13VAC10-40-40: Compliance with certain requirements of the tax code

A. The tax code imposes certain requirements and restrictions on the eligibility of mortgagors and residences for (i) the financing with the proceeds of tax-exempt bonds (as well as requirements and restrictions on the assumption of mortgage loans so financed); and (ii) the issuance of mortgage credit certificates.

B. The authority requires the following:

1. The mortgage revenue bond residence requirements;

2. The requirement that each applicant must not have had a present ownership interest in his principal residence within the preceding three years (the first-time homebuyer or three-year requirement); and

3. The mortgage revenue bond income requirements.

Notwithstanding the foregoing, certain authority loan programs described in 13VAC10-40-230, 13VAC10-40-250, 13VAC10-40-260, and 13VAC10-40-270 contain exceptions to the mortgage revenue bond requirements in this subsection.

C. In order to comply with these federal requirements and restrictions, as well as other authority requirements, the authority has established that certain procedures must be performed by the originating lender in order to determine such eligibility. The eligibility requirements for each borrower, the dwelling, and the procedures to be performed are described in this subsection. The originating lender will perform these procedures and evaluate each borrower's eligibility prior to the authority's approval of each loan. No loan will be approved by the authority unless all of the federal eligibility requirements are met as well as the usual requirements of the authority set forth in this chapter and the origination guide, unless the executive director determines that it is reasonable or necessary to waive or modify any such requirements and that the financial interests of the authority are adequately protected.

In addition to the three mortgage revenue bond requirements set forth in subsection B of this section, the executive director may apply some or all of the other tax-exempt bond requirements and restrictions set forth in the tax code to authority mortgage loans to enable the authority to effectively and efficiently allocate its current and anticipated financial resources so as to best meet the current and future housing needs of low and moderate income Virginians.