The Vermont Statutes Online

Title 10: Conservation and Development

Chapter 025: Vermont Housing Finance Agency

• Subchapter 001: General Provisions

• § 601. Definitions

  The following words and terms, unless the context clearly indicates a different meaning, shall have the following meaning:

  (1) “Agency” means the Vermont Housing Finance Agency created by this chapter.

  (2) “Bonds, notes, and other obligations” or “bonds, bond anticipation notes, or other obligations” means any bonds, notes, debentures, interim certificates, or other evidences of financial indebtedness issued by the Agency pursuant to this chapter.

  (3) “Eligible security” means any security or obligation payable from or evidencing an interest in mortgages or other obligations securing loans to finance residential housing in the State.

  (4) “Federally insured mortgage loan” means a mortgage loan for residential housing insured or guaranteed by the United States or an agency or instrumentality thereof, or a commitment by the United States or an agency or instrumentality thereof to insure such a mortgage.

  (5) “Federal mortgage loan” means a mortgage loan for residential housing made by the United States or an agency or instrumentality thereof or a commitment by the United States or an agency or instrumentality thereof to make such a mortgage loan.

  (6) “Housing development costs” means the costs incurred in connection with the acquisition, construction, or rehabilitation of residential housing, including the costs of its physical construction, the costs of acquisition of land, real or personal property, rights, rights-of-way, easements, and franchises necessary or convenient for the construction, and the costs of legal, administrative, architectural and related professional services, the costs of insurance, project reports, survey, other preliminary expenses, and the costs of working capital, reserves, and carrying charges.

  (7) “Housing sponsor” or “sponsor” means a person who is organized on a nonprofit or limited profit basis or agrees to appropriate conditions as described in subdivision 624(b)(5) of this title and who is approved by the Agency as qualified either to own, construct, acquire, rehabilitate, operate, manage, or maintain residential housing.

  (8) “Mortgage” means a mortgage deed, deed of trust, or other instrument that shall constitute a lien on real property in fee simple or on a leasehold under a lease having a remaining term, at the time such mortgage is acquired, that does not expire prior to the maturity date.

  (9) “Mortgage lender” means any bank or trust company, mortgage company approved by any government-sponsored entity, savings bank, savings and loan association, industrial bank, credit union, National Banking Association, federal savings and loan association, federal credit union, or other financial institution or governmental agency or instrumentality that customarily provides or otherwise aids in the financing of mortgage loans on residential housing located in the State.

  (10) “Mortgage loan” means and includes:

  (A) an interest-bearing or noninterest bearing obligation secured by either a mortgage or other security instrument constituting a lien on land and improvements in the State;

  (B) an interest-bearing or noninterest bearing obligation secured by a pledge of a cooperative interest and a conditional assignment of the proprietary lease incidental thereto;

  (C) an interest-bearing or noninterest bearing obligation secured by the owner-occupant’s interest in a mobile home, provided that:

  (i) the mobile home is to be sited in a manner intended for continuous residential occupancy by the owner on land owned by the owner of the mobile home and shall be secured by a mortgage that shall constitute a first lien on the mobile home and the real property to which it is affixed; or

  (ii) the mobile home is to be sited in a manner intended for continuous residential occupancy on land leased by the owner of the mobile home and shall be secured by a note or otherwise and collateral assignment of a lease of real property that shall constitute a first lien upon the mobile home. Notwithstanding any other provision of this chapter, the lease of the land upon which the mobile home is sited shall be for a term of at least one year, shall be renewable for periods of at least one year, and shall comply with the requirements of section 6236 of this title. This definition shall not preclude the requirement of security in addition to that specified in this subsection for any mortgage loan.

  (11) “Persons and families of low and moderate income” means persons and families irrespective of race, creed, national origin, sex, sexual orientation, or gender identity deemed by the Agency to require such assistance as is made available by this chapter on account of insufficient personal or family income, taking into consideration, without limitation, such factors as:

  (A) the amount of the total income of such persons and families available for housing needs;

  (B) the size of the family;

  (C) the cost and condition of residential housing available;

  (D) the cost and availability of mortgage loans on residential housing in the State;

  (E) the eligibility of such persons and families for federal housing assistance of any type predicated upon a low-income basis or upon the basis of the age of such persons;

  (F) the ability of such persons and families to compete successfully in the normal housing market and to pay the amounts at which private enterprise is providing decent, safe, and sanitary housing, and deemed by the Agency therefore to be eligible to occupy residential housing constructed and financed, wholly or in part, with insured or guaranteed construction loans or insured or guaranteed mortgages, or with other public or private assistance other than as provided by this chapter.

  (12) “Real property” means all lands, including improvements, and fixtures thereon, and property of any nature appurtenant thereto, or used in connection therewith, and every estate, interest and right, legal or equitable, therein, including terms of years and liens by way of judgment, mortgage, or otherwise and the indebtedness secured by such liens.

  (13) “Rehabilitation” means the rehabilitation, improvement, and repair of residential housing and facilities incidental thereto undertaken primarily to provide dwelling accommodations for occupancy by persons and families in this State.

  (14) “Residential housing” means residential housing units designed primarily to provide principal dwelling accommodations whether on a permanent or temporary basis for persons or families, which may include the land and improvements thereon and such nonhousing facilities or services considered necessary or convenient or part of a community development plan by the Agency in connection with the residential housing, including commercial enterprises and government functions within the same building. “Residential housing” includes single or multi-family dwellings, congregate homes, residential care homes as defined in 33 V.S.A. § 7102, nursing homes, transitional housing, emergency shelters for the homeless or displaced, mobile homes, single room occupancy dwellings, and group homes for persons with psychiatric or developmental disabilities. “Residential housing” also means cooperative interests and mobile home parks as defined in section 6201 of this title.

  (15) “Cooperative Housing Corporation” means a domestic corporation qualified under 11 V.S.A. chapter 14.

  (16) “Cooperative interest” means a cooperative interest as defined in 11 V.S.A. chapter 14.

  (17) “Member” means a person who owns a cooperative interest in a Cooperative Housing Corporation.

  (18) “Mobile home” means “mobile home” as that term is defined in 9 V.S.A. chapter 72.

  (19) “Equity loan” means a mortgage loan to a housing sponsor secured by a mortgage on property constituting residential housing in an amount that, when added to the amount of any prior mortgages on the property, does not exceed 90 percent of the value of the property plus the value of additional collateral deemed appropriate and as determined by the Agency, provided the Agency has made a finding that the effect of such loan will be to maintain or increase the supply of residential housing in the State for persons and families of low and moderate income. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974; amended 1975, No. 176 (Adj. Sess.), § 1, eff. March 26, 1976; 1987, No. 41, § 1; 1987, No. 250 (Adj. Sess.), § 1, eff. June 13, 1988; 1989, No. 77, §§ 1, 2, eff. June 7, 1989; 1991, No. 135 (Adj. Sess.), § 13; 1993, No. 141 (Adj. Sess.), § 18, eff. May 6, 1994; 2005, No. 189 (Adj. Sess.), § 1; 2007, No. 41, § 16; 2013, No. 96 (Adj. Sess.), § 34.)

• § 602. Statutory purposes

  The statutory purpose of the exemption for the Vermont Housing Finance Agency in subsection 641(a) of this title is to provide and promote affordable housing. (Added 2013, No. 200 (Adj. Sess.), § 8.)

• Subchapter 002: Establishment and Organization

• § 611. Creation of the Vermont Housing Finance Agency

  (a) There is created and established a body politic and corporate with such duties and powers as are set forth in this chapter, to be known as the “Vermont Housing Finance Agency” to carry out the provisions of this chapter. The Agency is constituted a public instrumentality exercising public and essential governmental functions, and the exercise by the Agency of the powers conferred by this chapter shall be deemed and held to be the performance of an essential governmental function of the State.

  (b) The Agency shall consist of nine commissioners, including ex officio the Commissioner of Financial Regulation, the State Treasurer, the Secretary of Commerce and Community Development, the Executive Director of the Vermont Housing and Conservation Board or their designees, and five commissioners, who shall be residents of the State, and who shall in the opinion of the Governor with consideration of statewide geographic representation be knowledgeable in housing, finance, and financial planning or other related areas, to be appointed by the Governor with the advice and consent of the Senate for terms of four years. Any vacancies in the membership of the Agency shall be filled in like manner but only for the remainder of an unexpired term. Each commissioner shall hold office for the term of his or her appointment and until his or her successor is appointed and qualified. A commissioner appointed by the Governor may be removed from office by the Governor for misfeasance, malfeasance, or willful neglect of duty or other cause after notice and public hearing unless such notice or hearing is expressly waived in writing.

  (c) The Governor shall designate annually a chair of the Agency from among the commissioners. The commissioners shall elect from among their number a vice chair annually and such other officers as they may determine. Meetings shall be held at the call of the Chair or whenever two commissioners so request. Five commissioners of the Agency shall constitute a quorum, and any action taken by the Agency under the provisions of this chapter may be authorized by resolution approved by a majority but not less than four of the commissioners present at any regular or special meeting. Resolutions of the Agency shall be made available to the public. No vacancy in the membership of the Agency shall impair the right of a quorum to exercise all the rights and perform all the duties of the Agency.

  (d) Commissioners other than ex officio members shall receive compensation authorized under 32 V.S.A. § 1010 for each day spent in the performance of their duties and each such commissioner shall be reimbursed from the funds of the Agency for his or her reasonable expenses incurred in carrying out his or her duties under this chapter.

  (e) Notwithstanding the provisions of any other law, no officer or employee of this State shall be deemed to have forfeited or shall forfeit his or her office or employment by reason of his or her acceptance of membership of the Agency or his or her service thereto.

  (f) The commissioners shall employ an executive director of the Agency. The Executive Director shall be the Secretary of the Agency and shall administer, manage, and direct the affairs and business of the Agency, subject to the policies, control, and direction of the commissioners. The commissioners may employ technical experts and such other officers, agents and employees and fix their qualifications, duties and compensation.

  (g) The Secretary shall keep a record of the proceedings of the Agency and shall be custodian of all books, documents, and papers filed with the Agency and of its minute book and seal. The Secretary shall have authority to cause to be made copies of all minutes and other records and documents of the Agency and to give certificates under the seal of the Agency to the effect that the copies are true copies and all persons dealing with the Agency may rely upon those certificates.

  (h) Before entering into his or her duties, each commissioner of the Agency shall take and subscribe an oath to perform the duties of his or her office faithfully, impartially, and justly to the best of his or her ability. A record of the oath shall be filed in the Office of the Secretary of State.

  (i) Notwithstanding any other law to the contrary it shall not be or constitute a conflict of interest for a trustee, director, officer, or employee of any financial institution, savings institution, investment banking firm, brokerage firm, commercial bank or trust company, architecture firm, insurance company, or any other firm, person, or corporation to serve as a member of the Agency, provided the trustee, director, officer, or employee abstains from deliberation, action and vote by the Agency in each instance where the business affiliation of any such trustee, director, officer, or employee is involved.

  (j) The Agency and its existence shall continue so long as it shall have notes, bonds, or other obligations, or any indebtedness outstanding, including notes, bonds, or other obligations or any such indebtedness hereafter issued or incurred, and until its existence is terminated by law. The net earnings of the Agency, beyond that necessary for retirement of its notes, bonds, or other obligations or any such indebtedness or to implement the public purposes and programs authorized in this chapter, shall not inure to the benefit of any person other than the State. Upon termination of the existence of the Agency, title to all of the property owned by the Agency, including any net earnings of the Agency, shall vest in the State. The State reserves the right at any time to alter, amend, repeal, or otherwise change the structure, organization, programs, or activities of the Agency, including the power to terminate the Agency, except that no law shall impair the obligation of any contract or contracts entered into by the Agency to the extent the law would contravene the Constitution of the State or the Constitution of the United States of America.

  (k) Notwithstanding any general or special law to the contrary, the provisions of 8 V.S.A. chapters 73 and 83 shall not apply to the Agency or to any loan heretofore or hereafter made or serviced by the Agency in accordance with this title. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974; amended 1975, No. 176 (Adj. Sess.), § 3, eff. March 26, 1976; 1987, No. 203 (Adj. Sess.), § 19, eff. May 27, 1988; 1989, No. 225 (Adj. Sess.), § 25; 1995, No. 180 (Adj. Sess.), § 38; 1995, No. 190 (Adj. Sess.), § 1(b); 2005, No. 75, § 18; 2009, No. 96 (Adj. Sess.), § 2; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.)

• Subchapter 003: Powers and Duties

• § 621. General powers and duties

  The Agency shall have all of the powers necessary and convenient to carry out and effectuate the purposes and provisions of this chapter, including those general powers provided a business corporation by 11A V.S.A. § 3.02 and those general powers provided a nonprofit corporation by 11B V.S.A. § 3.02 and including, without limiting the generality of the foregoing, the power to:

  (1) make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter, including contracts and instruments that may be made and executed with the State or the United States or any agency or instrumentality of either of them or with private corporations or individuals, including contracts with mortgage lenders or other qualified entities for the servicing of mortgages made or acquired by the Agency pursuant to this chapter or for assistance rendered the Agency in the location of all eligible mortgagees or to pay the reasonable value of services rendered to the Agency pursuant to these contracts;

  (2) acquire real or personal property, or any interest therein, on either a temporary or long-term basis in its own name by gift, transfer, foreclosure, lease, pledge, assignment, or otherwise, including rights or easements in real property; hold, sell, assign, lease, encumber, mortgage, or otherwise dispose of any real or personal property or any interest therein; hold, sell, assign, or otherwise dispose of any mortgage lien interest owned by it or under its control, custody or in its possession; and release or relinquish any right, title, claim, lien, interest, easement, or demand however acquired, including any equity or right of redemption in property foreclosed by it and to do any of the foregoing by public or private sale, with or without public bidding, notwithstanding the provisions of any other law;

  (3) receive and accept grants, aid, or contributions, from any source, of money, property, labor, or other things of value, to be held, used, and applied or awarded to carry out the purposes of this chapter subject to the conditions upon which the grants, aid, and contributions may be made, including gifts or grants from any agency or instrumentality of the United States or of this State for payment of rent supplements to eligible persons or families or for the payment in whole or in part of the interest expense of residential housing or for any other purpose consistent with this chapter;

  (4) provide, contract, or arrange for consolidated processing of any aspect of the financing of residential housing under this chapter in order to avoid duplication thereof by either undertaking the processing in whole or in part on behalf of any department, agency, or instrumentality of the United States or of this State, or, in the alternative, to delegate or contract for the processing in whole or in part to any department, agency, or instrumentality of the United States or of this State, or to a private contractor acceptable to the Agency;

  (5) provide advice, technical information, assistance in obtaining federal and State aid, and make such grants, loans, or advances as will assist the planning, construction, rehabilitation, and operation of residential housing primarily for persons of low and moderate income, including assistance in community development and organization, advisory services, the formation of cooperative housing corporations and to encourage community organizations to assist in developing same;

  (6) conduct research and promote development in housing, building technology, and related fields;

  (7) stimulate environmental planning for housing for persons of low and moderate income in order to enhance opportunities of such persons for self-development and employment;

  (8) procure insurance against any loss in connection with its property and other assets, including mortgages and mortgage loans, in such amounts and from such insurers as it deems desirable;

  (9) subject to any agreement with bondholders or noteholders, invest monies of the Agency not required for immediate use, including proceeds from the sale of any bonds or notes, at the discretion of the Agency in the same manner as permitted for investment of funds belonging to the State or held in the Treasury;

  (10) include in any borrowing such amounts as may be deemed necessary by the Agency to pay financing charges, interest on its obligations for a period not exceeding one year from their date, consultant advisory and legal fees, and such other expenses as are necessary or incident to such borrowing;

  (11) subject to any agreement with bondholders or noteholders, purchase bonds or notes of the Agency out of any funds or money of the Agency available therefor, and to hold, cancel, or resell such bonds or notes;

  (12) make and publish rules and regulations respecting its housing programs and such other rules and regulations as are necessary to effectuate its corporate purposes;

  (13) borrow money and issue bonds and notes or other evidences of indebtedness thereof, issue mortgage credit certificates as hereinafter provided;

  (14) subject to any agreement with bondholders or noteholders, refinance any mortgage loan made by the Agency in accordance with this chapter and consent to any modification with respect to rate of interest, time and payment of any installment of principal or interest, security or any other term of any contract, mortgage, mortgage loan, mortgage loan commitment, contract, or agreement of any kind to which the Agency is a party, and refinance any loan made by others if the Agency finds that such refinancing will maintain or increase the supply of residential housing in the State for persons and families of low and moderate income;

  (15) procure or agree to the procurement of insurance or guarantees from the federal government of the payment of any bonds or notes or any other evidences of indebtedness thereof issued by the Agency including the power to pay premiums on any such insurance;

  (16) purchase and enter into commitments to purchase eligible securities from mortgage lenders provided the proceeds of such purchase are reinvested by such mortgage lenders in new mortgage loans on residential housing for occupancy by persons and families of low and moderate income;

  (17) do any and all things necessary or convenient to effectuate the purposes and provisions of this chapter and to carry out its purposes and exercise the powers given and granted in this chapter;

  (18) make grants and loans or advances for predevelopment activities related to the development of residential housing;

  (19) make loans or advances secured by a mortgage to housing sponsors for the acquisition, construction, rehabilitation, operation, or maintenance of residential housing;

  (20) make loans to members of a housing cooperative corporation to finance their cooperative interests in such housing cooperative corporation and make mortgage loans and loans to persons or families to finance mobile homes;

  (21) use funds received from real estate trust and escrow accounts established under 26 V.S.A. § 2214(c), IORTA funds, for down payment and closing cost assistance with priority given to persons and families at or below 90 percent of median income and to persons and families purchasing perpetually affordable housing;

  [Subdivision (22) repealed on July 1, 2039.]

  (22) issue bonds, notes, and other obligations secured by the property transfer tax revenues transferred to the Agency pursuant to 32 V.S.A. § 9610(d); and

  (23) develop a program to finance and promote housing weatherization using funds appropriated by the State, funds generated through issuing bonds, notes and other obligations of the Agency, and funds from other sources obtained through grants or other arrangements, giving priority to programs benefiting persons and families at or below 120 percent of median income with high energy burdens and to programs to expand the pool of qualified weatherization contractors in the State. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974; amended 1975, No. 176 (Adj. Sess.), § 4, eff. March 26, 1976; 1987, No. 8, § 1, eff. April 14, 1987; 1987, No. 41, § 2; 1987, No. 250 (Adj. Sess.), § 2, eff. June 13, 1988; 1989, No. 77, § 3, eff. June 7, 1989; 1991, No. 86, § 2, eff. Jan. 1, 1992; 2005, No. 189 (Adj. Sess.), § 2; 2017, No. 85, § I.5; 2017, No. 85, § I.11; 2021, No. 74, § E.802.)

• § 622. Powers relative to purchase of and sale to mortgage lenders of mortgage loans; loans through mortgage lenders

  The Agency shall have the following powers in addition to others granted in this chapter:

  (1) To invest in, purchase or make commitments to purchase, and take assignments from mortgage lenders, of notes and mortgages evidencing mortgage loans for the purchase or refinancing of residential housing, whether or not for occupancy by persons and families of low and moderate income in this State upon the terms set forth in section 623 of this title.

  (2) To make loans to mortgage lenders under terms and conditions set forth in section 623 of this title.

  (3) To make commitments to purchase, and to purchase, service, and sell mortgage loans and to make loans directly upon the security of any such mortgage, provided the underlying mortgage loans shall have been made and shall be continued to be used solely to finance or refinance the construction, rehabilitation, purchase, or leasing of residential housing in this State.

  (4) To sell, at public or private sale, with or without public bidding, any mortgage or other obligation held by the Agency.

  (5) Subject to any agreement with bondholders or noteholders, to collect, enforce the collection of, and foreclose on any collateral securing its loans to mortgage lenders and acquire or take possession of such collateral and sell the same at public or private sale, with or without public bidding, and otherwise deal with such collateral as may be necessary to protect the interest of the Agency therein.

  (6) Renegotiate, refinance, or foreclose or sell, or contract for the foreclosure of or sale of, any mortgage in default; waive any default or consent to the modification of the terms of any mortgage; commence any action to protect or enforce any right conferred upon it by any law, mortgage, contract or other agreement, and bid for and purchase such property at any foreclosure or at any other sale, or acquire or take possession of any such property; operate, manage, lease, dispose of, and otherwise deal with such property, in such manner as may be necessary to protect the interests of the Agency and the holders of its bonds, notes or other obligations.

  (7) To purchase, make, or otherwise participate in the making, to enter into commitments, for the purchase, making, or participation in the making, of eligible loans for rehabilitation to persons and families of low and moderate income, and to owners of existing residential housing for occupancy by those persons and families, for the rehabilitation of existing residential housing owned by them. The loans may be insured or uninsured and shall be made with such security as the Agency considers advisable. They may be made in amounts sufficient to refinance existing indebtedness secured by the property, if the refinancing is determined by the Agency to be necessary to permit the owner to meet his or her housing costs without expending an unreasonable portion of his or her income on it. A loan for rehabilitation shall not be made unless the Agency determines that the loan is to be used primarily to make the housing more desirable to live in, to increase the market value of the housing, to comply with building, housing maintenance, fire, health, or similar codes and standards applicable to housing, to accomplish energy conservation related improvements, or to ensure independent living for elders or persons who have a disability. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974; amended 1977, No. 59, § 1, eff. April 23, 1977; 1987, No. 41, § 3; 2005, No. 189 (Adj. Sess.), § 3; 2013, No. 96 (Adj. Sess.), § 35.)

• § 623. Terms and conditions of the purchase and sale to mortgage lenders of mortgage loans; loans through mortgage lenders

  (a) No mortgage or other obligation purchased from a mortgage lender shall be eligible for purchase or commitment to purchase by the Agency hereunder unless at or before the time of transfer thereof to the Agency such mortgage lender certifies:

  (1) That in its judgment the loan would in respect of the security therefor be a prudent investment for its own account;

  (2) That the proceeds of sale or its equivalent shall be reinvested in new mortgage loans on residential housing for occupancy by persons and families primarily of low and moderate income within the State, or in loans for the rehabilitation of such residential housing, which rehabilitation loans need not be secured by a first mortgage lien, or invested in short-term obligations pending the purchase of those mortgages, or that the mortgage loans purchased or to be purchased by the Agency are new mortgage loans on residential housing for occupancy by persons and families primarily of low and moderate income within the State. However, each such new mortgage loan shall have been initiated for the purpose of sale to the Agency; and

  (3) That mortgage loans or rehabilitation loans made by mortgage lenders from the proceeds of sale of mortgages to the Agency shall bear a rate or rates of interest less than the prevailing rate of interest on comparable mortgage loans or rehabilitation loans available in the State without the assistance of the Agency, except when such proceeds arise from the sale to the Agency of new mortgage loans on residential housing for occupancy by persons and families primarily of low and moderate income within the State.

  (b) The Agency shall purchase mortgage loans at a purchase price equal to the outstanding principal balance thereof. However, a discount from the principal balance or the payment of a premium may be employed to effect a fair rate of return, as determined by the rate of return on comparable investments under market conditions existing at the time of purchase. In addition to the payment of outstanding principal balance, the Agency shall pay the accrued interest due thereon, on the date the loan or obligation is delivered against payment therefor.

  (c) Loans purchased or sold hereunder shall consist of federally insured mortgage loans or loans that are insured, guaranteed, or assisted by the State or by an agency or instrumentality thereof or for which there is a commitment by the United States or the State or an agency or instrumentality thereof to insure, guarantee, or assist such loan, and other mortgage loans that the Agency deems to be of reasonably comparable security.

  (d) The Agency shall from time to time adopt, modify, or repeal rules and regulations governing the making of loans to mortgage lenders and the purchase and sale of mortgage loans and the application of the proceeds thereof, including rules and regulations as to any or all of the following:

  (1) procedures for the submission of requests or the invitation of proposals for the purchase and sale of mortgage loans or for loans to mortgage lenders;

  (2) limitations or restrictions as to location or other qualifications or characteristics of residences to be financed from the proceeds of such purchase or loans;

  (3) restrictions as to the interest rates on loans made from the proceeds of purchase of mortgage loans or from loans to mortgage lenders or the return realized therefrom by mortgage lenders;

  (4) requirements as to commitments by mortgage lenders with respect to the application of the proceeds of such purchase or loan;

  (5) schedules of any fees and charges necessary to provide for expenses and reserves of the Agency;

  (6) requirements and specifications as to recourse; and

  (7) any other matters related to the duties and the exercise of the powers of the Agency under this section.

  (e) The rules and regulations shall be designed to effectuate the general purposes of this chapter and the following specific objectives:

  (1) the expansion of the supply of funds in the State available for mortgage loans for residential housing generally and particularly for occupancy by persons and families of low and moderate income;

  (2) provision for additional housing or rehabilitated housing needed to remedy the shortage of adequate housing in the State and to eliminate the existence of a large number of substandard dwellings; and

  (3) the restriction of the financial return and benefit on mortgage loans for residential housing for persons and families of low and moderate income to that level necessary to protect against the realization of mortgage lenders of a financial return or benefit in excess of prevailing market conditions;

  (4) in the case of mortgage loans secured by cooperative interest in cooperative housing corporations, to ensure that the purchase of such mortgage loans with the proceeds of bonds of the Agency will not, without the consent of the Agency, cause such bonds to be “other than qualified mortgage bonds.”

  (f) The interest rates and other terms of loans to mortgage lenders made from the proceeds of any issue of bonds of the Agency shall be at least sufficient so as to ensure the payment, from the amounts received by the Agency in repayment of the loans and interest thereon, of the bonds and the interest thereon as the same become due, including bonds and the interest thereon issued by the Agency to fund reserves.

  (g) The Agency shall require as a condition of each loan to a mortgage lender:

  (1) that the mortgage lender shall on or prior to the 180th day, or such earlier day as shall be prescribed by rules and regulations of the Agency, following the receipt of the loan proceeds, have entered into written commitments to make, and shall thereafter proceed as promptly as practicable to make and disburse from the loan proceeds, mortgage loans on residential housing primarily for occupancy by persons and families of low and moderate income in an aggregate principal amount equal to the amount of the loan less any fees and expenses of the mortgage lender approved by the Agency or loans for the rehabilitation of such residential housing, which rehabilitation loans need not be secured by a first mortgage lien; and

  (2) that mortgage loans or rehabilitation loans made by mortgage lenders with the proceeds of a loan to such mortgage lender shall bear a rate or rates of interest less than the prevailing rate of interest on comparable mortgage loans or rehabilitation loans available in the State without the assistance of the Agency.

  (h) The Agency may require that the loans to mortgage lenders shall be additionally secured as to payment of both principal and interest by a pledge of and lien upon collateral security in such amounts as the Agency shall by resolution determine to be necessary to ensure the payment of the loans and the interest thereon as they become due. The collateral security shall consist of:

  (1) direct obligations of, or obligations guaranteed by the United States of America;

  (2) obligations, satisfactory to the Agency, issued by any of the following federal agencies: Bank for Cooperatives, Federal Intermediate Credit Bank, Federal Home Loan Bank System, Federal Land Banks, the Government National Mortgage Association; Federal National Mortgage Association; or Federal Home Loan Mortgage Corporation;

  (3) direct obligations of or obligations guaranteed by the State; or

  (4) mortgages insured or guaranteed as to payment of principal and interest by the United States of America or an agency or instrumentality thereof or by the State or an agency or instrumentality thereof;

  (5) mortgages that the Agency deems to be of reasonably comparable security. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974; amended 1975, No. 14, § 1, eff. March 17, 1975; 1983, No. 52, § 2, eff. April 23, 1983; 1987, No. 41, § 4; 2005, No. 189 (Adj. Sess.), § 4.)

• § 624. Making of loans to housing sponsors

  (a) The Agency may:

  (1) Make, undertake commitments to make, purchase, undertake commitments to purchase, and participate with mortgage lenders in the making of mortgage loans, and to make grants, loans, and advances to housing sponsors to finance the acquisition, construction, or rehabilitation of residential housing, provided, that this subdivision shall not be construed to include equity loans.

  (2) Institute any action or proceeding against any housing sponsor receiving a loan under the provisions of this chapter, or owning any residential housing under this chapter in any court of competent jurisdiction in order to enforce the provisions of this chapter or the terms and provisions of any agreement or contract between the Agency and the recipients of loans under the provisions of this chapter, or to foreclose its mortgage, or to protect the public interest, the occupants of the residential housing, or the stockholders or creditors, if any, of the housing sponsors. In connection with any such action or proceeding it may apply for the appointment of a receiver to take over, manage, operate, and maintain the affairs of the housing sponsor and the Agency, through such agent as it designates, may accept the appointment of the receiver of any housing sponsor when so appointed by a court of competent jurisdiction. In the event of the reorganization of any housing sponsor, to the extent possible under the provisions of law, the reorganization shall be subject to the supervision and control of the Agency and no reorganization may be accomplished without the prior written consent of the Agency. In the event of a judgment against any housing sponsor in any action not pertaining to the foreclosure of a mortgage, there may be no sale of any of the real property included in any residential housing of that housing sponsor except upon 60 days written notice to the Agency. Upon receipt of the notice the Agency shall take such steps as in its judgment may be necessary to protect the rights of all parties.

  (3) Make, undertake commitments to make, purchase, undertake commitments to purchase, and participate with mortgage lenders in the making of equity loans.

  (b) The Agency shall provide by rules or regulations for the terms and conditions of mortgage loans to housing sponsors of residential housing. Mortgage loans made by the Agency to housing sponsors, in addition to such other terms and conditions as the Agency may by rule or regulation provide, shall be subject to the following:

  (1) No application for a mortgage loan may be approved unless the applicant is a housing sponsor as defined in section 601 of this title;

  (2) The mortgage loan may be in an amount not to exceed the value of the residential housing as determined by the Agency. The value determined may include the value of additional collateral as deemed appropriate by the Agency;

  (3) The mortgage loan shall be secured in such manner and be repaid in such period, not exceeding 40 years, as may be determined by the Agency and shall bear interest at a rate determined by the Agency. The interest rates shall be established by the Agency at the lowest level consistent with the Agency’s cost of operation and its responsibilities to the holders of its bonds, bond anticipation notes, and other obligations. In addition to such interest charges, the Agency may make and collect such fees and charges, including reimbursement of the Agency’s operating expenses, financing costs, service charges, insurance premiums, and mortgage insurance premiums, as the Agency determines to be reasonable;

  (4) Each mortgage and promissory note accompanying the mortgage shall contain such terms and provisions and be in such form as approved by the Agency;

  (5) Each mortgage loan to a housing sponsor for residential housing shall be subject to an agreement between the agency and the housing sponsor which will subject the housing sponsor and its principals or stockholders, if any, to limitations established by the agency as to sale prices, rental, and other charges, builder’s and developer’s profits and fees, and the disposition of its property and franchise to the extent more restrictive limitations are not provided by the law under which the housing sponsor is incorporated or organized or by this chapter; and

  (6) The Agency shall have the power at all times during the construction or rehabilitation of residential housing and its operation:

  (A) to enter upon and inspect any residential housing including all parts thereof, for the purpose of investigating the physical and financial condition thereof, and its construction, rehabilitation, operation, management, and maintenance, and to examine all books and records of the housing sponsor with respect to capitalization, income, and other matters relating thereto and to make those charges as may be required to cover the cost of the inspections and examinations;

  (B) to order such alterations, changes, or repairs as may be necessary to protect the security of its investment in residential housing or the health, safety, and welfare of the occupants or its users and to ensure that the residential housing is or has been constructed or rehabilitated in conformity with all applicable plans and specifications and building codes; and

  (C) to order any managing agent or sponsor of residential housing to do those acts as may be necessary to comply with the provisions of all applicable laws, ordinances, or building codes or any rule or regulation of the Agency or the terms of any agreement concerning the residential housing or to refrain from doing any acts in violation of it, and in this regard the Agency shall be a proper party to file a complaint and to prosecute thereon for any violations of law, ordinances or building codes as set forth in this chapter.

  (c) [Repealed.] (Added 1975, No. 176 (Adj. Sess.), § 5, eff. March 26, 1976; amended 1977, No. 47, § 2, eff. April 20, 1977; 1977, No. 199 (Adj. Sess.), § 1; 1987, No. 41, § 5; 1989, No. 77, § 4, eff. June 7, 1989; 2005, No. 189 (Adj. Sess.), §§ 5, 6.)

• § 625. Procedure prior to financing of multi-family housing undertaken by housing sponsors

  The Agency may not finance any residential housing undertaken by a housing sponsor under subdivision 624(a)(1) of this title unless:

  (1) the residential housing is primarily for occupancy by persons and families of low and moderate income, or qualifies for financing with proceeds of federally tax-exempt obligations, or at least 20 percent of the units are for occupancy by persons and families of low and moderate income;

  (2) the Agency determines that the acquisition, construction, or rehabilitation costs incurred or to be incurred by the housing sponsor under agreement are for housing development costs within the meaning of this chapter;

  (3) the Agency determines that there exists, or without the proposed residential housing there will exist, a shortage of decent, safe, and sanitary housing at rentals or prices that persons and families of low or moderate income are able to afford within the general housing market area or there is a shortage of temporary transitional or emergency housing to be served by the proposed residential housing; and

  (4) the Agency determines that the housing sponsor or sponsors undertaking the proposed housing development will maintain or increase the supply of well-planned, well-designed permanent, temporary, transitional, or emergency housing for persons or families of low and moderate income and that the sponsors are financially responsible persons or institutions. (Added 1975, No. 176 (Adj. Sess.), § 6, eff. March 26, 1976; amended 1987, No. 41, § 6; 1989, No. 77, § 5, eff. June 7, 1989; 2005, No. 189 (Adj. Sess.), §§ 7, 8; 2007, No. 176 (Adj. Sess.), § 11, eff. July 1, 2008.)

• § 626. Rules; insulation of structures

  (a) The Agency may adopt rules, but they shall be under 3 V.S.A. chapter 25, providing standards for the insulation, design, and equipping of buildings to minimize, insofar as is practicable and economical, the transfer of heat or cold between the interior and exterior of the building. The rules shall:

  (1) be consistent with standard practices and techniques in the construction industry; and

  (2) be, insofar as is practicable, consistent with nationally recognized building codes and regulations adopted under the authority of Congress; and

  (3) not require the installation of devices, equipment, or materials that would substantially alter the basic architecture of an existing building.

  (b) The Agency shall publish a manual that shall be made available, at cost, to any person upon his or her request. The manual shall show by diagram and otherwise various acceptable methods, materials, and devices that may be used by the owners of buildings and others to comply with the standards adopted by rule under subsection (a) of this section. (Added 1977, No. 59, § 2, eff. April 23, 1977.)

• § 627. Mortgage purchases

  (a) In addition to other powers granted in this chapter, the Agency shall have the power to participate with mortgage lenders in a program whereby mortgage loans, rehabilitation loans, and eligible securities are purchased from mortgage lenders by the Agency or by others. Before participating in any such program, the Agency shall determine that its participation will tend to expand the supply of funds in the State available for mortgage loans for residential housing generally and particularly for occupancy by persons and families of low and moderate income. The Agency may enter into contracts or other instruments for the administration and implementation of such programs. The Agency shall adopt rules and regulations in respect of such program as provided in subsections (d) and (e) of section 623 of this title but such program shall not otherwise be subject to the requirements of sections 622 and 623. If the purchaser of such loans and securities pursuant to this section is the Agency or a trust established under subsection (c) of this section, such purchase may be financed through the issue of bonds, notes, or other obligations by the Agency under subsection (b) of this section or through the issue of eligible securities by the Agency or a trust under subsections (c), (d), and (e) of this section. Such purchase may be refinanced by any of such methods whether previously financed or refinanced under any of such methods or otherwise. If the purchaser of such loans and securities pursuant to this section is not the Agency or such a trust, or if a purchase by the Agency or trust is for purposes of resale to others and does not involve the issue of bonds, notes, or other obligations or eligible securities by the Agency or trust, the Agency and trust shall each have power:

  (1) to cooperate with such other purchasers, with mortgage lenders, and with others;

  (2) to provide and agree to provide services in pooling and servicing such loans and securities;

  (3) to agree to bear risk of loss subject to such limitations as the Agency may prescribe; and

  (4) to do anything necessary or appropriate to participate in programs of other government agencies, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, their successors, or other financial institutions or intermediaries involved in the residential mortgage market that are not inconsistent with the purposes of this chapter.

  (b) Bonds, notes, and other obligations issued by the Agency pursuant to this section shall not be general obligations of the Agency, shall not be secured in whole or in part by a debt service reserve fund to which State funds may be appropriated pursuant to subsection 632a(f) of this title, shall not be subject to subdivision 631(b)(1) of this title, and shall not be taken into account for purposes of the limitation on indebtedness of the Agency contained in the last sentence of subdivision 631(a)(1). Such bonds, notes, and other obligations shall be payable solely from the receipts, revenues, or other income derived in respect of loans and securities purchased pursuant to this section or from the proceeds of such bonds, notes, and other obligations, or from receipts, revenues, or other income derived in respect of such proceeds or reserves established therefrom. Any official statement or other prospectus used by the Agency in offering such obligations for sale shall clearly indicate that such obligations are not the debt or obligation of the State or of the Agency except to the extent provided in this section.

  (c) Eligible securities issued pursuant to this section may be issued by the Agency itself. The Agency, by indenture or otherwise, may also establish a trust as the issuer of eligible securities under this section. The Agency may but need not be trustee of such a trust. Such a trust shall be established in such manner and subject to such provisions as the Agency deems necessary or appropriate to carry out the purposes of this section. A trust so established shall be a public instrumentality of the State acting on behalf of the State to the same extent as the Agency itself.

  (d)(1) In issuing eligible securities pursuant to this section, the Agency and any trust established by it shall have, in addition to its other powers under this chapter or general law, all the powers the Agency has in issuing bonds, notes, and other obligations pursuant to subsection (b) of this section, subject to the special provisions of subsection (b) of this section, including the following powers:

  (A) to authorize such securities, to issue them as negotiable investment securities, to execute them through appropriate present or former officers, and to sell them at public or private sale;

  (B) to make agreements and contracts with, and valid and effective pledges of property to, securities holders by resolution or otherwise;

  (C) to issue taxable securities, cause them to be registered, and grant appropriate indemnification;

  (D) to purchase and deal in such securities;

  (E) to secure such securities by appropriate trust instruments and agree that its contracts with securities holders will not be impaired by the State; and

  (F) to use and invest proceeds of securities and refunding securities.

  (2) The Agency’s exercise of the powers set forth in subdivision (1) of this subsection shall be in the manner more fully provided in this chapter for bonds, notes, and other obligations, or in a manner the Agency determines is reasonably comparable thereto taking into account the different characteristics of eligible securities, or of the issuer thereof, and other matters the Agency considers necessary or appropriate to effectively issue such securities.

  (e) Without limiting the generality of subsection (d) of this section:

  (1) eligible securities issued by the Agency or a public instrumentality pursuant to this section shall be legal investments to the same extent as bonds and notes issued under this chapter;

  (2) the holders of such securities shall be entitled to the same remedies, so far as apt, as are provided to holders of bonds and notes under section 635 of this title; and

  (3) if such securities evidence the issuer’s interest in mortgages otherwise than by the issuer’s promise to pay principal and interest in fixed amounts and at stated times, they shall not be subject to the provisions of this chapter governing amounts and times of payment of principal and interest on bonds, notes, and other obligations, and no finding under section 631(b)(2) of this title as to sufficiency of receipts, revenues, or other income to pay such securities shall be required with respect to them. (Added 1981, No. 23, § 2, eff. April 14, 1981; amended 1983, No. 52, § 3, eff. April 23, 1983; 2019, No. 14, § 14, eff. April 30, 2019.)

• § 628. Mortgage credit certificates

  In addition to other powers granted in this chapter, the Agency shall have the power to establish a qualified mortgage credit certificate program and to issue mortgage credit certificates as provided in this section. The terms “qualified mortgage credit certificate program” and “mortgage credit certificate” shall have the meaning prescribed in Section 25 of the Internal Revenue Code, as amended. Before establishing a qualified mortgage credit certificate program, the Agency shall determine that to do so will effectuate the purposes of this chapter. In carrying out such a program, the Agency shall have the power to take all appropriate actions for such purpose, including formulating and implementing administration procedures, making all necessary reports and filings, and electing not to issue bonds or notes otherwise authorized by this chapter. In lieu of the requirements of this chapter applicable to the purchase and sale by the Agency of mortgage loans and rehabilitation loans, any qualified mortgage certificate program established by the Agency shall comply with and be subject to the provisions of Section 25 of the Internal Revenue Code, as amended, and regulations thereunder as in effect from time to time. Any rule, regulation, practice, policy, or procedure adopted by the Agency for the purpose of implementing or administering a mortgage credit certificate program shall not be subject to the requirements of 3 V.S.A. chapter 25. (Added 1987, No. 8, § 2, eff. April 14, 1987.)

• Subchapter 004: Form and Nature of Bonds and Notes

• § 631. Bonds and notes

  (a)(1) The Agency may issue its negotiable notes and bonds in such principal amount as the Agency determines to be necessary to provide sufficient funds for achieving any of its corporate purposes, including the payment of interest on notes and bonds of the Agency, establishment of reserves to secure the notes and bonds including the reserve funds created under section 632 of this title, and all other expenditures of the Agency incident to and necessary or convenient to carry out its corporate purposes and powers.

  (2) The Agency shall have the power, from time to time, to issue notes to renew notes and bonds to pay notes, including the interest thereon and, whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds partly to refund bonds then outstanding and partly for any of its corporate purposes.

  (3) Except as may otherwise be expressly provided by resolution of the Agency, every issue of its notes and bonds shall be general obligations of the Agency payable out of any revenues or monies of the Agency, subject only to any agreements with the holders of particular notes or bonds pledging any particular revenues.

  (b) The notes and bonds shall be authorized by resolution or resolutions of the Agency, shall bear such date or dates and shall mature at such time or times as the resolution or resolutions may provide, except that no bond shall mature more than 42 years from the date of its issue. The bonds may be issued as serial bonds or as term bonds or as a combination thereof. The notes and bonds shall bear interest at such rate or rates, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places within or without the State, and be subject to such terms of redemption as the resolution or resolutions may provide; provided, however, that at the time of the authorization of the issuance of such bonds or notes the Agency determines in such resolution:

  (1) that mortgage loans made by or on behalf of the Agency, directly or indirectly, with the proceeds of such bonds or notes in accordance with section 621 or 622 of this title can be issued bearing a rate or rates of interest that will be less than the prevailing rate of interest on comparable mortgage loans available in the State without the assistance of the Agency at the time the bonds or notes are sold; and

  (2) that the Agency will derive receipts, revenues, or other income from mortgages purchased or loans made through mortgage lenders with the proceeds of such bonds or notes sufficient to provide, together with all other available receipts, revenues, and income of the Agency, for the payment of such bonds or notes and the payment of all costs and expenses incurred by the Agency with respect to the program or purpose for which such bonds or notes are issued. The notes and bonds of the Agency may be sold by the Agency, at public or private sale, at such price or prices as the Agency shall determine.

  (c) Any resolution or resolutions authorizing any notes or bonds or any issue thereof may contain provisions, which shall be a part of the contract or contracts with the holders thereof, as to:

  (1) pledging all or any part of the revenues of the Agency to secure the payment of the notes or bonds or of any issue thereof, subject to such agreements with noteholders or bondholders as may then exist;

  (2) pledging all or any part of the assets of the Agency, including mortgages and obligations securing the same, to secure the payment of the notes or bonds or of any issue of notes or bonds, subject to such agreements with noteholders or bondholders as may then exist;

  (3) the use and disposition of the gross income from mortgages owned by the Agency and payments upon other obligations held by the Agency;

  (4) the setting aside of reserves or sinking funds and the regulation and disposition thereof;

  (5) limitations on the purpose to which the proceeds of sale of notes or bonds may be applied and pledging the proceeds to secure the payment of the notes or bonds or of any issue thereof;

  (6) limitations on the issuance of additional notes or bonds, the terms upon which additional notes or bonds may be issued and secured, and the refunding of outstanding or other notes or bonds;

  (7) the procedure, if any, by which the terms of any contract with noteholders or bondholders may be amended or abrogated, the amount of notes or bonds the holders of which must consent thereto, and the manner in which consent may be given;

  (8) limitations on the amount of monies to be expended by the Agency for operating expenses of the Agency;

  (9) vesting in a trustee or trustees, within or without the State, such property, rights, powers, and duties in trust as the Agency may determine, which may include any or all of the rights, powers, and duties of the trustee appointed by the bondholders pursuant to this chapter and limiting or abrogating the right of the bondholders to appoint a trustee under this chapter or limiting the rights, powers, and duties of the trustee;

  (10) defining the acts or omissions to act that shall constitute a default in the obligations and duties of the Agency to the holders of the notes or bonds and providing for the rights and remedies of the holders of the notes or bonds in the event of such default, including as a matter of right the appointment of a receiver; provided, however, that the rights and remedies shall not be inconsistent with the general laws of the State and other provisions of this chapter; and

  (11) any other matters, of like or different character, that in any way affect the security or protection of the holders of the notes or bonds.

  (d) Any pledge made by the Agency shall be valid and binding from the time when the pledge is made; the revenues, monies, or property so pledged and thereafter received by the Agency shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the Agency, irrespective of whether such parties have notice thereof.

  (e) Bonds, notes, and other obligations authorized under this chapter may, in the discretion of the Agency, be issued with such terms as will cause the interest thereon to be subject to federal income taxation. To the extent required for their sale, the Agency may register such obligations, including the obligations of a trust established pursuant to section 627 of this title, under applicable federal and State securities laws. No person executing any bonds, notes, and other obligations issued by the Agency or others under authority of this chapter shall be subject to any personal liability or accountability by reason of the issuance thereof. The Agency shall indemnify any person who shall have served as a commissioner, officer, or employee of the Agency against financial loss or litigation expense arising out of or in connection with any claim or suit involving allegations that pecuniary harm has been sustained as a result of any transaction authorized by this chapter, unless such person is found by a final judicial determination not to have acted in good faith and for a purpose that he or she reasonably believed to be lawful and in the best interests of the Agency.

  (f) The Agency, subject to such agreements with noteholders or bondholders as may then exist, shall have power out of any funds available therefor to purchase notes or bonds of the Agency at a price as shall be determined in the economic best interests of the Agency.

  (g) In the discretion of the Agency, the notes or bonds may be secured by a trust indenture by and between the Agency and a corporate trustee, which may be any trust company or bank having the power of a trust company within or without the State. The trust indenture may contain such provisions for protecting and enforcing the rights and remedies of the noteholders or bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the Agency in relation to the exercise of its corporate powers and the custody, safeguarding, and application of all monies. The Agency may provide by such trust indenture for the payment of the proceeds of the notes or bonds and the revenues to the trustee under such trust indenture or other depository, and for the method of disbursement thereof, with such safeguards and restrictions as it may determine. All expenses incurred in carrying out the trust indenture may be treated as a part of the operating expenses of the Agency. If the notes or bonds shall be secured by a trust indenture, the noteholders and bondholders shall have no authority to appoint a separate trustee to represent them.

  (h) Any law to the contrary notwithstanding, a bond or note issued under this chapter is fully negotiable for all purposes of 9A V.S.A. § 1-101 et seq., and each holder or owner of a bond or note, or of any coupon appurtenant thereto, by accepting the bond or note or coupon shall be conclusively deemed to have agreed that the bond, note, or coupon is fully negotiable for those purposes.

  (i) Any provision of this chapter or of any other law or any recitals in any bonds or notes issued under this chapter to the contrary notwithstanding, all bonds, notes, and interest coupons appertaining thereto issued by the Agency shall have and are hereby declared to have all the qualities and incidents, including negotiability, of investment securities under 9A V.S.A. § 1-101 et seq., but no provision of those sections respecting the filing of a financing statement to perfect a security interest shall be applicable to any security interest created in connection with the issuance of the bonds, notes, or coupons.

  (j) In case any of the commissioners, executive director, or officers of the Agency whose signatures appear on any notes or bonds or coupons shall cease to be commissioners, executive director, or officers before the delivery of such notes or bonds, the signatures shall, nevertheless, be valid and sufficient for all purposes, the same as if such commissioners, executive director, or officers had remained in office until such delivery.

  (k) Interest rate exchange agreements. The Agency may enter into one or more agreements for the exchange of interest rates, cash flows, or payments to reduce net borrowing costs, achieve desirable net effective interest rates in connection with its issuance and sale of debt obligations and to provide for an efficient means of debt management.

  [Subsection (l) repealed on July 1, 2039.]

  (l)(1) The bonds, notes, and other obligations authorized to be issued pursuant to subdivision 621(22) of this title shall be secured by a pledge of the property transfer tax revenues to be transferred to the Agency pursuant to 32 V.S.A. § 9610(d) and shall mature on or before June 30, 2039.

  (2) The Agency may issue the bonds, notes, and other obligations in one or more series at one time or from time to time, provided that the aggregate annual debt service on the bonds, notes, and other obligations shall not exceed $2,500,000.00 at any time.

  (3) The Agency shall transfer the proceeds of the bonds, notes, and other obligations, less issuance fees and costs and required reserves, to the Vermont Housing and Conservation Trust Fund established pursuant to section 312 of this title for use by the Vermont Housing and Conservation Board as provided in section 314 of this title.

  (4) The Agency, the Vermont Housing and Conservation Board, and the State Treasurer may execute one or more agreements governing the terms and conditions under which the property transfer tax revenues that secure the bonds, notes, and obligations shall be transferred to the Agency, and any other issues they determine appropriate. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974; amended 1975, No. 176 (Adj. Sess.), § 2, eff. March 26, 1976; 1977, No. 47, §§ 3, 4, eff. April 20, 1977; 1977, No. 199 (Adj. Sess.), § 2; 1979, No. 36, § 2, eff. April 18, 1979; 1979, No. 97 (Adj. Sess.), § 1, eff. March 20, 1980; 1981, No. 23, § 3, eff. April 14, 1981; 1983, No. 52, § 4, eff. April 23, 1983; 1985, No. 94, §§ 1, 2; 1987, No. 250 (Adj. Sess.), § 3, eff. June 13, 1988; 1989, No. 145 (Adj. Sess.), § 1, eff. April 20, 1990; 2005, No. 75, § 19; 2005, No. 189 (Adj. Sess.), § 9; 2007, No. 86 (Adj. Sess.), § 1, eff. March 3, 2008; 2009, No. 1 (Sp. Sess.), § H.12, eff. June 2, 2009; 2017, No. 85, § I.6; 2017, No. 85, § I.11.)

• § 632. Repealed. 2009, No. 1 (Sp. Sess.), § H.13, eff. June 2, 2009.

• § 632a. Reserve and pledged equity funds

  (a) The Agency may create and establish one or more special funds, herein referred to as “debt service reserve funds” or “pledged equity funds.”

  (b) The Agency shall pay into each debt service reserve fund:

  (1) Any monies appropriated and made available by the State for the purpose of such fund.

  (2) Any proceeds of the sale of notes, bonds, or other debt instruments to the extent provided in the resolution or resolutions of the Agency authorizing their issuance.

  (3) Any other monies or financial instruments such as surety bonds, letters of credit, or similar obligations that may be made available to the Agency for the purpose of such fund from any other source or sources. All monies or financial instruments held in any debt service reserve fund created and established under this section except as hereinafter provided shall be used, as required, solely for the payment of the principal of the bonds, notes, or other debt instruments secured in whole or in part by such fund or of the payments with respect to the bonds, notes, or other debt instruments specified in any resolution of the Agency as a sinking fund payment, the purchase or redemption of the bonds, the payment of interest on the bonds, notes, or other debt instruments, or the payment of any redemption premium required to be paid when the bonds, notes, or other debt instruments are redeemed prior to maturity, or to reimburse the issuer of a liquidity or credit facility, bond insurance, or other credit enhancement for the payment by such party of any of the foregoing amounts on the Agency’s behalf; provided, however, that the monies or financial instruments in any such debt reserve fund shall not be drawn upon or withdrawn therefrom at any time in such amounts as would reduce the amount of such funds to less than the debt service reserve requirement established by resolution of the Agency for such fund as provided in this section except for the purpose of paying, when due, with respect to bonds secured in whole or in part by such fund, the principal, interest, redemption premiums, and sinking fund payments and of reimbursing, when due, the issuer of any credit enhancement for any such payments made by it, for the payment of which other monies of the Agency are not available. Any income or interest earned by or increment to any debt service reserve fund due to the investment thereof may be transferred by the Agency to other funds or accounts of the Agency to the extent it does not reduce the amount of such debt service reserve fund below the debt service reserve requirement for such fund.

  (c) The Agency shall pay into each pledged equity fund:

  (1) Any monies appropriated and made available by the State for the purpose of such fund.

  (2) Any proceeds of the sale of notes, bonds, or other debt instruments to the extent provided in the resolution or resolutions of the Agency authorizing the issuance thereof.

  (3) Any other monies or financial instruments such as surety bonds, letters of credit, or similar obligations that may be made available to the Agency for the purpose of such fund from any other source or sources. All monies or financial instruments held in any pledged equity fund created and established under this section except as provided in this section shall be used, as required, solely to provide pledged equity or over-collateralization of any trust estate of the Agency to the issuer of a liquidity or credit facility, bond insurance, or other credit enhancement obtained by the Agency; provided, however, that the monies or financial instruments in any pledged equity fund shall not be drawn upon or withdrawn from such fund at any time in such amounts as would reduce the amount of such funds to less than the pledged equity requirement established by resolution of the Agency for such fund as provided in this section except for the purposes set forth in and in accordance with the governing resolution. Any income or interest earned by or increment to any pledged equity fund due to the investment thereof may be transferred by the Agency to other funds or accounts of the Agency to the extent it does not reduce the amount of such pledged equity fund below the requirement for such fund. Anything in this subdivision to the contrary notwithstanding, upon the defeasance of the bonds, notes, or other debt instruments with respect to which the pledged equity requirement was established, the Agency may transfer amounts in such fund to another fund or account of the Agency proportionately to the amount of such defeasance, provided that the Agency shall repay to the State any amount appropriated by the State pursuant to subsection (f) of this section.

  (d) The debt service reserve and pledged equity requirements for any fund established under this section shall be established by resolution of the Agency prior to the issuance of any bonds, notes, or other debt instruments secured in whole or in part by a debt service reserve fund or prior to entering into any credit enhancement agreement and shall be the amount determined by the Agency to be reasonably required in light of the facts and circumstances of the particular debt issue or credit enhancement, provided that the maximum amount of the State’s commitment with respect to any pledged equity fund shall be determined by the Agency at or prior to entering into any credit enhancement agreement related to such pledged equity fund. The Agency shall not at any time issue bonds, notes, or other debt instruments secured in whole or in part by a debt service reserve fund or enter into any credit enhancement agreement that requires establishment of a pledged equity fund created and established under this section unless:

  (1) the Agency at the time of such issuance or execution shall deposit in such fund from the proceeds of such bonds, notes, or other debt instruments or from other sources an amount that, together with the amount then in such fund, will not be less than the requirement established for such fund at that time;

  (2) the Agency has made a determination at the time of the authorization of the issuance of such bonds, notes, or other debt instruments or at the time of entering into such credit enhancement agreement that the Agency will derive revenues or other income from the mortgage loans that secure such bonds, notes, or other debt instruments or that relate to any credit enhancement agreement sufficient to provide, together with all other available revenues and income of the Agency other than any amounts appropriated by the State pursuant to this section for the payment or purchase of such bonds, notes, and other debt instruments and reimbursement to the issuer of any credit enhancement the payment of any expected deposits into any pledged equity fund established with respect to such credit enhancement, and the payment of all costs and expenses incurred by the Agency with respect to the program or purpose for which such bonds, notes, or other debt instruments are issued; and

  (3) the State Treasurer or designee has provided written approval to the Agency that the Agency may issue such bonds, notes, or other debt instruments and enter into any related credit enhancement agreement.

  (e) In computing the amount of the debt service reserve or pledged equity funds for the purpose of this section, securities in which all or a portion of such funds shall be invested shall be valued at par if purchased at par or at amortized value, as that term is defined by resolution of the Agency, if purchased at other than par.

  (f) In order to ensure the maintenance of the debt service reserve fund requirement in each debt service reserve fund established by the Agency under this section, there may be appropriated annually and paid to the Agency for deposit in each fund a sum as shall be certified by the Chair of the Agency to the Governor, the President of the Senate, and the Speaker of the House as is necessary to establish or restore each such debt service reserve fund to an amount equal to the requirement for each such fund. The Chair shall annually, on or about February 1, make, execute, and deliver to the Governor, the President of the Senate, and the Speaker of the House a certificate stating the sum required to restore each such fund to the amount required by this section, and the Governor shall, on or before March 1, submit a request for appropriations in the amount so certified, and such amount may be appropriated and, if appropriated, shall be paid to the Agency during the then current State fiscal year. In order to ensure the funding of the pledged equity fund requirement in each pledged equity fund established by the Agency under this section at the time and in the amount determined at the time of entering into any credit enhancement agreement related to a pledged equity fund, there may be appropriated and paid to the Agency for deposit in each fund a sum as shall be certified by the Chair of the Agency to the Governor, the President of the Senate, and the Speaker of the House as is necessary to establish each pledged equity fund to an amount equal to the amount determined by the Agency at the time of entering into any credit enhancement agreement related to a pledged equity fund; provided that the amount requested, together with any amounts previously appropriated pursuant to this subsection for a particular pledged equity fund, shall not exceed the maximum amount of the State’s commitment as determined by the Agency pursuant to subsection (d) of this section. The Chair shall, on or about the February 1 next following the designated date for fully funding a pledged equity fund, make, execute, and deliver to the Governor, the President of the Senate, and the Speaker of the House a certificate stating the sum required to bring each fund to the amount required by this section or to otherwise satisfy the State’s commitment with respect to each fund, and the Governor shall, on or before March 1, submit a request for appropriations in the amount so certified, and such amount may be appropriated and, such amount, if appropriated, shall be paid to the Agency during the then current State fiscal year. The combined principal amount of bonds, notes, and other debt instruments outstanding at any time and secured in whole or in part by a debt service reserve fund established under this section and the aggregate commitment of the State to fund pledged equity funds pursuant to this subsection shall not exceed $155,000,000.00 at any time, provided that the foregoing shall not impair the obligation of any contract or contracts entered into by the Agency in contravention of the Constitution of the United States. Notwithstanding anything in this section to the contrary, the State’s obligation with respect to funding any pledged equity fund shall be limited to its maximum commitment, as determined by the Agency pursuant to subsection (d) of this section, and the State shall have no other obligation to replenish or maintain any pledged equity fund. (Added 2009, No. 1 (Sp. Sess.), § H.14, eff. June 2, 2009; amended 2011, No. 40, § 55, eff. May 20, 2011.)

• § 633. Refunding obligations — Issuance

  The Agency may provide for the issuance of refunding obligations for the purpose of refunding any obligations then outstanding that have been issued under the provisions of this chapter, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption of such obligations and for any corporate purpose of the Agency. The issuance of such obligations, the maturities and other details thereof, the rights of the holders thereof, and the rights, duties, and obligations of the Agency in respect of the same shall be governed by the provisions of this chapter that relate to the issuance of obligations, insofar as those provisions may be appropriate. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974.)

• § 634. Refunding obligations — Sale

  Refunding obligations issued as provided in section 633 of this title may be sold or exchanged for outstanding obligations issued under this chapter and, if sold, the proceeds thereof may be applied, in addition to any other authorized purposes, to the purchase, redemption, or payment of such outstanding obligations. Pending the application of the proceeds of any refunding obligations, with any other available funds, to the payment of the principal, accrued interest, and any redemption premium on the obligations being refunded, and, if so provided or permitted in the resolution authorizing the issuance of such refunding obligations or in the trust agreement securing them to the payment of any interest on such refunding obligations and any expenses in connection with such refunding, such proceeds may be invested in direct obligations of, or obligations the principal of and the interest on that are unconditionally guaranteed by the United States of America that shall mature or that shall be subject to redemption by the holders thereof, at the option of such holders, not later than the respective dates when the proceeds, together with the interest accruing thereon, will be required for the purposes intended. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974.)

• § 635. Remedies of bondholders and noteholders

  (a) In the event that the Agency defaults in the payment of principal or of interest on any bonds or notes issued under this chapter after they become due, whether at maturity or upon call for redemption, and the default continues for a period of 30 days, or in the event that the Agency fails or refuses to comply with the provisions of this chapter, or defaults in any agreement made with the holders of an issue of bonds or notes of the Agency, the holders of 25 percent in aggregate principal amount of the bonds or notes of such issue then outstanding, by instrument or instruments filed in the Office of the Secretary of State and proved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the holders of such bonds or notes for the purposes herein provided.

  (b) Such trustee may, and upon written request of the holders of 25 percent in principal amount of such bonds or notes then outstanding shall, in his or her or its own name:

  (1) enforce all rights of the bondholders or noteholders, including the right to require the Agency to collect interest and amortization payments on the mortgages or other obligations held by it adequate to carry out any agreement as to, or pledge of, the interest and amortization payments, and to require the Agency to carry out any other agreements with the holders of such bonds or notes and to perform its duties under this chapter;

  (2) enforce all rights of the bondholders or noteholders, including the right to collect and enforce the payment of principal of and interest due or becoming due on loans to mortgage lenders and collect and enforce any collateral securing the loans or sell the collateral, so as to carry out any contract as to, or pledge of revenues, and to require the Agency to carry out and perform the terms of any contract with the holders of such bonds or notes or its duties under this chapter;

  (3) bring suit upon all or any part of such bonds or notes;

  (4) by action or suit, require the Agency to account as if it were the trustee of an express trust for the holders of such bonds or notes;

  (5) by action or suit, enjoin any acts or things that may be unlawful or in violation of the rights of the holders of such bonds or notes;

  (6) declare all such bonds or notes due and payable, and, if all defaults shall be made good, then with the consent of the holders of 25 percent of the principal amount of such bonds or notes then outstanding to annul the declaration and its consequences.

  (c) The trustee shall in addition to the foregoing have and possess all the powers necessary or appropriate for the exercise of any functions specifically set forth herein or incident to the general representation of bondholders or noteholders in the enforcement and protection of their rights.

  (d) Before declaring the principal of bonds or notes due and payable, the trustee shall first give 30 days’ notice in writing to the Governor, to the Agency and to the Attorney General of the State.

  (e) The Superior Courts or courts with equity jurisdiction shall have jurisdiction of any suit, action, or proceeding by the trustee on behalf of bondholders or noteholders. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974.)

• § 636. Pledge of the State

  The State does hereby pledge to and agree with the holders of the notes and bonds issued under this chapter that the State will not limit or restrict the rights hereby vested in the Agency to perform its obligations and to fulfill the terms of any agreement made with the holders of its bonds or notes or in any way impair the rights and remedies of the holders until the notes and bonds, together with interest thereon, and interest on any unpaid installments of interest, are fully met, paid and discharged. The Agency is authorized to execute this pledge and agreement of the State in any agreement with the holders of the notes or bonds. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974.)

• § 637. Sovereign immunity, credit of State not pledged

  The Agency shall have the benefit of sovereign immunity to the same extent as the State of Vermont. Commissioners, officers, employees, and the executive director of the Agency shall be deemed employees of the State for purposes of 12 V.S.A. chapter 189 (tort claims against State) and 3 V.S.A. chapter 29 (claims against State employees). Notwithstanding the foregoing, obligations issued under the provisions of this chapter shall not be deemed to constitute a debt or liability or obligation of the State or of any political subdivision thereof or a pledge of the faith and credit of the State or of any political subdivision but shall be payable solely from the revenues or assets of the Agency. Each obligation issued under this chapter shall contain on the face thereof a statement to the effect that the Agency shall not be obligated to pay the same nor the interest thereon except from the revenues or assets pledged therefor and that neither the faith and credit nor the taxing power of the State or of any political subdivision thereof is pledged to the payment of the principal of or the interest on such obligations. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974; amended 2003, No. 122 (Adj. Sess.), § 240a; 2005, No. 75, § 20.)

• § 638. Notes and bonds as legal investments

  Notwithstanding any other law, the State and all public officers, governmental units, and agencies thereof, all banks, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations, and other persons carrying on an insurance business, all credit unions, and all executors, administrators, guardians, trustees, and other fiduciaries may legally invest any sinking funds, monies, or other funds belonging to them or within their control in any bonds or notes issued under this chapter, and the bonds or notes are authorized security for any and all public deposits. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974.)

• § 639. Annual reports; audit

  (a) On or before the last day of January in each year, the Agency shall submit a report of its activities for the preceding fiscal year to the Governor and to the General Assembly, specifically the committees in the House and Senate with jurisdiction over housing. Each report shall set forth a complete operating and financial statement covering its operations during the year, including the Agency’s present and projected economic health, amount of indebtedness, a statement of the amounts received from funds generated by interest from real estate escrow and trust accounts established pursuant to 26 V.S.A. § 2214(c), a list and description of the programs to which IORTA funds were provided and the amounts distributed to each county. The Agency shall cause an audit of its books and accounts to be made at least once in each year by certified public accountants; the cost shall be considered an expense of the Agency and a copy shall be filed with the State Treasurer. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection.

  (b) The Auditor of Accounts of the State and his or her duly authorized representatives may at any time examine the accounts and books of the Agency, including its receipts, disbursements, contracts, sinking funds, investments, and any other matters relating to its financial statements. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974; amended 1989, No. 145 (Adj. Sess.), § 3, eff. April 20, 1990; 1991, No. 86, § 3, eff. Jan. 1, 1992; 2007, No. 86 (Adj. Sess.), § 2, eff. March 3, 2008; 2013, No. 142 (Adj. Sess.), § 17.)

• § 640. Authorization to accept appropriated monies

  The Agency is authorized to accept and expend such monies as may be appropriated or approved from time to time by the General Assembly for effectuating its corporate purposes including the payment of the initial expenses of administration and operation and the establishment of reserves or contingency funds to be available for the payment of the principal of and the interest on any bonds, notes, or other obligations of the Agency. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974.)

• § 641. Tax exemption

  (a) All property of the Agency is public property devoted to an essential public and governmental function and purpose and is exempt from all taxes, franchise fees, and special assessments of whatever nature of the State or any subdivision. All bonds or notes issued under this chapter are issued by a body corporate and public of this State and for an essential public and governmental purpose and those bonds and notes, and the interest thereon and the income therefrom, and all activities of the Agency and fees, charges, funds, revenues, incomes, and other monies of the Agency whether or not pledged or available to pay or secure the payment of those bonds or notes, or interest thereon, are exempt from all taxation, franchise fees, or special assessments of whatever kind except for transfer, inheritance, and estate taxes.

  (b) The Agency is not required to make or file any reports, statements, or informational returns required of any other bodies corporate except as provided in this chapter.

  (c) Notwithstanding subsection (a) of this section, a tax lien on real property that has attached pursuant to 32 V.S.A. § 5061 shall not be extinguished as a result of the acquisition by the Agency of property subject to such lien. No real property owned by the Agency on April 1 of any year shall be assessed for taxes by any municipality and no lien for taxes pursuant to 32 V.S.A. § 5061 shall attach to such property whether or not the Agency subsequently transfers the property to a taxable person prior to April 1 of the following year. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974; amended 1983, No. 215 (Adj. Sess.), § 2, eff. May 10, 1984.)

• § 642. Liberal construction

  Neither this chapter nor anything herein contained is or shall be construed as a restriction or limitation upon any powers that the Agency might otherwise have under any laws of this State, and this chapter is cumulative to any such powers. This chapter does and shall be construed to provide a complete, additional, and alternative method for the doing of the things authorized thereby and shall be regarded as supplemental and additional to powers conferred by other laws. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974.)

• § 643. Inconsistent provisions in other laws superseded

  Insofar as the provisions of this chapter are inconsistent with the provisions of any other law, general, special, or local, the provisions of this chapter shall be controlling. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974.)