OAR 813-020-0070
Federal Eligibility Requirements
(1)
Section 143 of the Internal Revenue Code of 1986, as amended, requires the Department to meet the following requirements for each loan made under the Single-Family Mortgage Program in order to preserve the federal tax exemption for bonds issued to finance program loans:(a)
The residence financed by a program loan must be used as a qualifying principal residence by the borrower;(b)
A person who has held a present ownership interest in a principal residence at any time within the three years preceding the date of a loan closing may not obtain a program loan except as authorized in sections (2) and (3) of this rule;(c)
The acquisition cost of a residence financed by a program loan may not exceed the limits established by the Department pursuant to the Internal Revenue Code of 1986, as amended for new and existing Single-Family Residences;(d)
Only a new mortgage may be financed, except as provided in OAR 813-020-0025 (Program Loans)(2); and(e)
A borrower must have an annualized gross household income that does not exceed limits established by the Department in accordance with the Internal Revenue Code of 1986, as amended; and(f)
The assumption of a program loan is prohibited unless each person assuming the loan meets the requirements of this section.(2)
A lender may approve a program loan to a person who has held a present ownership interest in a principal residence at any time within the preceding three years subject to a determination by the Department that takes into account the federal restrictions on the aggregate dollar volume of such loans for a specific commitment and the circumstances of the prior ownership. The Department may give preference to applicants who have lost prior ownership interests involuntarily, as through divorce settlements, eminent domain proceedings or similar circumstances.(3)
In certain Targeted Areas, a higher maximum Acquisition Cost may be applicable and the limitation with respect to prior home ownership does not apply. Certain census tract areas are designated as Targeted Areas by Section 143 of the Internal Revenue Code of 1986, as amended. The Department may apply for approval of additional or revised Targeted Areas after considering certain statutory variables. In designating such areas, the Department shall solicit requests from all cities within the state, and apply certain criteria specified by the United States Department of Housing and Urban Development for such purpose to other urban and non-urban areas. The Department shall submit its findings for approval by the Secretary of the United States Department of Housing and Urban Development and the Secretary of the United States Treasury. The Department shall retain a current list of designated Targeted Areas.(4)
The Department is required to establish procedures that ensure compliance with applicable requirements of Section 143 of the Internal Revenue Code of 1986, as amended. Any failure to meet these requirements shall be corrected within a reasonable time. The Department shall grant no exceptions or waivers unless allowed by federal law.(5)
Intentionally left blank —Ed.(a)
When authorized by federal law, the Department may elect to credit certain amounts that may become available to its eligible borrowers, rather than to the United States Treasury. The Department shall periodically determine the overall amounts subject to credit. The Department shall distribute any credits in compliance with federal law, taking into consideration such factors as the security of its bonds, the ability of borrowers to repay program loans, fluctuations in market interest rates and other factors that may affect the Department’s ability to achieve its purpose and objectives.(b)
When required by federal law, the Department shall calculate and rebate certain amounts, if any, to the United States Treasury.
Source:
Rule 813-020-0070 — Federal Eligibility Requirements, https://secure.sos.state.or.us/oard/view.action?ruleNumber=813-020-0070.