35-726

35-726. Approval of general plan before issuing
bonds; fee; definition

A. Bonds shall not be issued by a corporation for the purpose of financing single
family dwelling units pursuant to section 35-706, subsection A, paragraph 11 or 12
without approval of a general plan by its governing body. The corporation shall submit a
general plan for each respective series of bonds to its governing body. The general plan
shall briefly describe:

1. The amount of the proposed bonds.

2. The maximum term of the bonds.

3. The maximum interest rate on the bonds.

4. The need for the bond issue.

5. The terms and conditions for originating or purchasing mortgage loans or making
loans to lenders.

6. The area in which the single family dwelling units to be financed may be
located.

7. The proposed fees, charges and expenditures to be paid for originators,
servicers, trustees, custodians, mortgage administrators and others.

8. All insurance requirements with respect to mortgage loans, mortgaged property,
mortgagors, originators, servicers and trustees.

9. The anticipated date of issuance of the bonds.

B. The governing body shall review general plans submitted by corporations pursuant
to subsection A of this section. In reviewing the plans the governing body shall
consider:

1. Whether the amount of the mortgage monies proposed to be made available is
reasonably related to the demand for the mortgage monies.

2. Whether the terms of the general plan are justifiable in the context of the
transaction and in the context of similar transactions.

3. Whether the fees, costs and expenditures as set forth in the general plan are
reasonably related to the services provided.

4. For projects of owner-occupied single family dwelling units to be occupied by
persons of low and moderate income and financed pursuant to section 35-706, subsection A,
paragraphs 11 and 12, whether the proposed mortgage monies to be made available will
fulfill a public purpose by providing housing for persons of low and moderate income or
by encouraging single family developments in all participating jurisdictions, including
such jurisdictions' slum or blighted areas as defined in section 36-1471.

C. The governing body shall approve or disapprove the general plan not later than
thirty days after receipt of the plan. If the governing body does not act upon the
general plan within thirty days from the date of receipt, the general plan shall be
deemed approved. If a general plan is approved, the corporation may issue the series of
bonds covered by the general plan with a total principal amount, maximum term and maximum
interest rate no greater than that which is set forth in the general plan. The
origination and servicing fees pertaining to mortgage loans to be financed in accordance
with the general plan shall not exceed those proposed in the general plan. The
corporation may vary other items in the general plan upon a finding that the variation is
minor and that the variations will not impair the security for the bonds or substantially
increase the cost of financing the single family dwelling units and the findings of the
corporation shall be conclusive.

D. The governing body may charge any corporation submitting a general plan for
review a fee of not to exceed ten thousand dollars together with reimbursement of its
actual costs and expenses incurred in reviewing the general plan.

E. A corporation shall not issue bonds, other than refunding bonds the proceeds of
which are used exclusively to refund a prior bond issue, to finance a multifamily
residential rental project, sanitarium, clinic, medical hotel, rest home, nursing home,
skilled nursing facility or life care facility as prescribed in section 20-1801, unless
the department approves the project. The department, with or without a hearing, shall
review the project and consider at least the following factors:

1. The demand for and feasibility of the project in the area set forth in the
application to the corporation.

2. The terms and conditions of the proposed bonds.

3. The proposed use of bond proceeds.

4. The benefit to the public if the project provides rental housing for persons of
low and moderate income or encourages rental housing in slum or blighted areas as defined
in section 36-1471.

5. If the project consists of a nursing home, or a life care facility as prescribed
in section 20-1801, the benefit to the public of the project, including the proposed
rent, fees and other charges of the project in relation to the level of services to be
offered.

F. Subsection E of this section does not apply to bonds issued to finance a
sanitarium, clinic, medical hotel, rest home, nursing home, skilled nursing facility, or
life care facility as prescribed in section 20-1801, if the facility is to be owned and
operated by this state or a political subdivision or agency of this state.

G. The department with or without a hearing shall approve or disapprove the project
not later than thirty days after receipt of the request for approval. If the project is
approved the corporation may issue the bonds described in the approval request with the
total principal amount, maximum term and maximum interest rate no greater than as set
forth in the request. The department shall charge each applicant submitting a project
approval request pursuant to this subsection a fee of not to exceed five thousand dollars
together with reimbursement of its actual costs and expenses incurred in reviewing the
project. Beginning on October 1, 2002, the department shall remit the fees to the state
treasurer for deposit in the Arizona department of housing program fund established by
section 41-3957.

H. For the purposes of this section, "department" means the Arizona department of
housing.