45.33(2)(b)
(b) A person listed in
sub. (1) who is not a permanently and totally disabled veteran may not receive a loan under this subchapter if the department or authorized lender determines that any of the following applies:
45.33(2)(b)1.
1. The person is delinquent in child support or maintenance payments or owes past support, medical expenses, or birth expenses, as evidenced by the appearance of the person's name on the statewide support lien docket under
s. 49.854 (2) (b), unless the person provides the department or authorized lender with one of the following:
45.33(2)(b)1.a.
a. A repayment agreement that the person has entered into, that has been accepted by the county child support agency under
s. 59.53 (5) and that has been kept current for the 6-month period immediately preceding the date of the application.
45.33(2)(b)1.b.
b. A statement that the person is not delinquent in child support or maintenance payments and does not owe past support, medical expenses, or birth expenses, signed by the department of children and families or its designee within 7 working days before the date of the application.
45.33(2)(b)2.
2. The amount of the loan exceeds 2.5 times the median price of a home in this state. The department shall establish the median price of a home in this state for each fiscal year by using the most recent housing price index generated by the Wisconsin Realtors Association before July 1.
45.33 History
History: 2005 a. 22,
25,
253;
2007 a. 20.
45.34
45.34
Uses for loan proceeds. 45.34(1)
(1)
Mortgage loan program. An authorized lender may, with the approval of the department, make loans under
s. 45.37 for any of the following purposes:
45.34(1)(a)1.
1. A manufactured home or real property on which a manufactured home is to be situated, but only if the eligible person has available and applies on the total cost of the property, an amount equivalent to at least 15 percent of the total cost. This 15 percent requirement does not apply to a disabled veteran.
45.34(1)(b)
(b) The construction of a home, including housing accommodation and garage, and the acquisition of land therefor.
45.34(1)(c)
(c) A loan 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 permanently and totally disabled individual.
45.34(1)(d)
(d) Refinancing the balance due on an indebtedness that was incurred for a use designated in
pars. (a) to
(c).
45.34(2)(a)(a) 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 contribution required by
s. 45.35. This paragraph does not apply to a permanently and totally disabled veteran.
45.34(2)(b)
(b) The department or authorized lender may require any person applying for a loan under this subchapter to certify that:
45.34(2)(b)1.
1. The property to be purchased, constructed, improved, or refinanced with financial assistance under this subchapter will be used by the person as a residence.
45.34(2)(b)2.
2. Unless other acceleration provisions are permitted under
s. 45.36 (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 person's interest in the residence or a quitclaim deed executed under the judgment does not constitute a sale.
45.34(3)
(3) Qualified veterans mortgage bonds. If the source of the funding for a loan under this subchapter is the proceeds of a qualified veterans mortgage bond, the department shall apply any applicable requirements of the Internal Revenue Code in determining a person's eligibility for a loan to assure that the bonds are exempt from federal tax.
45.34 History
History: 2005 a. 22,
25;
2011 a. 260.
45.35
45.35
Contribution. No loan may be made under this subchapter unless, in addition to the closing costs that the person may be required to pay, the person 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 permanently and totally disabled veteran.
45.35 History
History: 2005 a. 22.
45.36
45.36
Manner of repayment. 45.36(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. Any additional payments must be paid on the regular installment payment date.
45.36(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 one of the following applies:
45.36(2)(a)
(a) The sale is to another eligible person.
45.36(2)(b)
(b) The department or authorized lender servicing the loan determines that acceleration will jeopardize collection of the loan balance.
45.36(2)(c)
(c) The loan is a guaranteed loan which is assumed or paid in regular monthly installments under
s. 45.37 (11) (a).
45.36 History
History: 2005 a. 22.
45.37
45.37
Mortgage loan program. 45.37(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.
45.37(2)(a)(a) Applications for loans under this section for a purpose specified in
s. 45.34 (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. 45.34 (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 legally separated under
s. 767.001 (1) (d) or in the process of obtaining a divorce, the applicant's spouse also shall sign the application.
45.37(2)(b)
(b) The applicant may apply directly to the department or through a county veterans service officer for certification of eligibility.
45.37(3)(a)(a) Each loan made under this section, except a loan of $3,000 or less for a purpose specified under
s. 45.34 (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. 45.34 (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 under
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 under
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. 45.34 (1) (a),
(b), or
(d) shall have priority over all liens against the mortgaged premises and the buildings and improvements to the buildings, 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. 45.34 (1) (c) is acceptable if the applicant can establish a minimum equity in the property, as established by the department by rule.
45.37(3)(b)
(b) 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.
45.37(4)(a)(a) The board shall determine the interest rate on loans made under this section. Except as provided in
sub. (11), the interest rate determined may not be increased during the term of the loan. Except as provided in
sub. (11), the interest rate shall be as low as possible but shall be sufficient to fully pay all expenses and to provide reserves that are reasonably expected to be required in the judgment of the board in accordance with
par. (b) and
sub. (7) (a) 3.
45.37(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 funded under
sub. (6) (a) and shall select and implement the methods of managing and selling any property securing loans funded under
sub. (6) (a).
45.37(4)(b)2.
2. The board shall charge or cause to be charged to borrowers all costs necessary to insure against losses under
subd. 1.
45.37(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.
45.37(5)(a)(a) The department may do any of the following:
45.37(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 that the department may require. The contracts shall authorize the lender to retain an amount from the monthly payments for servicing loans made under 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. The department shall specify 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.
45.37(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 under this section.
45.37(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.
45.37(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.
45.37(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 that performance, and may refuse to permit a lender so removed to make or service any loan under this section until the department is satisfied that the lender will conform with its rules.
45.37(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 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 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 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.
45.37(5)(a)8.
8. Exercise all of the powers vested in it under this subchapter with respect to any applications for loans and loans approved under this section and with 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 those mortgages. The department may exercise or authorize those powers to be exercised in its own name.
45.37(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.
45.37(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.
45.37(5)(a)11.
11. Enter into contracts with persons other than authorized lenders for the servicing of loans made under this section.
45.37(5)(a)12.
12. Loan money from the veterans trust fund to the veterans mortgage loan repayment fund to fund loans under this section.
45.37(5)(b)
(b) At the time of closing, persons receiving loans under this section shall pay 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 percent 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.
45.37(6)
(6) Sources of loan funds. Funding for loans authorized under this section may, at the discretion of the building commission, be provided by one or a combination of the following:
45.37(6)(a)
(a) 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 requested shall meet all of the following additional requirements:
45.37(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 administered so that all debt service and all related costs of the program under this section will require no supplemental support from the general fund.
45.37(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 in the Internal Revenue Code, if that debt is a bond that is exempt from federal taxation.
45.37(6)(b)
(b) 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 the loans purchased by the authority, and principal on the loans, payments of losses by insurers not used for restoration of the property securing the loans, and any other collections, shall be deposited by the authority into the veterans housing bond redemption fund under
s. 234.43 and shall be disbursed from the fund as provided in
s. 234.43 (2).
45.37(6)(c)
(c) The secretary, with the approval of the governor and subject to the limits of
sub. (10), may request that revenue obligations be contracted in accordance with
subch. II of ch. 18. Revenue obligations requested shall meet all of the following additional requirements:
45.37(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.
45.37(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.
45.37(7)
(7) Repayment of mortgage loans. 45.37(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, any repayment of moneys borrowed under
s. 45.42 (8) (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:
45.37(7)(a)1.
1. Transfer to the bond security and redemption fund.
45.37(7)(a)2.
2. Acquisition or redemption of public debt in accordance with resolutions of the building commission.
45.37(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.
45.37(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. 45.82.
45.37(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.
45.37(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.
45.37(7)(a)8.
8. Payment of any other costs of program operation and management authorized under this section.
45.37(7)(a)9.
9. Loan money to the veterans trust fund, upon prior approval of the building commission for each loan, for the purposes under
s. 45.42.
45.37(7)(a)10.
10. Payment of origination fees, on behalf of veterans who have at least a 30 percent service-connected disability rating for purposes of
38 USC 1114 or
1134, to authorized lenders under
sub. (5) (b).
45.37(7)(a)12.
12. Payment of obligations arising from the acquisition of a headquarters and museum building for the department under
s. 45.03 (5) (b).
45.37(7)(b)
(b) 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.
45.37(7)(c)
(c) 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 all of this repayment schedule.
45.37(7)(d)
(d) 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. 45.42.
45.37(8)
(8) Use of surpluses. Surpluses may be used under
sub. (11) (c) only if there are no unrestricted fund balances available for that purpose in the funds created under
sub. (10).
Section 20.001 (3) (e) shall not be construed to prohibit this action.
45.37(9)
(9) Limitation on remodeling or alteration for a disabled veteran. Not more than 50 percent of the proceeds of a loan granted under this section for a purpose under
s. 45.34 (1) (a) may be used for remodeling or alteration of the housing accommodation after purchase to meet the special needs of a permanently and totally disabled veteran. That portion of the proceeds used for this purpose shall be reserved and distributed by the authorized lender.
45.37(10)
(10) Repayment of revenue obligations.
