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 manufactured home or real property on which a manufactured 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)
(c)
Home improvements. A loan of not more than $25,000 to improve a home, including the construction of a garage or the removal or other alteration of existing improvements that were made to improve the accessibility of a home for a disabled individual.
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 the total cost of the property exceeds its market value unless the amount by which the cost of the property exceeds its market value is paid by the borrower in addition to the downpayment required by
s. 45.77. This paragraph does not apply to a person who qualifies under
s. 45.745.
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 installments with the option to pay additional sums on any installment 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 installments 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) may be made to the department or 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 may apply directly to the department or through a county veterans' service officer for certification of eligibility as a veteran.
45.79(3)(a)(a)
Mortgage or guarantor required. Each loan made under this section, except a loan of $3,000 or less for a purpose specified under
s. 45.76 (1) (c), shall be evidenced by a promissory installment note and secured by a mortgage on the real estate in respect to which the loan is granted. A loan of $3,000 or less made for a purpose specified under
s. 45.76 (1) (c) shall be evidenced by a promissory installment note and shall be secured by a guarantor or 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) and secured by a mortgage shall have the mortgage name the department as mortgagee and payee. Any loan having as its source funds provided through
sub. (6) (b) and secured by a mortgage 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) is acceptable if the applicant can establish a minimum equity in the property as established by the department by rule.
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 or the department 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 installments 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 or the department for real estate taxes and casualty insurance premiums. The authorized lender or, if the department holds the payments in escrow, the department shall pay all of the amounts due for real estate taxes and casualty insurance premiums, even if the amount held in escrow is insufficient to cover the amounts due. If the amount held in escrow is insufficient to cover the amounts due, the authorized lender or, if the department holds the payments in escrow, the department shall recover from the borrower, after paying the amounts due under this subdivision, an amount equal to the difference between the amounts paid and the amount held in escrow. If the amount held in escrow is more than the amounts due, the authorized lender or, if the department holds the payments in escrow, the department shall refund to the borrower, after paying the amounts due under this subdivision, an amount equal to the difference between the amount held in escrow and the amounts paid by the authorized lender or the department.
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)(a)10.
10. Service loans made under this section and purchase from authorized lenders the servicing rights for loans made by authorized lenders under this section.
45.79(5)(a)11.
11. Enter into contracts with persons other than authorized lenders for the servicing of loans made under this section.
45.79(5)(b)
(b) Origination fees. Veterans receiving loans under this section shall pay at the time of closing an origination fee to the authorized lender participating in the loan, except that the department shall pay, on behalf of a veteran who receives a loan under this section and who has at least a 30% service connected disability rating for purposes of
38 USC 1114 or
1134, the origination fee to the authorized lender. The origination fee charged under this paragraph 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, where that debt is a bond that is exempt from federal taxation.
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 Internal Revenue Code, where that debt is a bond that is exempt from federal taxation.
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, any repayment of moneys borrowed under
s. 45.356 (9) (a), all moneys received under
sub. (5) (a) 6., 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, purchasing servicing rights for loans under this section, 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.
45.79(7)(a)9.
9. To loan money to the veterans trust fund, upon prior approval of the building commission for each loan, for the purposes under
s. 45.356.
45.79(7)(a)10.
10. Payment of origination fees, on behalf of veterans who have at least a 30% service connected disability rating for purposes of
38 USC 1114 or
1134, to authorized lenders under
sub. (5) (b).
45.79(7)(a)12.
12. To make payments of obligations arising from the acquisition of a headquarters and museum building for the department under
s. 45.35 (20).
45.79(7)(am)
(am) The board may amend the system of accounts established under
par. (a) only by resolution of the board that is approved by the building commission.
45.79(7)(b)
(b) If revenues of the veterans mortgage loan repayment fund are insufficient to meet all current expenses, the secretary of administration shall establish a repayment schedule whereby the general fund will be reimbursed in an orderly manner for moneys advanced. Interest rates to be charged on loans subsequently issued shall be adjusted to provide sufficient revenues to meet this repayment schedule.
45.79(7)(c)
(c) After meeting all expenses and providing for reserves under
par. (a) 3., assets in the veterans mortgage loan repayment fund, upon prior approval of the building commission, may be transferred to the veterans trust fund and used to fund loans under
s. 45.356.
45.79(7m)
(7m) Use of surpluses. Surpluses may be used under
sub. (10) (c) only if there are no unrestricted fund balances available for that purpose in the funds created under
sub. (9).
Section 20.001 (3) (e) shall not be construed to prohibit this action.
45.79(8)
(8) Limitation on remodeling or alteration for a disabled veteran. Not more than 50% of the proceeds of a loan granted under this section for a purpose under
s. 45.76 (1) (a) may be used for remodeling or alteration of the housing accommodation after purchase to meet the special needs of a veteran due to a permanent and total service-connected disability. That portion of the proceeds used for this purpose shall be reserved and distributed by the authorized lender.
45.79(9)
(9) Repayment of revenue obligations. 45.79(9)(a)(a) All moneys received from any source for repayment of loans, mortgages or mortgage loan notes funded with proceeds of revenue obligations issued under
sub. (6) (c) shall be deposited into one or more separate nonlapsible trust funds in the state treasury or with a trustee appointed for that purpose by the authorizing resolution for the revenue obligations. The board may pledge revenues received by the funds to secure revenue obligations issued under
sub. (6) (c) and shall have all other powers necessary and convenient to distribute the proceeds of the revenue obligations and loan repayments in accordance with
subch. II of ch. 18. Unrestricted balances in the funds may be used to fund additional loans issued under
sub. (6) (c) and pay the balances owing on loans after the assumptions of the loans or the closings of the sales of residences under
sub. (10) (c).
45.79(9)(b)
(b) Revenue obligations issued under
sub. (6) (c) shall not exceed $280,000,000 in principal amount, excluding obligations issued to fund or refund outstanding revenue obligation notes or to refund outstanding revenue obligation bonds.
45.79(9)(c)
(c) Except as may otherwise be expressly provided in resolutions authorizing the issuance of revenue obligations or in other agreements with the holders of revenue obligations, each issue of revenue obligations shall be on a parity with every other revenue obligation issued under
sub. (6) (c) and payable in accordance with
subch. II of ch. 18.
45.79(10)(a)(a) Upon any sale of the residence which secures a guaranteed loan made under this section after April 3, 1980, except for the purchase of the residence at the time the loan is initially made, the guaranteed loan may be assumed or continue to be paid in regular monthly installments if the person who assumes the mortgage loan payments or who will make the regular monthly installments agrees:
