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Public Act 92-0142
SB49 Enrolled LRB9201970MWcd
AN ACT concerning home mortgages.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Local Government Housing Finance Act.
Section 5. Definitions. In this Act:
"Appraised value" means the fair market value of a home
determined in accordance with generally accepted procedures
and standards applicable to the appraisal of real property.
"Authority" means any county or any municipality in this
State.
"Bonds" means any revenue bonds authorized under this
Act and payable as provided under this Act.
"Corporate authorities" means the county board or the
corporate authorities of a municipality as defined in the
Illinois Municipal Code.
"Home" means real property and improvements on real
property located within the Authority consisting of not more
than 4 dwelling units, including, but not limited to,
condominium units owned by one mortgagor who occupies or
intends to occupy one of the units.
"Home mortgage loan" means an interest-bearing loan to a
mortgagor evidenced by a promissory note and secured by a
mortgage on a home purchased or originated in accordance with
this Act made for the purpose of acquiring a home having a
purchase price less than the maximum home value.
"Lender" means any lending institution participating in a
residential housing finance plan as the originator of home
mortgage loans.
"Lending institution" means any bank, bank holding
company, credit union, trust company, savings bank, national
banking association, savings and loan association, building
and loan association, mortgage banker, or other financial
institution that customarily provides service or otherwise
aids in the financing of home mortgages, or any holding
company for any of the foregoing.
"Maximum home value" means the amount determined by the
corporate authorities.
"Mortgagor" means a person of low or moderate income who
has received or qualifies to receive a home mortgage loan on
a home.
"Ordinance" means an ordinance adopted and approved by
the corporate authorities of an Authority.
"Purchase price" means the actual consideration paid to
the seller of a home.
"Person" means a natural person or persons or a trust,
provided that the trust is for the benefit of a natural
person or members of that person's immediate family.
"Participation commitment" means any undertaking or
agreement by a lending institution to participate in the
implementation of a residential housing finance plan.
"Persons of low or moderate income" means a person or
family (consisting of one or more persons all of whom occupy
or will occupy the home) whose aggregate gross income
including the gross income of any co-signer or guarantor of
the promissory note made in connection with the making of a
home mortgage loan does not exceed a maximum amount to be
established by the corporate authorities and determined in
accordance with appropriate criteria, rules, and regulations,
approved by the corporate authorities in connection with the
implementation of a residential housing finance plan.
"Residential housing finance plan" means a program
implemented under this Act by an Authority to assist persons
of low or moderate income in acquiring safe, decent, and
sanitary housing that they can afford.
"State" means the State of Illinois.
"Trustee" means any State or national bank or trust
company, having trust powers, located within or outside the
State of Illinois, that may be appointed to act in any
capacity with respect to a residential housing finance plan
and the issuance of bonds to finance that plan whether
designated as a trustee, custodian, or administrator.
Section 10. Powers. In addition to powers that an
Authority may now have, Authorities have the following
powers:
(a) To acquire, and to contract and enter into advance
commitments to acquire, directly or indirectly, home
mortgages owned by lending institutions at any prices and
upon any other terms and conditions that are determined by
the Authority or trustee that the Authority designates as its
agent.
(b) To make and execute contracts with lending
institutions for the origination and servicing of home
mortgage loans on behalf of an Authority and to pay the
reasonable value of services rendered in accordance with
those contracts.
(c) To make loans to lenders to enable those lenders to
make home mortgage loans in accordance with this Act.
(d) To establish, by rules, regulations, or ordinances
relating to the issuance of bonds or in any financing
documents relating to the issuance of bonds, any standards
and requirements applicable to the purchase of home mortgage
loans or the origination of home mortgage loans or loans to
lenders that the Authority deems necessary or desirable to
effectuate the public purposes of this Act, including but not
limited to: (i) the time within which lending institutions
must make participation commitments and make disbursements
for home mortgage loans; (ii) the terms and conditions of
home mortgage loans to be acquired or originated; (iii) the
standards and criteria to be applied by the Authority in
defining persons of low or moderate income; (iv) the amounts
and types of insurance coverage required on homes, home
mortgage loans, and bonds; (v) the representations and
warranties to be required of persons and lending institutions
as evidence of compliance with the standards and
requirements; (vi) restrictions as to interest rate and other
terms of home mortgage loans or the return realized therefrom
by lending institutions; (vii) the type and amount of
collateral security to be provided to assure repayment of any
loans to lenders by the Authority and to assure repayment of
bonds; and (viii) any other matters related to the purchase
or origination of home mortgage loans or the making of loans
to lenders that shall be deemed relevant or necessary by the
corporate authorities.
(e) To require from each lending institution from which
home mortgage loans are to be purchased or that will
originate home mortgage loans on behalf of the Authority or
from lenders to which loans are made the submission, at the
time of making participation commitments, of evidence
satisfactory to the Authority of the ability and intention of
the lending institutions to make home mortgage loans and the
submission, within the time specified by the Authority for
making disbursements for home mortgage loans, of evidence
satisfactory to the Authority of the making of home mortgage
loans and of compliance with any standards and requirements
established by the Authority.
(f) To require that a lending institution or lender
furnish, prior to or concurrent with the delivery of any
participation commitment by a lending institution, a
commitment fee in the form of a cash deposit, letter of
credit, promissory note, surety bond, or other instrument
approved by the corporate authorities executed by or on
behalf of the lending institution, in an amount to be
determined by the corporate authorities.
(g) To issue its bonds to defray, in whole or in part,
(i) the cost of acquiring or originating home mortgage loans
or making loans to lenders in order to enable them to make
home mortgage loans; (ii) if deemed necessary or advisable,
the cost of paying interest on bonds during a reasonable
period necessary to acquire or originate the home mortgage
loans or to make the loans to the lender; (iii) the costs of
studies and surveys, insurance premiums, underwriting fees,
legal, accounting, and marketing services incurred in
connection with the issuance and the sale of the bonds,
including amounts required to establish reasonably necessary
bond and interest reserve accounts, and trustee, custodian,
and rating agency fees; (iv) the costs of reasonable
reserves; and (v) any other costs that are reasonably related
to the foregoing.
(h) To authorize the sale or other disposition of any
home mortgage loan, in whole or in part, upon any terms, at
any price and time, and from time to time, as may be
necessary to assure that the revenues and receipts to be
derived with respect to the home mortgage loans, together
with any insurance proceeds, funds held in reserve accounts,
and earnings thereon, shall produce and provide revenues and
receipts at least sufficient to provide for the prompt
payment of the principal, redemption premiums, if any, and
interest at maturity of all bonds issued pursuant to this Act
or to otherwise authorize the sale or other disposition of
any home mortgage loan after the bonds have been paid or
deemed to be paid.
(i) To pledge any revenues and receipts to be received
from any home mortgage loans to the punctual payment of bonds
authorized under this Act, and the interest and redemption
premiums, if any, on the bonds.
(j) To mortgage, pledge, or grant security interests in
any home mortgage loans, notes, or other property in favor of
the holder or holders of bonds issued therefor.
(k) To issue its bonds in any amount that may be
necessary (and not limited by the amount of bonds refunded)
for the purpose of refunding, in whole or in part, at any
time, bonds previously issued, the proceeds of which
refunding bonds may be used, at the discretion of the
corporate authorities, for paying bonds at maturity, calling
bonds for payment, and paying bonds prior to maturity, or for
deposit into an escrow or trust fund in advance of maturity
of bonds to be held for payment thereof at maturity or
earlier.
(l) To appoint or designate a trustee or trustees for
the benefit of the bondholders and to delegate and assign
thereto, insofar as it may lawfully do so, its rights,
duties, and responsibilities with respect to carrying out and
enforcing the terms and provisions of its residential housing
finance plan.
(m) To provide for and authorize the use and disposition
of any funds remaining in the possession of the Authority or
its trustees following payment and retirement of the bonds of
a designated series issued under this Act.
(n) To make and execute contracts and other instruments
necessary or convenient to the exercise of any of the powers
granted in this Act.
Section 15. Ordinance authorizing exercise of powers.
The exercise of any or all powers granted by this Act shall
be authorized and the bonds shall be authorized to be issued
under this Act for the purposes set forth in this Act, by an
ordinance adopted by the corporate authorities that takes
effect immediately upon adoption. The ordinance shall set
forth a finding and declaration (i) of the public purpose
therefor and (ii) that the ordinance is adopted pursuant to
this Act, which finding and declaration shall be conclusive
evidence of the existence and sufficiency of the public
purpose and of the power to carry out and give effect to the
public purpose.
The bonds shall bear interest at any rate or rates
without regard to any other law pertaining to interest rate
limitations, may be payable at any time or times, may be in
one or more series, may bear any date or dates, may mature at
any time or times not exceeding 40 years from their
respective dates, may be payable in any medium of payment at
any place or places, may carry any registration privileges,
may be subject to any terms of redemption at any premiums,
may be executed in any manner, may contain any terms,
covenants, and conditions, and may be in any form, either
coupon or registered, that the corporate authorities shall
provide. The bonds may be sold at public or private sale at
any price, in any manner and upon any terms that the
corporate authorities may authorize, and may be issued to the
purchaser or purchasers of bonds sold under this Act. The
bonds and interim notes shall be deemed to be securities and
negotiable instruments within the meaning of and for all
purposes of the Uniform Commercial Code.
Section 20. Covenants. Any ordinances authorizing the
issuance of the bonds under this Act may contain covenants
regarding (i) the use and disposition of the revenues and
receipts from any home mortgage loans for which the bonds are
to be issued, including the creation and maintenance of any
reasonable and adequate reserves that the corporate
authorities may determine; (ii) the insurance to be carried
on any home mortgage loan or bonds and the use and
disposition of the proceeds of that insurance; (iii) the
appointment of one or more trustees for the benefit of the
bondholders, paying agents, or bond registrants; (iv) the
investment of any funds held by the trustee or lender,
notwithstanding any other law to the contrary; (v) the
maximum rate payable on any home mortgage loan; and (vi) the
terms and conditions upon which the holders of the bonds or
any portion of the bonds, or any trustees for the bonds, are
entitled to the appointment of a receiver by a court of
competent jurisdiction, and any terms and conditions may
provide that the receiver may take possession of the home
mortgage loans or any part thereof and maintain, sell, or
otherwise dispose of the home mortgage loans, prescribe other
payments, and collect, receive, and apply all income and
revenues thereafter derived therefrom. An ordinance
authorizing the issuance of bonds under this Act may provide
that payment of the principal of, redemption premium, if any,
on and interest on any bonds issued under this Act shall be
secured by a mortgage, pledge, security interest, insurance
agreement, or indenture of trust of or with respect to any
home mortgage loans and a lien upon the revenues and receipts
derived therefrom or from any notes or other obligations of
lending institutions with respect to which the bonds are
issued. The mortgage, pledge, security interest, insurance
agreement, or indenture of trust constitute a contract with
the holder or holders of the bonds and continue in effect
until the principal of, the interest on, and the redemption
premiums, if any, on the bonds have been fully paid or
provision made for the payment of the bonds, and the duties
of the Authority and its corporate authorities and officers
under this Act and any ordinance and any mortgage, pledge,
security interest, insurance agreement, or indenture of trust
shall be enforceable as provided therein by any bondholder by
mandamus, foreclosure of any mortgage, pledge, security
interest, insurance agreement, or indenture of trust, or
other appropriate suit, action, or proceeding in any court of
competent jurisdiction; provided the ordinance or any
mortgage, pledge, security interest, insurance agreement, or
indenture of trust under which the bonds are issued may
provide that all remedies and rights to enforcement may be
vested in a trustee (with full power of appointment) for the
benefit of all the bondholders, which trustee shall be
subject to the control of any number of holders or owners of
any outstanding bonds as provided therein.
Section 25. Signatures. The bonds shall bear the manual
or facsimile signatures of any officers of the Authority that
may be designated in the ordinance authorizing the bonds and
the signatures constitute the valid and binding signatures of
the officers, notwithstanding that before the delivery of and
payment for the bonds any or all of the persons whose
signatures appear thereon have ceased to be officers of the
Authority. The validity of the bonds shall not be dependent
on nor affected by the validity or regularity of any
proceedings relating to the home mortgage loans acquired or
made from proceeds of the bonds. A recital in the bonds that
they are issued pursuant to this Act shall be conclusive
evidence of their validity and of the regularity of their
issuance.
Section 30. Pledges; validity. Any pledge made to secure
bonds shall be valid and binding from the time when the
pledge is made. The revenues and receipts or property or
interests in property pledged and thereafter received by the
Authority or trustee shall immediately be subject to the lien
of the pledge without any physical delivery of the pledge or
further act, and the lien of any such pledge shall be valid
and binding as against all parties having claims of any kind
in tort, contract, or otherwise against the Authority or
trustee irrespective of whether the parties have notice
thereof. Neither the ordinance, nor any other instrument by
which a pledge is created, need be recorded.
Section 35. Bonds; obligations of the Authority. All
bonds issued under this Act shall be limited obligations of
the Authority issuing the same, payable solely from the (i)
bond proceeds, (ii) revenues and receipts derived from the
home mortgage loans or from any notes or other obligations of
persons with respect to which the bonds are issued and
secured by a mortgage, pledge, security interest, insurance
agreement, or indenture of trust of or with respect to such
home mortgage loans, (iii) certain insurance proceeds which
may relate to the bonds or the home mortgage loans, (iv)
participation fees, or (v) certain reserve funds. No
Authority shall have any right or authority to levy taxes to
pay any of the principal of, redemption premium, if any, or
interest on any bonds issued pursuant to this Act or any
judgment against an Authority on account of the bonds. No
holder of any bonds issued under this Act shall have the
right to compel any exercise of the taxing power of any
Authority to pay the bonds, the interest, or redemption
premium, if any, on the bonds, and the bonds shall not
constitute an indebtedness of the Authority, or a loan of the
faith and credit of the Authority, within the meaning of any
constitutional or statutory provision, nor shall the bonds be
construed to create any moral obligation on the part of the
Authority to provide for the payment of the bonds. It shall
be plainly stated on the face of each bond that it has been
issued under the provisions of this Act and that it does not
constitute an indebtedness of the Authority, or a loan of the
faith and credit of the Authority, within the meaning of any
constitutional or statutory provision. Bonds may be issued
pursuant to this Act without regard to (i) any statutory
limitation as to bonded indebtedness and shall not be
included in computing total bonded indebtedness within the
meaning of any statutory limitation, (ii) any requirement of
competitive bidding or procedure for award of contracts
applicable by any statute, (iii) any requirement of
publication of ordinance or other documents, or (iv) any
requirement of referendum or petition.
Section 40. Personal liability; corporate authorities.
Neither the members of the corporate authorities of an
Authority, nor any official or employee of the Authority, nor
any person executing bonds issued under this Act shall be
liable personally for payment of the bonds or the interest or
redemption premium, if any, thereon or be subject to any
personal liability or accountability by reason of the
issuance thereof.
Section 45. Joint or cooperative action. One or more
Authorities (whether or not any of them are home rule units)
may join together or cooperate with one another in the
exercise, either jointly, on behalf of the Authorities, or
otherwise, of any one or more of the powers conferred upon
Authorities under this Act or other enabling acts or powers.
The joint or cooperative action shall be taken only in
accordance with and pursuant to a written agreement entered
into between or among such cooperating parties.
Section 50. Legal investments. Notwithstanding any other
provision of law, bonds issued pursuant to this Act shall be
legal investments for all trust funds, insurance companies,
savings and loan associations, investment companies, and
banks, both savings and commercial, and shall be legal
investments for executors, administrators, trustees, and all
other fiduciaries. The bonds shall be legal investments for
State school funds and for any funds which may be invested in
county, municipal, or school district bonds, and such bonds
shall be deemed to be securities which may properly and
legally be deposited with, and received by, any State or
municipal officer or by any agency or political subdivision
of the State for any purpose for which the deposit of bonds
or obligations of the State is now, or may hereafter, be
authorized by law, including deposits to secure public funds.
Section 55. Interests of corporate officers or employees;
participating lending institutions. Notwithstanding the
provisions of any other law to the contrary, a member of the
corporate authorities, or an officer or employee of the
Authority, may be an officer, employee, or stockholder of a
lending institution or lender participating in a residential
housing finance plan of the corporate authorities, provided
the member (if a member of the corporate authorities)
declares such position or interest at a regular meeting of
the corporate authorities prior to passage of an ordinance
establishing the plan and abstains from voting on the
ordinance.
Section 60. Scope of additional powers. The powers
conferred by this Act are in addition and supplemental to,
and the limitations imposed by this Act shall not affect, the
powers conferred upon Authorities by any other law. This Act
is not a limitation upon the powers of home rule units. Home
mortgage loans may be acquired, purchased, and financed, and
bonds may be issued under this Act for those purposes,
notwithstanding that any other law or power may provide for
the acquisition, purchase, and financing of like home
mortgage loans, or the issuance of bonds for like purposes,
and without regard to the requirements, restrictions,
limitations, or other provisions contained in any law,
including any law relating to any requirement of competitive
bidding or restriction imposed on the sale or disposition of
property or award of contracts. Nothing in this Act shall be
deemed or construed to prohibit the exercise of the powers
conferred upon Authorities in connection with the financing
of federally assisted housing for persons of low and moderate
income.
Section 65. Construction. This Act is necessary for
the health, welfare, and safety of the State, its counties
and municipalities, and its inhabitants; therefore, it shall
be liberally construed to effect its purposes.
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly May 03, 2001.
Approved July 24, 2001.
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