; and the remaining term on the existing loan or the terms outlined in the sellers' guide for Type II mobile homes, whichever is longer, if acceptable to the insurer/guarantor.

(c) The refinance loan may include improvements to the property subject to the following:

(1) the loan amount may not exceed the balance on the existing loan owned by the Corporation plus the cost of improvements and allowable closing costs;

(2) loans for which the Corporation then provides Home Ownership Fund assistance under 15 AAC 151.300 - 15 AAC 151.340 and Type II mobile home loans are not eligible under the home improvement refinance option;

(3) the improvements to the mortgaged premises may be for energy conservation, solar installation, rehabilitation, modernization and addition and must either enhance the structural integrity of the building, add to its square footage, increase its appraised value, or constitute a fixture.

(d) The Corporation will, in its discretion, refinance more than one loan held by the Corporation which are secured by the same property if each loan being refinanced satisfies the requirements of this section.

(e) The Corporation will, in its discretion, refinance one or more loans held by the Corporation and one or more loans not held by the Corporation which are secured by the same property if the refinance mortgage loan satisfies the requirements of 15 AAC 151.625.

Notes

15 AAC 151.620

Eff. 5/7/93, Register 130; am 6/11/96, Register 139; am 5/3/2001, Register 159

Before Register 130, July 1994, the substance of 15 AAC 151.620 was contained in former 15 AAC 118.287. The history note for 15 AAC 151.620 does not reflect the history of the section under its former number.

Authority:AS 18.56.088

AS 18.56.098