Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This rule authorizes associations to make
loans secured by real estate other than residential real estate and prescribes
the conditions and limitations on those loans.
(1) An association may originate, invest in,
sell, purchase, participate or otherwise deal in loans secured by real estate
other than residential real estate as follows:
(A) First mortgage loans-Loans secured by a
first lien on other real estate;
(B) Second mortgage loans-Loans secured by a
second lien on other real estate in the same amount as if the loan were secured
by a first lien, less the unpaid balance of the first lien indebtedness, on the
terms set out in this rule, provided that the total of the unpaid balance of
all loans secured by each deed of trust and the maximum advances authorized
under the deed of trust do not exceed the value of the security; and
(C) Advances-An association may make advances
on an open-ended first deed of trust held by the association, not subject to
any intervening security interest of another, if the total of the unpaid
balance of all loans secured by each deed of trust and the maximum advances
authorized under the deed of trust do not exceed the value of the security or
the advance is made for the purpose of protecting the value of the security
interest of the association.
(2) The aggregate amount which an association
may invest in other real estate loans shall not exceed forty percent (40%) of
the association's assets.
(3) Terms
and Conditions.
(A) All other real estate
loans shall be repayable within a period not to exceed thirty (30) years from
the date the loan is made, except loans made to finance the acquisition of real
estate, development of real estate, or both, and loans made on the security of
building lots and sites, which shall not be for a term in excess of eight (8)
years.
(B) Other real estate loans
may be fully amortized, partially amortized or nonamortized, provided that
interest is payable at least semiannually. Provisions for full amortization of
the loan shall be required in the loan contract, to begin no later than five
(5) years from the date of origination. Amortized construction loans for a term
in excess of five (5) years must provide for repayment to begin within
thirty-six (36) months from the date of origination.
(C) For loans made to finance the development
of real estate, loans on the security of building lots and sites, loans on
unimproved real estate and construction loans, upon the release of any portion
of the security property from the lien securing the loan, the principal balance
of the loan shall be reduced by an amount at least equal to that portion of the
outstanding loan balance attributable to the value of the property to be
released. Value, is the appraised value at the time the loan was
made.
(D) Loan documentation for
development loans shall contain a satisfactory preliminary development plan. In
addition, loans to one (1) borrower made under this regulation for any one (1)
development project shall not exceed three percent (3%) of the association's
assets. A development project includes all facilities that compose an
integrated development plan. With respect to construction loans, associations
shall reserve the right to impose limits on the number of structures under
construction at a given time. Despite the limitations imposed by this section,
an association may make loans to a service corporation in any amount, subject
to applicable limitations on investments in those service
corporations.
*Original authority: 369.144, RSMo 1971, amended 1982,
1983, 1984, 1989, 1994; 369.229, RSMo 1971, amended 1983, 1994; and 369.249 and
369.299, RSMo 1971, amended 1994.