(a) For the purposes of this section:
(1) “Eligible borrower” means the owner of a residential building;
(2) “Participating lender” means a depository bank or credit union that participates in the Collapsing Foundations Credit Enhancements Program established pursuant to this section; and
(3) “Qualifying loan” means any loan provided to an eligible borrower for the purpose of repairing or replacing a concrete foundation that has deteriorated due to the presence of pyrrhotite and (A) is issued by a participating lender, (B) is subject to the underwriting standards established by the participating lender, (C) carries a rate of interest in accordance with subsection (b) of this section, and (D) is made pursuant to the Collapsing Foundations Credit Enhancements Program.
(b) There is established a Collapsing Foundations Credit Enhancements Program, administered by the Connecticut Housing Finance Authority, for the purpose of assisting eligible borrowers to obtain necessary funding for replacement or repair of concrete foundations that have deteriorated due to the presence of pyrrhotite. The program shall, among other efforts, make one or more financial products or credit enhancements available, including, but not limited to, loan guarantees that may enable participating lenders to make qualifying loans with loan-to-value ratios in excess of regulatory standards. To participate in the program, the participating lender shall offer a qualifying loan with an interest rate that is not less than one-half of one percentage point below the interest rate that is otherwise available to the eligible borrower based on the creditworthiness of such eligible borrower.
(c) The Connecticut Housing Finance Authority shall seek the participation of banks and credit unions in the Collapsing Foundations Credit Enhancements Program and shall develop the terms, conditions and standards for such program, in consultation with the Lieutenant Governor and representatives of the banking and credit union industries, not later than thirty days before the program, or any phase of the program, is made available to eligible borrowers. The terms, conditions and standards that are developed shall identify the necessary form of inspection or testing to verify that the eligible borrower's foundation has deteriorated due to the presence of pyrrhotite and the terms and conditions of any financial product or credit enhancement that may be made available pursuant to the program, taking into account the funding that may be necessary to support such financial product or credit enhancement. The program may be launched in phases and shall permit a participating lender to make a qualifying loan with or without utilizing any other financial products or credit enhancements developed pursuant to such program.
(d) The Connecticut Housing Finance Authority shall publish a plain language summary of such program and the borrower eligibility requirements on the Internet web site of the authority not later than fifteen days before such program, or any phase of such program, is made available to property owners.
(June Sp. Sess. P.A. 17-2, S. 337.)
History: June Sp. Sess. P.A. 17-2 effective October 31, 2017.