Title of Regulation: 13VAC10-10. Rules and Regulations - General Provisions for Programs of the Virginia Housing Development Authority (amending 13VAC10-10-80).

Statutory Authority: § 36-55.30:3 of the Code of Virginia.

Effective Date: July 1, 2011.

Agency Contact: J. Judson McKellar, Jr., General Counsel, Virginia Housing Development Authority, 601 South Belvidere Street, Richmond, VA 23220, telephone (804) 343-5540, or email judson.mckellar@vhda.com.

Summary:

Because of recent federal regulatory changes, the Virginia Housing Development Authority (VHDA) is restructuring its single family mortgage loan program as a mortgage purchase program whereby the loans will be originated in the name of the mortgage lenders, will be funded at closing by such lenders, and will be purchased by the authority after closing. The amendments make the requirements in the current regulations for reinvestment of loan sales proceeds and for the prudent investment certification inapplicable in the case of a mortgage loan that, when made, is to be purchased by VHDA. The amendments conform the current regulations to the amendments to § 36-55.35 of the Code of Virginia enacted in the 2011 Session of the General Assembly. The amendments also expressly recognize that the authority under the current regulations to purchase mortgage loans includes the purchase of single family mortgage loans pursuant to the regulations in 13VAC10-40.

13VAC10-10-80. Purchase of mortgage loans.

A. The authority may from time to time, pursuant and subject to its rules and regulations, purchase mortgage loans from mortgage lenders, including, without limitation, the purchase of single family mortgage loans pursuant to 13VAC10-40. In furtherance thereof, the executive director may request mortgage lenders to submit offers to sell mortgage loans to the authority in such manner, within such time period and subject to such terms and conditions as he shall specify in such request. The executive director may take such action as he shall deem necessary or appropriate to solicit offers to sell mortgage loans, including mailing of the request to mortgage lenders, advertising in newspapers or other publications and any other methods of public announcement which he may select as appropriate under the circumstances. The executive director may also consider and accept offers for sale of individual mortgage loans submitted from time to time to the authority without any solicitation therefor by the authority.

B. The authority shall require as a condition of the purchase of any mortgage loans from a mortgage lender pursuant to this section that such mortgage lender within 180 days from the receipt of proceeds of such purchase shall enter into written commitments to make, and shall thereafter proceed as promptly as practical to make and disburse from such proceeds, residential mortgage loans in the Commonwealth of Virginia having a stated maturity of not less than 20 years from the date thereof in an aggregate principal amount equal to the amount of such proceeds. The foregoing requirement in this subsection B of this section shall not apply to the purchase by the authority of a mortgage loan that, when made by the mortgage lender, is to be purchased by the authority or that is held, insured, or assisted by the federal government or any agency or instrumentality thereof.

C. At or before the purchase of any mortgage loan pursuant to this section, the mortgage lender shall certify to the authority that the mortgage loan would in all respects be a prudent investment and that the proceeds of the purchase of the mortgage loan shall be invested as provided in subsection B of this section or invested in short-term obligations pending such investment; provided, however, that such certification shall not be required in the case of the purchase by the authority of a mortgage loan that, when made by the mortgage lender, is to be purchased by the authority or that is held, insured, or assisted by the federal government or any agency or instrumentality thereof.

D. The purchase price for any mortgage loan to be purchased by the authority pursuant to this section shall be established or determined in accordance with subsection B of § 36-55.35 of the Code of Virginia.