SB238INTRODUCED
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SB238
1Q78Z3Z-1
By Senator Price
RFD: Fiscal Responsibility and Economic Development
First Read: 19-Mar-24
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5 1Q78Z3Z-1 03/18/2024 CMH (L)CMH 2024-1097
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First Read: 19-Mar-24
SYNOPSIS:
Under existing law, the Alabama Home Buyers
Initiative Act created a program administered by the
Alabama Housing Finance Authority to encourage new
thirty-year, fixed-rate conventional mortgage loans for
new home ownership. The loans are encouraged through
the establishment of a Mortgage Guarantee Fund through
which reimbursements are provided to investors who
suffer a foreclosure loss as a result of a qualified
mortgage loan. Funds in the Mortgage Guarantee Fund are
appropriated from the Alabama Capital Improvement Trust
Fund and other sources.
Also under existing law, other alternative
housing programs have been authorized which promote
home ownership in this state through the payment of
mortgage insurance premiums, establishment of homeowner
education programs, and other means.
This bill would provide that upon the depletion
of funds appropriated from the Alabama Capital
Improvement Trust Fund, any additional funds
appropriated to the Mortgage Guarantee Fund shall be
made available for other housing programs, including
alternative housing programs.
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A BILL
TO BE ENTITLED
AN ACT
Relating to the Home Buyers Initiative Act; to amend
Section 24-1A-43, Code of Alabama 1975, to provide for the
expenditure of certain funds appropriated to the Mortgage
Guarantee Fund to be used for certain housing programs that
promote home ownership, including alternative housing
programs.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 24-1A-43, Code of Alabama 1975, is
amended to read as follows:
"ยง24-1A-43
(a) There is hereby established a mortgage guarantee
fund to be held in the State Treasury and to be administered
by the Alabama Housing Finance Authority that will be
available to reimburse foreclosure losses, if any, that arise
with respect to a qualified mortgage loan under the Alabama
Home Buyers Initiative. There is appropriated from the Alabama
Capital Improvement Trust Fund to the guarantee fund a total
of six million dollars ($6,000,000) for the fiscal year ending
September 30, 2009. This appropriation shall be irrevocably
deposited in the guarantee fund within ten10 days after this
actAct 2009-284 becomes effective. Pursuant to Section VII of
Amendment 666 to the Constitution of Alabama 1901 Section
219.04 of the Constitution of Alabama of 2022 , the Legislature
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219.04 of the Constitution of Alabama of 2022 , the Legislature
finds that it is advisable and necessary to make this
appropriation to the mortgage guarantee fund which is in
excess of the amount contained in the Governor's certification
of the amount of funds needed for Capital Improvements capital
improvements.
(b) A mortgage guarantee fund fee shall be paid at
closing from the proceeds of each qualified mortgage loan and
shall be deposited in the guarantee fund. All interest or
investment income on funds deposited in the guarantee fund
shall be credited to, and shall remain part of, the guarantee
fund.
(c) The state Comptroller shall issue payment warrants
from the mortgage guarantee fund only after receipt of a
certification from the program administrator that identifies
each qualified mortgage loan that has suffered a foreclosure
loss, contains a calculation of the amount of the foreclosure
loss, and provides payment instructions for each investor that
suffered such foreclosure loss. Payments from the guarantee
fund shall be deemed made first from the six million dollars
($6,000,000) appropriated to the guarantee fund in subsection
(a), until exhausted, thereafter from interest or investment
income on the guarantee fund, and finally from guarantee fund
fees deposited in the guarantee fund.
(d) The amount of reimbursement available from the
mortgage guarantee fund for each qualified mortgage loan shall
not exceed forty percent (40%) 40 percent of suchthe loan's
foreclosure balance.
(e) Reimbursements to investors from the mortgage
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(e) Reimbursements to investors from the mortgage
guarantee fund shall be paid in the order in which
certifications of foreclosure loss are received.
(f) The mortgage guarantee fund shall remain available
until it is depleted. If the program administrator certifies
to the State Treasurer that : (i) (1) all qualified mortgage
loans have been paid in full before the guarantee fund is
depleted,; or (2)(ii) the existing balance in the guarantee
fund exceeds the maximum amount that is available to be
withdrawn to reimburse foreclosure losses under this article,
the remaining balance or excess amount in the guarantee fund,
as the case may be, and all future mortgage guarantee fund
fees, if any, shall be made available for other housing
programs identified and administered by the program
administrator, including without limitation guarantee funds
for other housing initiatives, and homeowner education.
(g) Upon the depletion of the funds appropriated from
the Alabama Capital Improvement Trust Fund described in
subsection (a), any additional funds that are appropriated to
the mortgage guarantee fund shall be made available for other
housing programs identified and administered by the program
administrator as provided in this article, including
alternative housing programs as provided in Section 24-1A-44. "
Section 2. This act shall become effective on October
1, 2024.
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