(a) The agency may provide interest assistance to any financial institution with respect to any loan insured by the agency pursuant to this chapter, except mortgages insured pursuant to § 13-22-115. This assistance, subject to the limitation of funds available pursuant to § 13-22-111, may be in amounts determined by the agency to be necessary to enable the owner to afford the interest cost of the mortgage loan.

Terms Used In Tennessee Code 13-22-112

  • Agency: means the housing development agency, created pursuant to §. See Tennessee Code 13-22-101
  • Contract: A legal written agreement that becomes binding when signed.
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
  • Mortgagee: The person to whom property is mortgaged and who has loaned the money.
  • Mortgagee: means the original mortgage lender under an insurable mortgage, and its successors and assigns, as approved by the agency. See Tennessee Code 13-22-101
  • Owner: means any person, firm, partnership or agency, either public or private, having the legal or beneficial ownership of a housing accommodation or of a building, structure, or property containing one (1) or more housing accommodations. See Tennessee Code 13-22-101
  • State: means the state of Tennessee. See Tennessee Code 13-22-101
(b) A contract for interest assistance shall constitute an undertaking by the state to grant to the mortgagee of an insured mortgage loan, for a term not to exceed the term of the mortgage loan, periodic supplements to the interest payable by the owner. Such periodic supplements when added to the interest payments made by the owner shall not exceed the interest rate established pursuant to § 13-22-109(a)(3).
(c) Prior to entering into a mortgage interest assistance contract, the agency shall determine that such assistance is required to avoid default and foreclosure, that no other remedy exists on affordable and reasonable terms, and that the owner meets other such qualifications as the agency may require.
(d) Any contract for interest assistance may also contain other conditions not inconsistent with this chapter, as may be prescribed by the agency by regulation or as may be agreed on by the financial institution, the agency and the owner.
(e) Payments of interest assistance shall be made directly to the mortgagee of the insured mortgage loan, shall not be subject to the control of the owner, and shall not constitute income to the owner for taxation or other purposes.
(f) The agency shall, with the owner and the mortgagee, review from time to time the terms of such contract and the need for assistance thereunder and make any appropriate revisions or termination.
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