§ 13-22-105 — Mortgage insurance fund - Premium reserve fund - Home repair loan insurance account

(a) (1) The agency shall create and establish a mortgage insurance fund which shall be used as a revolving fund for carrying out this chapter with respect to mortgages insured hereunder and shall pay into such fund: (A) Any moneys appropriated, paid or otherwise, made available by the state for the purpose of such fund; and (B) Any other moneys which may be made available to the agency for the purpose of such fund from any other source. (2) All moneys held in the mortgage insurance fund, except as hereinafter provided, shall be used, as required, solely for the payment of the agency's liabilities arising from mortgages insured pursuant to this chapter; provided, that moneys in such fund shall not be withdrawn therefrom at any time in such amount as would reduce the amount of such fund to less than the mortgage insurance fund requirement, except for the purpose of paying such liabilities, as the same become due and for the payment of which other moneys of the agency are not available. Any income or interest earned by, or increment to, the mortgage insurance fund due to the investment thereof, or any amount in excess of the mortgage insurance fund requirement, may be transferred by the agency to other funds or accounts of the agency to the extent that it does not reduce the amount of the mortgage insurance fund below the mortgage insurance fund requirement. (3) At the close of each fiscal year and as a part of its annual report, the agency shall include a certified statement as to the condition of the mortgage insurance fund. If, as of the last day of the fiscal year, the mortgage insurance fund does not meet the mortgage insurance fund requirement as defined in § 13-22-101 , the commissioner of finance and administration shall cause to be deposited in the mortgage insurance fund, from funds available to the agency, an amount of moneys sufficient to restore the fund to a level equal to the mortgage insurance fund requirement. A deficiency in the mortgage insurance fund as computed in accordance with § 13-22-101(7) during any fiscal year shall not invalidate any contracts for mortgage insurance or commitments to provide mortgage insurance outstanding at the time such deficiency occurs. (b) (1) The agency shall establish and keep a fund to be known as the "premium reserve fund" for the purpose of providing revenues to the agency for payment of all administrative and other costs arising from its operations, including liabilities arising from contracts of mortgage insurance entered into by the agency. (2) The agency shall pay into this fund: (A) All moneys appropriated or otherwise made available by the state for the purpose of the fund; (B) All moneys received by the agency as a result of its operations, including, but not limited to, income from fees, premiums and other charges; income resulting from the investment of these and other funds; and income from the lease, rental or other disposition of real property and other assets; and (C) Other moneys which may be made available to the agency for the purpose of such fund from any other source. (3) The agency shall regulate all fees and charges which are to be paid by or charged to the mortgagor. (4) The agency may, from time to time, transfer for deposit in the mortgage insurance fund as established by subsection (a), moneys received by the agency and held in the premium reserve fund which are in excess of the amounts required to pay the agency's operating and administrative expenses, including liabilities arising from contracts of mortgage insurance entered into by the agency. (5) The agency may invest moneys held in the fund created by this section in investments and accounts in accordance with this chapter; provided, that such investments shall be payable within such times as the funds may be needed to meet liabilities incurred by the agency. The agency may establish separate accounts under the premium reserve fund for such purposes as the agency may deem proper. (c) (1) The agency shall establish a special account, to be known as the home repair loan insurance account, and may pay into this account moneys appropriated and made available by the state, and other moneys which may be available from any other source. All moneys held in the home repair loan insurance account shall be used by the agency to meet its liabilities on contracts made by it pursuant to this section and upon such terms and conditions as established by the agency. (2) The agency is authorized to enter into contracts of home repair loan insurance with approved financial institutions on home repair loans, provided: (A) The term of the loan does not exceed ten (10) years and the principal will be fully amortized over the term of the loan in substantially equal monthly payments; (B) The principal amount of the loan does not exceed ten thousand dollars ($10,000) per dwelling unit; (C) The loan bears interest, exclusive of premium charges permitted by the agency, at a rate not in excess of the legal rate for such loans in this state; (D) The proceeds of the loan have been or will be used solely in connection with the alteration, improvement, or repair of the housing accommodation which is the subject of the loan and, upon completion of the alteration, improvement, or repair work, the owner shall certify that the loan proceeds have been used for such work; (E) All alteration, improvement, or repair work has been or will be completed in substantial compliance with all applicable building or housing codes, fire ordinances, or health regulations; (F) The housing accommodation which is the subject of an insured home repair loan is located in a code enforcement area, older urban neighborhood, an area of historic or community importance, a rural community, or an area specifically designated by the agency as a reinvestment area; and (G) The agency shall not at any time insure or cause the state to be obligated upon unsecured promissory notes or third mortgage loans. (3) The agency may enter into contracts of home repair loan insurance; provided, that the home repair loan insurance account contains an amount of money equal to five percent (5%) of the sum of accounts insured under this section. Moneys in this account may not be withdrawn at any time in such amount as would reduce the account to less than the amount required, except for the purpose of paying claims arising under contracts of home repair loan insurance as the same become due and for the payment of which other moneys of the agency are not available. Any income or interest earned by the account due to the investment thereof, or any amount in excess of the amount required by this section, may be transferred by the agency to other funds or accounts of the agency.

Legislative History

Acts 1974, ch. 579, § 4; 1975, ch. 339, § 5; 1977, ch. 360, § 4; T.C.A., § 13-2205; Acts 1988, ch. 901, § 4.