                                 CODE OF VIRGINIA

TERMS AND CONDITIONS OF PURCHASE FROM AND SALE TO MORTGAGE LENDERS OF MORTGAGE
LOANS; LOANS TO MORTGAGE LENDERS (§ 36-55.35)

A. Except in the case of a mortgage loan that, when made by the mortgage lender,
is to be purchased by HDA, no obligation shall be eligible for purchase or
commitment to purchase by HDA from a mortgage lender hereunder if the date of
said obligation precedes the date of HDA&#8217;s commitment to purchase such
obligation by such number of years as shall be determined by HDA and unless at
or before the time of transfer thereof to HDA such mortgage lender certifies:

   1. That in its judgment the loan would in all respects be a prudent
   investment; and

   2. That the proceeds of sale or its equivalent shall be reinvested as provided
   in subsection F of this section, or invested in short-term obligations pending
   such reinvestment. However, certification pursuant to this subsection shall
   not be required in the case of the purchase or commitment to purchase by HDA
   of a mortgage loan held, insured or assisted by the federal government or any
   agency or instrumentality thereof.

B. HDA shall purchase mortgage loans at a purchase price equal to the
outstanding principal balance; however, discount from the principal balance or
the payment of a premium may be employed to effect a fair rate of return which
in the opinion of HDA is consistent with the obligations of the HDA hereunder
and the purposes of this chapter. In addition to the aforesaid payment of
outstanding principal balance HDA shall pay the accrued interest due thereon, on
the date the loan or obligation is delivered against payment therefor. The
provisions of this subsection shall not apply to the purchase by HDA of a
mortgage loan held, insured or assisted by the federal government or any agency
or instrumentality thereof, in which case the purchase price shall be determined
by agreement of HDA and the mortgage lender.

C. Loans purchased or sold hereunder may include but shall not be limited to
loans which are insured, guaranteed or assisted by the federal government or for
which there is a commitment by the federal government to insure, guarantee or
assist such loan.

D. HDA shall from time to time adopt, modify or repeal rules and regulations
governing the making of loans to mortgage lenders and the purchase and sale of
mortgage loans and the application of the proceeds thereof, including rules and
regulations as to any or all of the following:

   1. Procedures for the submission of requests or the invitation of proposals
   for the purchase and sale of mortgage loans or for loans to mortgage lenders;

   2. Limitations or restrictions as to number of family units, location or other
   qualifications or characteristics of residences to be financed by residential
   mortgage loans and requirements as to the income limits of persons and
   families of low and moderate income occupying such residences;

   3. Restrictions as to the interest rates on residential mortgage loans or the
   return realized therefrom by mortgage lenders;

   4. Requirements as to commitments by mortgage lenders with respect to
   residential mortgage loans;

   5. Schedules of any fees and charges necessary to provide for expenses and
   reserves of the HDA; and

   6. Any other matters related to the duties and the exercise of the powers of
   HDA to purchase and sell mortgage loans or to make mortgage loans or other
   loans to mortgage lenders.
   				Such rules and regulations shall be designed to effectuate the general
   purposes of this chapter and the following specific objectives: (i) the
   expansion of the supply of funds in the Commonwealth available for residential
   mortgage loans; (ii) the provision of the additional housing needed to remedy
   the shortage of adequate housing in the Commonwealth and eliminate the
   existence of a large number of substandard dwellings; and (iii) the
   restriction of the financial return and benefit to that necessary to protect
   against the realization by mortgage lenders of an excessive financial return
   or benefit as determined by prevailing market conditions.

E. The interest rate or rates and other terms of the loans to mortgage lenders
made from the proceeds of any issue of bonds of the HDA shall be at least
sufficient so as to assure the payment of said bonds and the interest thereon as
the same become due from the amounts received by HDA in repayment of such loans
and interest thereon.

F. HDA shall require as a condition of each loan to a mortgage lender and as a
condition of the purchase or the making of a commitment to purchase mortgage
loans from a mortgage lender that such mortgage lender within such period of
time following the receipt of the proceeds as shall be prescribed by rules and
regulations of HDA, shall have entered into written commitments to make, and
shall thereafter proceed as promptly as practicable to make and disburse from
such proceeds, residential mortgage loans in the Commonwealth of Virginia having
a stated maturity of not less than twenty years from the date thereof in an
aggregate principal amount equal to the amount of such proceeds. HDA shall not
purchase nor make commitment to purchase mortgage loans or obligations from a
mortgage lender from which it has previously purchased mortgage loans nor make a
loan to a mortgage lender to which it has previously made a loan unless said
mortgage lender has either restored or made commitments to restore to its
portfolio of residential mortgage loans in the Commonwealth of Virginia,
residential mortgage loans having a stated maturity of not less than twenty
years from the date thereof in an aggregate principal amount equal to either the
proceeds of prior sale or the amount of prior loan to said mortgage lender. HDA
may require the submission to it by each mortgage lender of evidence
satisfactory to it of the making of such new residential mortgage loans. The
provisions of this subsection shall not apply to the purchase or commitment to
purchase by HDA of a mortgage loan held, insured or assisted by the federal
government or any agency or instrumentality thereof or a mortgage loan that,
when made by the mortgage lender, is to be purchased by HDA.

G. HDA shall require that such loans to mortgage lenders shall be additionally
secured as to payment of both principal and interest by a pledge of and lien
upon collateral security in such amounts as HDA shall by resolution determine to
be necessary to assure the payment of such loans and the interest thereon as the
same become due. Such collateral security shall consist of (a) direct
obligations of, or obligations guaranteed by, the United States of America or
the Commonwealth of Virginia; (b) bonds, debentures, notes or other evidences of
indebtedness, satisfactory to the HDA, issued by any of the following federal
agencies: Bank for Cooperatives, Federal Intermediate Credit Bank, Federal Home
Loan Bank System, Export-Import Bank of Washington, Federal Land Banks, the
Federal National Mortgage Association or the Government National Mortgage
Association; (c) direct obligations of or obligations guaranteed by the
Commonwealth; or (d) mortgages insured or guaranteed, upon terms and conditions
satisfactory to the HDA, by the federal government or private mortgage insurance
companies as to payment of principal and interest.

HISTORY: 1972, c. 830; 1975, c. 536; 1982, c. 101; 1996, c. 298; 2011, cc. 218,
224.