1. (a) Except as provided in (d) of this section, each of the mortgagors to whom financing to acquire a residence under 15 AAC 151.110 is provided must meet the requirements of this subsection. A mortgagor meets the requirements of this subsection only if the mortgagor had no present ownership interest in a principal residence located anywhere at any time during the three-year period prior to the date on which the mortgage is executed. For purposes of the preceding sentence, the Corporation will not take into account the mortgagor's interest in the residence with respect to which the financing is being provided. In the event there is more than one mortgagor with respect to a particular residence, each of the mortgagors must meet the three-year requirement. A person who is liable under a note secured by a mortgage, but who does not have a present ownership interest in a residence subject to the mortgage, need not meet the three-year requirement. For example, where a parent takes no interest in the residence, it is not necessary that the parent meet the three-year requirement since the parent is not a mortgagor of the residence. Examples of interests which constitute a present ownership interest are the following:

   1. (1) a fee simple interest;
   2. (2) a joint tenancy, a tenancy in common, or a tenancy by the entirety;
   3. (3) a life estate;
   4. (4) a land contract (.i.e., a contract pursuant to which possession and the benefits and burdens of ownership are transferred although legal title is not transferred until some time later); and
   5. (5) an interest held in trust for the mortgagor (whether or not created by the mortgagor) that would constitute a present ownership interest if held directly by the mortgagor.

2. (b) Examples of interests which do not constitute present ownership interests for purposes of 15 AAC 151.115(a) are the following:

   1. (1) a remainder interest;
   2. (2) a lease with or without an option to purchase;
   3. (3) a mere expectancy to inherit an interest in a principal residence;
   4. (4) the interest that a purchaser of a residence acquires on execution of a purchase contract; and
   5. (5) an interest in other than a principal residence during the previous three years.
3. (c) The Corporation will require proof by affidavit of mortgagors of eligibility and compliance with the requirements of this section and will establish other procedures to ascertain eligibility and compliance with the requirements.
4. (d) The Corporation will not use proceeds of qualified mortgage bonds to purchase a loan made to a mortgagor who does not meet the qualifications described in 15 AAC 151.115(a) except to the extent permitted under the applicable provisions of the Code.

(Eff. 5/7/93, Register 130)

Authority: AS 18.56.098, AS 18.56.099