Section 36-41-6. Loans to qualified housing sponsors or eligible households; loans to lending institutions

   (a) With respect to the power to make loans set forth in subsection (a) of Code Section 36-41-5, each authority may make loans to qualified housing sponsors or eligible households for the financing, acquisition, or rehabilitation of residential housing within the geographic boundaries of the large municipality activating the authority. Any such loan:

   (1) Shall be used for all or part of the cost of financing, acquiring, or rehabilitating residential housing, including the construction of residential housing, in accordance with the rules of the authority; and

   (2) Shall be secured in such manner and be repaid in such period, not exceeding 40 years, as may be determined by the authority and shall bear interest at a rate determined by the authority.

(b) Each authority may make and contract to make loans to lending institutions, on such terms and conditions as it shall determine, in accordance with the following criteria, and all lending institutions are authorized to borrow from the authority in accordance with administrative guidelines of the authority established pursuant to the following criteria:

   (1) The authority shall require that each lending institution receiving a loan pursuant to this subsection shall issue and deliver to the authority evidence of its indebtedness to the authority, which shall constitute a general obligation of such lending institution and shall bear such date or dates, shall mature at the time or times, shall be subject to prepayment, and shall contain such other provisions consistent with this Code section as the authority shall determine;

   (2) The interest rate or rates and other terms of such loans made from the proceeds of any issue of bonds of the authority shall be at least sufficient to assure the payment of the bonds and the interest thereon as the same become due;

   (3) The authority may require that such loans shall be secured as to payment of both principal and interest by a pledge of collateral security in such amounts as the authority shall determine to be necessary to assure the payment of such loans and the interest thereon as the same become due. Such collateral security may consist of:

      (A) Obligations for the payment of money by or guaranteed by the United States of America;

      (B) Obligations for the payment of money by any of the following: the Bank for Cooperatives, the Federal Intermediate Credit Bank, the Federal Home Loan Bank System, the Export-Import Bank, the Federal Land Banks, the Federal National Mortgage Association, or the Government National Mortgage Association;

      (C) Obligations for the payment of money by the state or any municipal corporation therein;

      (D) Mortgages insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs and such other mortgages insured or guaranteed by the federal government or by a private insurer as to payment of principal and interest as shall be approved by the authority;

      (E) Conventional mortgages approved by the authority; or

      (F) Any other security determined by the authority to protect the interests of the authority and the bondholders;

   (4) The authority may require that collateral for such loans be deposited with a bank, trust company, or other financial institution acceptable to the authority located in the state and designated by the authority as custodian therefor. In the absence of such requirement and if required by the authority, each lending institution shall enter into an agreement with the authority containing such provisions as the authority shall deem necessary to:

      (A) Identify adequately and maintain such collateral;

      (B) Service such collateral; and

      (C) Require the lending institution to hold such collateral as an agent for the authority and be accountable to the authority as the trustee of an express trust for the application and disposition thereof and the income therefrom. The authority may also establish such additional requirements as it shall deem necessary with respect to the pledging, assigning, setting aside, or holding of such collateral and the making of substitutions therefor or additions thereto and the disposition of income and receipts therefrom;

   (5) The authority shall require as a condition of each loan to a lending institution that such lending institution, within such period after receipt of the loan proceeds as the authority may prescribe by regulation, shall have entered into written commitments to make and, within such period thereafter as the authority may prescribe by regulation, shall have disbursed the net loan proceeds in mortgage loans on residential housing in an aggregate principal amount equal to the net amount of such loan proceeds. Such mortgage loans shall have such terms and conditions as the authority may prescribe;

   (6) The authority shall require each lending institution to which the authority has made a loan to submit evidence satisfactory to the authority of the making of new mortgage loans for residential housing as required by this Code section and in connection therewith may, through its employees or agents, inspect the books and records of any such lending institution;

   (7) Compliance by any lending institution with the terms of its agreement with or undertaking to the authority with respect to the making of mortgage loans for residential housing may be enforced by the decree of any court of competent jurisdiction;

   (8) To the extent that any provisions of this subsection may be inconsistent with any provision of law of the state governing the affairs of lending institutions, the provisions of this subsection shall control.

(c) Notwithstanding any other provision of this chapter, each authority may finance residential housing under any provision of this chapter for occupancy by persons who, by virtue of age, physical condition, or other appropriate factors, are determined by the authority to require the assistance provided by such authority under this chapter, without regard to personal or family income.

Ga. L. 1979, p. 4662, § 6; Ga. L. 1980, p. 556, § 7; Ga. L. 1985, p. 391, §§ 4, 5; Ga. L. 1987, p. 150, §§ 5, 6; Ga. L. 1990, p. 45, § 1; Ga. L. 1992, p. 6, § 36.