{"data":{"id":"us-ky/krs-198a.250","jurisdiction":"us-ky","citation":"KRS 198A.250","heading":"Loans to mortgage lenders for residential mortgage loans -- Rules and","body":"regulations.\n(1) The corporation may make loans to mortgage lenders for the purpose of furnishing\nfunds to such mortgage lenders to be used for making residential mortgage loans.\n(2) The corporation shall from time to time adopt, modify, amend or repeal rules and\nregulations governing the making of loans to mortgage lenders and the use of the\nproceeds thereof, including rules and regulations as to any or all of the following:\n(a) Procedures for the application or submission of requests for loans to mortgage\nlenders;\n(b) Standards and requirements as to allocations of loans among all or certain of\nthe mortgage lenders or awards of loans and determining the amounts and\ninterest rates thereof;\n(c) Limitations or restrictions as to the number of family units, locations or other\nqualifications or characteristics of residential housing to be financed by\nresidential mortgage loans;\n(d) Restrictions as to the interest rates on residentia l mortgage loans or the return\nrealized therefrom by mortgage lenders;\n(e) Requirements with respect to the application of the proceeds of loans to\nmortgage lenders, including the time within which the proceeds of any such\nloan must be committed and disbursed for residential mortgage loans;\n(f) Schedules of any fees and charges necessary to provide for expenses and\nreserves of the corporations; and\n(g) Any other matters related to the duties and the exercise of the powers of the\ncorporation under this section.\nSuch rules and regulations shall in each case be designed to effectuate the general\npurposes of this chapter and the following specific objectives: (i) the expansion of\nthe supply of funds in the state available for residential mortgage loans; (ii ) the\nprovision of the additional residential housing needed to remedy the shortage of\nadequate housing in the state and to eliminate the existence of a large number of\nsubstandard dwellings; and (iii) the effective participation by mortgage lenders in\nthe program authorized by this chapter and the restriction of the financial return and\nbenefit thereto from such program to that necessary and reasonable to induce such\nparticipation.\n(3) The obligation to repay loans to mortgage lenders shall be general obligations of the\nrespective mortgage lenders and shall bear such date or dates, shall mature at such\ntime or times, shall be evidenced by such note, bond or other certificate of\nindebtedness, shall be subject to prepayment and shall contain such other provisions\nconsistent with this section, all as the corporation shall by  resolution determine.\n(4) Any other provision of this section to the contrary notwithstanding, the interest rate\nor rates and other terms of the loans to mortgage lenders made from the p roceeds of\nany issue of bonds of the corporation shall be at least sufficient to assure the\npayment of said bonds and the interest thereon as the same become due from the\namounts received by the corporation in repayment of such loans and interest\nthereon.\n(5) The corporation may require that such loans to mortgage lenders be additionally\nsecured as to payment of both principal and interest by a pledge of and lien upon\ncollateral security in such amounts as the corporation by resolution shall determine\nto be necessary to assure the payment of such loans and the interest thereon as the\nsame become due.  Such collateral security shall consist of (i) direct obligations of,\nor obligations guaranteed by, the United States of America; (ii) bonds, debentures,\nnotes or other evidences of indebtedness, satisfactory to the corporation, issued by\nany of the following federal agencies: banks for cooperatives, federal intermediate\ncredit banks, federal home loan banks, export -import bank of the United States,\nfederal land  banks, the federal national mortgage association or the government\nnational mortgage association; (iii) direct obligations of or obligations guaranteed\nby the state; or (iv) mortgages insured or guaranteed by the United States of\nAmerica or an instrumenta lity thereof as to payments of principal and interest. The\ncorporation may require in the case of any or all mortgage lenders that such\ncollateral be lodged with a bank or trust company located in the state designated by\nthe corporation as custodian theref or.  In the absence of such requirement a\nmortgage lender shall upon receipt of the loan proceeds from the corporation enter\ninto an agreement with the corporation containing such provisions as the\ncorporation shall deem necessary to adequately identify an d separately maintain\nsuch collateral and  service the same and providing that such mortgage lender shall\nhold such collateral as an agent for the corporation and shall be held accountable as\nthe trustee of an express trust for the application and disposit ion thereof and the\nincome therefrom solely to the uses and purposes in accordance with the provisions\nof such agreement. A copy of each such agreement and any revisions or\nsupplements thereto shall be filed with the secretary of state, and no further filing or\nother action under Article 9 of KRS Chapter 355 or any other law of the state shall\nbe required to perfect the security interest of the corporation in such collateral or\nany additions thereto or substitutions therefor, and the lien and trust for the benefit\nof the corporation so created shall be binding from and after the time made against\nall parties having claims of any kind in tort, contract or otherwise against such\nmortgage lender. The corporation may also establish such additional requirements\nas it shall deem necessary with respect to the pledging, assigning, setting aside, or\nholding of such collateral and the making of substitutions therefor or additions\nthereto and the disposition of income and receipts therefrom.\n(6) The corporation shall require the submission to it by each mortgage lender to which\nthe corporation has made a loan of evidence satisfactory to the corporation of the\nmaking of residential mortgage loans as required by this section and prescribed by\nrules and regulations of the corporation and in connection therewith may inspect the\nbooks and records of such mortgage lender.\n(7) All residential mortgage loans made as required by this section shall comply with\nthe applicable provisions of the laws of the state, and, where federal law or the law\nof another jurisdiction governs the affairs of the mortgage lender with the applicable\nprovisions of such law.\n(8) The corporation may require agreement by any mortgage lender as a condition of\nthe loan to such mortgage lender, to the payment of penalties to the corporation for\nviolation by the mortgage lender of any provision of this sectio n or its undertaking\nto the corporation with respect to the making of residential mortgage loans, and\nsuch penalties shall be recoverable at the demand of the corporation.\n(9) If at any time the corporation shall determine that an adequate supply of funds exists\nin regular banking channels for residential mortgage loans, the corporation shall\ndiscontinue the making of loans to mortgage lenders until such time as the\ncorporation may subsequently determine that the supply of funds available for new\nresidential mortgage loans is again inadequate.\n(10) For purposes of this section, the term \"residential mortgage loan\" means a loan\nmade by a mortgage lender and secured by a mortgage constituting a first lien upon\nresidential housing.","path":["KRS Chapter 198A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=6953","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:51:51Z","sha256":"5f01fe8e7f37a667f46b01d8d5b39fa76c3bdeec055bbc0657204f833b01b7ae","source_id":"us-ky","stale":false,"prev":"us-ky/krs-198a.240","next":"us-ky/krs-198a.300"},"notice":"GroundRules: Original legal text. Not legal advice."}