Bill 2438

                    Current Status

Bill Number:               2438
Ratification Number:       56
Act Number                 31
Introducing Body:          House
Subject:                   Authorizing the State Housing Authority
                           to issue notes and bonds to finance the
                           creation of the Loan to Lender Program, the
                           Insured Indirect Loan Program, the Mortgage
                           Purchase Program and the Construction Loan
                           Program

(A31, R56, H2438)

AN ACT TO AMEND ACT 76 OF 1977, AS AMENDED, RELATING TO THE SOUTH CAROLINA STATE HOUSING AUTHORITY, THE PROVIDING OF DWELLING ACCOMMODATIONS, AND NOTES AND BONDS, SO AS TO DEFINE FURTHER THE ENTITIES TO WHICH THE STATE HOUSING AUTHORITY MAY MAKE MORTGAGE LOANS AND TO DEFINE FURTHER THE SECURITY REQUIRED FOR SUCH LOANS.

Be it enacted by the General Assembly of the State of South Carolina:

Authority authorized to issue notes and bonds

SECTION 1. Subitem (a) of item (1) of Section 5 of Act 76 of 1977 is amended to read:

"(a) Upon obtaining the approval of the Budget and Control Board pursuant to Section 6 of this act and in order to provide funds for any of its corporate purposes, the Authority is authorized to issue from time to time its notes and bonds, the proceeds of which must be used by the Authority to make loans to mortgage lenders upon the agreement of such mortgage lenders to make mortgage loans to persons and families of the intended beneficiary classes or to housing sponsors. Such notes and bonds must be issued in such principal amount without limitation as the Authority determines to be necessary to provide sufficient funds for achieving its corporate purposes as hereinafter prescribed, including notes in anticipation ofthe issuance of such bonds and including refunding notes and bonds as more fully set forth in Sections 8 and 9. The Authority must require that loans to lenders made pursuant to Section 5(1)(a) must be additionally secured as to payment of both principal and interest by a pledge of collateral security, or secured by securities, certificates of deposit, or other obligations issued by mortgage lenders which have been insured or guaranteed by the federal government, in such amounts as the Authority determines. Such collateral security is subject to the approval of the Authority and may consist of: (1) direct obligations or obligations guaranteed by the United States of America; (2) bond debentures, notes, or other evidences of indebtedness issued by any of the following: Bank for Cooperatives, Federal Intermediate Credit Bank, Federal Home Loan Bank System, Federal Home Loan Mortgage Corporation, Export-Import Bank, Federal Land Banks, Federal National Mortgage Association, Government National Mortgage Association, or Farmers Home Administration; (3) general obligations of the State of South Carolina; (4) federally insured or federally guaranteed mortgages; (5) other mortgages on housing within the State without regard as to whether such housing is for persons or families of either beneficiary class; (6) securities, certificates ofdeposit, or other obligations issued by mortgage lenders which have been insured or guaranteed by the federal government; and (7) such other security as the Authority determines to be sufficient to insure protection of the bonds. The program authorized by this subitem is known as the 'Loan to Lender Program'."

Further

SECTION 2. Subitem (b) of item (1) of Section 5 of Act 76 of 1977 is amended to read:

"(b) Upon obtaining the approval of the Budget and Control Board pursuant to Section 6 and in order to provide funds for its corporate purposes, the Authority is authorized to issue from time to time its notes and bonds for the purpose of obtaining funds with which to make:

(i) construction loans secured by mortgages of housing sponsors or of persons or families of either beneficiary class;

(ii) permanent mortgage loans to housing sponsors or to persons or families of either beneficiary class who agree to and must be required to provide for construction or rehabilitation of residential housing for rental or purchase by persons or families of either beneficiary class. However, there must be in effect a federal program providing assistance in the repayment of such loans made by the Authority. In addition to or in lieu of such federal assistance programs the loans may besecured by federally insured mortgages or by a mortgage insured by a private mortgage insurer authorized to do business within the State or by such security as the Authority determines to be sufficient. The program authorized by this subitem is known as the 'Insured Direct Loan Program'."

Further

SECTION 3. Subitem (c) of item (1) of Section 5 of Act 76 of 1977 is amended to read:

"(c) Upon obtaining the approval of the Budget and Control Board pursuant to Section 6 and in order to provide funds for its corporate purposes, the Authority is authorized to issue its notes and bonds, the proceeds of which must be used to purchase federally insured or guaranteed mortgages or mortgages insured by a private mortgage company authorized to do business in this State from mortgage lenders upon the agreement of the mortgage lenders to use the proceeds of the sale of the mortgages to the Authority for the purpose of originating new mortgage loans to housing sponsors or to persons or families of either beneficiary class. The notes and bonds must be secured both as to principal and interest by a pledge of the proceeds of the mortgages so purchased. The program authorized by this subitem is known as the 'Mortgage Purchase Program'."

Further

SECTION 4. Subitem (d) of item (1) of Section 5 of Act 76of 1977 is amended to read:

"(d) Upon obtaining the approval of the Budget and Control Board pursuant to Section 6 and in order to provide funds for its corporate purposes, the Authority is authorized to issue from time to time its notes and bonds, the proceeds of which must be used to make construction loans secured by mortgages of housing sponsors or persons or families of either beneficiary class where there is in effect a commitment for permanent financing through the means of a federal mortgage, a federally insured or guaranteed mortgage, or a mortgage insured by a private mortgage insurance company authorized to do business in this State. The program authorized by this subitem is known as the 'Construction Loan Program'."

Time effective

SECTION 5. This act shall take effect upon approval by the Governor.