§ 42-55-6. Powers relative to making loans.
The corporation shall have all of the powers necessary or convenient to carry out
and effectuate the purpose and provisions of this chapter, including the following
powers in addition to others granted in this chapter:
(1) Make, undertake commitments to make, and participate in the making of mortgage loans,
including without limitation federally insured mortgage loans, and to make temporary
loans and advances in anticipation of permanent mortgage loans to housing sponsors
or healthcare sponsors to finance the construction or rehabilitation of, or installation
of energy saving improvements to, residential housing designed and planned for occupancy
primarily by persons and families of low and moderate income or healthcare facilities
upon the terms and conditions set forth in § 42-55-9;
(2) Make, undertake commitments to make, and participate in the making of mortgage loans
to persons of low or moderate income who may purchase residential housing or who own
and occupy residential housing used as security for loans where the proceeds may be
dispersed at such time or times that the corporation may determine, including without
limitation persons and families of low and moderate income who are eligible or potentially
eligible for federally insured mortgage loans or federal mortgage loans. These loans
shall be made only after a determination by the corporation that mortgage loans are
not otherwise available, wholly or in part, from private lenders upon reasonably equivalent
terms and conditions;
(3) Make, undertake commitments to make, and participate in the making of loans to persons
of low or moderate income for the purpose of making energy saving improvements to
residential housing. Any loan made pursuant to this subsection may be secured by a
mortgage or otherwise, shall be repaid, shall bear interest and shall be upon any
terms and conditions that may be determined by the corporation;
(4) Make and publish rules and regulations respecting the grant of mortgage loans pursuant
to this chapter, the regulation of borrowers, the admission of tenants and other occupants
to housing developments pursuant to this chapter, and the construction of ancillary
commercial facilities;
(5) Enter into agreements and contracts with housing sponsors or healthcare sponsors under
the provisions of this chapter;
(6) Institute any action or proceeding against any housing sponsor or healthcare sponsor
or persons and families of low and moderate income receiving a loan under the provisions
hereof, or owning any housing development hereunder in any court of competent jurisdiction
in order to enforce the provisions of this chapter or the terms and provisions of
any agreement or contract between the corporation and the recipients of loans under
the provisions hereof, or to foreclose its mortgage, or to protect the public interest,
the occupants of the housing development, or the stockholders or creditors, if any,
of the sponsor. In connection with an action or proceeding it may apply for the appointment
of a receiver to take over, manage, operate, and maintain the affairs of the housing
sponsor or healthcare sponsor and the corporation, through the agent it shall designate,
is hereby authorized to accept the appointment of the receiver of a sponsor when so
appointed by a court of competent jurisdiction. In the event of the reorganization
of any housing sponsor or healthcare sponsor to the extent possible under the provisions
of law, the reorganization shall be subject to the supervision and control of the
corporation, and no reorganization shall be had without the prior written consent
of the corporation. In the event of a judgment against any housing sponsor or healthcare
sponsor in any action not pertaining to the foreclosure of a mortgage, there shall
be no sale of any of the real property included in any housing development, housing
project, or healthcare facilities hereunder of a sponsor except upon sixty (60) days'
written notice to the corporation. Upon receipt of that notice, the corporation shall
take those steps that in its judgment may be necessary to protect the rights of all
parties;
(7) Make, undertake commitments to make, and participate in the making of mortgage loans
to persons of low or moderate income for the purpose of improving septic systems and
wells on their residential property to substantially comply with standards as set
by the department of environmental management and/or the department of health. Any
loan made pursuant to this subsection may be secured by a mortgage or otherwise shall
be repaid, shall bear interest, and shall be upon those terms and conditions that
may be determined by the corporation;
(8) Make and participate in the making of grants to assist in the construction, rehabilitation,
or operation of residential housing;
(9) Make and publish rules and regulations respecting the making of grants to assist in
the construction, rehabilitation, or operation of residential housing;
(10) Provide grants to any existing private nonprofit housing program sponsor for the following
use and purpose:
(i) Establish or expand an existing revolving loan fund, if the housing program sponsor
matches the funds, those grants not to exceed one hundred thousand dollars ($100,000).
(ii) Provided, however, that grants shall not be made more frequently than once per year
and that the grants be made from funds held in the corporation's reserve fund.
(iii) In the event that the private nonprofit housing program sponsor should cease its operations,
all unexpended funds shall revert back to the corporation;
(11) Guaranty "homeowners notes�.
(i) A "homeowners note� is the promissory note secured by a second mortgage of any eligible
home buyer made payable to any person, firm, corporation or other entity loaning money
to the eligible home buyer to purchase his or her principal residence. The homeowners
note shall be in a form, at an interest rate, in denominations and upon other terms
and conditions established in rules and regulations promulgated by the corporation.
Homeowners notes may be used solely to assist in the financing of the purchase of
a principal residence by eligible home buyers.
(ii) An eligible home buyer is a first-time buyer (defined as one who has not had an ownership
interest in his or her principal residence for at least three (3) years) whose current
income, as defined by federal regulation, does not exceed the median family income
of Rhode Island residents, as determined annually by the U.S. Department of Housing
and Urban Development.
(iii) The corporation shall qualify eligible borrowers and issue a commitment to guaranty
the homeowners note upon the terms and conditions set forth in the commitment. The
commitment of guaranty will be valid for four (4) months after the date of issuance
by the corporation.
(iv) The principal face amount of the homeowners note to be guaranteed shall be determined
by a formula to be developed and recalculated by the corporation, within thirty (30)
days after new figures are determined by the U.S. Department of Housing and Urban
Development, as follows:
(A) The maximum principal amount for which eligible home buyers may qualify for a guarantee
is twenty percent (20%) of the median home price in the state of Rhode Island, as
determined by the U.S. Treasury Department.
(B) The formula shall provide for eligibility by increments of five hundred dollars ($500)
with eligibility being rounded up to the next increment.
(C) The formula shall provide that a prospective home buyer's eligibility shall be for
a principal amount determined by multiplying: twenty percent (20%) of the median home
price in the state of Rhode Island times (X) thrice the percentage by which the home
buyer falls below the Rhode Island median family income, up to the maximum amount
for which homeowners are eligible.
(v) The guaranty shall become effective at the time of acquisition of the real estate;
provided, that the eligible home buyer has complied with the terms and conditions
of the commitment; the eligible home buyer has granted to the payee of the note a
mortgage on the residence subject only to a purchase money mortgage and real estate
taxes not yet due and payable; and a confirmed copy of the homeowners note and a certified
copy of the recorded mortgage securing the note has been delivered to the corporation.
(vi) A homeowners note shall mature at the end of seven (7) years from the date of endorsement
or upon the sale or transfer of the title to the real estate securing the note, whichever
shall first occur. Interest shall accrue, in arrears, from the date of endorsement
and become due and payable at maturity of the homeowners note.
(vii) The corporation may promulgate any rules and regulations as may be necessary to implement
the homeowners notes program;
(12) Establish the Environmentally Compromised Home Opportunity (ECHO) loan program.
(i) The corporation may make, undertake commitments to make, and participate in the making
of loans to persons owning residential property, the value of which has been significantly
reduced by contamination.
(ii) Any loan made pursuant to this subsection (12) may be made on properties which have
been certified by the department of environmental management as (A) within the boundaries,
or directly abutting a site, known to be impacted by the release of hazardous materials
or petroleum, or (B) within the boundaries, or directly abutting a site, listed on
the National Priorities List as determined by the federal Comprehensive Environmental
Response Compensation and Liability Act (CERCLA, as may from time to time be amended).
(iii) Any loan made pursuant to this subsection (12) may be secured by a mortgage or otherwise,
shall be repaid, shall bear interest and shall be upon any terms and conditions that
may be determined by the corporation; the principal amount of such loan shall not
exceed twenty-five thousand dollars ($25,000), but such loan shall not in any way
limit any other loan or grant assistance which may otherwise be available.
(iv) The corporation shall have no liability under any environmental statute or regulation
due to any loan made pursuant to this subsection (12).