Chapter 234

234.54(1r) (1r) The authority shall establish the housing rehabilitation loan program capital reserve fund to secure the bonds issued under the authority of s. 234.50, and shall pay into such fund any moneys appropriated and made available by the state for the purposes of such fund, any proceeds of sale of housing rehabilitation bonds to the extent provided in the resolution of the authority authorizing the issuance thereof and any other moneys which are made available to the authority for the purpose of such fund from any other source.

234.54(2) (2) All moneys held in the housing rehabilitation loan program capital reserve fund, except as otherwise specifically provided, shall be used, as required, solely for the payment of the principal of bonds of the authority secured in whole or in part by such fund or of sinking fund payments with respect to such bonds, the purchase or redemption of such bonds, the payment of interest on such bonds or the payment of any redemption premium required to be paid when such bonds are redeemed prior to maturity; but, if moneys in such fund at any time are less than the capital reserve fund requirement established for such fund as provided in this section, the authority shall not use such moneys for any optional purchase or optional redemption of such bonds. Any income or interest earned by, or increment to, the capital reserve fund due to the investment thereof may be transferred by the authority to other housing rehabilitation loan program funds or accounts of the authority to the extent such transfer does not reduce the amount of the capital reserve fund below the capital reserve fund requirement for the fund.

234.54(3) (3) 

234.54(3)(a) (a) The authority may not issue bonds, secured in whole or in part by the capital reserve fund if upon the issuance of such bonds, the amount in the capital reserve fund will be less than the capital reserve fund requirement of the capital reserve fund, unless the authority, forthwith upon the issuance of the bonds, deposits in the capital reserve fund from the proceeds of the bonds to be issued, or from other sources, an amount which, together with the amount then in the capital reserve fund, will not be less than the capital reserve fund requirement for the fund. The annual debt service for any calendar year is the amount of money equal to the aggregate of all of the following:

234.54(3)(a)1. 1. All interest payable during the calendar year on all bonds secured in whole or in part by the capital reserve fund outstanding on the date of computation.

234.54(3)(a)2. 2. The principal amount of all bonds described in subd. 1. outstanding on the date of computation which mature during the calendar year.

234.54(3)(a)3. 3. All amounts specified in any resolution of the authority authorizing any of the bonds described in subd. 1. as payable during the calendar year as a sinking fund payment with respect to any of the bonds which mature after the calendar year.

234.54(3)(b) (b) The annual debt service calculation made under par. (a) shall be calculated on the assumption that the bonds will after the date of computation cease to be outstanding by reason, but only by reason, of the payment of bonds when due, and the payment when due and application in accordance with the resolution authorizing those bonds, of all of the sinking fund payments payable at or after the date of computation. However, in computing the annual debt service for any calendar year, bonds considered to have been paid in accordance with the defeasance provisions of the resolution of the authority authorizing the issuance thereof may not be included in bonds outstanding on the date of computation.

234.54(4) (4) 

234.54(4)(a) (a) To assure the continued operation and solvency of the authority for the carrying out of the public purposes of this chapter, the authority shall accumulate in the capital reserve fund an amount equal to the capital reserve fund requirement for such fund.

234.54(4)(b) (b) If at any time the capital reserve fund requirement for the capital reserve fund exceeds the amount of such capital reserve fund, the chairperson of the authority shall certify to the secretary of administration, the governor and the joint committee on finance the amount necessary to restore such capital reserve fund to an amount equal to the capital reserve fund requirement in respect thereto. If such certification is received by the secretary of administration in an even-numbered year prior to the completion of the budget compilation under s. 16.43, the secretary shall include the certified amount in the budget compilation. In any case, the joint committee on finance shall introduce in either house, in bill form, an appropriation of the amount so certified to the capital reserve fund. Recognizing its moral obligation to do so, the legislature hereby expresses its expectation and aspiration that, if ever called upon to do so, it shall make such appropriation.

234.54(4)(c) (c) Paragraph (b) applies only to bonds issued before December 31, 1983.

234.54(5) (5) In computing the amount of the capital reserve fund for the purposes of this section, securities in which all or a portion of such capital reserve fund is invested shall be valued at par, or if purchased at less than par, at their cost to the authority, adjusted to reflect the amortization of discount or premium paid upon their purchase.

234.54(6) (6) Notwithstanding subs. (1r) to (5), the authority, subject to such agreements with bondholders as may then exist, may elect not to secure any particular issue or series of its bonds with the capital reserve fund. Such election shall be made in the resolution authorizing such issue or series. In this event, subs. (2) and (3) shall not apply to the bonds of such issue or series in that they shall not be entitled to payment out of or be eligible for purchase by such fund nor may they be taken into account in computing or applying any capital reserve fund requirement.

234.54 History History: 1977 c. 418; 1981 c. 21; 1995 a. 225; 1997 a. 35.

234.55 234.55 Housing rehabilitation loan program bond redemption fund.

234.55(1) (1) The authority shall establish the housing rehabilitation loan program bond redemption fund. All housing rehabilitation loans purchased with moneys from the housing rehabilitation loan fund or notes evidencing loans to lenders from such fund for housing rehabilitation loans shall be the exclusive property of such redemption fund. All moneys received from the repayment of such loans, any amounts transferred by the authority to such fund pursuant to s. 234.52 or from other funds or sources, any federal insurance or guarantee payments with respect to such loans, all moneys resulting from the sale of bonds for the purpose of refunding outstanding housing rehabilitation bonds unless credited to the housing rehabilitation loan program capital reserve fund, any other moneys which may be available to the authority for the purpose of such fund, and all moneys received from the repayment of loans provided under ss. 234.045 and 234.53 (2m) shall be deposited into such fund to be used for the repayment of housing rehabilitation bonds issued under the authority of s. 234.50.

234.55(2) (2) Subject to agreements with bondholders and except as provided in sub. (3), the authority may use moneys in the fund solely:

234.55(2)(a) (a) For the payment of the principal of and interest on housing rehabilitation bonds of the authority when the same become due whether at maturity or on call for redemption and for the payment of any redemption premium required to be paid when such bonds are redeemed prior to their stated maturities, and to purchase such bonds;

234.55(2)(b) (b) To pay actual and necessary expenses incurred to service and administer outstanding housing rehabilitation bonds, including fees and expenses of trustees and paying agents, and to collect housing rehabilitation loans;

234.55(2)(c) (c) For transfer to the housing rehabilitation loan program loan loss reserve fund; or

234.55(2)(d) (d) For transfer to the housing rehabilitation loan fund.

234.55(3) (3) Any balance remaining after satisfaction of all obligations under sub. (2) shall be transferred to the housing rehabilitation loan program administration fund.

234.55(4) (4) Moneys of the fund may be invested as provided in s. 234.03 (18). All such investments shall be the exclusive property of the fund. All earnings on or income from such investments shall be credited to the fund.

234.55 History History: 1977 c. 418; 1985 a. 29 s. 3200 (28); 1999 a. 9; 2017 a. 277; 2021 a. 221.

234.59 234.59 Homeownership mortgage loan program.

234.59(1) (1) Definitions. In this section:

234.59(1)(a) (a) “Authorized lender” means a bank, savings bank, savings and loan association, credit union or mortgage banker.

234.59(1)(d) (d) “Eligible property” means any of the following:

234.59(1)(d)1. 1. A residential structure having a single dwelling unit, if the structure is or will be the principal residence of an applicant.

234.59(1)(d)2. 2. A residential structure having no more than 4 dwelling units, if one of the units is or will be the principal residence of an applicant and the structure is an existing dwelling first occupied at least 5 years before execution of a homeownership mortgage loan secured by the dwelling.

234.59(1)(d)3. 3. A dwelling unit in a condominium, a cooperative, or an unincorporated cooperative association, together with an interest in common areas, if the unit is or will be the principal residence of an applicant.

234.59(1)(d)4. 4. A residential structure having 2 dwelling units, if one of the units will be the principal residence of an applicant.

234.59(1)(e) (e) “Existing dwelling” means a previously occupied dwelling.

234.59(1)(f) (f) “Homeownership mortgage loan” means a loan to finance the construction, long-term financing or qualified rehabilitation of an eligible property by an applicant.

234.59(1)(h) (h) “Mortgage banker” means a mortgage banker licensed under s. 224.72, but does not include a person licensed under s. 138.09.

234.59(1)(i) (i) “New dwelling” means a dwelling which has never been occupied.

234.59(1)(j) (j) “Principal residence” means residential real property in this state that an applicant maintains as a full-time residence, but does not use as a vacation home or for trade or business purposes.

234.59(1)(k) (k) “Targeted area residence” has the meaning given in 26 CFR 6a.103A-2 (b) (3).

234.59(2) (2) Powers and duties of the authority. The authority shall establish and administer a homeownership mortgage loan program to encourage homeownership and to facilitate the acquisition or rehabilitation of eligible property by applicants. To implement the program, the authority:

234.59(2)(a) (a) May enter into contracts permitting an authorized lender to make or service homeownership mortgage loans or both.

234.59(2)(c) (c) Shall maintain a current list of authorized lenders.

234.59(2)(e) (e) May enter into agreements to insure or provide additional security for homeownership mortgage loans or bonds or notes issued under s. 234.60.

234.59(2)(f) (f) May make a loan to a veteran, as defined in 38 USC 101 (2), who has not previously received a homeownership mortgage loan financed by bonds or notes issued under s. 234.60.

234.59(3) (3) Loan conditions.

234.59(3)(bd) (bd)

234.59(3)(bd)1. 1. To the extent required as a condition to maintaining the exclusion from gross income for federal income tax purposes of interest on bonds, notes, or other evidences of indebtedness issued by or on behalf of the authority, a homeownership mortgage loan under this section shall be made to an applicant whose income does not exceed the applicable level specified under 26 USC 143 (f). The authority shall determine an applicant’s income in the manner specified under 26 USC 143 (f) and applicable rulings of the Internal Revenue Service.

234.59(3)(bd)2. 2. Nothing under this section precludes the authority from imposing income limitations that are more restrictive than the income level determined in the manner specified under 26 USC 143 (f) and applicable rulings of the Internal Revenue Service.

234.59(3)(c) (c) The authority shall notify an authorized lender if a person’s name appears on the statewide support lien docket under s. 49.854 (2) (b). An authorized lender may not make a loan to an applicant if it receives notification under this paragraph concerning the applicant, unless the applicant provides to the lender a payment agreement that has been approved by the county child support agency under s. 59.53 (5) and that is consistent with rules promulgated under s. 49.858 (2) (a).

234.59(3)(d) (d) The authority may not make, buy, or assume a home ownership mortgage loan for an individual who does not have a social security number.

234.59(3)(e) (e) A homeownership mortgage loan may not be made to finance the acquisition or replacement of an existing mortgage given by an applicant. This paragraph does not apply to any of the following:

234.59(3)(e)1. 1. A construction loan.

234.59(3)(e)2. 2. Temporary initial financing.

234.59(3)(e)3. 3. A loan made to finance a rehabilitation.

234.59(3)(e)3m. 3m. A homeownership mortgage loan made in part to finance the acquisition or replacement of an existing mortgage given by an applicant if all of the following apply:

234.59(3)(e)3m.a. a. The eligible property is located in an area in a 1st class city in which the authority determines there is a high concentration of persons and families of low and moderate income.

234.59(3)(e)3m.b. b. As determined by the authority, the total amount the applicant owes on the existing mortgage, including principal and interest, plus the amount required for repairs to the eligible property, exceeds the maximum amount the applicant is able to borrow from other lenders given the lenders’ loan-to-value ratio requirements.

234.59(3)(e)3m.c. c. A portion of the loan under this subdivision is used to finance qualified rehabilitation of the eligible property.

234.59(3)(e)4. 4. A loan made to pay off a loan funded or serviced by the authority.

234.59 History History: 1981 c. 349; 1983 a. 82, 192; 1985 a. 29 ss. 2127, 2261 to 2269, 3200 (14); 1985 a. 332; Stats. 1985 s. 234.59; 1987 a. 27, 359; 1987 a. 403 s. 256; 1989 a. 31, 346; 1991 a. 221; 1993 a. 286, 287; 1995 a. 27, 404; 1999 a. 9; 2005 a. 75, 441; 2007 a. 97; 2009 a. 2; 2013 a. 40; 2017 a. 277.

234.592 234.592 Qualified subprime loan refinancing.

234.592(1) (1) Definitions. In this section:

234.592(1)(a) (a) “Authorized lender” has the meaning given in s. 234.59 (1) (a).

234.592(1)(b) (b) “Eligible property” has the meaning given in s. 234.59 (1) (d) 1.

234.592(1)(c) (c) “Principal residence” has the meaning given in. s. 234.59 (1) (j).

234.592(1)(d) (d) “Qualified subprime loan” means an adjustable rate single-family residential mortgage loan made after December 31, 2001, and before January 1, 2008.

234.592(2) (2) Powers and duties of the authority. The authority shall establish and administer a qualified subprime loan refinancing program to encourage homeownership and to facilitate the retention of eligible property by applicants. To implement the program, the authority:

234.592(2)(a) (a) May finance the acquisition or replacement of a qualified subprime loan and may enter into contracts permitting an authorized lender to finance the acquisition or replacement of a qualified subprime loan or both.

234.592(2)(b) (b) Shall maintain a current list of authorized lenders.

234.592(2)(c) (c) May enter into agreements to insure or provide additional security for loans or bonds or notes issued under s. 234.60.

234.592(3) (3) Loan conditions.

234.592(3)(a) (a) Except as provided in par. (b), the authority may finance the acquisition or replacement of or enter into contracts permitting an authorized lender to finance the acquisition or replacement of an existing mortgage given by an applicant on an eligible property only if all of the following conditions are satisfied:

234.592(3)(a)1. 1. The eligible property is and will remain the principal residence of the applicant.

234.592(3)(a)2. 2. The existing mortgage was originally financed through a qualified subprime loan and has not subsequently been refinanced.

234.592(3)(a)3. 3. The authority makes a determination that the mortgage described in subd. 2. will be reasonably likely to cause financial hardship to the applicant if not refinanced.

234.592(3)(a)4. 4. The term of any refinancing agreement entered into under this paragraph does not exceed 30 years.

234.592(3)(a)5. 5. The monthly payments to be made by an applicant under an agreement entered into under this paragraph include principal, interest, property taxes, and insurance. In this subdivision, “insurance” includes mortgage insurance, homeowner’s insurance, and, if applicable, flood insurance.

234.592(3)(a)6. 6. The authority complies with special rules for subprime refinancing established under 26 USC 143 (k) (12).

234.592(3)(b) (b) The authority may not enter into an agreement under this subsection if the applicant’s name appears on the statewide support lien docket under s. 49.854 (2) (b), unless the applicant provides to the authority a payment agreement that has been approved by the county child support agency under s. 59.53 (5) and that is consistent with rules promulgated under s. 49.858 (2) (a).

234.592 History History: 2009 a. 2.

234.60 234.60 Bonds for homeownership mortgage loans and qualified subprime loan refinancing.

234.60(1) (1) The authority may issue its bonds or notes to fund homeownership mortgage loans or the refinancing of qualified subprime loans under s. 234.592.

234.60(2) (2) The limitations in ss. 234.18, 234.40, 234.50, 234.61, and 234.65 do not apply to bonds or notes issued under this section.

234.60(4) (4) Before issuing bonds or notes under this section, the authority shall consult and coordinate the bond or note issue with the building commission.

234.60(5) (5) 

234.60(5)(a) (a) The secretary of administration shall determine the date after which no bond or note issued may be treated as a qualified mortgage bond under 26 USC 143 (a) (1).

234.60(5)(b) (b) No bonds or notes may be issued under this section after the date determined under par. (a), except bonds or notes issued to refund outstanding bonds or notes issued under this section.

234.60(5)(c) (c) The secretary of administration shall determine the date after which no bond or note may be issued under this section for the purpose of financing the acquisition or replacement of an existing mortgage under s. 234.592.

234.60(9) (9) The executive director of the authority shall make every effort to encourage participation in the homeownership mortgage loan program and the qualified subprime loan refinancing program by women and minorities.