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FISCAL NOTE
2023 REGULAR SESSION
Introduced
Senate Bill 616
By Senators Weld and Deeds
[Introduced February 14, 2023; referred
to the Committee on Military; and then to the Committee on Finance]
A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §31-18F-1, §31-18F-2, §31-18F-3, §31-18F-4, §31-18F-5, §31-18F-6; and to amend and reenact §36-8-13 of said code, all relating generally to creating the West Virginia Veterans’ Home Loan Mortgage Program of 2023; establishing a special revenue account known as the West Virginia Veterans’ Home Loan Mortgage Account; declaring the purpose of the account; providing that the Housing Development Fund shall administer the account; setting forth terms of the program; authorizing the Housing Development Fund to make certain mortgage loans from the account; authorizing the Housing Development Fund to promulgate legislative and emergency rules; and authorizing the unclaimed property administrator to transfer a certain amount from the Unclaimed Property Trust Fund to the account.
Be it enacted by the Legislature of West Virginia:
This article shall be known as the West Virginia Veterans’ Home Loan Mortgage Program Act of 2023.
As used in this section, the following definitions apply:
(1) "Account" means the West Virginia Veterans’ Home Loan Mortgage Account.
(2) "Eligible veteran" means an individual who is a West Virginia resident and who:
(a) Is a member of the West Virginia National Guard;
(b) Is a member of the federal reserve forces of the armed forces of the United States, serving pursuant to Title 10 of the United States Code;
(c) Is serving on federal active duty pursuant to Title 10 of the United States Code;
(d) Is an unremarried spouse of an individual who was otherwise an eligible veteran and was killed in the line of duty;
(e) Is a child of an individual who was otherwise an eligible veteran and was killed in the line of duty;
(f) Is an eligible veteran as defined by rule promulgated by the Fund; or
(g) Was previously a member of the armed forces pursuant to subdivisions (a), (b), or (c) and was discharged under honorable conditions.
(h) An individual who meets the requirements of (a), (b), (c) (f), or (g) of this subdivision 2 of this article and who is establishing their primary residence in West Virginia and is purchasing a home in this state for the first time.
(3) "First-time home buyer" means an individual determined by the Fund to be a first-time home buyer pursuant to rules adopted by the Fund.
(4) "Fund" means the West Virginia Housing Development Fund.
(5) "Mortgage loan" means a loan for the purchase of real property with any improvements located within this state that is to be used for primary residential purposes by the eligible veteran and that is based upon a written instrument approved by a federal agency and that is secured by a deed of trust.
(6) "Participating financial institution" means a corporate lender or other loan originator approved by the Fund for originating loans pursuant to this article.
(7) "Resident" means an individual who maintains or will maintain after receiving a mortgage loan a primary residence within West Virginia and who has not established a residence elsewhere even though the individual may be temporarily absent from the state.
(8) "Under honorable conditions" means a discharge or separation from military duty characterized by the armed forces as under honorable conditions. The term includes honorable discharge and general discharge. The term does not include a dishonorable discharge or another administrative discharge characterized by military regulation as other than honorable.
(9) "Veterans’ home loan mortgage program" or "program" means the program created in Article 18F of Chapter 31 of this code.
(a) There is hereby created by this section the West Virginia Veterans’ Home Loan Mortgage Program of 2023 under the direction and management of the West Virginia Housing Development Fund for eligible veterans who are first-time home buyers.
(b) The Housing Development Fund is authorized to purchase mortgage loans from participating financial institutions pursuant to this article or through direct origination.
(a) Interest on a home mortgage loan made pursuant to this section must be charged at 1% less than the federal national mortgage association’s delivery rate or 1% lower than the Fund’s Homeownership Program, whichever is less. If the federal national mortgage association’s rate becomes unavailable, the Fund shall use another similar rate for the purposes of this section.
(b) The maximum amount of a loan made by the Fund pursuant to this article is 100% of the value of the statewide allowable purchase price determined by the Fund.
(c) The Fund shall require as a condition for a loan that an eligible veteran participate in a first-time home buyer education program approved by the Fund.
(d) A loan made by the Fund must be secured by a government guaranty pursuant to rules adopted by the Fund unless the Fund determines to allow the use of conventional mortgage insurance requirements and coverage.
(e) An eligible veteran shall participate in a loan by contributing a minimum amount of $2,500 unless the Fund determines otherwise. An eligible veteran may use the minimum contribution toward paying closing costs and may borrow from the veterans’ home loan mortgage program the maximum loan amount allowed by the mortgage insurer for the loan.
(f) There is no limit on the maximum amount of income that may be earned by an eligible veteran for the purposes of a loan pursuant to this article.
(g) In order to allow small financial institutions to participate equitably in the program along with large financial institutions, the Fund may adopt rules to specify the maximum amount of mortgage loans that may be made by any one participating financial institution.
(h) The legislative auditor shall have access to all documentation used for the purpose of the program.
(i) The Fund shall annually submit to the Joint Committee on Government and Finance a report describing, at a minimum, the operation and use of this program. This report shall be due no later than December 1 of each year and may be combined with other reports submitted by the Fund to the legislature.
(a) A special revenue account known as the "West Virginia Veterans’ Home Loan Mortgage Account" is hereby established in the State Treasury. The purpose of the account is to make monies available to the Housing Development Fund for loans that qualify pursuant to this article.
(b) The Housing Development Fund shall administer the account and service the mortgage loans under the program.
(c) The account shall receive all monies transferred to the account pursuant to §36-8-13(f) of this code and any repayments and interest paid to the account.
(d) As a loan pursuant to this article is repaid, the principal payments on the loan must be redeposited in the account until all of the principal of the loan is repaid. In the event of foreclosure, the proceeds from the sale of the foreclosed property must be deposited to the account. The account may be used to cover the initial purchase of the mortgage loans from participating lenders as well as amounts determined by the Fund, to pay for the origination and servicing release fees of a loan by a participating financial institution and to cover the holding costs of any foreclosed properties. Interest received on the loans may be used by the Fund, to pay the reasonable costs for the administration of the program and servicing of the loans. Remaining interest received on the loan must be deposited into the account.
(a) The Fund shall promulgate rules, including emergency rules, if necessary, in accordance with §29A-3-1 et seq. of this code, including rules:
(1) Specifying which financial institutions may be participating financial institutions;
(2) Specifying underwriting criteria for a program loan, such as minimum down payment, credit score, ratios of housing expense and of all reoccurring debt as a percentage of income of the borrower, and any exceptions to those criteria;
(3) Specifying the statewide allowable purchase price of a home for the purposes of the program;
(4) Specifying the security required for a mortgage loan financed by the program;
(5) Providing the legislative auditor with access to records of participating financial institutions regarding loans made pursuant to this program;
(6) Governing the loan application process;
(7) Specifying the maximum origination fee that may be charged by a participating financial institution; and
(8) Specifying the maximum servicing fees that may be charged by the Fund; and
(9) Other loan conditions determined to be necessary by the Fund.
(b) The Fund may also promulgate rules, including emergency rules, if necessary, changing any of the following provisions if the Fund determines a change is necessary in order to carry out the purposes of the program:
(1) The definition of eligible veteran:
(2) The security for a loan provided pursuant to this program; and
(3) The requirements for minimum participation for the eligible veteran.
(a) The administrator shall record the name and last known address of each person appearing from the holders reports to be entitled to the property and the name and last known address of each insured person or annuitant and beneficiary and with respect to each policy or annuity listed in the report of an insurance company, its number, the name of the company, and the amount due.
(b) The Unclaimed Property Fund is continued. The administrator shall deposit all funds received pursuant to this article in the Unclaimed Property Fund, including the proceeds from the sale of abandoned property under §36-8-12 of this code. The administrator may invest the Unclaimed Property Fund with the West Virginia Board of Treasury Investments or the Investment Management Board and all earnings shall accrue to the fund and are available for expenditure in accordance with the article. In addition to paying claims of unclaimed property duly allowed, the administrator may deduct the following expenses from the Unclaimed Property Fund:
(1) Expenses of the sale of abandoned property;
(2) Expenses incurred in returning the property to owners, including without limitation the costs of mailing and publication to locate owners;
(3) Reasonable service charge; and
(4) Expenses incurred in examining records of holders of property and in collecting the property from those holders.
(c) The Unclaimed Property Trust Fund is continued within the State Treasury. The administrator may invest the Unclaimed Property Trust Fund with the West Virginia Board of Treasury Investments and all earnings shall accrue to the fund and are available for expenditure in accordance with this article. After deducting the expenses specified in subsection (b) of this section and maintaining a sum of money from which to pay claims duly allowed, the administrator shall transfer the remaining moneys in the Unclaimed Property Fund to the Unclaimed Property Trust Fund.
(d) On or before December 15 of each year, notwithstanding any provision of this code to the contrary, the administrator may transfer the sum of $1 million from the Unclaimed Property Trust Fund to the Jumpstart Savings Trust Fund, until an actuary certifies there are sufficient funds to satisfy all obligations and administrative expenses of the Jumpstart Savings Program.
(f) Subject to cash availability, on or before July 15, 2023, the unclaimed property administrator may transfer up to $8 million from the Unclaimed Property Trust Fund to the West Virginia Veterans’ Home Loan Mortgage Account.
(g) After transferring any money required by subsections (d), and (e), and (f) of this section, the administrator shall transfer moneys remaining in the Unclaimed Property Trust Fund to the General Revenue Fund.
NOTE: The purpose of this bill is to create the West Virginia Veterans’ Home Loan Mortgage Program of 2023
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.
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