(a) Upon approval of emergency mortgage assistance payments, the authority shall enter into an agreement with the mortgagor for repayment of all such assistance with interest as provided in this section. The agreement shall provide for monthly payments by the mortgagor after emergency mortgage assistance payments have ended and shall be subject to the following provisions:

(1) If the mortgagor's total housing expense, including projected repayments for mortgage assistance under this section, is greater than thirty-five per cent of the mortgagor's aggregate family income, repayment of the emergency mortgage assistance payments shall be deferred until such total housing expense, including projected repayments for mortgage assistance under this section, is less than or equal to thirty-five per cent of such aggregate family income;

(2) If repayment of emergency mortgage assistance payments is not made by the date the mortgage is paid in full, the mortgagor shall make monthly payments to the authority in an amount not less than the monthly mortgage payment until such assistance is repaid;

(3) Interest shall accrue on all emergency mortgage assistance payments made by the authority at a rate based upon the cost of funds to the state periodically determined by the State Treasurer in consultation with the authority. Interest shall start to accrue whenever the mortgagor is required to commence repayment under this section.

(b) Repayment of amounts owed to the authority from a mortgagor under the provisions of sections 8-265cc to 8-265kk, inclusive, shall be secured by a mortgage on the mortgagor's real property, provided said mortgage shall not be deemed to take priority over any other mortgage or lien in effect against such property on the date the emergency mortgage is recorded. The authority may allow subordination of its mortgage if such subordination is required to permit the mortgagor to obtain a home improvement loan for repairs necessary to preserve the property.

(c) The authority shall establish written procedures for periodic review of the mortgagor's financial circumstances to determine the amounts of repayment required under this section.

(d) All moneys received by the authority from mortgagors for repayment of emergency mortgage assistance payments shall be paid to the authority, deposited in such funds or accounts as the authority may establish from time to time for such purpose and be used solely for the purposes of the program established pursuant to sections 8-265cc to 8-265kk, inclusive.

(e) Any mortgagor who misrepresents any financial or other pertinent information in conjunction with the filing of an application for emergency mortgage assistance or modification of such assistance, may be denied assistance and required to immediately repay any amount of assistance already made. The mortgagee may, at any time thereafter, take any legal action to enforce the mortgage without further restrictions or requirements.

(f) The authority may take any action it deems appropriate to recover emergency mortgage assistance when the mortgagor fails to repay such assistance under the terms and conditions established under this section.

(P.A. 93-414, S. 6, 10; P.A. 94-185, S. 6, 10; P.A. 99-241, S. 6, 66; P.A. 08-176, S. 10; P.A. 09-209, S. 33; 09-219, S. 1.)

History: P.A. 93-414 effective July 1, 1993; P.A. 94-185 made technical changes, effective June 2, 1994; P.A. 99-241 amended Subsec. (d) to provide that repayments received by the authority be deposited in the General Fund, effective July 1, 1999; P.A. 08-176 amended Subsec. (d) to replace requirement that moneys received be paid to State Treasurer and deposited in General Fund with requirement that moneys be used solely for purposes of program established pursuant to Secs. 8-265cc to 8-265kk, effective July 1, 2008; P.A. 09-209 amended Subsec. (a) by deleting former Subdiv. (1), redesignating existing Subdivs. (2) to (4) as Subdivs. (1) to (3) and adding “including projected repayments for mortgage assistance under this section” in redesignated Subdiv. (1); P.A. 09-219 changed effective date of P.A. 09-209, S. 33, from October 1, 2009, to July 9, 2009, and applicable to applications for emergency mortgage assistance filed on and after July 1, 2008, effective July 9, 2009.