Connecticut General Statutes 8-253 – Mortgage loans and insurance of mortgage payments
(a) The authority may make mortgage loans or upon application of a proposed mortgagee insure and make advance commitments to insure payments required by a loan for housing upon such terms and conditions as the authority may prescribe. Mortgage loans made or insured by the authority under this chapter may be for construction financing as well as permanent financing, and may provide financing for related facilities to the extent permitted by applicable authority regulations. Mortgage loans made or insured by the authority under this chapter shall be secured by a first or second mortgage. The aggregate principal amount of all mortgages so insured by the authority under this chapter and outstanding at any one time shall not exceed ten times the average annual balance for the preceding calendar year of funds on deposit in the Housing Mortgage Insurance Fund. The aggregate amount of principal obligations of all mortgages so insured shall not constitute indebtedness of the state of Connecticut. Any contract of insurance executed by the authority under this section shall be conclusive evidence of eligibility for such mortgage insurance and the validity of any contract of insurance so executed or of an advance commitment to issue such shall be incontestable in the hands of an approved mortgagee from the date of execution of such contract or commitment, except for fraud or misrepresentation on the part of such approved mortgagee and, as to commitments to insure, noncompliance with the terms of the advance commitment or authority regulations in force at the time of issuance of the advance commitment.
Terms Used In Connecticut General Statutes 8-253
- Amortization: Paying off a loan by regular installments.
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Fraud: Intentional deception resulting in injury to another.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
(b) For mortgage payments to be eligible for insurance under the provisions of this chapter, the underlying mortgage shall be one which is made to and held by a mortgagee approved by the authority as responsible and able to service the mortgage properly. Permanent mortgage loans made or insured by the authority under the provisions of this chapter shall: (1) Not exceed (i) ninety per cent of the estimated cost of such proposed housing if owned or to be owned by a profit-making mortgagor or (ii) one hundred per cent of the estimated cost of such proposed housing if owned or to be owned by a housing authority, a municipal developer, a nonprofit corporation or cooperative or by a resident-owner of a structure containing not more than three dwelling units, or of a condominium; (2) have a maturity satisfactory to the authority but in no case longer than fifty years from the date of the issuance of the loan or insurance; (3) contain amortization provisions satisfactory to the authority requiring periodic payments by the mortgagor not in excess of his reasonable ability to pay as determined by the authority; (4) be in such form and contain such terms and provisions with respect to maturity, property insurance, repairs, alterations, payment of taxes and assessments, default reserves, delinquency charges, default remedies, anticipation of maturity, additional and secondary liens, equitable and legal redemption rights and other matters as the authority may prescribe. If a loan made by the authority under this chapter is insured or if the project or any units therein are assisted by any department, agency or instrumentality of the United States or this state, and the terms of the mortgage insurance commitment or regulatory agreement covering such insurance or other assistance are inconsistent with the terms and conditions required by this section or established by the authority under this chapter, the terms of such mortgage insurance commitment or regulatory agreement shall prevail, to the extent of such inconsistency.
(c) Construction mortgage loans made by the authority under the provisions of this chapter may be advanced at the discretion of the authority in installments as the work progresses, provided that the authority shall retain not more than ten per cent of the construction contract price until the construction or rehabilitation has been inspected and found by the authority to be more than ninety per cent completed. Thereafter such retention or any part thereof may be either advanced at the discretion of the authority or retained until the authority shall determine that the mortgagor has complied with all of the terms and conditions of subsection (b) of § 8-253 and § 8-253a. The total of all advances made, after any adjustment under subdivision (6) of § 8-253a, shall not exceed (i) ninety per cent of the project cost if owned or to be owned by a profit making mortgagor or (ii) one hundred per cent of the project cost if owned or to be owned by a housing authority, a municipal developer or a nonprofit corporation or cooperative.