§ 58-27-42 — Real property mortgage loan limited by property value--Loan on leasehold--Additional investment in other assets.

No mortgage loan or investment in a mortgage loan upon any one parcel of real property may exceed in amount at the time of acquisition: (1) Seventy - five percent of the fair value of the property if the property is a dwelling house primarily intended for occupancy by one family and the loan is required to be amortized within not more than thirty years by payment of installments on the loan at regular intervals not less frequent than annually; or (2) Seventy - five percent of the fair value of the property in all other cases. However, the percentage may be up to one hundred percent if the loan is made to a corporation which qualifies under subdivision 58-27-17(2) for investment in its bonds, notes, or other evidences of indebtedness, or if the borrower assigns to the lender a noncancellable lease or leases on the real estate providing rentals payable to the borrower in amount sufficient to repay the loan with interest in the manner specified by the note or notes evidencing the loan and executed as lessee or lessees by a corporation or corporations, which qualified under subdivision 58-27-17(2) for investment in its or their bonds, notes, or other evidences of indebtedness and in each case the obligations of the borrower or of the lessee or lessees shall be rated in the three highest grades by any one of the recognized rating agencies or whose securities, if publicly issued, would qualify for a rating. The director shall define "noncancellable lease" and "recognized rating agencies" by regulation. No mortgage loan upon a leasehold may be made or acquired pursuant to this subdivision unless the terms of the mortgage loan shall provide for amortization payments to be made by the borrower on the principal thereof at least once in each year in amount sufficient to completely amortize the loan within four - fifths of the term of the leasehold which is unexpired at the time the loan is made, but in no event exceeding thirty years. (3) An additional ten percent of the fair value of the property in excess of the limitation imposed by subdivisions (1) and (2) of this section, but not to exceed one hundred percent in all, if the excess is treated as an investment under § 58-27-51 and within the limitations imposed by the section. An insurer's investments authorized under this section may not exceed twenty five percent of its admitted assets.

Legislative History

SL 1966, ch 111, ch 6, § 25 (1); SL 1967, ch 130; SL 1972, ch 265; SL 1992, ch 350, § 20; SL 1995, ch 285, § 1.