AS Title 18, Chapter 56: Alaska Housing Finance Corporation

Article 1. Alaska Housing Finance Corporation. Chapter 56. Alaska Housing Finance Corporation. Sec. 18.56.010. Findings and purpose. (a) There exists within the state a serious shortage of decent, safe, and sanitary residential housing available at low or moderate prices or rentals to persons of lower and moderate income. There also exist within the state remote, underdeveloped, or blighted areas where the development of decent, safe, and sanitary housing is necessary to economic growth. These conditions are inimical to the safety, health, welfare, and prosperity of the residents of the state and to the sound growth of urban and rural communities. (b) The legislature finds and declares that private enterprise has not been able to provide, without assistance, an adequate supply of safe and sanitary homes at prices or rents that persons of lower or moderate income can afford, or to achieve rehabilitation of much of the present housing for persons of lower and moderate income, or to provide without assistance the housing necessary to promote the economic growth of remote, underdeveloped, or blighted areas, and that existing state and federal programs are inadequate to meet housing needs of persons of lower and moderate income or of remote, underdeveloped, or blighted areas. It is imperative that the supply of housing for persons of lower and moderate income and the housing necessary to promote the economic growth of remote, underdeveloped, or blighted areas be increased and that coordination and cooperation among private enterprise, state and local government be encouraged to sponsor, build, and rehabilitate residential housing for these persons. (c) The legislature finds and declares further that, in accomplishing this purpose, the creation of the Alaska Housing Finance Corporation is essential to assist in the acquisition and development of land and the construction, rehabilitation, financing, management, maintenance, sale, and rental of dwelling units for persons of lower and moderate income or persons in remote, underdeveloped, or blighted areas and that these activities serve a public purpose in benefiting the people of the state. The Alaska Housing Finance Corporation is empowered to act on behalf of the state and its people in serving this public purpose for the benefit of the general public. (d) The program of making loans for residential housing to veterans in accordance with AS 26.15 has increased and improved the supply of adequate housing in the state, and the continuation of the program is essential to the economic growth of the state and the expansion of the supply of adequate residential housing in the state. Participation by the Alaska Housing Finance Corporation in the program of purchasing and insuring state veterans' loans as provided in this chapter will be of material aid in insuring the continuance of the program of making loans for residential housing to veterans in accordance with AS 26.15 . (e) Expansion of the program of the Alaska Housing Finance Corporation of purchasing insured and uninsured mortgage loans is essential to the economic growth of the state and the supply of adequate residential housing in the state. (f) The legislature finds that enabling the Alaska Housing Finance Corporation to assist in financing the program of veterans' loans for residential housing in accordance with AS 26.15 and to expand its program of purchasing other mortgage loans serves a public purpose in benefiting the people of the state. The Alaska Housing Finance Corporation is empowered to act on behalf of the state and its people in serving this public purpose for the benefit of the general public. (g) The legislature finds that permitting the Alaska Housing Finance Corporation to create a subsidiary to assist in the financing of prepayment of all or a portion of a governmental employer's share of unfunded accrued actuarial liability of retirement systems serves a public purpose in benefiting the people of the state. The Alaska Housing Finance Corporation may act on behalf of the state and its people in serving this public purpose for the benefit of the general public. (h) The legislature finds that permitting the Alaska Housing Finance Corporation to create a subsidiary to assist in the financing of sustainable energy development serves a public purpose benefitting the people of the state. The Alaska Housing Finance Corporation is empowered to act on behalf of the state and its people in serving this public purpose for the benefit of the general public. Sec. 18.56.020. Alaska Housing Finance Corporation. The Alaska Housing Finance Corporation is a public corporation and government instrumentality within the Department of Revenue, but having a legal existence independent of and separate from the state. The corporation may not be terminated as long as it has bonds, notes, or other obligations outstanding. Upon termination of the corporation, its rights and property pass to the state. Sec. 18.56.030. Corporation governing body. (a) The corporation shall be governed by a board of directors consisting of (1) the commissioner of revenue; (2) the commissioner of commerce, community, and economic development; (3) the commissioner of health; and (4) four public members appointed by the governor, as follows: (A) one member with expertise or experience in finances or real estate; (B) one member who is a rural resident of the state or who has expertise or experience with a regional housing authority; (C) one member who has expertise or experience in residential energy efficient home-building or weatherization; and (D) one person who has expertise or experience in the provision of senior or low-income housing. (b) If a member described in (a)(1), (2), or (3) of this section is unable to attend a meeting of the board the member may by an instrument in writing filed with the board, designate a deputy or assistant to act in the member's place at the meeting. For all purposes of this chapter, the designee is a member of the board at the meeting. (c) The board members described in (a)(4) of this section serve two-year terms. (d) If a vacancy occurs on the board, the governor shall make an appointment, effective immediately, for the unexpired portion of the term. (e) The members of the board described in (a)(4) of this section receive $100 compensation for each day spent on official business of the corporation and may be reimbursed by the corporation for actual and necessary expenses at the same rate paid to members of state boards under AS 39.20.180 . (f) The governor shall appoint the members under (a)(4) of this section to give the board of directors a reasonable geographic balance among regions of the state. The members of the board appointed under (a)(4) of this section shall have recognized competence and wide experience in housing, finance, or other business management-related fields. Sec. 18.56.040. Meetings of board. (a) The board shall elect a chairman from among its membership at its annual meeting each year. A majority of the members constitute a quorum for organizing the board, conducting its business, and exercising the powers of the corporation. The board shall meet at the call of its chairman. The board shall meet not less than once each three months. (b) The board may meet and transact business by electronic media if (1) public notice of the time and locations where the meeting will be held by electronic media has been given in the same manner as if the meeting were held in a single location; (2) participants and members of the public in attendance can hear and have the same right to participate in the meeting as if the meeting were conducted in person; and (3) copies of pertinent reference materials, statutes, regulations, and audio-visual materials are reasonably available to participants and to the public. (c) A meeting by electronic media as provided in this section has the same legal effect as a meeting in person. (d) For the purposes of this chapter public notice of 24 hours or more is adequate notice of a meeting of the board at which the issuance of corporation bonds is authorized. Sec. 18.56.045. Minutes of meetings. The board shall keep minutes of each meeting and send a certified copy to the governor and to the Legislative Budget and Audit Committee. Sec. 18.56.050. Administration of affairs. The board shall manage the assets and business of the corporation and may adopt, amend, and repeal bylaws and regulations governing the manner in which the business of the corporation is conducted and the manner in which its powers are exercised. The board shall delegate supervision of the administration of the corporation to the executive director, appointed in accordance with AS 18.56.052 . Sec. 18.56.052. Executive director. The corporation shall employ an executive director, who may not be a member of the board. The executive director shall be appointed by the board and serves at the pleasure of the board. Sec. 18.56.055. Legal advisor. The attorney general is the legal counsel for the corporation. The attorney general shall advise the corporation in legal matters and represent it in suits. Sec. 18.56.060. Employment of personnel. The board may appoint other officers and engage professional and technical advisors as independent contractors. The executive director may hire employees of the corporation and, subject to the approval of the board, engage professional and technical advisors under contract with the corporation. The board shall prescribe the duties and compensation of corporation personnel, including the executive director. Sec. 18.56.070. Personnel exempt from state Personnel Act. The personnel of the corporation are exempt from AS 39.25 . Sec. 18.56.080. Interdepartmental cooperation. All departments, agencies, and public corporations of the state may provide information, services, facilities, and loans to the corporation upon its request. The corporation shall, upon request, reimburse departments, agencies, and public corporations of the state for services or facilities provided, loans advanced, or expenses incurred on the corporation's behalf at the request of the corporation. Sec. 18.56.082. Alaska housing finance revolving fund. The Alaska housing finance revolving fund is established in the corporation. The revolving fund consists of appropriations made to the revolving fund by the legislature, money or other assets transferred to the revolving fund by the corporation, and unrestricted repayments of principal on loans made or purchased by the corporation. Amounts deposited in the revolving fund shall be expended for the purposes of the corporation, set out in this chapter. Sec. 18.56.083. Bonds for senior housing. [Repealed, § 140 ch 4 FSSLA 1992. For current law, see AS 18.56.790 .] Sec. 18.56.084. International borrowing. For the purpose of obtaining access to international capital markets to borrow money for the special mortgage loan purchase program under AS 18.56.098 , as an addition to the powers of the corporation under AS 18.56.090 , the corporation may (1) establish, or cause to be established, subsidiary corporations incorporated in the state or in another state, or under the laws of a foreign jurisdiction; (2) invest in corporations established under this section; (3) issue bonds and borrow money for investments in corporations established under this section; (4) borrow from corporations established under this section; (5) guarantee the obligations of corporations established under this section; or (6) enter into agreements with corporations established under this section or with other persons. In exercising a power under this section, the corporation may not subject its assets to risk of loss through foreign currency exchange. A guarantee under this section constitutes a bond of the corporation as defined in AS 18.56.390 . Sec. 18.56.085. Investment of state surplus. [Repealed, § 77 ch 106 SLA 1980.] Sec. 18.56.086. Creation and management of subsidiaries. (a) The corporation may create subsidiary corporations for the purpose of financing or facilitating the financing of school construction, facilities for the University of Alaska, facilities for ports and harbors, the acquisition, development, management, or operation of housing, prepayment of all or a portion of a governmental employer's share of unfunded accrued actuarial liability of retirement systems, sustainable energy development, or other capital projects. A subsidiary corporation created under this section may be incorporated under AS 10.20.146 — 10.20.166. The corporation may transfer assets of the corporation to a subsidiary created under this section. A subsidiary created under this section may borrow money and issue bonds as evidence of that borrowing, and has all the powers of the corporation that the corporation grants to it. However, a subsidiary created for the purpose of financing or facilitating the financing of prepayment of a governmental employer's share of unfunded accrued actuarial liability of retirement systems may borrow money and issue bonds only after submitting a proposal to the Legislative Budget and Audit Committee under (b) of this section, if the state bond rating is the equivalent of AA- or better, and subject to AS 37.15.903 . Unless otherwise provided by the corporation, the debts, liabilities, and obligations of a subsidiary corporation created under this section are not the debts, liabilities, or obligations of the corporation. (b) Before the issuance of bonds under this section, the subsidiary corporation shall submit a proposal to the Legislative Budget and Audit Committee for review, and 45 days shall elapse before bonds are issued, unless the Legislative Budget and Audit Committee earlier recommends that the subsidiary corporation proceed with the issuance. Should the Legislative Budget and Audit Committee recommend within the 45-day period that the subsidiary corporation not proceed with the issuance of bonds, the subsidiary corporation shall again review the proposal, and, if the subsidiary corporation decides to issue the bonds, the subsidiary corporation shall provide the Legislative Budget and Audit Committee with a statement of the subsidiary corporation's reasons for doing so before issuance under this section. (c) In managing a subsidiary created for the purpose of financing or facilitating the financing of sustainable energy development, the corporation shall consider the state energy policy described in AS 44.99.115 and shall prioritize sustainable energy development that supports energy efficiency and renewable energy for residential buildings, commercial buildings, and community facilities. Sec. 18.56.088. Administrative procedure; regulations. (a) Except for AS 44.62.310 — 44.62.319 (Open Meetings Act), AS 44.62 (Administrative Procedure Act) does not apply to this chapter. The corporation shall make available to members of the public copies of the regulations adopted under (b) — (e) of this section. (b) The board may adopt regulations by motion or by resolution or in any other manner permitted by its bylaws. (c) The board may adopt regulations to carry out the purposes of this chapter, and shall adopt regulations necessary for the following purposes: (1) determination of borrower eligibility including, but not limited to, income limitations and the determination of remote, underdeveloped, or blighted areas of the state; (2) loan guidelines and terms including but not limited to maximum loan amounts and required loan-to-value ratios, but excluding mortgage loan interest rates; (3) characteristics of housing eligible for loans or purchase of loans, including compliance with the requirements of AS 18.56.300 ; (4) the qualifications of loan originators and servicers and the method of allocating amounts available for the purchase of loans; (5) establishment of a procedure, including a fee schedule, for the commitment for one year or less of money for the purchase of an individual mortgage loan at a specific interest rate; and (6) establishment of the program of housing assistance authorized by AS 18.56.090 (b) including program regulations that, at minimum, (A) establish priorities and criteria for providing money and other forms of authorized assistance in response to housing assistance proposals; (B) define the forms of housing assistance authorized under AS 18.56.090 (b); (C) set out procedures to evaluate housing assistance proposals; (D) set out procedures to approve the award of housing assistance; and (E) prescribe methods of monitoring the use of money paid out under AS 18.56.090 (b) and the progress of activity under the approved housing assistance program. (d) Except as provided in (e) of this section, at least 15 days before the adoption, amendment, or repeal of a regulation on a subject specified in (c)(1) — (4) of this section, the board shall give public notice of the proposed action by publishing the notice in at least three newspapers of general circulation in the state and by mailing a copy of the notice to every person who has filed a request for notice of proposed regulations with the board or the corporation. The public notice must include a statement of the time, place, and nature of the proceedings for the adoption, amendment, or repeal of the regulation and must include an informative summary of the proposed subject of the regulation. On the date and at the time and place designated in the notice, the board shall give each interested person or an authorized representative, or both, the opportunity to present statements, arguments, or contentions in writing, and shall give members of the public an opportunity to present oral statements, arguments, or contentions for a total period of at least one hour. The board shall consider all relevant matter presented to it before adopting, amending, or repealing a regulation. At a hearing under this subsection, the board may continue or postpone the hearing to a time and place that it determines. A regulation that is adopted, or its amendment or repeal, may vary in content from the informative summary specified in this subsection if the subject matter of the regulation, or its amendment or repeal, remains the same and the original notice was written so as to assure that members of the public are reasonably notified of the proposed subject of the board's action in order for them to determine whether their interests could be affected by the board's action on that subject. (e) A regulation or order of repeal on a subject specified in (c) of this section may be adopted as an emergency regulation or order of repeal if the board makes a finding in its order of adoption or repeal, including a statement of the facts that constitute the emergency, that the adoption of the regulation or order of repeal is necessary for the immediate preservation of the orderly operation of the corporation's loan and bonding programs. The requirements of (d) of this section do not apply to the initial adoption of an emergency regulation covering a subject specified in (c)(1) — (4) of this section; however, upon adoption of an emergency regulation, the board shall, within 10 days after adoption, give notice of the adoption in accordance with (d) of this section. An emergency regulation adopted under this subsection does not remain in effect more than 120 days unless the board complies with (d) of this section during the 120-day period. (f) A regulation adopted under (b) — (e) of this section becomes effective immediately upon its adoption by the board, unless otherwise specifically provided by the order of adoption. (g) The provisions of (b) — (e) of this section do not apply to regulations governing interest rates on the corporation's mortgage loan programs. (h) The board shall adopt regulations in accordance with (a) — (f) of this section that establish a procedure by which a seller of mortgage loans may appeal a decision of the corporation not to purchase mortgage loans offered by the seller. (i) The board may adopt regulations under (a) — (f) of this section that establish conditions and terms for mobile home loans that are not in accordance with the provisions of this chapter, including conditions and terms relating to owner-occupancy, the number of loans that may be made to a single borrower, and borrower eligibility requirements, if the board first determines that the regulations are necessary to ensure the continued security of the mobile home loan portfolio. Sec. 18.56.089. Compliance with Executive Budget Act; corporation finances; dividend. (a) The provisions of AS 37.07 (Executive Budget Act) (1) apply to (A) the operating budget of the corporation; (B) amounts payable from corporate earnings or assets of the corporation for grants or grant programs authorized by this chapter; (C) interest rate subsidies and building subsidies as determined by the corporation; (D) the amount and source or sources of the total annual appropriation for the corporation's loan programs for which a subsidy is not provided, but the provisions of AS 37.07 are not otherwise applicable to that appropriation; (E) the amount and source or sources of the total annual appropriation for the corporation's multi-family housing loans and the corporation's housing programs and housing projects if a subsidy is provided from the corporation's arbitrage earnings for the loans, programs, or projects, but the provisions of AS 37.07 are not otherwise applicable to that appropriation; and (F) except as otherwise specifically provided in (2) of this subsection, the activities of the corporation under AS 18.55 and the activities of the corporation under this chapter; (2) do not apply to activities of the corporation under AS 18.55 and this chapter that (A) relate to the corporation's borrowing of money as provided in this chapter to make or purchase mortgage loans, including the issuing of its obligations or evidence of that borrowing and the repayment of the debt obligation; (B) relate to the corporation's ability to refinance existing mortgage loans in order to achieve a lower interest rate; or (C) are directly attributable to the servicing of mortgage loans, including real estate acquired by the corporation as a result of foreclosure. (b) To further ensure effective budgetary decision making by the legislature, the corporation shall (1) annually review the corporation's assets, including the assets of the Alaska housing finance revolving fund under AS 18.56.082 , to determine whether assets of the corporation exceed an amount required to fulfill the purposes of the corporation as defined in AS 18.55 and this chapter; in making its review, the board shall determine whether, and to what extent, assets in excess of the amount required to fulfill the purposes of the corporation during the next fiscal year are available without (A) breaching any agreement entered into by the corporation; (B) materially impairing the operations or financial integrity of the corporation; or (C) materially affecting the ability of the corporation to (i) stabilize the market price of and demand for residential housing; and (ii) ensure an adequate long-term supply of residential housing for persons of lower and moderate income; (2) specifically identify in the corporation's assets the amounts that the corporation believes are necessary to meet the requirements of (1)(C) of this subsection; and (3) present to the legislature by January 10 of each year a complete accounting of all assets of the corporation, including assets of the Alaska housing finance revolving fund under AS 18.56.082 , and a report of the review and determination made under (1) and (2) of this subsection; the accounting shall be audited by an independent outside auditor and must include a full description of all mortgage loan interest and principal repayments and program receipts, including (A) mortgage loan commitment fees received by or accrued to the corporation during the preceding fiscal year; and (B) all income earned on assets of the corporation during that period, including earnings on assets of the state assisted mortgage fund. (c) The corporation shall make a dividend available to the state each fiscal year. The corporation shall pay the dividend for a current fiscal year to the state before the end of that fiscal year. The legislature may appropriate the dividend for capital projects. The corporation shall notify the commissioner of revenue of the amount of each dividend under this subsection for inclusion in the state operating budget and shall also notify the commissioner when each dividend is available for payment to the state. The amount of the dividend for a current fiscal year is calculated as follows: (1) the lesser of $103,000,000 or 75 percent of the adjusted change in net assets of the corporation for the base fiscal year; (2) minus the amount of money from the corporation used during that current fiscal year for bond repayment and other costs related to the bonds issued under (A) ch. 26, SLA 1996, up to a maximum of $1,000,000; (B) sec. 10(b), ch. 130, SLA 2000; (C) sec. 1, ch. 1, SSSLA 2002; (D) sec. 4, ch. 120, SLA 2004; and (3) minus any appropriation of unrestricted unencumbered money of the corporation during the current fiscal year, other than an appropriation for the corporation's operating budget. (d) In (c) of this section, (1) “adjusted change in net assets” means the change in net assets from the base fiscal year, adjusted for capital expenditures incurred during the base fiscal year and temporary market value adjustments to assets and liabilities made during the base fiscal year; (2) “base fiscal year” means the fiscal year ending two years before the end of the current fiscal year in which the dividend is made available to the state; (3) “dividend” means a payment made to the state under (c) of this section. Sec. 18.56.090. General powers and limitations. (a) In addition to other powers granted in this chapter, the corporation may, for the purpose of providing housing for persons of lower and moderate income or persons located in remote, underdeveloped, or blighted areas of the state and for its other corporate purposes, (1) make or participate in the making of mortgage loans to sponsors, developers, builders, and purchasers of residential housing, if the corporation determines that (A) mortgage loans are not otherwise available, wholly or in part, from private lenders upon reasonably equivalent terms and conditions; and (B) the residential housing for which the mortgage loans are made complies with applicable provisions of AS 18.56.096 (c) and the applicable thermal and lighting energy standards of AS 46.11.040 ; (2) purchase or participate in the purchase of mortgage loans made to sponsors, developers, builders, owners, and purchasers of residential housing, if the corporation (A) has given approval before the initial making of the loan and has determined that mortgage loans were, at the time the approval was given, not otherwise available, wholly or in part, from private lenders upon reasonably equivalent terms and conditions; or (B) has determined that (i) the purchase or participation will result in additional residential housing, taking into account without limitation such factors as reinvestment of the proceeds of the sale in additional mortgage loans, increased availability of mortgage loans insured by the federal government, its agencies or departments, the reduction, if any, of interest payments to be made with respect to mortgage loans, or such other factors as will tend to increase or improve the supply of residential housing within the state; and (ii) the residential housing covered by the mortgage loan complies with applicable provisions of AS 18.56.096 (c) and the applicable thermal and lighting energy standards of AS 46.11.040 ; (3) make partial rental payments and mortgage interest payments under a contract with any housing owner if the payments will be applied to decrease rental or mortgage interest charges of persons of lower and moderate income or owners or purchasers of residential housing in remote, underdeveloped, or blighted areas of the state; (4) make loans from the housing development fund; (5) collect and pay reasonable fees and charges in connection with making, purchasing, and servicing its mortgages, loans, notes, bonds, certificates, commitments, and other evidences of indebtedness; (6) acquire real property, or any interest in real property, in its own name, by purchase, transfer, or foreclosure, when the acquisition is necessary or appropriate to protect any loan in which the corporation has an interest; sell, transfer, and convey the property to a buyer; and, if the sale, transfer, or conveyance cannot be effected with reasonable promptness or at a reasonable price, rent or lease the property to a tenant pending the sale, transfer, or conveyance; (7) sell, at public or private sale, to any purchaser, including the Federal National Mortgage Association, all or any part of a mortgage or other instrument or document securing a construction, land development, mortgage, or temporary loan of any type permitted by this chapter; (8) purchase, in order to meet the requirements of the sale of its mortgages to the Federal National Mortgage Association, stock of the Federal National Mortgage Association; (9) procure insurance against any loss in connection with its operation; (10) consent to the modification of the rate of interest, time of payment of any installment of principal or interest, or any other terms, of the mortgage loan, mortgage loan commitment, construction loan, temporary loan, contract, or agreement of any kind to which the corporation is a party; (11) borrow money as provided in this chapter to carry out and effectuate its corporate purposes, and issue its obligations as evidence of borrowing; (12) include in any borrowing the amounts necessary to pay financing charges, interest on the obligations for a period not exceeding one year after the date on which the corporation estimates funds will otherwise be available to pay the interest, consultant, advisory, and legal fees, and other expenses that are necessary or incident to this borrowing; (13) under AS 18.56.088 , adopt and publish regulations respecting its lending programs and other regulations that are necessary to effectuate its purposes; (14) provide technical and advisory services to sponsors, builders, and developers of residential housing and to residents of it; (15) promote research and development in scientific methods of constructing low-cost and energy-efficient residential housing of high durability; (16) make and execute agreements, contracts, and other instruments necessary or convenient in the exercise of the powers and functions of the corporation under this chapter, including contracts with any person, firm, corporation, governmental agency, or other entity; (17) receive, administer, and comply with the conditions and requirements respecting any appropriation or gift, grant, or donation of property or money; (18) sue and be sued in its own name; (19) adopt an official seal; (20) adopt bylaws for the regulation of its affairs and the conduct of its business and adopt regulations and policies in connection with the performance of its functions and duties; (21) employ fiscal consultants, engineers, attorneys, real estate counselors, appraisers, and other consultants and employees that may be required in the judgment of the corporation, and fix and pay their compensation from funds available to the corporation; (22) do all acts and things necessary, convenient, or desirable to carry out the powers expressly granted or necessarily implied in this chapter; (23) invest or reinvest, subject to its contracts with noteholders and bondholders, any money or funds held by the corporation in any obligations or other securities or investments in which banks or trust companies in the state may legally invest funds held in reserves or sinking funds or any funds not required for immediate disbursement, and in certificates of deposit or time deposits secured by obligations of, or guaranteed by, the state or the United States; (24) purchase a mortgage loan made to refinance an existing mortgage loan, without regard to whether the corporation holds the existing mortgage loan, as long as the interest rate and fees charged to the borrower are sufficient to fully reimburse the corporation for all costs incurred by the corporation in purchasing the mortgage loan and as long as the borrower will be in compliance with AS 18.56.096 (a)(6) after purchase of the mortgage loan by the corporation; (25) participate in the making of mortgage loans to borrowers for congregate housing under AS 18.56.100 (b)(1) as the purchaser of those loans; loans made for congregate housing under this paragraph must reflect application of prudent underwriting standards and lending practices that include, but are not limited to, appropriate loan-to-value ratios and the ability of a borrower to repay the loan; (26) participate in the development of buildings or units that, by their use, address homelessness but that, by their operation, appear nonresidential in nature; (27) provide financial assistance to prevent homelessness, including prevention of foreclosures and evictions; (28) provide financial assistance to support housing retention services or facilitate transition from dependency on low-cost housing; (29) participate with appropriate sponsoring agencies or groups in demonstration housing projects that address homelessness; (30) authorize, under AS 18.56.230 , certain commercial uses in a multi-unit residential housing development owned or financed by the corporation. (b) The corporation may, subject to (c) of this section, (1) reserve money to itself, or provide money for, or provide deferred loans, interest rate subsidies, building subsidies, participation financing through housing partnerships, and other forms of housing assistance as set out in regulations of the corporation to, another governmental agency, a municipality, a regional housing authority, or a private nonprofit organization, to pay for the design, construction, development, rehabilitation, or improvement of housing for persons of low and moderate income, for housing in remote, undeveloped, or blighted areas of the state, and for congregate and special needs housing; (2) provide money for, and provide deferred loans, interest rate subsidies, building subsidies, participation financing through housing partnerships, and other forms of housing assistance as set out in regulations of the corporation to, corporations and project sponsors for congregate and special needs housing; and (3) receive money for a purpose described in (1) or (2) of this subsection. (c) The corporation may not provide money or another form of housing assistance authorized by (b) of this section unless the board identifies in the corporation's proposed operating budget the money available to the corporation, including the corporation's own assets, for the proposed housing assistance. The provisions of this subsection apply to (1) subsidies authorized by the home ownership assistance program under AS 18.56.091 ; (2) mortgage subsidies authorized by the graduated payment mortgage loan program under AS 18.56.098 (c); (3) interest rate deductions authorized in the housing development fund under AS 18.56.100 (b)(1) and (l); (4) money or another form of housing assistance payable from corporate earnings or assets of the corporation, other than money appropriated to the corporation for the specific purpose, for a program set out in AS 18.56.400 — 18.56.850. (d) Notwithstanding authority granted by AS 18.55 and this chapter, the corporation may not acquire or construct a building for the corporation's own use and occupancy unless the proposed acquisition or construction has been approved by the legislature by law. (e) In furtherance of its corporate purpose, the corporation may, in cooperation with the Alaska Energy Authority, provide technical assistance to (1) municipalities that is related to residential and commercial building energy codes and energy efficiency standards; and (2) support or establish public, quasi-public, or nonprofit entities that provide financial assistance for sustainable energy development projects in the state or delivering energy to the state, including community and low-income lenders and capital providers. (f) In (a) of this section “homelessness” means the state of an individual who lacks a fixed, regular, and adequate nighttime residence, and includes an individual who (1) is sharing the housing of other individuals because of loss of housing, economic hardship, domestic violence, or a similar reason; (2) is living in a motel, hotel, trailer park, or camping ground because of the lack of alternative adequate accommodations; (3) is living in an emergency or transitional shelter; (4) is abandoned in a hospital; (5) is waiting for a foster care placement; (6) has a primary nighttime residence that is a public or private place not designed for or ordinarily used as a regular sleeping accommodation for human beings; (7) is living in a car, a park, a public space, an abandoned building, substandard housing, a bus or train station, or a similar setting; (8) is fleeing a domestic violence situation, does not have an alternative residence, and lacks the resources and support needed to obtain housing; (9) is being evicted within a week, does not have an alternative residence, and lacks the resources and support needed to obtain housing; (10) is being discharged within a week from an institution, including a mental health treatment facility, substance abuse treatment facility, or prison, in which the individual has been a resident for more than 30 consecutive days, does not have an alternative residence, and lacks the resources and support needed to obtain housing. Sec. 18.56.091. Home ownership assistance program. (a) The corporation shall implement a home ownership assistance program to assist persons of lower and moderate income to purchase homes financed under the special mortgage loan purchase program by providing a subsidy to the persons in an amount not greater than the difference between (1) the amount annually required to pay interest and principal on that person's loan and real property taxes and insurance for the home purchase with the loan; and (2) 25 percent of that person's annual gross income. (b) Notwithstanding (a) of this section, the loan amount eligible for assistance under the subsidy authorized by (a) of this section is the amount determined under AS 18.56.098 (k). Sec. 18.56.092. Veterans' loans for residential housing. [Repealed, § 77 ch 106 SLA 1980. For current provisions see AS 18.56.101 .] Sec. 18.56.093. Insurance. (a) There is established in the corporation the housing insurance fund, the rural housing hazard insurance fund, and the rural housing title insurance fund. The funds shall be completely segregated from all other funds of the corporation, and are trust funds for the uses and purposes of this section. The corporation may adopt regulations under AS 18.56.088 and enter into agreements with respect to the exercise of any power relating to the funds under this section, including, without limitation, agreements as to the use of the money in the funds, agreements with respect to the terms and conditions upon which payments from the funds must be made to the corporation with respect to mortgage loans insured under this section, agreements as to accounts or subaccounts in the funds for different categories of loans, and agreements regarding the payment of and security for bonds of the corporation. The corporation may pledge, assign, or grant other interests in the funds as may be necessary or appropriate in connection with the insurance of mortgage loans and to provide for the payment of and security for bonds of the corporation. (b) In addition to any other fees and charges that the corporation may charge on mortgage loans, the corporation may collect, or cause to be collected, insurance commitment fees and insurance premiums on mortgage loans insured by a fund under this section. (c) A mortgage loan purchased by the corporation as part of its special mortgage loan purchase program may be insured by the housing insurance fund, and a mortgage loan on a mobile home or residence located in a remote, underdeveloped, blighted, or rural area of the state may also be insured (1) against hazard loss by the rural housing hazard insurance fund when hazard insurance from other sources satisfactory to private mortgage lenders is not, in the opinion of the corporation, available on reasonable terms, and (2) against title defect by the rural housing title insurance fund when title insurance from other sources satisfactory to private mortgage lenders is not, in the opinion of the corporation, available on reasonable terms. The endorsement of the corporation on the mortgage that it is insured by any fund under this section at the time of purchase or acquisition of the mortgage loan is conclusive evidence that the mortgage loan is insured under the provisions of this section by the fund. (d) Mortgage loans may be insured by a fund or an account in a fund under this section only when the amount in the fund or in the account as a percentage of the sum of all mortgage loans to be insured and all unpaid principal on mortgage loans to be insured by the fund or the account equals or exceeds the fund requirement. The fund requirement for each fund or account shall be calculated as the percentage that the corporation determines is actuarially sound for operation of the fund or account. (e) When the corporation determines what is actuarially sound with respect to the operation of each fund or account in a fund, it shall consider means of providing sufficient revenue for the operation of the fund or account, without regard to amounts that may have been or may, after the date of determination of actuarial soundness, be appropriated under (f) of this section and it shall consider factors which must include, without limitation, (1) as to the mortgages insured by the housing insurance fund, or an account of the housing insurance fund, estimates of future defaults and losses on mortgage loans insured under this section based on actual default and loss experience on those mortgage loans or on similar mortgage loans in this state or elsewhere, estimates of recoveries on defaulted or foreclosed mortgage loans based on that experience, the terms and conditions of the mortgage loans insured under this section, estimates of earnings and income of amounts on deposit in the fund, and any other appropriate factors; (2) as to mortgages insured by the rural housing title insurance fund, estimates of defaults and losses by reason of title defects that are otherwise uninsured, estimates of earnings and income of amounts of deposit in the fund or the account, and any other appropriate factors; and (3) as to mortgages insured by the rural housing hazard insurance fund, or an account of the rural housing hazard insurance fund, estimates of default by reason of hazard losses which are otherwise uninsured, estimates of earnings and income of amounts on deposit in the fund or the account, and any other appropriate factors. (f) On December 1 of each year the corporation shall ascertain the amount on deposit in each fund established under this section and in each account of each fund. If the amount in any fund or account is less than the fund requirement for the fund or account, the corporation shall, no later than January 2 of the following year, certify in writing to the governor and to the legislature, the amount, if any, required to restore that fund or account to the fund requirement. The legislature may appropriate the amount and the corporation shall deposit in the fund or account all amounts appropriated during the then current state fiscal year. Nothing in this subsection creates a debt or liability of the state. Sec. 18.56.094. New capital city mortgage loans. [Repealed, § 77 ch 106 SLA 1980.] Sec. 18.56.095. Mortgage insurance. (a) There is a special fund of the state to be known as the “state mortgage insurance fund” (called the “mortgage insurance fund”) which shall be completely segregated and set apart from all other funds of the state, and which is a trust fund for the uses and purposes of this section and into and from which money shall be paid as provided in this section. The mortgage insurance fund shall be held by the commissioner of revenue, subject to the power of the commissioner of commerce, community, and economic development to enter into and perform agreements with respect to the use of money in the mortgage insurance fund and to pledge, assign, or grant interests in the mortgage insurance fund as provided in this section. The commissioner of commerce, community, and economic development may enter into agreements with the corporation with respect to the exercise of any power or approval relating to the mortgage insurance fund under this section, including, without limitation, agreements as to the use of money in the mortgage insurance fund, agreements with respect to the terms and conditions upon which payments from the mortgage insurance fund shall be made to the corporation with respect to mortgage loans insured under this section, and agreements regarding the payment of and security for mortgage insurance bonds, and in connection with these agreements the commissioner of commerce, community, and economic development may pledge, assign, or grant other interests in the mortgage insurance fund to the corporation as may be necessary or appropriate in connection with the insurance of mortgage loans and to provide for the payment of and security for mortgage insurance bonds. Any such agreement or any of the rights of the corporation under the agreement and payments received or to be received under the agreement may be pledged or assigned by the corporation for the benefit of the holders of mortgage insurance bonds. (b) In addition to any other fees and charges that the corporation may charge on mortgage loans, it may collect or cause to be collected on all mortgage loans made or purchased with the proceeds of the sale of mortgage insurance bonds, either or both a special mortgage loan insurance commitment fee or a mortgage loan insurance premium. The special mortgage loan insurance commitment fees and special mortgage loan insurance premiums when received shall be deposited in the mortgage insurance fund by the corporation, or by any mortgage loan servicer, trustee, or agent designated by the corporation to receive them, and shall be held, invested and, together with all investment income derived from them, reinvested by the commissioner of revenue as set out in AS 37.10.071 , subject to any agreement with the corporation under (a) of this section. (c) If, at any time after receipt by the corporation of a payment from the mortgage insurance fund with respect to a mortgage loan or any portion of the principal and interest and other amounts payable on a mortgage loan, the corporation recovers an amount on the mortgage loan or portion of it from any source other than the mortgage insurance fund, it shall apply the amount recovered in the following order: first to repay the general fund of the state to the extent of appropriations made pursuant to requests made under (f) of this section, and second, to repay the mortgage insurance fund.

(d) A mortgage loan may be insured if the loan-to-value ratio at the time of the insurance loan does not exceed 80 percent or, if the loan-to-value ratio does exceed that percentage, if it is federally insured or guaranteed or insured by a qualified mortgage insurance company to the extent of the excess. The endorsement of the corporation on the mortgage at the time of purchase or acquisition of the mortgage loan is conclusive evidence that the mortgage loan is insured under the provisions of this section. The insurance is payable solely from the mortgage insurance fund. (e) Mortgage loans may only be insured when the amount in the mortgage insurance fund as a percentage of the sum of all mortgage loans to be insured and all unpaid principal on mortgage loans insured by the corporation equals or exceeds the fund requirement. As used in this section, the fund requirement is calculated as follows as to the following mortgage loans insured by the corporation: (1) in the case of federally insured or guaranteed mortgage loans, or mortgage loans insured by a qualified mortgage insurance company or, if not so insured or guaranteed, with a loan-to-value ratio at the time of the mortgage insurance application less than 80 percent, the greater of (A) two percent of the unpaid principal amount of those mortgage loans, or (B) a percentage that the corporation with the approval of the commissioner of commerce, community, and economic development determines is actuarially sound for operation of the mortgage insurance fund; (2) [Repealed, § 77 ch 106 SLA 1980.] (f) On December 1 of each year the commissioner of commerce, community, and economic development shall determine the amount on deposit in the mortgage insurance fund. If the amount in the fund is less than the fund requirement, the commissioner of commerce, community, and economic development shall request the corporation to transfer from any available funds the amount necessary to restore the mortgage insurance fund to the fund requirement and the corporation shall promptly comply with the request from any funds available subject to agreements with holders of any of its obligations. If sufficient funds are not provided as the result of the requests, the commissioner of commerce, community, and economic development shall, no later than January 2 of the following year, make and deliver to the governor and to the chairmen of the house and senate finance committees a certificate stating the sum required to restore the fund to the fund requirement and the sum so certified may be appropriated and paid to the fund during the then current state fiscal year. Nothing in this subsection creates a debt or liability of the state. (g) [Repealed, § 77 ch 106 SLA 1980.] (h) In this section, unless the context clearly indicates a different meaning, (1) the determination of what is “actuarially sound” with respect to the operation of the mortgage insurance fund shall be based on a consideration of the factors that will provide sufficient revenue for the operation of the fund, without regard to amounts that may have been or may, after the date of determination of actuarial soundness, be appropriated pursuant to (f) of this section, including, without limitation, estimates of future defaults and losses on mortgage loans insured under this section based on actual default and loss experience on those mortgage loans or on similar mortgage loans in this state or elsewhere, estimates of recoveries on defaulted or foreclosed mortgage loans based on that experience, the terms and conditions of the mortgage loans insured under this section, estimates of earnings and income of amounts on deposit in the mortgage insurance fund, and any other appropriate factors; (2) “loan-to-value ratio” means the ratio between the principal amount of a mortgage loan and the appraised value, as determined by the corporation, of the residential housing financed by the mortgage loan; (3) “mortgage insurance bond” means a bond, note, or other obligation of the corporation, the proceeds of which are authorized to be expended to purchase or make a mortgage loan insured under this section; (4) “qualified mortgage insurance company” means a mortgage insurance company satisfactory to the corporation; (5) “special mortgage loan insurance commitment fee” and “special mortgage loan insurance premium” mean, respectively, a fee of a percent of the principal amount of a mortgage loan to be insured under this section, and an annual insurance premium of a percent of the portion of the unpaid principal amount of a mortgage loan insured under this section that is not federally insured or guaranteed or insured by a private mortgage insurance company, that the corporation with the approval of the commissioner of commerce, community, and economic development determines is actuarially sound for the operation of the mortgage insurance fund. Sec. 18.56.096. Limitation on power to make or purchase mortgage loans. (a) The corporation may not make, participate in the making of, purchase, or participate in the purchase of (1) a first mortgage loan under this chapter for a duplex, triplex, or four-plex that exceeds the limitations on first mortgage loans for similar housing purchased by the Federal National Mortgage Association as to principal amount and loan-to-value ratio; (2) a second mortgage loan for a duplex, triplex, or four-plex the amount of which, when combined with the principal balance of a first mortgage loan on the property, exceeds the limitation on the amount set out in (1) of this subsection or that has a loan-to-value ratio, when considered with the principal balance of the first mortgage loan, that exceeds 90 percent; (3) a mortgage loan to finance the purchase of new housing or for the improvement or rehabilitation of existing housing, unless the construction, improvement, or rehabilitation work has been performed by a contractor who is registered to work as a contractor under AS 08.18 ; this paragraph does not apply if the construction, improvement, or rehabilitation work (A) has been totally or substantially performed by the borrower; (B) has been performed by a borrower who acts as the contractor for the construction, improvement, or rehabilitation work; or (C) has been performed in an area designated by the corporation as exempt from the requirements of this paragraph because of the unavailability of registered contractors in that area; (4) a first mortgage loan for a single-family residence that exceeds the limitations on first mortgage loans for similar housing purchased by the Federal National Mortgage Association as to principal amount by more than 10 percent or a second mortgage loan for a single-family residence, the amount of which, when combined with the principal balance of a first mortgage loan on the property, has a loan-to-value ratio that exceeds 90 percent; (5) a first or second mortgage loan for rental housing unless the borrower agrees not to discriminate against tenants or prospective tenants because of sex, marital status, changes in marital status, pregnancy, parenthood, race, religion, color, national origin, or status as a student; (6) a first mortgage loan if the borrower has an outstanding first mortgage housing loan under this chapter or an outstanding first mortgage loan for owner-occupied housing under former provisions of AS 44.47 ; or (7) a loan to a person who has a past due child support obligation established by court order or by the child support services agency under AS 25.27.160 — 25.27.220 at the time of application. (b) The loan-to-value limitation established in (a)(4) of this section does not apply to a mortgage loan that is federally insured or guaranteed. The loan-to-value limitations established in (a)(1) and (4) of this section do not apply to a mortgage loan that is a refinancing mortgage loan under AS 18.56.108 . (c) The corporation may not make, participate in the making of, purchase, or participate in the purchase of a loan for a residential building if construction of the building began after December 31, 1991, unless the building complies with the thermal and lighting energy standards required by AS 46.11.040 . The corporation (1) may adopt regulations to implement this subsection; and (2) shall, by regulation, establish (A) procedures by which the person responsible for the construction of the building may demonstrate that the building complies with the thermal and lighting energy standards, including (i) self-certification, if the contractor responsible for the building construction provides satisfactory evidence that the contractor has completed a training program that is satisfactory to the corporation; (ii) submission of the certificate of a registered architect, registered engineer, or a building inspector, and the architect, engineer, or building inspector has completed a training program that is satisfactory to the corporation; (iii) submission of the certificate of occupancy issued by the municipality in which the building is located, if the certificate is issued by a municipality in which the municipal building code meets or exceeds the thermal and lighting energy standards, as determined by the corporation; (iv) another method approved by the corporation in regulations adopted by the corporation; and (B) criteria by which the energy conservation standards may be met; for purposes of this subparagraph, the residential building complies with the energy standards if the residence has received a rating under a home energy rating system adopted by the corporation that, in the judgment of the corporation, meets or exceeds the thermal energy standards required by AS 46.11.040 . Sec. 18.56.097. Collateral for loans. Under procedures established by regulations of the corporation adopted in accordance with AS 18.56.088 a person may pledge as security for the repayment of a loan made, purchased, or insured by the corporation under this chapter a preference right the person holds to receive title to land the person occupies as a primary place of residence, primary place of business, subsistence campsite, or as headquarters for reindeer husbandry. The preference right must be conveyed to the person by the Native corporation to which the land was granted under 43 U.S.C. 1613 before it may be pledged as security under this section. The Department of Commerce, Community, and Economic Development shall prescribe procedures and standard forms for establishing and appraising the value of a preference right held by a person to secure the repayment of a loan made, purchased, or insured by the corporation under this chapter. Sec. 18.56.098. Special mortgage loan purchase program. (a) The corporation shall establish a special mortgage loan purchase program. Under the special mortgage loan purchase program, the corporation may purchase first or second mortgage loans. A first or second mortgage loan purchased under this subsection must be made for the purchase, improvement, or rehabilitation of a residence or must be a refinancing loan. First or second mortgage loans purchased under this subsection may include graduated payment mortgage loans and adjustable rate mortgage loans. (b) The corporation shall adopt regulations under AS 18.56.088 to establish minimum construction standards that a residence must meet before the corporation may purchase a mortgage loan on the residence under (a) of this section. The minimum construction standards must include standard deviations from the minimum construction standards to allow the corporation to purchase loans on residences that do not meet the minimum construction standards but that are certified by an engineer to be within the standard deviations. The standard deviations must include, but are not limited to, provisions relating to water holding tanks, on-site water and sewer systems, and foundations. (c) The corporation may pledge mortgage loans purchased by the corporation under (a) of this section, mortgage loans assigned to the corporation for the special mortgage loan purchase program, and mortgage loans purchased with amounts appropriated to the corporation for the special mortgage loan purchase program to pay the principal, interest, and redemption premium, if any, on bonds or bond anticipation notes issued by the corporation for the special mortgage loan purchase program and may expend amounts appropriated to the special mortgage loan purchase program for mortgage loan subsidies or other purposes of the program as necessary to cause the interest rate on mortgage loans purchased under the special mortgage loan purchase program and retained by the corporation or sold under AS 18.56.099 to equal the rates specified in this section. (d) [Repealed, § 51 ch 115 SLA 1981.] (e) The corporation shall adopt regulations under AS 18.56.088 to implement the special mortgage loan purchase program. The regulations shall include provisions allowing, prohibiting, or restricting the right to assume or the right to provide for the payment of mortgage loans purchased under (a) of this section by a person other than the mortgagor. A provision in a mortgage loan purchased by the corporation after June 30, 1981, that prohibits or restricts the right to assume or the right to provide for the payment of mortgage loans is enforceable. The corporation shall enforce the regulations adopted under this subsection. (f) The corporation shall establish the interest rate on a first mortgage loan purchased under (a) of this section in accordance with the following: (1) the interest rate on the loan amount eligible for assistance of a mortgage loan purchased with the proceeds of an issue of taxable bonds of the corporation is three percent less than the cost of funds of that issue, except that (A) if the cost of funds of that issue is less than 10 percent, the interest rate is equal to the cost of funds; and (B) if the cost of funds of that issue is more than 10 percent, the interest rate may not be less than 10 percent; (2) an interest rate determined under this subsection on the loan amount eligible for assistance of a mortgage loan that is not purchased from the proceeds of bonds that are qualified veterans' mortgage bonds under the applicable provisions of 26 U.S.C. (Internal Revenue Code) shall be reduced by one percentage point if the loan is made to an eligible veteran under AS 18.56.101 ; (3) the interest rate for the amount of a mortgage loan purchased under (a) of this section that exceeds the loan amount eligible for assistance is equal to the cost of funds to the corporation attributable to that part of the loan; (4) the interest rate on the loan amount eligible for assistance of a mortgage loan purchased with money that is not the proceeds of either taxable or tax-exempt bonds is the rate the corporation determines is appropriate by application of the provision of (1) of this subsection; (5) the interest rate on the loan amount eligible for assistance of a mortgage loan purchased from the proceeds of bonds that are exempt from taxation, other than bonds that constitute qualified veterans' bonds under (h) of this section, is equal to the interest rate determined under (1) and (2) of this subsection on a loan purchased under (a) of this section from the proceeds of the most recent applicable issue of taxable bonds sold by the corporation; a higher or lower interest rate shall be established on the entire loan amount if required to ensure the tax-exempt status of the bonds; (6) the corporation shall determine the interest rate on a mortgage loan that is an adjustable rate mortgage loan as provided in this subsection; the corporation shall recalculate the interest rate from time to time based on changes in the cost to the corporation of the funds used to purchase the adjustable rate mortgage loan; however, the corporation may establish a minimum interest rate applicable to an adjustable rate mortgage loan, and the interest rate on the adjustable rate mortgage loan may not be less than the minimum interest rate so established regardless of the cost of funds to the corporation; (7) for loans made under this section, the corporation shall give effect to interest rate changes applicable to the loans based on time of loan application, time of issuance of the corporation's bonds issued to purchase loans, or other factors as the corporation determines; (8) in this subsection, (A) “cost of funds” means the true interest cost expressed as a rate on bonds of the corporation plus an additional percentage as determined by the corporation to represent the allocable expenses of operation, costs of issuance, and mortgage servicing; (B) “taxable bonds” means bonds bearing interest that is taxable under applicable provisions of 26 U.S.C. (Internal Revenue Code) and which were issued to finance the purchase of first mortgage loans. (g) The corporation shall establish the interest rate on a second mortgage loan purchased under (a) of this section in the manner established for computing the interest rates on a first mortgage loan under (f) of this section except that, in the case of a second mortgage loan, if the first mortgage loan made to the same borrower is held by the corporation and was purchased under the special mortgage loan purchase program, the outstanding principal balance of the existing first mortgage loan is subtracted from the loan amount eligible for assistance to determine the amount of the loan that is eligible for an interest rate on a second mortgage loan determined by reference to (f) of this section. (h) The interest rate on the loan amount eligible for assistance of a mortgage loan purchased from the proceeds of bonds that constitute qualified veterans' mortgage bonds under applicable provisions of 26 U.S.C. (Internal Revenue Code) is the rate for other loans to veterans under (f)(2) of this section. A higher or lower interest rate shall be established on the entire loan amount if required by applicable provisions of 26 U.S.C. (Internal Revenue Code). (i) If the money used to purchase a mortgage loan made to a veteran under this section comes from an issue of bonds of the corporation guaranteed by the state, each bond must be issued as part of an issue substantially all of the proceeds of which are used to provide residences for qualifying veterans. In this subsection, a qualifying veteran is a person who is a “qualified veteran” as the term is defined or may subsequently be defined under 26 U.S.C. 143. (j) The interest rate limitations of AS 45.45.010 do not apply to loans purchased under this section or to loans that the corporation has, in any manner, committed itself to purchase. (k) In this section and in AS 18.56.091 and 18.56.099 (1) “graduated payment mortgage loan” means a mortgage loan the terms of which provide for monthly principal and interest payments that (A) during the first year of the mortgage loan are lower than the monthly principal and interest payments that would be required under the terms of a level payment mortgage loan made at the same interest rate; and (B) during subsequent years of the mortgage loan are graduated to provide for the same return over the term of the loan that would have been provided by a level payment mortgage loan made at the same interest rate; (2) “loan amount eligible for assistance” means (A) the first $50,000 of a mortgage loan for persons of lower or moderate income whose purchase of a home is assisted under AS 18.56.091 ; or (B) except as to persons whose purchase of a home is assisted under AS 18.56.091 , the amount of a mortgage loan that does not exceed the amount of the loan established by law; if an amount has not been established by law, the amount is zero; (3) “mortgage loan” includes a beneficial interest or participation in a mortgage loan; (4) “residence” means (A) an owner-occupied, single-family residence, including a mobile home; or (B) an owner-occupied duplex, triplex, or fourplex. Sec. 18.56.099. Powers of corporation to deal in mortgage loans. The corporation may purchase, sell, hold, or otherwise deal in mortgage loans. In connection with the purchase or sale of a beneficial interest or participation in a mortgage loan, the corporation may enter into a trust agreement providing for the custody, control, and administration of the mortgage loan. The trust agreement may provide that the corporation or a bank or trust company shall act as trustor or trustee under the trust and that title to the mortgage loans subject to the trust shall be considered to have passed as provided in the trust agreement. To the extent provided in the trust agreement, the effect of a sale of a beneficial interest or participation in a mortgage loan is the same as the sale of the mortgage loan subject to the trust. Sec. 18.56.100. Housing development fund. (a) There is created a housing development fund to be administered by the corporation as a trust fund separate and distinct from any other money or funds administered by the corporation. (b) Consistent with AS 18.56.090 , the corporation may make temporary and permanent loans from the housing development fund, at an interest rate or rates determined by the corporation, and with the security for repayment that is necessary and practicable, to purchase, make, or participate in the making of mortgage loans (1) to borrowers who are sponsors, nonprofit corporations, or agencies of the state or a municipal government, for permanent loans to develop, build, repair, remodel, or rehabilitate residential housing that is to be used and occupied as congregate housing; or (2) that are not federally insured or guaranteed for residential housing, if the corporation determines that the loans are not otherwise available, wholly or in part, from private lenders upon reasonably equivalent terms and conditions. (c) To the credit of the housing development fund shall be deposited (1) grants and contributions to the fund; and (2) all receipts of the corporation on account of repayment of or sale or other disposition of the security for any loans made under (b) of this section. (d) The corporation may receive and accept from any source whatever any grants or contributions for the housing development fund. (e) [Repealed, § 72 ch 113 SLA 1982.] (f) [Repealed, § 72 ch 113 SLA 1982.] (g) [Repealed, § 72 ch 113 SLA 1982.] (h) [Repealed, § 72 ch 113 SLA 1982.] (i) [Repealed, § 72 ch 113 SLA 1982.] (j) [Repealed, § 72 ch 113 SLA 1982.] (k) [Repealed, § 72 ch 113 SLA 1982.] (l) The corporation may reduce the interest rate on a loan entered into under (b)(1) of this section only from amounts appropriated to the housing development fund specifically to reduce the interest payable by borrowers who develop housing under (b)(1) of this section. If a project developed by a borrower with a reduced interest subsidy made under this subsection ceases to be used for congregate housing, the corporation shall adjust the interest rate payable on the unpaid balance of the loan to the prevailing rate of interest charged by the corporation on loans made for other residential purposes, but may not reduce the interest rate payable below the subsidized rate. (m) The corporation shall adopt regulations to implement (b)(1) and (l) of this section that (1) determine borrower eligibility, including regulations to determine that the borrower has the ability to repay the loan; (2) define procedures for the application, review, and approval of authorized loans; (3) establish loan guidelines, loan terms, and acceptable security for loans; and (4) identify characteristics of housing projects eligible for loans. (n) In (b)(1) and (l) of this section, “congregate housing” means a multi-family housing development with fully independent living units and services integrated in the buildings that may include, but are not limited to, housekeeping, meal service, and resident training or development programs. Sec. 18.56.101. Eligibility for veterans' interest rates. The following persons are eligible veterans for the purposes of AS 18.56.098 (f) and (g): (1) a person who served in the armed forces of the United States for 90 days or more, or whose service was for less than 90 days because of injury or disability incurred in the line of duty, after April 6, 1917, whose discharge was under honorable conditions; (2) the widow or widower of a member of the armed forces or an eligible veteran if the member or veteran served in the armed forces for at least 90 days after April 6, 1917, and the veteran's discharge was under honorable conditions; (3) a person who has served for not less than five years in the Alaska Army National Guard, or the Alaska Air National Guard, or a reserve unit of the United States armed forces if the reserve unit required, as a minimum, one weekend each month of duty and 15 consecutive days of active duty training each year and (A) whose discharge was under honorable conditions; or (B) who is currently in an active status in the guard or a reserve unit; (4) a person who has served as a commissioned officer of the Regular or Reserve Corps of the Public Health Service whose discharge was under honorable conditions; (5) a person who served in the Alaska Territorial Guard for 90 days or more or whose service was for less than 90 days because of injury or disability incurred in the line of duty; (6) the widow or widower of a person who served at least 90 days in the Alaska Territorial Guard. Sec. 18.56.102. Simplified refinancing mortgage loan purchase program. [Repealed, § 9 ch 41 SLA 1987. For current law, see AS 18.56.108 .] Sec. 18.56.103. Federal taxation of interest on bonds and bond anticipation notes. If the interest on bonds or bond anticipation notes of the corporation issued after June 1, 1980, becomes taxable under the income tax laws of the United States, the legislature may appropriate an amount sufficient to pay the outstanding principal and interest on the bonds or bond anticipation notes. Nothing in this section creates a debt or liability of the state. Sec. 18.56.104. Allocation of tax-exempt bonds. [Repealed, § 2 ch 81 SLA 1987.] Sec. 18.56.105. Allocation of lending activities. The corporation shall designate regions within the state that, in the aggregate, encompass the entire state. In participating in the making or purchasing of loans under AS 18.56.090 (a)(1) and (2) or under AS 18.56.100 , the corporation shall make its money available through the private financial institutions in the state within each region designated by the corporation under this section. The corporation shall allocate its money among the regions on the basis of recent and future anticipated lending activity as well as the potential need for the loans in each region and may reallocate its money among the regions as it considers appropriate to reflect changes in lending activity or need in the regions. Sec. 18.56.106. Nonconforming housing loan program. (a) There is established in the corporation the nonconforming housing loan program to assist persons to purchase housing that does not conform to minimum building standards under any state or federal program that provides for housing purchases. (b) The corporation shall adopt regulations under this section that establish conditions and terms for nonconforming housing loans including terms and conditions relating to owner and nonowner occupancy, the number of loans that may be made to a single borrower, and borrower eligibility requirements. The corporation shall permit loans under this section for nonconforming housing located on land to which a borrower has agricultural rights. Sec. 18.56.107. Loan origination and service fees for rural areas. Loan origination and service fees charged for a loan made or purchased in a rural area with money received by the corporation after July 1, 1981, may be higher than loan origination and service fees charged for other loans made or purchased by the corporation and the corporation may pay a portion of the higher fees. Sec. 18.56.108. Simplified refinancing mortgage loan purchase program. (a) The corporation shall establish a simplified refinancing mortgage loan purchase program. Under the simplified refinancing mortgage loan purchase program, the corporation may purchase refinancing mortgage loans to provide relief to borrowers under circumstances described by regulations adopted by the corporation. (b) AS 18.56.098 (c), (e), and (j) apply to refinancing mortgage loans purchased under (a) of this section. (c) Subject to (d) of this section, the interest rate on a refinancing mortgage loan purchased under (a) of this section is two percent less than the cost to the corporation of the money used to purchase the refinancing mortgage loan, except that if the cost of money (1) is 10 percent or less, the interest rate is equal to the cost of money; and (2) is more than 10 percent, the interest rate may not be less than 10 percent. (d) If the refinancing mortgage loan is an adjustable rate mortgage loan, the corporation shall establish the initial interest rate as provided in (c) of this section and shall recalculate the interest rate from time to time in accordance with (c) of this section. However, notwithstanding (c)(1) of this section, the corporation may establish a minimum interest rate applicable to an adjustable rate refinancing mortgage loan. The interest rate on the adjustable rate refinancing mortgage loan may not be less than the minimum interest rate established under this subsection, regardless of the cost of money to the corporation. (e) The corporation may adopt regulations to implement this section, including regulations to define “cost of money” for purposes of this section. The regulations may provide for recalculation of the cost of money under (d) of this section at the times and frequencies the corporation considers appropriate. The time and frequency for a recalculation under (d) of this section is not required to match the time or frequency of a change in the cost of money to the corporation. (f) Equity extraction may not be allowed under this program. (g) In this section, “refinancing mortgage loan” means a loan refinancing another mortgage loan owned by the corporation. Sec. 18.56.109. Teachers' and health care professionals' housing loan program. [Repealed, § 2 ch 115 SLA 2008.] Sec. 18.56.110. Bonds and notes. (a) The corporation, by resolution, may issue bonds and bond anticipation notes in order to provide funds to carry out and effectuate its purposes. (b) The principal and interest on these bonds or notes, except state guaranteed bonds, is payable from corporation funds, excluding funds in the housing development fund. The principal and interest on state guaranteed bonds is payable from corporation funds, excluding funds in the housing development fund, and in accordance with the terms of the state guaranty of principal and interest. Bond anticipation notes may be payable from the proceeds of the sale of bonds or from the proceeds of sale of other bond anticipation notes or, in the event bond or bond anticipation note proceeds are not available, the notes may be paid from other funds or assets of the corporation. Bonds or notes may be additionally secured by a pledge of a grant or contribution from the federal government, or a corporation, association, institution, or person, or a pledge of money, income, or revenues of the corporation from any source. The corporation may issue state guaranteed bond anticipation notes in anticipation of the sale of state guaranteed bonds to be issued under this chapter. State guaranteed bond anticipation notes are guaranteed as to principal and interest by the state and secured by the full faith, credit, and resources of the state. (c) Bonds or bond anticipation notes may be issued in one or more series and shall be dated, bear interest at the rate or rates per year or within the maximum rate, be in the denomination, be in the form, either coupon or registered, carry the conversion or registration provisions, have the rank or priority, be executed in the manner and form, be payable from the sources in the medium of payment and place or places within or outside the state, be subject to authentication by a trustee or fiscal agent, and be subject to the terms of redemption with or without premium, as the resolution of the corporation may provide. Bond anticipation notes shall mature at the time or times that are determined by the corporation. Bonds shall mature at a time, not exceeding 50 years from their date, that is determined by the corporation. Before the preparation of definitive bonds or bond anticipation notes, the corporation may issue interim receipts or temporary bonds or bond anticipation notes, with or without coupons, exchangeable for bonds or bond anticipation notes when these definitive bonds or bond anticipation notes have been executed and are available for delivery. (d) Bonds or bond anticipation notes, except state guaranteed bonds and bond anticipation notes, may be sold in the manner and on the terms the corporation determines. State guaranteed bonds and bond anticipation notes shall be sold at public sale by the corporation in amounts and at times as may be approved by the state bond committee, on terms fixed under the notice of sale. (e) If an officer whose signature or a facsimile of whose signature appears on any bonds or notes or coupons attached to them ceases to be an officer before the delivery of the bond, note or coupon, the signature or facsimile is valid the same as if the officer had remained in office until delivery. (f) In any resolution of the corporation authorizing or relating to the issuance of bonds or bond anticipation notes, the corporation has power by provisions in the resolution which will constitute covenants of the corporation and contracts with the holders of the bonds or bond anticipation notes (1) to pledge to any payment or purpose all or any part of its revenues to which its right then exists or may thereafter come into existence, and the money derived from the revenues, and the proceeds of any bonds or notes; (2) to covenant against pledging all or any part of its revenues, or against permitting or suffering a lien on the revenues of its property; (3) to covenant as to the use and disposition of any and all payments of principal or interest received by the corporation on mortgage loans, construction loans, or other investments held by the corporation; (4) to covenant as to establishment of reserves or sinking funds and the making of provision for and the regulation and disposition of the reserves or sinking funds; (5) to covenant with respect to or against limitations on a right to sell or otherwise dispose of property of any kind; (6) to covenant as to bonds and notes to be issued, and their limitations, terms, and conditions, and as to the custody, application, and disposition of the proceeds of the bonds and notes; (7) to covenant as to the issuance of additional bonds or notes, or as to limitations on the issuance of additional bonds or notes and the incurring of other debts; (8) to covenant as to the payment of the principal of or interest on the bonds or notes, as to the sources and methods of the payment, as to the rank or priority of the bonds or notes with respect to a lien or security, or as to the acceleration of the maturity of the bonds or notes; (9) to provide for the replacement of lost, stolen, destroyed, or mutilated bonds or notes; (10) to covenant against extending the time for the payment of bonds or notes or interest on the bonds or notes; (11) to covenant as to the redemption of bonds or notes and privileges of their exchange for other bonds or notes of the corporation; (12) to covenant to create or authorize the creation of special funds of money to be held in pledge or otherwise for operating expenses, payment or redemption of bonds or notes, reserves, or other purposes, and as to the use and disposition of the money held in the funds; (13) to establish the procedure, if any, by which the terms of any contract or covenant with or for the benefit of the holders of bonds or notes may be amended or abrogated, the amount of bonds or notes the holders of which must consent to amendment or abrogation, and the manner in which the consent may be given; (14) to covenant as to the custody of any of its properties or investments, their safekeeping and insurance, and the use and disposition of insurance money; (15) to covenant as to the time or manner of enforcement or restraint from enforcement of any rights of the corporation arising by reason of or with respect to nonpayment of any principal or interest of any mortgage loans or construction loans; (16) to provide for the rights and liabilities, powers and duties arising upon the breach of any covenant, condition, or obligation, and to prescribe the events of default and the terms and conditions upon which any or all the bonds, notes, or other obligations of the corporation become or may be declared due and payable before maturity and the terms and conditions upon which any such declaration and its consequences may be waived; (17) to vest in a trustee or trustees within or outside the state the property, rights, powers, and duties in trust as the corporation may determine, which may include any or all of the rights, powers, and duties of any trustee appointed by the holders of any bonds or notes, and to limit or abrogate the right of the holders of any bonds or notes of the corporation to appoint a trustee under this chapter or limit the rights, powers, and duties of the trustee; (18) to pay the costs or expenses incident to the enforcement of the bonds or notes or of the provisions of the resolution or of any covenant or agreement of the corporation with the holders of its bonds or notes; (19) to agree with any corporate trustee which may be any trust company or bank having the powers of a trust company within or outside the state as to the pledging or assigning of revenue or funds to which or in which the corporation has any rights or interest; the agreement may further provide for other rights and remedies exercisable by the trustee as may be proper for the protection of the holders of any bonds or notes of the corporation and not otherwise in violation of law and may provide for the restriction of the rights of an individual holder of bonds or notes of the corporation; (20) to appoint and provide for the duties and obligations of any paying agent or paying agents, or other fiduciaries as the resolution may provide within or outside the state; (21) to limit the rights of the holders of any bonds or notes to enforce any pledge or covenant securing bonds or notes; (22) to make covenants other than and in addition to the covenants expressly authorized in this section, of like or different character, and to make covenants to do or refrain from doing acts and things as may be necessary, or convenient and desirable, in order to better secure bonds or notes or that, in the absolute discretion of the corporation, will tend to make bonds or notes more marketable, notwithstanding that the covenants, acts or things may not be enumerated in this section. (g) Notwithstanding AS 18.56.090 (a)(11) and (a) of this section, the corporation may not issue bonds in any 12-month period in an amount that exceeds the amount of bonds authorized to be issued during the preceding period, unless a different amount is authorized by the legislature. This subsection does not apply to (1) the issuance by the corporation of refunding bonds; (2) the issuance by the corporation of bonds the proceeds of which are intended to be used to refinance mortgage loans held by the corporation; or (3) the issuance by a subsidiary of the corporation of bonds to prepay all or a portion of a governmental employer's share of unfunded accrued actuarial liability of retirement systems if the board of the subsidiary first finds that the actuarially assumed rate of return on the funds managed by the Alaska Retirement Management Board is projected to exceed the true interest cost to be paid on the bonds by at least 1.5 percent annually. Sec. 18.56.115. Independent financial advisor. In negotiating the private sale of bonds or bond anticipation notes to an underwriter, the corporation may retain a financial advisor. A financial advisor retained under this section must be independent from the underwriter. Sec. 18.56.120. Validity of any pledge. The pledge of assets or revenue of the corporation to the payment of the principal or interest on any obligations of the agency is valid and binding from the time the pledge is made and the assets or revenue are immediately subject to the lien of the pledge without physical delivery or further act. The lien of any pledge is valid and binding against all parties having claims of any kind in tort, contract, or otherwise against the corporation, irrespective of whether those parties have notice of the lien of the pledge. This section does not prohibit the corporation from selling assets subject to any pledge, except that any sale may be restricted by the trust agreement or resolution providing for the issuance of the obligations. Sec. 18.56.125. Capital reserve fund. (a) For the purpose of securing any one or more issues of its obligations, the corporation may establish one or more special funds, called “capital reserve funds”, and shall pay into those capital reserve funds (1) any money appropriated and made available by the state for the purpose of any of those funds, (2) any proceeds of the sale of its obligations, to the extent provided in the resolution or resolutions of the corporation authorizing their issuance, and (3) any other money that may be made available to the corporation for the purposes of those funds from any other source. All money held in a capital reserve fund, except as provided in this section, shall be used as required, solely for the payment of the principal of obligations or of the sinking fund payments with respect to those obligations; the purchase or redemption of obligations; the payment of interest on obligations; or the payment of any redemption premium required to be paid when those obligations are redeemed before maturity. However, money in any fund may not be withdrawn from it at any time in an amount that would reduce the amount of that fund to less than the capital reserve requirement set out in (b) of this section, except for the purpose of making, with respect to those obligations, payment, when due, of principal, interest, redemption premiums and the sinking fund payments for the payment of which other money of the corporation is not available. Any income or interest earned by, or increment to, a capital reserve fund, due to the investment of the fund or any other amounts in it, may be transferred by the corporation to other funds or accounts of the corporation to the extent that the transfer does not reduce the amount of the capital reserve fund below the capital reserve fund requirement. (b) If the corporation decides to issue obligations secured by a capital reserve fund, the obligations may not be issued if the amount in the capital reserve fund is less than such a percent, not exceeding 10 percent of the principal amount of all of those obligations secured by that capital reserve fund then to be issued and then outstanding in accordance with their terms, as may be established by resolution of the corporation (called the “capital reserve fund requirement”), unless the corporation, at the time of issuance of the obligations, deposits in such capital reserve fund from the proceeds of the obligations to be issued or from other sources, an amount which, together with the amount then in the fund, will not be less than the capital reserve fund requirement. (c) In computing the amount of a capital reserve fund for the purpose of this section, securities in which all or a portion of the funds are invested shall be valued at par or, if purchased at less than par, at amortized costs as the term is defined by resolution of the corporation authorizing the issue of the obligations, or by some other reasonable method established by the corporation by resolution. Valuation on a particular date shall include the amount of any interest earned or accrued to that date. (d) To assure the continued operation and solvency of the corporation for the carrying out of its corporate purposes, provision is made in (a) of this section for the accumulation in capital reserve funds of an amount equal to their capital reserve fund requirement. (e) The chairman of the corporation shall annually, no later than January 2, make and deliver to the governor and chairmen of the house and senate finance committees a certificate stating the sum, if any, required to restore any capital reserve fund to the capital reserve fund requirement. The legislature may appropriate that sum, and all sums appropriated during the then current fiscal year by the legislature for the restoration shall be deposited by the corporation in the proper capital reserve fund. Nothing in this section creates a debt or liability of the state. (f) [Repealed by § 77 ch 106 SLA 1980.] Sec. 18.56.130. Remedies. A holder of obligations or coupons attached to them issued under the provisions of this chapter, and a trustee under any trust agreement or resolution authorizing the issuance of the obligations, except as restricted by a trust agreement or resolution, either at law or in equity, may enforce all rights granted hereunder or under the trust agreement or resolution, or under any other contract executed by the corporation under this chapter, and may enforce and compel the performance of all duties required by this chapter or by the trust agreement or resolution to be performed by the corporation or by any officer of it. Sec. 18.56.135. Loan servicing requirements. (a) If the servicing of a loan is sold to another person, the seller shall notify the mortgagor of the sale within 10 days after the actual date of the sale. The notification must include (1) the name, address, and telephone number of the person who will assume responsibility for the servicing and accept payments for the loan; (2) a detailed written financial breakdown of the loan, including the interest rate, monthly payment amount, and current escrow balance. (b) The purchaser of loan servicing under (a) of this section shall (1) issue to the mortgagor corrected coupon or payment books, if used; (2) within 20 days after the due date of the first payment to be made to the purchaser, (A) notify the mortgagor of the name, address, and telephone number of the person from whom the mortgagor can receive information regarding the servicing of the loan; (B) inform the mortgagor of changes made regarding the loan escrow account or servicing requirements, including the interest rate, monthly payment amount, and current escrow balance. (c) A loan servicing agent shall respond within 15 business days to a written request for information from the mortgagor. The written response must include the telephone number of the agent's representative who can assist the mortgagor. (d) If a mortgagor of a loan is required to maintain funds in an escrow account to cover the payment of the tax or insurance obligations for the mortgaged property, the loan servicing agent shall make each tax or insurance payment in a timely manner as the obligations become due if the funds in the account are sufficient to cover the payment. If the funds in the account are insufficient to make the payment, the loan servicing agent shall promptly notify the mortgagor of the shortage and may make the payment on behalf of the mortgagor. (e) In this section, (1) “loan” means a mortgage loan purchased by the corporation under a residential housing loan program authorized by this chapter;

(2) “loan servicing agent” means an institution other than the Alaska Housing Finance Corporation that services a loan. Sec. 18.56.140. Negotiable instruments. All obligations and interest coupons attached to them are negotiable instruments under the laws of this state, subject only to any applicable provisions for registration. Sec. 18.56.150. Obligations eligible for investment. Obligations issued under the provisions of this chapter are securities in which all public officers and public bodies of the state and its political subdivisions, all insurance companies, trust companies, banking associations, investment companies, executors, administrators, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them. These obligations may be deposited with any state or municipal officer of any agency or political subdivision of the state for any purpose for which the deposit of bonds, notes, or obligations of the state is authorized by law. Sec. 18.56.160. Refunding obligations. (a) The corporation may provide for the issuance of refunding obligations for the purpose of refunding any obligations then outstanding that have been issued under the provisions of this chapter, including the payment of any redemption premium on them and any interest accrued or to accrue to the date of redemption of the obligations. The issuance of the obligations, the maturities and other details of them, the rights of the holders of them, and the rights, duties, and obligations of the corporation in respect of them are governed by the provisions of this chapter that relate to the issuance of obligations, insofar as those provisions may be appropriate. (b) Refunding obligations may be sold or exchanged for outstanding obligations issued under this chapter and, if sold, the proceeds may be applied, in addition to any other authorized purposes, to the purchase, redemption, or payment of the outstanding obligations. Pending the application of the proceeds of refunding obligations, with any other available funds, to the payment of the principal, accrued interest, and any redemption premium on the obligations being refunded, and, if so provided or permitted in the resolution authorizing the issuance of the refunding obligations or in the trust agreement securing them, to the payment of any interest on the refunding obligations and any expenses in connection with the refunding, the proceeds may be invested in direct obligations of, or obligations the principal of and the interest on which are unconditionally guaranteed by, the United States that mature or that will be subject to redemption, at the option of the holders of them, not later than the respective dates when the proceeds, together with the interest accruing on them, will be required for the purposes intended. Sec. 18.56.170. Credit of state not pledged. (a) Obligations issued under the provisions of this chapter other than state guaranteed bonds do not constitute a debt, liability, or obligation of the state or of any political subdivision of the state or a pledge of the faith and credit of the state or of a political subdivision but are payable solely from the revenue or assets of the corporation. Each obligation issued under this chapter other than a state guaranteed bond shall contain on its face a statement that the corporation is not obligated to pay it nor the interest on it except from the revenue or assets of the corporation and that neither the faith and credit nor the taxing power of the state or of any political subdivision of the state is pledged to the payment of the principal of or the interest on the obligation. (b) Expenses incurred by the corporation in carrying out the provisions of this chapter are payable from funds provided under this chapter and liability may not be incurred by the corporation in excess of these funds. Sec. 18.56.180. Officers not liable. A member or other officer of the corporation is not subject to personal liability or accountability by reason of having executed or issued any obligations. Sec. 18.56.190. Tax exemption. (a) The exercise of the powers granted by this chapter will be in all respects for the benefit of the people of the state, for their well-being and prosperity, and for the improvement of their social and economic conditions, and the corporation is not required to pay a tax or assessment on any property owned by the corporation under the provisions of this chapter or upon the income from it, except taxes on real property of which the corporation is fee owner. (b) All obligations issued under this chapter are declared to be issued by a body corporate and public of the state and for an essential public and governmental purpose, and the obligations, and the interest and income on and from the obligations, and all fees, charges, funds, revenues, income, and other money pledged or available to pay or secure the payment of the obligations, or interest on the obligations, are exempt from taxation except for transfer, inheritance, and estate taxes. Sec. 18.56.200. Annual report. (a) The corporation shall prepare and transmit annually a report accounting to the governor for the efficient discharge of all responsibility assigned by law or by directive to the corporation. The corporation shall notify the legislature that the report is available. (b) By January 10 of each year, the board shall publish a report of the corporation for distribution. The board shall notify the governor, legislature, and the public that the report is available. The report shall be written in easily understandable language. The report must include a financial statement audited by an independent outside auditor, a statement of corporation investments in mortgage loans under this chapter, including an estimate of market value of the mortgage loans, a comparison of the corporation performance with the goals of the corporation, and the levels of bonding and investment activities anticipated in the previous year's report under (c) of this section, and any other information the board believes would be of interest to the governor, the legislature, and the public. The annual income statement and balance sheet of the corporation shall be published in at least one newspaper in each judicial district. The board may also publish other reports it considers desirable to carry out its purpose. (c) The corporation shall include in its annual report under (b) of this section an estimate of the investment activity of the corporation in mortgage loans under this chapter for the following 12-month period and an estimate of the amount of bonds to be issued for the investments. (d) The corporation shall include in its annual report under (b) of this section (1) a report of its activities under (A) AS 18.55.010 — 18.55.290 (Housing Project and Public Building Assistance Act); (B) AS 18.55.300 — 18.55.470 (programs of moderate income and rental housing); (C) AS 18.55.480 — 18.55.960 (Slum Clearance and Redevelopment Act); (2) a summary of its efforts to implement a program to extend the operation of the programs authorized under AS 18.55 and this chapter to rural communities; (3) an evaluation of the corporation's ability to fulfill the objectives of AS 18.56.010 (b) — (e); and (4) the amount of interest rate, building, and other subsidies for each program of the corporation for which subsidies are given. Sec. 18.56.205. Residential mortgage assistance for members of the Alaska delegation to Congress. The corporation may extend the special mortgage loan purchase program under AS 18.56.098 to purchase a mortgage loan made for the purchase or rehabilitation of a residence located in the District of Columbia or within 50 miles of the District of Columbia to a member of the United States Congress from Alaska if the member is otherwise qualified for assistance under the special mortgage loan purchase program. Sec. 18.56.210. Market stabilization powers. (a) If the board determines that it is in the best interest of the corporation, the corporation may take appropriate action under this section to stabilize the market price of and demand for residential housing in the state. To accomplish the purposes of this section, the corporation may (1) make and execute necessary agreements and conveyances under which a borrower may exchange residential housing securing a mortgage loan owned, held, or sold by the corporation for other residential housing owned by the corporation; (2) repurchase a mortgage loan sold or pledged by the corporation for the purpose of exercising a power conferred by this section; (3) for the purpose of qualifying residential housing situated in a condominium project for the best available financing for mortgage loans, make and execute agreements and contracts necessary to encourage all owners who occupy units in a condominium project that is not eligible for financing under this chapter to exchange their ownership interest for a condominium unit owned by the corporation in another project; (4) make and execute appropriate agreements with insurers, investors, and guarantors concerning the temporary removal of residential housing owned by the corporation from the resale market; (5) convert residential housing owned by the corporation that is designed and constructed for owner occupancy to another beneficial use; (6) make bulk sales of property owned by the corporation under procedures and terms the corporation determines are in the best interests of the corporation; (7) after giving due consideration to the interests of competing individual sellers of residential housing, provide financing under terms established by the board to promote the sale of residential housing owned by the corporation; (8) invest funds of the corporation in the removal and disposal of substandard publicly owned residential housing if the board of directors determines that the investment is prudent, properly secured, and in the long-term best interests of the corporation; (9) create subsidiary entities to implement a power conferred by this section and to provide insurance under AS 18.56.093 and 18.56.095; (10) purchase loans from the former housing assistance loan fund (former AS 44.47.380 ) if and only if the payments of principal and interest on the loans, or amounts equal to the payments of principal and interest on the loans, are deposited in a separate fund of the corporation to be used for the purposes, and subject to the standards and criteria, of former AS 44.47.360 — 44.47.560 as those statutes provided on June 10, 1988; and (11) take other actions necessary, convenient, or desirable to carry out the powers granted in this subsection. (b) The corporation shall implement the powers conferred by (a) of this section by adopting regulations under AS 18.56.088 . Sec. 18.56.220. Duty to advise about corporation's programs. The corporation shall make a reasonable effort, through seminars, training sessions, and other forms of technical assistance, to assist local governments, regional housing authorities, nonprofit organizations, and other organizations and individuals to understand the corporation's housing programs and the opportunities that exist to obtain financial assistance from the corporation. Sec. 18.56.230. Commercial use in a multi-unit residential housing development owned or financed by the corporation; limitations. (a) The corporation may authorize commercial use in a multi-unit residential housing development it owns or finances if (1) the use is not prohibited under (b) of this section; and (2) the total of all commercial uses does not occupy more than a percentage of the space in the multi-unit residential housing development that the corporation has determined is consistent with the corporation's goal of increasing available affordable housing. (b) The corporation may not authorize the commercial use of space in a multi-unit residential housing development owned or financed by the corporation for (1) a business that offers adult entertainment; (2) the sale of alcoholic beverages, unless the sale is in premises (A) licensed under a restaurant or eating place license issued by the Alcoholic Beverage Control Board under AS 04.09.210 or seasonal restaurant or eating place tourism license issued by the Alcoholic Beverage Control Board under AS 04.09.360 ; or (B) covered by a restaurant endorsement issued by the Alcoholic Beverage Control Board under AS 04.09.450 ; (3) substance abuse treatment; or (4) a business that primarily sells, transfers, or stores cigarettes or tobacco-related products. (c) This section does not require the corporation to authorize commercial use in a multi-unit residential housing development owned or financed by the corporation. (d) In this section, (1) “business that offers adult entertainment” has the meaning given in AS 23.10.350 (f); (2) “cigarette” has the meaning given in AS 18.74.290 ; (3) “commercial use” includes a business or nonprofit activity conducted by a sole proprietorship, cooperative, corporation, firm, partnership, or other association of persons organized in any manner. Sec. 18.56.300. Construction standards for housing eligible for purchase of loans. (a) The corporation may not make or purchase a housing loan for residential housing the construction of which begins after June 30, 1992, unless the seller of the mortgage loan complies with the provisions of this section and unless (1) the unit is in compliance with the construction codes of the municipality, if the unit is located within a municipality that has adopted and enforces construction codes and each of those codes meets or exceeds the comparable standards for similar housing established by the state building code; or (2) the unit is in compliance with the comparable standards for similar housing established by the state building code (A) if the unit is located (i) within a municipality whose construction codes do not meet the standards for similar housing established by the state building code; (ii) within a municipality that does not enforce construction codes; or (iii) outside a municipality; or (B) as to each specific code within the construction codes of the municipality that has adopted and enforces construction codes if the specific code does not meet or exceed the comparable standard for similar housing established by the state building code. (b) As a condition of a commitment to purchase or approve a loan under this section for residential housing the construction of which begins after June 30, 1992, the corporation shall require inspection of the unit of residential housing that is the subject of the loan. The inspection must be performed by a municipal building inspector, by an individual who is registered under AS 08.18 to perform home inspections for new construction, by an architect registered under AS 08.48 , by an engineer registered under AS 08.48 , or by another person approved by the corporation. When the unit of residential housing is located in a rural area, the person who makes the inspection may use methods other than a personal physical inspection to make the inspection if the method is approved by the corporation, and variations from the applicable code may be accepted at the corporation's discretion, if the person authorized to inspect the unit under this subsection satisfies the corporation that the variation does not adversely affect the structural integrity of the unit or the health and safety of the residents. The person who makes the inspection shall determine whether the construction conforms to relevant provisions of the construction codes of the municipality or of the state building code, as applicable, at each of the following stages of construction: (1) plan approval; (2) completion of footings and foundations; (3) completion of electrical installation, plumbing, and framing; (4) completion of installation of insulation; (5) final approval. (c) A person may not bring an action for damages based on a duty imposed by (b) of this section to inspect a residential unit unless the action is for damages caused by gross negligence or intentional misconduct. (d) This section does not apply to a nonconforming housing loan made or purchased by the corporation. (e) In this section, (1) “construction codes” means, with reference to a municipality, the building, mechanical, plumbing, and electrical codes, or any of them that have been adopted and are enforced by the municipality; (2) “rural area” means a community with a population of 5,500 or less that is not connected by road or rail to Anchorage or Fairbanks; (3) “state building code” means (A) for building standards, the standards set out in the version of the Uniform Building Code adopted by the Department of Public Safety under AS 18.70.080 , including the provisions of that code applicable to buildings used for residential purposes containing fewer than four dwelling units, notwithstanding the exclusion of those buildings from the Department of Public Safety's jurisdiction made by AS 18.70.080 (a)(2); (B) for mechanical standards, the standards set out in the version of the Uniform Mechanical Code adopted by the Department of Public Safety under AS 18.70.080 , including the provisions of that code applicable to buildings used for residential purposes containing fewer than four dwelling units, notwithstanding the exclusion of those buildings from the Department of Public Safety's jurisdiction made by AS 18.70.080 (a)(2); (C) for plumbing standards, the minimum plumbing code adopted for the state under AS 18.60.705 ; and (D) for electrical standards, the minimum electrical standards prescribed by AS 18.60.580 . Sec. 18.56.390. Definitions for AS 18.56.010 — 18.56.390. In AS 18.56.010 — 18.56.390, unless the context clearly indicates a different meaning, (1) “adjustable rate mortgage loan” means a mortgage loan with respect to which the interest rate varies or is expected to vary from time to time by reference to an index or formula or other reference point; (2) “bond” or “obligation” means a bond, bond anticipation note, or other note of the corporation authorized to be issued by the corporation under this chapter, or a mortgage participation certificate issued with respect to mortgages of the corporation; (3) “construction loan” means a construction loan for land development or residential housing that is secured by a federally insured or guaranteed mortgage or that is insured or guaranteed by the United States or an instrumentality of the United States, or for which there is a commitment by the United States or an instrumentality of the United States to insure or guarantee such a loan, or a construction loan for land development or residential housing which land development or residential housing will be secured by a mortgage loan; (4) “development costs” means the costs approved by the corporation as appropriate expenditures that may be incurred by sponsors, builders, and developers of residential housing, before commitment and initial advance of the proceeds of a construction loan or of a mortgage loan, including but not limited to (A) payments for options to purchase properties on the proposed residential housing site, deposits on contracts of purchase, or, with prior approval of the corporation, payments for the purchase of the properties; (B) legal and organizational expenses, including payments of attorney fees, project manager, clerical, and other staff salaries, office rent, and other incidental expenses; (C) payment of fees for preliminary feasibility studies and advances for planning, engineering, and architectural work; (D) expenses for tenant surveys and market analyses; and (E) necessary application and other fees; (5) “governmental agency” means any department, division, public agency, political subdivision, or other public instrumentality of the state or the federal government; (6) “governmental employer” means the State of Alaska or a municipality or other state or municipal governmental entity within the state, including an agency, instrumentality, district, school district, public corporation, department, division, or other subdivision of the state or of a municipality, in its capacity as an employer; (7) “housing development fund” means the housing development fund created by AS 18.56.100 ; (8) “land development” means the process of acquiring land primarily for residential housing construction for persons of lower and moderate income and making, installing, or constructing nonresidential housing improvements, including water, sewer, and other utilities, roads, streets, curbs, gutters, sidewalks, storm drainage facilities, and other installations or works, whether on or off the site, that the corporation considers necessary or desirable to prepare the land primarily for residential housing construction; (9) “mortgage” or “mortgage loan” means a mortgage loan for residential housing insured or guaranteed by the United States or an instrumentality of the United States or for which there is a commitment by the United States or an instrumentality of the United States to insure or guarantee such a mortgage, or if not so insured or guaranteed or if there is no such commitment, that is secured upon such terms and conditions as the corporation considers necessary or practicable to insure all repayments; (10) “persons of lower and moderate income” means a person or persons considered by the corporation to require assistance available under this chapter on account of insufficient or inadequate personal or family income or otherwise limited personal financial resources, taking into consideration, without limitation, such factors as (A) the amount of the total income of the persons available for housing needs; (B) the size of the family; (C) the cost and condition of housing facilities available; (D) standards established for various federal programs determining eligibility based on income of the persons; and (E) the ability of the persons to compete successfully in the normal housing market and to pay the amounts at which private enterprise is providing decent, safe, and sanitary housing; (11) “remote, underdeveloped, or blighted areas” means areas considered by the corporation to require assistance available under this chapter on account of insufficient availability of the residential housing necessary to promote, develop, or maintain the economic growth or potential of the area, taking into consideration, without limitation, the following: (A) the population, resources, and environment of the area; (B) the present availability and condition of residential housing in and near the area; (C) the cost of construction and rehabilitation of residential housing in the area; (D) the availability of other federal or state sponsored programs to facilitate the development of residential housing in the area; and (E) the ability of residents of the area to finance the purchase of residential housing or to rent or lease residential housing at rates comparable to those in effect in other areas of the state; (12) “residential building” or “residential housing” (A) means a specific work or improvement undertaken primarily to provide dwelling accommodations without limitation as to form of lawful occupancy, whether rental, under contract, fee ownership, cooperative housing, condominium, mobile home, or other lawful form of ownership; (B) includes (i) special needs housing; and (ii) the acquisition, construction, or rehabilitation of land, buildings, and improvements to them, and other nonhousing facilities as may be incidental or appurtenant to the land or buildings; (13) “special needs housing” (A) means residential housing designed to meet the needs of persons with specific and special housing needs, including supportive services; (B) includes (i) housing for the elderly and individuals with a disability or mental illness; (ii) emergency shelter for the homeless; and (iii) transitional housing; (14) “sponsors” means individuals, public and private corporations, associations, partnerships or other entities, whether or not operated for profit; and consumer housing cooperatives, associations, partnerships, or other entities organized under law for the primary purpose of providing housing to individuals and families of lower and moderate income; it includes organizations engaged in the production, origination, and development of residential housing units intended to qualify for financial assistance under 42 U.S.C. 1437f (sec. 8, Housing Act of 1937), as amended. Article 2. Housing Assistance. Sec. 18.56.400. Powers of corporation related to housing assistance. The board may (1) adopt regulations in accordance with AS 18.56.088 to implement AS 18.56.400 — 18.56.600; (2) make and execute agreements, contracts, and other instruments necessary or convenient in the exercise of the powers and functions granted under AS 18.56.400 — 18.56.600; (3) purchase or participate in the purchase of small community housing mortgage loans under AS 18.56.400 — 18.56.600; (4) purchase or participate in the purchase of loans for building materials for small community housing under AS 18.56.400 — 18.56.600; (5) procure insurance against loss in connection with the corporation's functions under AS 18.56.400 — 18.56.600; (6) acquire real or personal property, or an interest in real or personal property, by purchase, transfer, or foreclosure, when the acquisition is necessary or appropriate to protect a loan in which the corporation has an interest; sell, transfer and convey that property to a buyer; and, if the sale, transfer or conveyance cannot be effected with reasonable promptness or at a reasonable price, rent or lease the property to a tenant pending the sale, transfer or conveyance; (7) do all acts necessary, convenient, or desirable to carry out the powers expressly granted or necessarily implied in AS 18.56.400 — 18.56.600; (8) originate and service direct loans made to qualified buyers under AS 18.56.400 — 18.56.600. Sec. 18.56.410. Alaska energy efficient home grant fund. (a) There is established in the corporation the Alaska energy efficient home grant fund consisting of money appropriated to it by the legislature and deposited in it by the corporation. The corporation shall administer the Alaska energy efficient home grant fund under the provisions of this section. (b) Subject to appropriation, the corporation may grant funds from the Alaska energy efficient home grant fund to agencies of the state or federal government, individuals, or businesses that retrofit existing single family dwellings or build new single family dwellings that meet criteria adopted by the corporation. (c) The corporation shall adopt guidelines and procedures for the fund. Sec. 18.56.420. Housing assistance loan program. (a) There is created in the corporation the housing assistance loan program. The corporation shall provide money to originate, purchase, participate in the purchase of, or refinance (1) small community housing mortgage loans; (2) loans made for building materials for small community housing; (3) loans made for renovations or improvements to small community housing; and (4) loans made for the construction of owner-occupied small community housing other than loans to builders or contractors or loans that compensate an owner for the owner's labor or services in constructing the owner's own housing. (b) [Repealed, § 8 ch 134 SLA 2004.] Sec. 18.56.430. Home ownership assistance fund. (a) There is created in the corporation the home ownership assistance fund consisting of money appropriated to it by the legislature and deposited in it by the corporation. Money in the fund shall be used solely to assist persons of lower and moderate income to purchase or construct single-family homes financed under AS 18.56.400 — 18.56.600 by providing a subsidy to those persons. (b) The subsidy provided by this section may not exceed the amount that is necessary to reduce the annual interest rate paid on the mortgage loan to six percent. (c) A mortgage loan that is subsidized from the home ownership assistance fund may not exceed $120,000. (d) The corporation shall adopt regulations that establish maximum income-to-loan payment ratios for persons who apply for a subsidy under this section. (e) In this section, “persons of lower and moderate income” means individuals considered by the corporation to require assistance under this section because of inadequate income or other limited personal financial resources, taking into consideration (1) the amount of total income available for housing needs; (2) the size of the family; (3) the cost and condition of available housing; (4) standards established in various federal programs for determining eligibility based on income; (5) the ability to enter the private housing market and to pay market amounts for decent, safe, and sanitary housing; and (6) other factors considered relevant by the corporation. Sec. 18.56.440. Limitations on use of housing assistance loan program. The housing assistance loan program may not be used to (1) originate a direct loan or purchase or participate in the purchase of a small community housing mortgage loan that exceeds the limitations on mortgage loans purchased by the Federal National Mortgage Association as to principal amount or loan-to-value ratio; (2) originate a direct loan or purchase or participate in the purchase of a loan made for building materials for small community housing (A) that exceeds $45,000 or exceeds (i) 80 percent of the appraised value of the work completed on the small community housing for which the loan is made if the small community housing is pledged as collateral for the loan; or (ii) 90 percent of the value of other property that is pledged as security for the loan and that is satisfactory to the corporation as collateral; (B) unless the terms of the loan agreement require inspections and certifications, as required by regulations of the corporation, at the expense of the borrower; and (C) unless the period of time allowed for repayment of the loan is equal to or less than 15 years; (3) originate direct loans or purchase or participate in the purchase of a small community housing mortgage loan that is secured by real property the marketable title to which is shown under AS 18.56.480 (b)(2) if the total amount of outstanding small community housing mortgage loans held by the corporation exceeds 10 times the amount of money in the restricted title loss reserve account established by AS 18.56.490 ; (4) originate a direct loan for small community housing or purchase or participate in the purchase of a small community housing mortgage loan, other than a loan for the repair, remodeling, rehabilitation, or expansion of an existing owner-occupied residence, if the borrower has an outstanding housing loan made under a state loan program, other than a loan for nonowner-occupied housing under AS 18.56.580 or under former AS 44.47.520 , that bears interest at a rate that was less than the prevailing market interest rate for similar housing loans at the time the loan was made; (5) originate a direct mortgage loan or purchase or participate in the purchase of a mortgage loan for rental housing unless the borrower agrees not to discriminate against tenants or prospective tenants because of sex, marital status, changes in marital status, pregnancy, parenthood, race, religion, color, national origin, or status as a student; or (6) originate, purchase, or participate in a loan to a person who has a past due child support obligation established by court order or by the child support services agency under AS 25.27.160 — 25.27.220 at the time of application. Sec. 18.56.450. Operating loss reserve account. (a) There is established an operating loss reserve account for the purpose of meeting legal expenses incurred through the foreclosure of properties acquired by the corporation under AS 18.56.400 (6) and making repairs to these properties so that they may be sold to new buyers. (b) The operating reserve loss account consists of money appropriated to it by the legislature and deposited in it by the corporation. To the extent that money is paid out of the operating loss reserve account for the purposes stated in this section, this money shall be replaced with money received as interest on loans authorized by AS 18.56.400 — 18.56.600. Sec. 18.56.460. Security for loans. (a) The corporation shall adopt regulations in accordance with AS 18.56.088 establishing acceptable security for loans originated or purchased in whole or in part under AS 18.56.420 . (b) A person may pledge as security for the repayment of a loan originated or purchased in whole or in part under AS 18.56.420 a preference right that person holds to receive title to land the person occupies as a primary place of residence, primary place of business, subsistence campsite, or as headquarters for reindeer husbandry. The preference right must be conveyed to the person by the Native corporation to which the land was granted under 43 U.S.C. 1613 (Alaska Native Claims Settlement Act) before it may be pledged as security under this subsection. The corporation shall prescribe procedures and standard forms for establishing, pledging, and appraising the value of a preference right held by a person to secure the repayment of a loan originated or purchased in whole or in part under AS 18.56.420 . Sec. 18.56.470. Interest on loans. (a) The interest rate on a mortgage loan originated or purchased in whole or in part under AS 18.56.420 for small community housing or multi-family housing under AS 18.56.580 is one percent less than the interest rate, as determined under AS 18.56.098 (f)(1) — (4), on a mortgage loan purchased under AS 18.56.098 (a) from the proceeds of the most recent applicable issue of taxable bonds before the origination or purchase of the mortgage loan originated or purchased under AS 18.56.420 . However, the interest rate on that portion of a loan that exceeds $250,000 is the same as the interest rate determined under AS 18.56.098 (f)(1) — (4). (b) Notwithstanding the requirements of (a) of this section, if there has not been an applicable issue of taxable bonds issued within six months before the origination or purchase of a loan under this section, the corporation may estimate the interest rate that an issue of taxable bonds would bear. Sec. 18.56.480. Title. (a) Before the corporation originates or purchases a small community housing mortgage loan in whole or in part, the corporation may require a borrower to show marketable title to real property offered as security for the loan to be purchased. (b) A borrower may show marketable title to real property for the purposes of (a) of this section (1) by purchasing title insurance from a title insurance company authorized to do business in the state; or (2) by delivering to the corporation a copy of a letter of intent signed by an authorized representative of the United States Department of the Interior that shows the transfer of title to the property from the United States government to the borrower if (A) the borrower is an Alaska Native; and (B) title to the property was originally transferred from the United States government, directly or indirectly, to the borrower under federal law. (c) For the purposes of this section, a deed which federal law prohibits or limits the power to transfer or encumber and which would otherwise constitute marketable title to real property is considered marketable title to real property if the United States Bureau of Indian Affairs or another appropriate federal agency waives immunity under the federal law from foreclosure or other alienation of the real property. Sec. 18.56.490. Restricted title loss reserve account. (a) There is established in the corporation the restricted title loss reserve account. The restricted title loss reserve account consists of money appropriated to it by the legislature and deposited to it by the corporation, and shall be administered by the corporation. (b) The corporation may withdraw money from the restricted title loss reserve account in an amount equal to the loss to the corporation on a small community housing mortgage loan originated or purchased in whole or in part by the corporation if marketable title to the real property used to secure the loan was shown under AS 18.56.480 (b)(2). Money withdrawn from the restricted title loss reserve account under this section shall be deposited in the Alaska housing finance revolving fund ( AS 18.56.082 ). Sec. 18.56.500. Fire insurance. Before purchasing or participating in the purchase of a small community housing mortgage loan, the corporation may require the borrower to agree to purchase and maintain fire insurance for the real property for which the loan is made in an amount not less than the outstanding principal balance of the loan. Sec. 18.56.510. Loan origination and servicing. (a) Before purchasing or participating in the purchase of a small community housing mortgage loan, the corporation shall enter into a loan servicing agreement with the private financial institution from which the loan is to be purchased. (b) The corporation may execute service agreements with private lending institutions or with regional Native housing authorities established under AS 18.55.996 to service loans originated by the corporation or loans originated under AS 18.55.997 . (c) Under the servicing agreement, the private financial institution or the regional Native housing authority shall administer the loan and may charge the corporation a negotiated origination or servicing fee on the corporation's share of the loan. When appropriate, the private financial institution or the regional Native housing authority may also charge the borrower a reasonable originator fee not to exceed one percent. Sec. 18.56.520. Appraisals. Before originating or purchasing or participating in the purchase of a small community housing mortgage loan, the corporation may have or may require the borrower to have an appraisal made of the fair market value of the real property, including structures on the real property, for which the loan is made. In conducting an appraisal under this section, the appraiser shall give full value to insulation and other features of construction in structures on the real property that add to the energy efficiency of the structures. Sec. 18.56.530. Energy audit exemption. In making loans under AS 18.56.400 — 18.56.600, the corporation is exempt from the requirements of AS 46.11.050 (b). Sec. 18.56.540. Toll-free telephone number. For the purposes of administration of AS 18.56.400 — 18.56.600, the corporation shall arrange for and maintain a toll-free telephone number for the corporation so that private financial institutions and their borrowers may contact the corporation from any location in the state by telephone without a toll charge. Sec. 18.56.550. Field offices; contract services; assistance to others. (a) The corporation may establish field offices under AS 18.56.400 — 18.56.600, may hire one or more lending officers, and may contract for the services of (1) real property appraisers who are familiar with housing and construction in small communities; and (2) engineers who are familiar with engineering problems in arctic and subarctic regions. (b) The personnel described in (a) of this section may make visits to small communities to provide preconstruction and post-construction inspections of real property for which loans are originated or purchased by the corporation in whole or in part under AS 18.56.420 and to provide assistance to private financial institutions and their borrowers. Authority for final approval of loans may not be exercised by the personnel described in this section. Sec. 18.56.560. Demonstration projects and information. The corporation may enter into agreements with public and private agencies to provide demonstration projects and information concerning housing construction in small communities. Sec. 18.56.570. Regional allocation. [Repealed, § 8 ch 134 SLA 2004.] Sec. 18.56.580. Loans for multi-family housing. (a) The corporation may use the housing assistance loan program created in AS 18.56.420 to make loans for the purchase, participation in the purchase, origination, development, or refinancing of multi-family housing in small communities. (b) In this section, (1) “development” means the construction of a new residence or the acquisition, repair, remodeling, rehabilitation, or expansion of an existing residence; (2) “multi-family housing” means a multi-family residence containing two or more dwelling units that may be nonowner-occupied or owner-occupied. Sec. 18.56.590. Annual report. [Repealed, § 42 ch 12 SLA 2006.] Sec. 18.56.600. Definitions. In AS 18.56.400 — 18.56.600, (1) “housing” means owner-occupied, single-family housing and owner-occupied duplexes in which not more than 25 percent of the gross floor area is or will be devoted to commercial use; (2) “small community” means a community with a population of 6,500 or less that is not connected by road or rail to Anchorage or Fairbanks, or with a population of 1,600 or less that is connected by road or rail to Anchorage or Fairbanks; in this paragraph, “connected by road” does not include a connection by the Alaska marine highway system. Article 3. Low Cost and Low Income Multiple Housing. Sec. 18.56.650. Low cost and low income multiple family housing development fund and grants. (a) There is created in the corporation a low cost and low income multiple family housing development fund. Subject to appropriation the corporation shall make grants to municipalities or public or private nonprofit corporations designated as tax exempt under 26 U.S.C. 501(c)(3) and (4) (Internal Revenue Code of 1954) for the purpose of developing low cost, low income multiple family housing. (b) Application for a grant under (a) of this section shall be in the form prescribed by the corporation. The application (1) shall demonstrate the need for low cost, low income multiple family housing in the area to be served, the feasibility of the proposed project; and (2) must include an adequate management plan that shall demonstrate the ability of the eligible recipient to sustain the proposed project. (c) A low cost and low income multiple family housing project developed under this section (1) shall be prepared in accordance with facility procurement policies developed by the Department of Transportation and Public Facilities under AS 35.10.160 — 35.10.200; and (2) is a public facility under AS 35.10.160 — 35.10.200. (d) The corporation shall adopt regulations under AS 18.56.088 to carry out the purposes of this section. (e) In this section, “low cost and low income multiple family housing” (1) means a specific work or improvement undertaken primarily to provide multiple family dwelling accommodations for low income persons; (2) includes the acquisition, construction, or rehabilitation of land, buildings, improvements, and other nonhousing facilities that are incidental or appurtenant to the housing. Article 4. Senior Housing Office. Sec. 18.56.700. Senior housing office. (a) There is established in the corporation a senior housing office. The office shall promote a comprehensive response to the needs of senior citizens for adequate, accessible, secure, and affordable housing in the state. In order to fulfill this purpose, the office may (1) study the needs of senior citizens in the state for housing to meet their needs; (2) seek financial assistance from appropriate sources for the development of housing alternatives for senior citizens; (3) administer the senior housing loan program established under AS 18.56.700 — 18.56.799; (4) cooperate and coordinate with other public and private agencies to respond to the housing needs of senior citizens; (5) offer public education programs to increase the awareness of alternatives to large residential facilities for senior citizens; (6) provide information to senior citizens to help them understand their financial alternatives related to homes they might already own and to help them coordinate with other senior citizens in finding housing alternatives, including information and coordination on home equity conversion and home sharing; and (7) disseminate information to construction contractors to educate them about remodeling projects that would meet the needs of many senior citizens for accessible and secure housing. (b) In order to avoid duplication of efforts and to benefit from the commission's expertise, the office shall consult with the Alaska Commission on Aging in the performance of the office's duties under AS 18.56.700 — 18.56.799 so that the housing needs of senior citizens can be met most efficiently and effectively. Sec. 18.56.710. Senior housing revolving fund. (a) The senior housing revolving fund is established. The revolving fund consists of appropriations made to it by the legislature, the proceeds of bonds sold under AS 18.56.790 , repayments of principal and interest on loans made or purchased from assets of the fund, and money or other assets transferred to the revolving fund by the corporation. The corporation may (1) pledge amounts deposited in the revolving fund for bonds issued under AS 18.56.790 ; (2) use amounts deposited in the fund for making, purchasing, or participating in (A) senior housing mortgage loans; (B) loans made for building materials for senior housing; (C) loans made for renovation or improvement of or for senior housing, including loans for renovation or improvement of congregate or individual residences; and (D) loans made for the construction of senior housing. (b) For each loan proposed to be made under AS 18.56.700 — 18.56.799, the corporation shall determine the financial feasibility of the project for which the loan would be used and the extent to which the project would meet senior housing needs in the area for which it is proposed. Sec. 18.56.720. Interest rate. [Repealed, § 7 ch 84 SLA 1998.] Sec. 18.56.730. Conditions on loans. (a) The corporation shall adopt regulations under AS 18.56.088 (a) and (b) establishing acceptable security for loans originated or purchased in whole or in part under AS 18.56.700 — 18.56.799. (b) The corporation (1) may condition a loan under AS 18.56.700 — 18.56.799 on an agreement by the borrower to maintain the financed project as senior housing for a time period specified by the corporation; and (2) shall establish by regulation the criteria it will use for specifying time periods under (1) of this subsection and for determining under what circumstances the time periods can be decreased after the loan is made. Sec. 18.56.740. Fire insurance. Before purchasing or participating in the purchase of a senior housing mortgage loan, the corporation shall require the borrower to agree to purchase and maintain fire insurance for the real property for which the loan is made in an amount not less than the outstanding principal balance of the loan. Sec. 18.56.750. Loan origination and servicing. (a) Before purchasing or participating in the purchase of a senior housing loan, the corporation shall enter into a loan servicing agreement with the private financial institution from which the loan is to be purchased. (b) The corporation may execute service agreements with private lending institutions or with regional Native housing authorities established under AS 18.55.996 to service loans originated by the office. (c) Under the servicing agreement, the private financial institution or the regional Native housing authority shall administer the loan and may charge the corporation a negotiated origination or servicing fee on the office's share of the loan.

When appropriate, the private financial institution or the regional Native housing authority may also charge the borrower a reasonable origination fee not to exceed one percent. Sec. 18.56.760. Appraisals. Before originating or purchasing or participating in the purchase of a senior housing mortgage loan, the corporation may have or may require the borrower to have an appraisal made of the fair market value of the real property, including structures on the real property, for which the loan is made. In conducting an appraisal under this section, the appraiser shall give full value to insulation and other features of construction in structures on the real property that add to the energy efficiency of the structures. Sec. 18.56.770. Toll-free telephone number. The corporation shall arrange for and maintain a toll-free telephone number for senior housing purposes so that private financial institutions and their borrowers may contact the office from any location in the state by telephone without a toll charge. Sec. 18.56.780. Contracting for services. The corporation may contract for the services of persons who will assist the office in performing its duties under AS 18.56.700 — 18.56.799. Sec. 18.56.790. Bonds for senior housing. (a) Under the procedures of this chapter, the corporation may issue bonds in a total amount not exceeding $30,000,000 to fund senior housing loans made under AS 18.56.700 — 18.56.799. (b) [Repealed, § 7 ch 84 SLA 1998.] (c) [Repealed, § 7 ch 84 SLA 1998.] (d) [Repealed, § 8 ch 84 SLA 1998.] (e) In this section, “bond” has the meaning given in AS 18.56.390 . Sec. 18.56.795. Regulations. For purposes of implementing AS 18.56.700 — 18.56.799, the corporation shall, under AS 18.56.088 , establish by regulation the age requirement for occupants of senior housing, which may not be less than 55 years of age. Sec. 18.56.799. Definitions. In AS 18.56.700 — 18.56.799, (1) “office” means the senior housing office established under AS 18.56.700 ; (2) “senior housing” (A) means construction or improvement undertaken primarily to provide dwelling accommodations for older individuals, including conventional housing, housing for frail elderly, group homes, congregate housing, residential horizontal property regimes organized under AS 34.07 , residential cooperatives organized under AS 10.15 or AS 34.08 , residential condominiums organized under AS 34.08 , and other housing that meets special needs of the elderly; (B) includes acquisition, construction, or rehabilitation of land, buildings, improvements, and other nonhousing facilities that are incidental or appurtenant to the housing described in (A) of this paragraph. Article 5. Senior Citizens Housing Development Fund. Sec. 18.56.800. Declaration of purpose. There exists in the state a serious shortage of decent, safe, and sanitary residential housing available at low or moderate prices or rentals to older individuals. There also exists in the state organizations whose purposes are to provide the kinds of housing needed to alleviate this shortage. Development work to provide such housing involves substantial expense that is often beyond the resources of the organizations. Sec. 18.56.810. Senior citizens housing development. (a) There is created in the corporation a senior citizens housing development fund. Subject to direct appropriation or through proceeds of a bond issue, the corporation shall make grants to municipalities, public or private nonprofit corporations designated as tax exempt under 26 U.S.C. 501(c)(3) and (4) (Internal Revenue Code of 1954), or regional housing authorities created in AS 18.55.996 (b) for the purpose of developing senior citizen housing. A grant from the proceeds of a bond issue may be made only to municipalities. (b) Application for a grant under (a) of this section shall be in the form prescribed by the corporation. The application (1) shall demonstrate the need for senior citizen housing in the area to be served and the feasibility of the proposed project; and (2) must include an adequate management plan that shall demonstrate the ability of the eligible recipient to sustain the proposed project. (c) A senior citizen housing project developed under this section (1) shall be prepared in accordance with facility procurement policies developed by the Department of Transportation and Public Facilities under AS 35.10.160 — 35.10.200; and (2) is a public facility under AS 35.10.160 — 35.10.200. (d) The corporation shall adopt regulations to carry out the purposes of this section. The provisions of AS 18.56.088 (a) and (b) apply to regulations adopted under this section. (e) In this section, “senior citizen housing” has the meaning given “senior housing” in AS 18.56.799 . Article 6. Energy Efficiency and Conservation Programs. Sec. 18.56.850. Home energy conservation and weatherization program. (a) The corporation shall plan, study, implement, and assist programs for home energy conservation and weatherization including, without limitation, the (1) home energy loan program; (2) rural capital retrofit program; and (3) energy efficiency and weatherization program. (b) In the development of a home energy conservation or weatherization program under (a) of this section, the corporation may not consider the value of Alaska longevity bonus payments under AS 47.45 or permanent fund dividends under AS 43.23 in determining whether a person meets income guidelines established under AS 18.56.088 and (a) of this section for a state or, to the extent permitted by federal law, a federal energy conservation or weatherization program. Sec. 18.56.855. Alaska energy efficiency revolving loan fund. (a) The Alaska energy efficiency revolving loan fund is established in the corporation to carry out the purposes of this section. The revolving loan fund consists of money or assets appropriated or transferred to the corporation for the revolving loan fund, including money and assets deposited in the revolving loan fund by the corporation and earnings on investments of money held in the revolving loan fund. The corporation may establish separate accounts in the fund. The corporation shall establish the interest rates, security provisions, and other terms of a loan made under this section taking into consideration the corporation's cost of funds and other factors the corporation considers appropriate. (b) Money and other assets of the Alaska energy efficiency revolving loan fund may be used to (1) make loans to regional educational attendance areas or to municipal governments, including subdivisions of municipal governments, to the University of Alaska, or to the state for the purpose of financing energy efficiency improvements to buildings owned by regional educational attendance areas, by the University of Alaska, by the state, or by municipalities in the state; (2) secure bonds issued by the corporation to finance the loans described in (1) of this subsection; (3) pay costs of administering the revolving loan fund; and (4) pay the costs of administering and enforcing the terms of loans made by the corporation from the revolving loan fund. (c) Before a regional educational attendance area, the University of Alaska, a municipal government, or a subdivision of a municipal government, may borrow money from the corporation under this section, the regional educational attendance area, the University of Alaska, or the municipal government shall waive any sovereign immunity defense it may have available to it with respect to enforcement of the terms of the loan. A regional educational attendance area, the University of Alaska, or a municipal government may waive sovereign immunity to comply with the requirement of this subsection. The state waives any sovereign immunity defense against enforcement of the terms of a loan made to the state under this section. A person or corporation having a claim under this section shall bring an action in a state court in Alaska that has jurisdiction over the claim. (d) All regional educational attendance areas and municipal governments in the state and the University of Alaska are authorized to borrow from the corporation under this section. The corporation shall set out the terms of a loan to a regional educational attendance area in a loan agreement or similar document. At the discretion of the corporation, a borrowing by a regional educational attendance area, the University of Alaska, or a municipal government under this section may be effected by use of a loan agreement or similar document evidencing and setting out the terms of the loan or by issuance of a bond by the municipal government to the corporation. Notwithstanding a charter provision requiring public sale by a regional educational attendance area or a municipality of its municipal bonds or other indebtedness, a regional educational attendance area or municipality may sell its bonds under this section to the corporation at a negotiated, private sale. At the discretion of the corporation, the bonds or other indebtedness of the municipality may be general obligations of the municipality or may be secured by an identified revenue source or by a combination of the full faith and credit of the municipality and an identified revenue source. (e) Notwithstanding any other provision of law, to the extent that a department or agency of the state is the custodian of money payable to a regional educational attendance area, to the University of Alaska, or to a municipality, at any time after written notice to the department or agency head from the corporation that the regional educational attendance area, the University of Alaska, or the municipality is in default on the payment of principal of or interest on municipal bonds or other indebtedness then held or owned by the corporation, or amounts due under an agreement between the corporation and a regional educational attendance area, the University of Alaska, or a municipality, the department or agency shall withhold the payment of that money from that regional educational attendance area, the University of Alaska, or that municipality and pay over the money to the corporation for the purpose of paying the principal of and interest on the bonds or indebtedness. The notice must be given in each instance of default. If a notice is given under this subsection and under AS 44.85.170 and the default is continuing under this subsection and under AS 44.85.170 , the department or agency shall make payment to the corporation and to the Alaska Municipal Bond Bank Authority on a pro rata basis, taking into consideration the principal amount of the respective default amounts. (f) An authorized state officer may borrow from the corporation under this section for buildings owned by the state. The superintendent of a regional educational attendance area, at the direction of the regional educational attendance area school board, may borrow from the corporation under this section for buildings owned by the regional educational attendance area. The president of the University of Alaska, at the direction of the Board of Regents, may borrow under this section for buildings owned by the University of Alaska. (g) In addition to other security that may be given with respect to a loan made under this section, the corporation may require a deed of trust on the building that is the subject of the energy efficiency loan and the real estate on which the building is located. A regional educational attendance area, the University of Alaska, or a municipality may grant a deed of trust to the corporation as needed for this purpose. An authorized state officer may grant a deed of trust to the corporation as needed for this purpose. (h) The corporation shall administer the Alaska energy efficiency revolving loan fund in accordance with regulations adopted by the corporation. The corporation may adopt regulations under AS 18.56.088 to carry out the purposes of this section. (i) This section applies to home rule municipalities. (j) In this section, “authorized state officer” means (1) the commissioner of the department of the state for a building owned by the state; (2) the executive director of a public corporation for a building owned by the public corporation; (3) the legislative council for a building owned by the legislature; (4) the administrative director of the Alaska Court System for a building owned by the judicial system; (5) any other person designated in writing by a person listed in (1) — (4) of this subsection. Sec. 18.56.860. Home energy rating systems. The corporation shall act as the authorizing agency for purposes of approving home energy rating systems used in the state. Article 7. General Provisions. Sec. 18.56.900. Definitions. In this chapter, (1) “board” means the board of directors of the corporation; (2) “corporation” means the Alaska Housing Finance Corporation created by this chapter; (3) “sustainable energy development” means (A) renewable energy generation from sources that are continually replenished by nature, such as the sun, wind, water, or biological processes; (B) building energy efficiency, including switching to renewable fuels and electrification; (C) electrical infrastructure incorporating (i) energy storage to support clean energy distribution, including remote and non-remote microgrids and smart grid applications; or (ii) sustainable technologies, including distributed generation, advanced battery, and combined heat and power; (D) clean transportation, including (i) electric vehicles powered by batteries, hydrogen vehicles, plug-in hybrid electric vehicles, and other zero-emissions vehicles for consumers, businesses, government, and public transit; and (ii) electric vehicle charging and fueling infrastructure; or (E) any greenhouse gas emissions reduction, energy efficiency, or zero-emission technology approved by the corporation.