Older Housing

C.R.S. tit. 7, art. 49
in effect

C.R.S. § 7-49-101 Legislative declaration

7-49-101. Legislative declaration. (1) The general assembly hereby finds and declares that: (a) There exists in both the urban and rural areas of the state a substantial quantity of older houses which, while still structurally sound and safe, are in danger of deteriorating due to the lack of available private investment capital which would help ensure their purchase or rehabilitation; (b) The purchase, repair, and restoration of such houses by interested persons will tend to stabilize the physical and social environment of the area in which such houses are located, preserve the economic base of the community of which they are a part, and help prevent the spread of blighted houses; (c) A need exists for assistance to individuals and families in securing financing to purchase or rehabilitate such housing; that such purpose can best be met by coordination and cooperation among private lenders and insurers with state and local governments; that such assistance can be provided by stimulating the flow of private investment capital into the financing of such houses by providing a program of mortgage lending and insurance specifically designed to provide loans or insurance to individuals or families who would otherwise qualify for mortgage loans in areas of newer housing; and that local governments can further stimulate the upgrading of endangered older houses by minimizing the problems associated with over-restrictive and narrowly-defined and administered building codes and inspection procedures. (2) It is further declared that a general law cannot be made applicable to the corporation authorized by this article because of the atypical and special nature of the corporation's powers, duties, privileges, rights, and liabilities.

C.R.S. § 7-49-102 Definitions

7-49-102. Definitions. As used in this article, unless the context otherwise requires: (1) "Corporation" means the Colorado older housing preservation corporation authorized to be created in this article. (2) "Eligible housing structure" or "eligible housing" means a structure occupied by the owner and used primarily for residential purposes, consisting of eight or less units, thirty years of age or older, and on land located in a recorded subdivision plat in which fifty percent or more of the residential housing structures are thirty years of age or older. (3) "Financial institution", "member institution", or "institution" means any bank, trust company, savings and loan association, credit union, public or private pension or retirement fund, insurance company or corporation related thereto, partnership, foundation, or any other financial institution authorized to invest in or make mortgage loans or to provide insurance for mortgage loans. (4) "Insured lender" or "lender" means any financial institution which makes a loan which is insured under this article. (5) "Mortgage" means a written instrument evidencing or creating a lien against real property for the purpose of providing security for the repayment of a debt. For the purposes of this article, the term includes a deed of trust.

C.R.S. § 7-49-103 Corporation authorized

7-49-103. Corporation authorized. A corporation, for the purposes enumerated in this article, may be incorporated upon approval of the governor and the state treasurer. The provisions of the "Colorado Business Corporation Act", articles 101 to 117 of this title, not in conflict with or inconsistent with the provisions of this article shall apply to such corporation. The purpose clause of the articles of incorporation shall recite that the purposes for which the corporation is formed are to stimulate the flow of private investment capital for the purchase and rehabilitation of eligible housing; to encourage and assist through financial aid, advice, technical assistance, and other appropriate means the improvement of existing housing throughout the state; and, in furtherance of these purposes, to cooperate with the division of housing of the department of local affairs and the Colorado housing and finance authority and with other organizations, public and private.

C.R.S. § 7-49-104 Corporate name

7-49-104. Corporate name. The corporation shall be called the Colorado older housing preservation corporation.

C.R.S. § 7-49-105 Approval of governor and state treasurer

7-49-105. Approval of governor and state treasurer. The articles of incorporation shall not be delivered to the secretary of state, for filing pursuant to part 3 of article 90 of this title, unless the governor and the state treasurer have approved in writing the method for selection of public members of the board of directors and the creation of the corporation.

C.R.S. § 7-49-106 Election of board of directors

7-49-106. Election of board of directors. (1) The business and affairs of the corporation shall be conducted by a board of directors comprised of: (a) Four members elected by a vote of the eight participating financial institutions who have made or committed the largest contributions to the loan and insurance funds provided for in sections 7-49-108 and 7-49-109; and (b) Two members elected by the remaining participating financial institutions; and (c) Three members, elected under procedures established in the articles of incorporation at the time of incorporation and approved by the governor and state treasurer, representing the general public; and (d) The executive director of the department of local affairs or the executive director's designee, the chairperson of the banking board, the commissioner of insurance, the executive director of the Colorado housing and finance authority, and the state treasurer, who shall serve as ex officio voting members of the board of directors. (2) Except for the ex officio members, the terms of office for each member shall be four years; except that, at the time of incorporation, a majority of the members of the initial board shall be elected for four-year terms and the remainder for two-year terms. Any vacancy shall be filled in the same manner as the original election but shall be for the unexpired term.

C.R.S. § 7-49-107 Restrictions on powers

7-49-107. Restrictions on powers. (1) The powers of the corporation shall be subject to the following restrictions: (a) It shall not approve any application for a loan until the applicant has shown that the applicant has applied to two or more financial institutions that could lawfully lend the amount of money sought and that the financial institutions have refused in writing to make the requested loan or would only make such loan under conditions substantially different from the prevailing rates and conditions available to persons borrowing for the purchase or remodeling of newer homes; (b) It shall not give security for any loan made unless all loans are secured ratably in proportion to unpaid balances due. (2) Nothing in this article shall be construed to empower the board of directors to adopt rules or regulations that are inconsistent with federal law governing financial institutions or any federal rules or regulations promulgated pursuant to such federal law.

C.R.S. § 7-49-108 Membership - loans from members

7-49-108. Membership - loans from members. (1) Any financial institution is authorized to become a member of the corporation by making application to the board of directors on such form and in such manner as the board of directors may by rule require, and membership shall become effective upon approval of the application by said board. Membership shall be for the duration of the corporation; but, upon written notice given to the corporation two years in advance, a member may withdraw from membership at the expiration of the notice and shall not thereafter be obligated to make any loans as a member of the corporation. (2) Every member shall agree to make, pledge, or commit loans to the corporation or to other borrowers as provided in this section when called upon by it to do so, upon such terms and conditions as shall be approved by rule from time to time by the board of directors. (3) (a) Pursuant to procedures established by rule at the time of incorporation, or as from time to time modified by the board of directors with the approval of a majority of the member institutions, the corporation shall have the right to ask every member to make, pledge, or commit loans up to two-tenths of one percent of its assets (or more if a greater amount is subsequently authorized) for rehabilitation, refinancing, or acquisition loans made under this article. A member's obligation to make, pledge, or commit loans in excess of two-tenths of one percent of its assets arises only with the consent of the individual member. (b) Such request may be made by the corporation to a member institution asking that the member fulfill its obligations by making an insured loan to finance rehabilitation work, refinancing, or acquisition. (c) If a member institution has made loans insured under this article, outstanding principal amounts of which equal or exceed two-tenths of one percent of such lending institution's assets or the amount of funds pledged, the institution may assign a loan application qualified under this article to another member institution which has not made loans insured under this article equal to the amount of funds pledged or committed to the corporation or two-tenths of one percent of its assets, and the member institution to which the assignment has been made will, if such member institution approves, make the insured loan. (d) In the alternative, a member institution which has exceeded its two-tenths of one percent quota may place a loan application qualified under this article with the corporation which shall have the authority to assign such qualified loan application to any member institution which has not exceeded its commitments, and such institution shall make such loan if it approves thereof. The member institution to which such assignment is made need not be located in the municipality in which the housing facility mortgaged or to be mortgaged pursuant to such assigned loan is located. (e) Each loan shall be subject to reasonable administrative discretion and approval by the lender, under rules established by the corporation, as to the structural soundness of the housing structure and the economic soundness of the proposed loan. (f) If loans are made directly to the corporation by a member institution for use by the corporation pursuant to procedures established at the time of incorporation, the corporation may transfer amounts to each member institution for the purpose of making loans as provided in this article. Each such loan shall be subject to reasonable administrative discretion by the lender as to the structural soundness of the housing structure and the economic soundness of the proposed loan.

C.R.S. § 7-49-109 Loan insurance fund established

7-49-109. Loan insurance fund established. (1) The articles of incorporation shall include provisions for the establishment of a loan insurance fund as follows: (a) At the time of incorporation, and prior to initiating any loans under section 7-49-108, the corporation may call upon each member institution to contribute to the loan insurance fund. The contribution of each institution shall not exceed two-one hundredths of one percent of its assets, unless a greater amount is contributed voluntarily by a member institution or unless a greater amount is stated at the time of incorporation. The corporation may call for contributions to the loan insurance fund only as needed to meet its insurance obligations on loans insured under this article that are in default and for the purpose of maintaining a fund of cash in the loan insurance fund of five hundred thousand dollars. Calls for contributions shall be made upon each of the member institutions in an amount that bears, at the date of the call, the same proportion to the loan insurance fund as such institution's assets bear to the total assets owned by the institutions. (b) The loan insurance fund may be maintained by mortgage insurance fees not to exceed one-half of one percent above the rate charged for the mortgage or rehabilitation loan. (2) In the alternative, mortgage insurance may also be provided under the provisions of section 10-4-106, C.R.S.

C.R.S. § 7-49-110 Mortgage loans eligible for insurance

7-49-110. Mortgage loans eligible for insurance. (1) Fund insurance may be made available under the following conditions: (a) Fund insurance is applicable to loans originated by mortgagees approved by the corporation. (b) Mortgage loans must be a first lien against subject property. (c) Mortgage loans involving leaseholds must have a remaining lease term of not less than the mortgage term plus ten years. (d) Mortgage loans on one- to eight-family properties are eligible only if owner-occupied. (e) All mortgage loans shall bear interest at the rate agreed upon by the mortgagor and the corporation if the loan is made directly from funds held by the corporation and transferred to a participating lender, or by the mortgagor and the lending institution if the loan is made by the institution on call from the corporation. (f) No mortgage loan shall be insured for a term in excess of forty years. (g) The mortgage loan must contain amortization provisions satisfactory to the corporation for the complete amortization of the loan in monthly installments. Generally, the sum of principal and interest payments shall be substantially the same from month to month; however, special amortization programs involving increasing or decreasing monthly payments may be considered for insurance by the corporation. (h) Mortgage loans submitted for insurance consideration to the corporation must conform to the exhibits, documentation, and eligibility criteria as required under the loan insurance program for which approval is being requested. The corporation may establish, from time to time, the maximum interest rate and term of the loan which it will permit as to any loan it will insure.

C.R.S. § 7-49-111 Percentage of insurance

7-49-111. Percentage of insurance. (1) The corporation may insure: (a) Up to one hundred percent of the unpaid principal amount of loans for the purpose of purchasing, rehabilitating, or repairing eligible housing; (b) Up to thirty percent of the original principal amount of refinancing loans, if the funds in excess of those required to discharge existing mortgages are used for rehabilitation of all dwelling units in structures refinanced and for no other purpose; and (c) Up to thirty percent of the original principal amount of acquisition loans, if the insured loan together with other resources of the borrower is sufficient to acquire the property and to complete rehabilitation in accordance with the standards of this article. When the borrower of such an insured loan has repaid to the lender thirty percent of the original principal balance, the loan shall cease to be insured, and thereafter the borrower shall no longer be required to make mortgage insurance payments to the corporation.

C.R.S. § 7-49-112 Processing loans for insurance

7-49-112. Processing loans for insurance. (1) Insurance on a loan qualifying for mortgage insurance under this article shall be in effect as of the date on which the lender has made a report to the corporation which shall document: (a) The estimated cost of the rehabilitation work to be done; (b) In the case of a refinancing loan or acquisition loan, that such loan shall not exceed one hundred percent of the fair market value of the property to be refinanced or acquired after rehabilitation work has been completed; (c) That the estimated useful life of the housing accommodation, after rehabilitation, in the case of a rehabilitation loan, is greater than the term of the insurable mortgage; (d) That the housing facility after purchase or rehabilitation will not contain any substantial violation of housing, building, or sanitary codes which would make the housing so unsafe that it presents a danger to the occupants or the public health or safety.

C.R.S. § 7-49-113 Eligible properties

7-49-113. Eligible properties. (1) Property which is the subject of mortgage insurance or a mortgage or rehabilitation loan must: (a) Meet the provisions of section 7-49-102 (2); (b) Be located in this state; (c) Be primarily residential in nature and use. (2) If the housing facility includes three or more units, the corporation or lending institution may require appraisal as an investment and include an income and operating statement. Approval may also be subject to satisfactory leases.

C.R.S. § 7-49-114 Working capital fund

7-49-114. Working capital fund. (1) The corporation shall, at the time of incorporation, establish a general fund, referred to in this article as the "working capital fund", and shall pay into such working capital fund any other moneys which may be available to the corporation for its general purposes from any source. (2) All moneys held in the working capital fund, including, without limitation, any cash funds transferred directly to the corporation and any income or interest earned by or increment to such fund, shall be used by the corporation for its general purposes, and, to the extent authorized by it, any such moneys in excess of the amount required to make and keep the corporation self-supporting and to repay loans from member institutions shall be made available for the purposes of loans or for the loan insurance fund.

C.R.S. § 7-49-115 Division of housing - assistance

7-49-115. Division of housing - assistance. (1) The division of housing of the department of local affairs is hereby authorized to assist individuals and the corporation as to: (a) The nature, extent, and manner of repairs, remodeling, or rehabilitation financed under this article and the nature, extent, and manner of repairs required to ensure that the dwelling structure will not be structurally unsound and unsafe after such work is completed; (b) The manner, method, or mode by which the mortgage recipient could undertake all or any portion of the work; and (c) The progress of the work, including technical assistance regarding the quality of such work. (2) The corporation may establish rules and regulations providing a schedule of the amount or percentage of the cost or any technical assistance provided by a lender or which may be done under contract to the division of housing of the department of local affairs or by a private firm. Said amount may be included in the loan; except that the total amount to be charged shall not exceed one-half of one percent of the total amount of a loan to finance repair or rehabilitation work only or one-half of one percent of the cost of the repair or rehabilitation work to be undertaken in conjunction with the refinancing of an existing mortgage or the financing of the acquisition of a housing facility.

C.R.S. § 7-49-116 Nonliability of state for mortgage insurance commitments

7-49-116. Nonliability of state for mortgage insurance commitments. This state shall not be liable for mortgage insurance commitments of the fund beyond the reserves and fee revenues of the fund. The mortgage insurance commitments issued on the fund shall contain a statement to that effect.

C.R.S. § 7-49-117 Deposit of funds

7-49-117. Deposit of funds. The corporation shall not deposit any of its funds in any banking institution unless such institution has been designated as a depository by a vote of a majority of the directors present at an authorized meeting of the board of directors, exclusive of any director who is an officer or director of the depository so designated.

C.R.S. § 7-49-118 Books and records

7-49-118. Books and records. In addition to the books and records required by sections 7-116-101 to 7-116-105, the corporation shall keep a record showing the names and addresses of all members of the corporation and the current status of loans made by each to the corporation. Members shall have the same rights with respect to such books and records as are given to stockholders by sections 7-116-101 to 7-116-106.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-07.docxFetched: 10/6/2026

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