265—45.6(16) Linked deposits.
- 45.6(1) Once a financial institution or lender has received a completed loan application from a borrower, the financial institution or lender is to notify the authority via a linked deposit reservation request. The reservation request is on a form created and periodically updated by the authority. The form may be in a paper format or an online web-based format at the authority’s discretion. The authority reviews and approves or denies requests. If the reservation request is approved, the authority will tentatively reserve an amount in or available to the fund for up to 60 days for a linked deposit for the mortgage loan that was the subject of the request. No reservation is made if the requested mortgage loan amount exceeds the amount(s) in and available to the fund. The reservation is terminated if the mortgage loan does not close within the 60-day period. If the reservation request is denied, the authority will notify the financial institution or lender that originated the mortgage loan and state the reason for denial.
- 45.6(2) The financial institution or lender that originated the mortgage loan is to review the borrower’s mortgage loan application, applying ordinary manufactured housing lending underwriting criteria. If the loan application is approved by the financial institution or lender, the financial institution or lender submits a request to the authority for a linked deposit. The request shall be on a form created and periodically updated by the authority and which may be in a paper format or an online web-based format at the authority’s discretion.
- 45.6(3) Upon receipt of a linked deposit request, the authority will review the information provided and determine whether the mortgage loan is eligible under the program’s criteria. If necessary, the authority may request additional information. If the mortgage loan is determined eligible, the authority will, if necessary to make the linked deposit, transfer moneys from one or more of the revolving funds, at the authority’s discretion, into the fund to ensure there is a sufficient amount available in the fund to make the linked deposit. The authority then deposits with the financial institution an amount equal to the principal amount of the mortgage loan via automated clearing house (ACH) money transfer. The linked deposit is not security for the mortgage loan or for the interlender loan, if any, nor is it a loan guarantee. The lender or financial institution making the mortgage loan bears all financial risk for the mortgage loan. The financial institution bears all financial risk for any interlender loan. If the mortgage loan is determined ineligible, the authority will notify the financial institution or lender that originated the mortgage loan and state the reason for denial.
- 45.6(4) The authority shall receive monthly bank statements for the linked deposit account.
- 45.6(5) The moneys in the linked deposit account remain in the account for the duration of the mortgage loan. Annually, as of June 30, the financial institution or lender that originated the mortgage loan is to notify the authority of the amount of principal that has been repaid on the mortgage loan during the previous 12 months. The authority will then withdraw from the linked deposit account an amount equal to the principal that was repaid on the mortgage loan during the previous year so that the amount of the linked deposit equals the outstanding principal balance of the mortgage loan.
- 45.6(6) If a financial institution has more than one mortgage loan in the program, the linked deposits for those mortgage loans may be maintained in a single account.
- 45.6(7) The linked deposit for a mortgage loan is withdrawn in full if the mortgage loan is paid off, if the manufactured home purchased with the mortgage loan proceeds is destroyed, or if the borrower defaults on the mortgage loan.
- 45.6(8) The linked deposit account shall bear interest at a rate of not less than 1 percent per annum.
The process to create a linked deposit is as follows:
[ARC 0178D, IAB 4/1/26, effective 5/6/26]