No obligation purchased from a mortgage lender, other than an obligation purchased from or guaranteed by an agency or instrumentality of the United States government, shall be eligible for purchase or commitment to purchase by the authority under § 11-11-119 unless at or before the time of transfer thereof to the authority such mortgage lender certifies: (1) That in its judgment the loan would in all respects be a prudent investment for its own account; and (2) That the mortgage loans transferred to the authority are for residential housing within South Dakota; or (3) That the proceeds of sale or its equivalent shall be reinvested in residential mortgages within the State of South Dakota, or invested in short - term obligations pending the purchase of such residential mortgages.
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