Section 16.38 - Loans to lending institutions1. The authority may make, and contract to make, loans to lending institutions on terms and conditions as the authority determines are reasonably related to protecting the security of the authority's investment and to implementing the purposes of this chapter, and subject to this section. All lending institutions are authorized to borrow from the authority in accordance with the provisions of this section and the rules of the authority.2. The authority shall require as a condition of each loan to a lending institution that the lending institution, within a reasonable period after receipt of the loan proceeds as the authority prescribes by rule, shall have entered into written commitments to make, and, within a reasonable period thereafter as the authority prescribes by rule, shall have disbursed the loan proceeds in new mortgage loans to low or moderate income families in an aggregate principal amount equal to the amount of the loan. New mortgage loans shall have terms and conditions as the authority prescribes by rules which are reasonably related to implementing the purposes of this chapter.3. The authority shall require the submission to the authority by each lending institution to which the authority has made a loan, of evidence satisfactory to the authority of the making of new mortgage loans to low or moderate income families as required by this section, and in that connection may, through its members, employees, or agents, inspect the books and records of a lending institution.4. Compliance by a lending institution with the terms of its agreement with the authority with respect to the making of new mortgage loans to low or moderate income families may be enforced by decree of any district court of this state. The authority may require as a condition of a loan to a national banking association or a federally chartered savings and loan association, the consent of the association to the jurisdiction of courts of this state over any such proceeding. The authority may also require, as a condition of a loan to a lending institution, agreement by the lending institution to the payment of penalties to the authority for violation by the lending institution of its agreement with the authority, and the penalties shall be recoverable at the suit of the authority.5. The authority shall require that each lending institution receiving a loan pursuant to this section shall issue and deliver to the authority an evidence of its indebtedness to the authority which shall constitute a general obligation of the lending institution and shall bear a date, mature at a time, be subject to prepayment, and contain other provisions consistent with this section and reasonably related to protecting the security of the authority's investment, as the authority determines.6. Notwithstanding any other provision of this section to the contrary, the interest rate and other terms of loans to lending institutions made from the proceeds of an issue of bonds or notes of the authority shall be at least sufficient to assure the payment of the bonds or notes and the interest on them as they become due.7. The authority shall require that loans to lending institutions are additionally secured as to payment of both principal and interest by a pledge of and lien upon collateral security by special escrow funds or other forms of guaranty and in such amounts and forms as the authority shall by resolution determine to be necessary to assure the payment of the loans and the interest thereon as they become due. Collateral security shall consist of direct obligations of, or obligations guaranteed by, the United States or one of its agencies, obligations satisfactory to the authority which are issued by other federal agencies, direct obligations of or obligations guaranteed by a state or a political subdivision of a state, or investment quality obligations approved by the authority.8. The authority may require that collateral for loans be deposited with a bank, trust company, or other financial institution acceptable to the authority located in this state and designated by the authority as custodian. In the absence of such a requirement, each lending institution shall enter into an agreement with the authority containing provisions as the authority deems necessary to adequately identify and maintain the collateral, service the collateral, and require the lending institution to hold the collateral as an agent for the authority and be accountable to the authority as the trustee of an express trust for the application and disposition of the collateral and the income from it. The authority may also establish additional requirements as the authority deems necessary with respect to the pledging, assigning, setting aside, or holding of collateral and the making of substitutions for it or additions to it and the disposition of income and receipts from it.9. The authority may require as a condition of loans to lending institutions, any representations and warranties the authority determines are necessary to secure the loans and carry out the purposes of this section.10. If a provision of this section is inconsistent with a provision of law of this state governing lending institutions, the provision of this section controls for the purposes of this section.2014 Acts, ch 1080, §38, 78
Added by 2014 Iowa, ch 1080,s 38, eff. 1/1/2015.