45.74 History
History: 1973 c. 208;
1975 c. 26,
224;
1977 c. 29,
381,
418,
446;
1979 c. 220,
221,
355;
1987 a. 9,
27,
319,
399;
1989 a. 31;
1991 a. 39;
1993 a. 16,
254;
1995 a. 255,
404.
45.745
45.745
Loans to disabled veterans; qualifying factors. A veteran who is receiving 100% disability compensation from the U.S. department of veterans affairs under
38 USC 301 to
315,
331 to
337 and
350 to
362 due to a permanent and total service-connected disability may receive a loan under this subchapter if the department or authorized lender determines, after disregarding any payment received under
s. 45.85, that all of the following apply:
45.745(1)
(1) Annual income limitation. For persons identified under
s. 45.79 (7) (c) 1., the annual income of the person or both the person and the person's spouse does not exceed 140% of the amount specified under
s. 45.74 (1).
45.745(2)
(2) Ability to pay. The person will not be incurring an excessive indebtedness in view of the person's income.
45.745(3)
(3) Need. The person requires a loan in addition to the person's own funds.
45.745(5)
(5) Cost of housing or loan. If the net cost of the housing accommodation including garage, but excluding land and other nonhousing improvements on the property after deducting the federal grant does not exceed 2 times the person's annual income, or if the net cost of the housing accommodation including garage, land and other nonhousing improvements on the property after deducting the federal grant does not exceed 2.5 times the person's annual income, or if the amount of the loan applied for under
s. 45.79 after deducting the federal grant does not exceed 2.5 times the person's annual income, whichever the person elects.
45.745(6)
(6) Previous loans. If the person has a previous loan outstanding under this subchapter, any of the following apply:
45.745(6)(b)
(b) The previous loan has been assumed by an eligible person with the department's approval upon the sale of the residence securing the previous loan.
45.76
45.76
Eligible uses for loan proceeds. 45.76(1)
(1)
Mortgage loan program. An authorized lender may, with the approval of the department, make loans under
s. 45.79 for:
45.76(1)(a)1.
1. A mobile home or real property on which a mobile home is to be situated, but only if the veteran has available and applies on the total cost of the property, an amount equivalent to at least 15% of the total cost. This 15% requirement does not apply to a person who qualifies under
s. 45.745.
45.76(1)(b)
(b)
Construction. Construction of a home, including housing accommodation and garage, and the acquisition of land therefor.
45.76(1)(c)1.1. A loan of not more than $15,000 to improve a home, including construction of a garage.
45.76(1)(c)2.
2. The department may provide home improvement loans under this paragraph funded under
s. 45.79 (6) (a) only if the department has received a determination, based on a ruling from the internal revenue service, that using the bond revenue for those loans will not preclude the bonds from being qualified veterans' mortgage bonds, as defined in
26 USC 143.
45.76(1)(d)1.1. Refinancing the balance due on an indebtedness which was incurred for a use designated in
pars. (a) to
(c) if the balance owing on the indebtedness does not exceed the amount requested in a prior loan application from the veteran and if the indebtedness was incurred by the veteran after a prior loan application from the veteran was denied by the department. Refinancing loans may be made under this paragraph only if the board reverses the department's denial after determining that the prior application met requirements in effect on the date of the denial and that the loan application should have been approved.
45.76(1)(d)2.
2. Refinancing the balance due on a construction period loan, bridge loan or other financing if the financing was used for a purpose designated in
par. (b) and has a term of 24 months or less.
45.76(3)(a)(a)
Cost and value of property. No loan may be made under this subchapter if the department or authorized lender determines that:
45.76(3)(a)1.
1. The total cost of the property exceeds its market value. This subdivision does not apply to a person who qualifies under
s. 45.745.
45.76(3)(a)2.
2. The value of the land and nonhousing improvements thereon is disproportionate to the value of the housing accommodation.
45.76(3)(b)
(b)
Certificate of use. The department or authorized lender may require any person applying for a loan under this subchapter to certify that:
45.76(3)(b)1.
1. The residence to be purchased, constructed, improved or refinanced with financial assistance under this subchapter will be used as the person's principal residence.
45.76(3)(b)2.
2. Unless other prepayment provisions are permitted under
s. 45.78 (2), the loan made under this subchapter will be repaid in full upon sale of the residence or any of the person's interest in it. A divorce judgment divesting the veteran's interest in the residence or a quitclaim deed executed under the judgment does not constitute a sale.
45.77
45.77
Veteran's contribution. No loan may be made under this subchapter unless, in addition to the closing costs that the veteran may be required to pay, the veteran has available, and applies on the total cost of the property for which the loan is made, an amount equivalent to at least 5% of the total cost. The amount may consist of money or other assets, including equity in real property. This section does not apply to a person who qualifies under
s. 45.745.
45.78
45.78
Manner of repayment. 45.78(1)(1)
Monthly payments; right to prepay. Each loan made under this subchapter shall be repaid in monthly instalments with the option to pay additional sums on any instalment paying day.
45.78(2)
(2) Acceleration provisions. All loans made under this subchapter shall be repaid in full upon sale of the residence securing the loan or any interest in such residence, unless:
45.78(2)(a)
(a) The sale is to another eligible person;
45.78(2)(b)
(b) The department or authorized lender servicing the loan determines that acceleration will jeopardize collection of the loan balance; or
45.78(2)(c)
(c) The loan is a guaranteed loan which is assumed or paid in regular monthly instalments under
s. 45.79 (10) (a).
45.78 History
History: 1973 c. 208;
1979 c. 155.
45.79
45.79
Mortgage loan program. 45.79(1)
(1)
Loans authorized. An authorized lender or a county veterans' service officer may, as agent for and with the approval of the department, make loans to eligible persons for qualified purposes in the manner provided under this section.
45.79(2)(a)(a)
Application and content. Applications for loans under this section for a purpose specified in
s. 45.76 (1) (a),
(b) or
(d) shall be made to an authorized lender and applications for loans under this section for a purpose specified under
s. 45.76 (1) (c) shall be made to a county veterans' service officer on forms approved by the department and signed by the applicant. If the applicant is married and not separated or in the process of obtaining a divorce, the applicant's spouse also shall sign the application.
45.79(2)(b)
(b)
Certification by department. The applicant shall apply to the department through a county veterans' service officer for certification of eligibility as a veteran.
45.79(2)(c)
(c)
Processing. After the department has determined that the person applying for the loan is a veteran, the authorized lender or county veterans' service officer shall pass upon the merits of each application and shall forward the application to the department with its recommendation. The department may disallow the loan applied for or approve it in whole or in part and disburse funds in the amount of any loan approved.
45.79(2m)
(2m) Disability compensation disregard. Notwithstanding
ss. 45.74 (1) and
45.745 (1), in determining eligibility for a loan under this section, the department or authorized lender may not consider as income any service-connected disability compensation received by a veteran from the U.S. department of veterans affairs under
38 USC 301 to
315,
331 to
337 and
351 to
363.
45.79(3)(a)1.1. Each loan made under this section shall be evidenced by a promissory instalment note and secured by a mortgage on the real estate in respect to which the loan is granted. Any loan having as its source funds provided through
sub. (6) (a) shall have the mortgage name the department as mortgagee and payee. Any loan having as its source funds provided through
sub. (6) (b) shall have the mortgage name the authorized lender involved as mortgagee and payee, and such mortgage and note shall be assigned by the authorized lender to the authority immediately upon execution. A mortgage securing a loan made for a purpose specified in
s. 45.76 (1) (a),
(b) or
(d) must have priority over all liens against the mortgaged premises and the buildings and improvements thereon, except tax and special assessment liens filed after the recording of the mortgage. A mortgage securing a loan made for a purpose specified under
s. 45.76 (1) (c) may be junior and subject to not more than one prior mortgage, and, except for that prior mortgage, must have priority over all liens against the mortgaged premises and the buildings and improvements on those premises, except tax and special assessment liens filed after the recording of the mortgage.
45.79(3)(a)2.
2. No loan may be made under this section for the purchase or improvement of a mobile home unless such loan is secured by both a first mortgage on real estate and a primary chattel security agreement covering the mobile home itself.
45.79(3)(b)
(b)
Casualty insurance coverage. Mortgages given to secure loans under this section shall provide for adequate fire and extended coverage insurance. Policies providing such insurance coverage shall name the authorized lender involved as an insured.
45.79(4)(a)(a) The board shall determine the interest rate on loans made under this section. Except as provided in
sub. (10), the interest rate so determined may not be increased during the term of the loan. Except as provided in
sub. (10), the interest rate shall be as low as possible but shall be sufficient to fully pay all expenses and to provide reserves which are reasonably expected to be required in the judgment of the board in accordance with
par. (b) and
sub. (7) (a) 3.
45.79(4)(b)1.1. The board shall select and implement the methods of insuring against losses arising from delinquency and default in the repayment of loans under
sub. (6) (a) and shall select and implement the methods of managing and selling any property securing loans funded under
sub. (6) (a).
45.79(4)(b)2.
2. The board shall charge or cause to be charged to borrowers all costs for insuring the program under
subd. 1.
45.79(4)(b)3.
3. Moneys collected under
subd. 2. and that are held by the state shall be deposited, reserved and expended as provided in
sub. (7) (a) 3.
45.79(5)(a)(a)
Additional authorized activities of the department. The department may:
45.79(5)(a)1.
1. Enter into contracts with authorized lenders throughout this state authorizing such lenders to process applications and close and service loans made under this section. The contracts shall include the responsibilities of the authorized lender with respect to credit evaluations, financial eligibility determinations, valuation of the home for which the loan is to be made, collection procedures in the event of delinquent loan repayments and other functions which the department may require. Such contracts shall authorize the lender to retain an amount from the monthly payments for servicing loans made by this section. The rate of the service fee shall not exceed a maximum rate established by the department with the lender in accordance with current practices under similar programs, and shall be stated in the contracts. A maximum length of time between receipt of monthly mortgage payments by the lender and transmittal of such payments to the state or the authority shall be established by the department and specified in the contracts.
45.79(5)(a)2.
2. Commit to advance and advance funds in the full amount of any mortgage securing a purchase loan to be made by an authorized lender in accordance with the terms of this section.
45.79(5)(a)3.
3. Commit to advance and advance in instalments up to the full amount of any mortgage securing a construction loan made by an authorized lender, to provide for the purchase and improvement of a lot and the completion of the construction for which the loan is to be made, under the terms of this section.
45.79(5)(a)4.
4. Mail checks, share drafts or other drafts or otherwise transfer or arrange for transfer of funds, to authorized lenders not sooner than 7 days prior to proposed closing or disbursement dates.
45.79(5)(a)5.
5. Designate and maintain a current list of lenders authorized to make or service loans under this section. The department shall promulgate rules establishing standards for and governing the performance of authorized lenders in making and servicing loans under this section and shall periodically monitor such performance. The department shall promulgate rules to provide for the removal from its list of authorized lenders of any lender that makes an excessive number of errors on loan applications processed under
subd. 1. The department may summarily remove from its list of authorized lenders any lender that indicates it does not wish to participate in the program and after hearing on notice remove from its list of authorized lenders any lender that fails to conform with the rules of the department governing such performance, and may refuse to permit a lender so removed to make or service any loan under this section until such time as the department is satisfied that the lender will conform with such rules.
45.79(5)(a)6.
6. Require borrowers to make monthly escrow payments to be held by the authorized lender for real estate taxes and casualty insurance premiums which shall be paid by the authorized lender where due to the extent of the amounts owing thereon or to the extent escrowed, whichever is less.
45.79(5)(a)8.
8. The department may exercise all of the powers vested in it under this subchapter in respect to any applications for loans and loans approved under this section and in respect to any mortgages and mortgage notes executed to authorized lenders and assigned to and purchased by the authority under this section and the properties securing such mortgages. The department is specifically authorized in its discretion to exercise or authorize such powers to be exercised in its own name.
45.79(5)(a)9.
9. With prior approval of the building commission, retire all 1981 veterans home loan revenue bonds and transfer any assets remaining in the bond fund after retirement into the veterans trust fund. The department may sell the assets transferred to the veterans trust fund under this subdivision and deposit the proceeds of any sale into the veterans trust fund.
45.79(5)(b)
(b)
Origination fees. Persons receiving loans under this section shall pay at the time of closing an origination fee to the authorized lender participating in the loan. The origination fee charged to borrowers under this section shall be negotiated between the department and the authorized lender but may not exceed that which the authorized lender would charge other borrowers in the ordinary course of business under the same or similar circumstances.
45.79(6)
(6) Sources of loan funds. Funding for loans authorized by this section may, at the discretion of the building commission, be provided by one or a combination of:
45.79(6)(a)
(a)
State debt. The secretary, with the approval of the governor and subject to the limits of
s. 20.866 (2) (zn), may request that state debt be contracted in accordance with
ch. 18. Debt so requested must meet each of the following additional requirements:
45.79(6)(a)1.
1. State debt may be contracted when it reasonably appears to the building commission that all state obligations so incurred under this paragraph and
s. 20.866 (2) (zo) can be fully paid from moneys received from veterans repayments of loans on mortgages and mortgage notes funded under this paragraph and other available revenues of the veterans mortgage loan repayment fund. In making this determination, the building commission may take into account the effect of its planned future actions to refinance existing state debt, to create reserve funds and to modify the structure of the total debt outstanding so as to ensure that projected repayments of loans on mortgages and mortgage notes, together with other available moneys, will be sufficient as received to fund debt service payments as due. It is the intent of the legislature that the program authorized under this section be fully self-supporting and that it be so administered that all debt service and all related costs of the program under this section will require no supplemental support from the general fund.
45.79(6)(a)2.
2. The chairperson of the board shall certify that the chairperson does not expect proceeds of state debt issued under this paragraph to be used in a manner that would cause the debt to be arbitrage bonds as defined by the internal revenue code.
45.79(6)(b)
(b)
Debt of the authority. Loans made under this section may be purchased by the authority from the veterans housing loan fund under
s. 234.41. All receipts of interest, except amounts retained as servicing fees by the authorized lenders servicing such loans purchased by the authority, and principal on such loans, payments of losses by insurers not used for restoration of the property securing such loans, and any other collections, shall be deposited by the authority in the veterans housing bond redemption fund under
s. 234.43 and shall be disbursed therefrom as provided in
s. 234.43 (2).
45.79(6)(c)
(c)
Revenue obligations. The secretary, with the approval of the governor and subject to the limits of
sub. (9), may request that revenue obligations be contracted in accordance with
subch. II of ch. 18. Revenue obligations so requested must meet the following additional requirements:
45.79(6)(c)1.
1. Revenue obligations may be contracted when it reasonably appears to the building commission that all obligations incurred under this paragraph can be fully paid from moneys received from veterans' repayments of loans on mortgages and mortgage notes funded under this paragraph.
45.79(6)(c)2.
2. The chairperson of the board shall certify that the board and the department do not expect and shall not use proceeds of revenue obligations issued under this paragraph in a manner that would cause the revenue obligations to be arbitrage bonds as defined in the U.S. internal revenue code.
45.79(7)
(7) Repayment of mortgage loans. 45.79(7)(a)(a) There is created the veterans mortgage loan repayment fund. All moneys received by the department for the repayment of loans funded under
sub. (6) (a) except for servicing fees required to be paid to authorized lenders, net proceeds from the sale of mortgaged properties, any repayment to the department of moneys paid to authorized lenders, gifts, grants, other appropriations and interest earnings accruing thereon, and any moneys deposited or transferred under
s. 18.04 (6) (b) or
(d) shall be promptly deposited into the veterans mortgage loan repayment fund. The board shall establish by resolution a system of accounts providing for the maintenance and disbursement of moneys of the veterans mortgage loan repayment fund to fund loans under
sub. (6) (a) or to fund, refund or acquire public debt as provided in
s. 18.04 (5). The system of accounts shall record and provide moneys for all of the following purposes:
45.79(7)(a)1.
1. Transfer to the bond security and redemption fund.
45.79(7)(a)2.
2. The acquisition or redemption of public debt in accordance with resolutions of the building commission.
45.79(7)(a)3.
3. Payment of losses arising from delinquency or default in the repayment of loans funded under
sub. (6) (a), including loss of principal and interest accrued to the point of final disposition of the defaulted loan and the expenses of management and sale of the property taken upon default of loan repayment.
45.79(7)(a)4.
4. Payment of all costs incurred by the department in processing and servicing loans and accounting for and administering the program under this section, including a portion of grants made to county veterans' service officers under
s. 45.43 (7).
45.79(7)(a)5.
5. Payment of all costs incurred in contracting public debt for the purposes under
s. 18.04 (5) and under
s. 18.04 (2) for the purpose of funding veterans' housing loans.
45.79(7)(a)6.
6. Payment of costs of issuance of obligations to fund loans under
sub. (6) (c) if not paid from the proceeds of the obligations.
45.79(7)(a)8.
8. Payment of any other costs of program operation and management authorized under this section.
