Section 260.401  Mortgage Loans

Each Mortgage Loan to be purchased under the Program shall comply with the terms of the Lender Application, the HomeBuilder Application (if applicable), the Notice of Acceptance and the Mortgage Purchase Agreement  and shall specifically comply with the following requirements, among others:

a)         The original principal amount of each Mortgage Loan, unless such Mortgage Loan is the subject of insurance or guaranty by the FHA,  the VA or the FmHA, shall not exceed 100% of the Property Value.  Each Mortgage Loan that has a loan-to-Property Value ratio in excess of 80% at the time of origination shall:

(1)        be insured by a private mortgage insurer licensed to do business in the State and qualified to insure single family mortgages purchased by the FHLMC or successor federal agency to the extent, if any, required, so that the uninsured portion of such Mortgage Loan shall not exceed 75% of the Property Value; or

(2)        be subject to insurance or guaranty by the FHA or the VA or any other agency or instrumentality of the United States of America having similar powers to insure or guarantee mortgage loans.

b)         Each Mortgage Loan to be purchased by the Authority shall be secured by a Mortgage on a Qualified Dwelling and shall also meet the applicable terms and conditions set forth in this Part, the HomeBuilder Application (if applicable), the Lender Application, the Notice of Acceptance and the Mortgage Purchase Agreement.  Lenders shall sell to the Authority, and the Authority shall purchase, only Mortgage Loans made to Eligible Borrowers.

c)         Each Mortgage securing a Mortgage Loan to be purchased by the Authority shall:

1)         be executed on a form approved by the Authority;

2)         be a valid first mortgage lien on a Qualified Dwelling;

3)         be consistent with Illinois law; and

4)         conform with the requirements prescribed by the Authority and any applicable insurer.

d)         Each Mortgage Loan to be purchased by the Authority shall be non-assumable and non-assignable, unless otherwise required by applicable State or federal law, and shall contain a provision giving the Authority the right to  accelerate the maturity of the Mortgage Loan upon sale or lease of the Qualified Dwelling.

e)         The purchase price of each Qualified Dwelling that is the subject of a Mortgage Loan to be purchased by the Authority under the Program shall not exceed 90% of the average area purchase price applicable to the areas in which such Qualified Dwelling is located (except that in the case of Targeted Area Residences the purchase price shall not exceed 110% of the average area purchase price), except to the extent permitted by the Code.  Average area purchase price shall be established pursuant to procedures prescribed by the Code.

f)          The Authority shall not purchase any Mortgage Loan if, on the date of purchase, the obligor of the Mortgage Loan is delinquent in the payment of any installment of principal, interest or other amounts due under the terms of such Mortgage Loan.

g)         The Authority may foreclose Mortgages held as security for Mortgage Loans purchased under this Part that are in default according to their terms, or reassign such Mortgages to the Lender in accordance with the terms of the Mortgage Purchase Agreement. The Authority may take title in its name upon foreclosure and to subsequently convey title to such property to any qualified insurer of the mortgage or any bona fide purchaser of the property.