(1) The authority shall enter into agreements with participants and their co-owners to loan funds to pay property taxes and special assessments on their qualifying dwelling units. The maximum loan under ss. 234.621 to 234.626 in any one year is limited to the lesser of $3,525 or the amount obtained by adding the property taxes levied on the qualifying dwelling unit for the year for which the loan is sought, the special assessments levied on the dwelling unit, and the interest and penalties for delinquency attributable to the property taxes or special assessments. Loans shall bear interest at a rate equal to the prime lending rate at the time the rate is set, as reported by the federal reserve board in federal reserve statistical release H. 15, plus 1 percent. The executive director shall set the rate no later than October 15 of each year, and that rate shall apply to loans made in the following year. (2) The authority shall have all powers under s. 234.03 that are necessary or convenient to the operation of a loan program, including, without limitation because of enumeration, the power to enter into contracts, to pay or be paid for the performance of services, to exercise all rights of a lienholder under subch. I of ch. 779 and to perform other administrative actions that are necessary in the conduct of its duties under ss. 234.621 to 234.626. (3) The authority shall adopt rules and establish procedures under which applications for loans may be submitted, reviewed and approved; under which repayment of loans are to be obtained; under which disputes and claims are to be settled; and under which records are to be maintained. (4) The authority shall enter into loan agreements with participants and co-owners who agree to all of the following: (b) That the loan shall be due and payable upon the occurrence of any of the following events: 1. Transfer of the qualifying dwelling unit by any means except upon transfer to a co-owner who resides in the unit and who is permitted to assume the participant’s account as provided in s. 234.624. 2. The death of the participant if the participant is the sole owner. 3. The death of the last surviving co-owner who owns the qualifying dwelling unit. 4. The authority discovers that the participant or a co-owner has made a false statement on the application or otherwise in respect to the program. 5. The condemnation or involuntary conversion of the qualifying dwelling unit. 6. The participant ceases to meet the eligibility requirements of s. 234.623, except as provided in sub. (5). 7. The participant fails to comply with par. (d). 8. At the participant’s or co-owner’s election, at any time before any of the events under subds. 1. to 7. occurs. 9. If the participant is a veteran, as defined in s. 45.01 (12) (a) to (f), who is not 65 years of age or older, at a time before any of the events under subds. 1. to 7. occurs, as determined under policies and procedures established by the authority. (c) To pay, upon repayment of the loan, interest specified in the loan agreement. (d) To limit the outstanding liens and judgments on the qualifying dwelling unit to no more than the permitted obligations. (5) If a participant in the program ceases to meet the eligibility requirements of this section, the authority, rather than demanding repayment under sub. (4) (b), may allow the participant to continue in the program, may allow the participant to continue in the program but be ineligible for additional loans, or may require partial settlement. The authority may also allow co-owners to be added to the loan agreement if, in the judgment of the executive director, the addition of co-owners does not significantly increase the authority’s exposure to risk under the loan agreement. (6) At any time after an application is filed, the authority may verify the correctness of the application and any other information regarding the eligibility of the participant. If the authority finds that at the time a participant received a loan the participant was not eligible under the program, the authority shall notify the participant and may require repayment of the loan as determined by the authority. (7) The authority, its agents or representatives may examine the books and records of an applicant under this subchapter or other sources of information bearing on the application to verify the information provided by an applicant, may require the production of books, records and memoranda and may require testimony and proof relevant to its investigation. If a person fails to furnish information requested by the authority to verify the correctness of the application, the authority may reject the application. (9) Upon the making of the initial loan, a nonconsensual statutory lien in favor of the authority to secure payment of the principal, interest, fees and charges due on all loans, including loans made after the lien is filed, to the participant made under ss. 234.621 to 234.626 shall attach to the qualifying dwelling unit in respect to which the loan is made. The qualifying dwelling unit shall remain subject to the statutory lien until the payment in full of all loans and charges. If the authority funds such loans from the proceeds of notes or bonds under s. 234.626, its right under the lien shall automatically accrue to the benefit of the holders of those notes or bonds, without any action or assignment by the authority. When a loan becomes due and payable, the statutory lien hereby conferred may be enforced by the authority or the holders of the notes or bonds or their representative, as the case may be, in the same manner as a construction lien under ss. 779.09 to 779.12, except that neither the participant nor any co-owners or their personal representatives, successors or assigns shall be personally liable for any deficiency which may arise from the sale. At the time of disbursing the initial loan to a participant, the authority shall record with the register of deeds of the county in which the qualifying dwelling unit is located, on a form prescribed by the authority which shall contain a legal description of the qualifying dwelling unit, a notice of the loan made under ss. 234.621 to 234.626 and the existence of the statutory lien arising therefrom. The register of deeds shall record the notice in the land records and index it in the indexes maintained by the register of deeds. The statutory lien created by this section shall have priority over any lien that originates subsequent to the recording of the notice. (10) If the property taxes or special assessments are paid, using a loan made under ss. 234.621 to 234.626, after the taxes or assessments are due, the participant shall be liable for interest and penalty charges for delinquency under ch. 74. Subject to sub. (1), the principal amount of loans made under this program may include delinquency charges.
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