Urban area mortgages (Repealed)

(a) Pursuant to the Act, CHFA may finance mortgage loans in certain legislatively designated urban areas of the state without regard to the borrower's income, but such loans may not be made by CHFA if otherwise available on "reasonable terms." (b) This requirement that a loan not be otherwise available on reasonable terms will be deemed satisfied by an applicant provided that the applicant shows proof of refusal for a direct mortgage loan from not less than two financial institutions that are making residential mortgage loans in the area in which the housing is located, indicating that such refusal was for at least one of the following reasons: (1) the applicant, according to the financial institution's regular lending guidelines, could not afford to make loan payments in the amount required by the financial institution's interest rate, including points; (2) the applicant, according to the financial institution's regular lending guidelines, could not afford to make loan payments in the amount required by the financial institution's normal term of years for the mortgage loan; or (3) the applicant, according to the financial institution's regular lending guidelines, could not meet the financial institution's downpayment requirement. (c) The refusal should reflect the lending institution's least restrictive terms. In the case of a one-year variable loan with a low initial interest rate, however, the refusal may reflect the interest rate implied by the underlying formula for establishing the interest rate in future years. The refusal must be based on a loan amount that reflects the application of the full amount available for downpayment. (d) The proof of refusal shall be substantially in the form prescribed by CHFA. The proof of refusal shall include the name of the lending institution, the terms on which the lending institutions would make the loan sought by the applicant, and a statement that the lending institution would decline to extend such a loan to the applicant. The proof of refusal shall be signed by a person authorized to act for the lending institution.