(a) There is created a housing development fund to be administered by the corporation as a trust fund separate and distinct from any other money or funds administered by the corporation.

(b) Consistent with AS 18.56.090, the corporation may make temporary and permanent loans from the housing development fund, at an interest rate or rates determined by the corporation, and with the security for repayment that is necessary and practicable, to purchase, make, or participate in the making of mortgage loans

(1) to borrowers who are sponsors, nonprofit corporations, or agencies of the state or a municipal government, for permanent loans to develop, build, repair, remodel, or rehabilitate residential housing that is to be used and occupied as congregate housing; or

(2) that are not federally insured or guaranteed for residential housing, if the corporation determines that the loans are not otherwise available, wholly or in part, from private lenders upon reasonably equivalent terms and conditions.

(c) To the credit of the housing development fund shall be deposited

(1) grants and contributions to the fund; and

(2) all receipts of the corporation on account of repayment of or sale or other disposition of the security for any loans made under (b) of this section.

(d) The corporation may receive and accept from any source whatever any grants or contributions for the housing development fund.

(e) [Repealed, § 72 ch 113 SLA 1982.]

(f) [Repealed, § 72 ch 113 SLA 1982.]

(g) [Repealed, § 72 ch 113 SLA 1982.]

(h) [Repealed, § 72 ch 113 SLA 1982.]

(i) [Repealed, § 72 ch 113 SLA 1982.]

(j) [Repealed, § 72 ch 113 SLA 1982.]

(k) [Repealed, § 72 ch 113 SLA 1982.]

(l) The corporation may reduce the interest rate on a loan entered into under (b)(1) of this section only from amounts appropriated to the housing development fund specifically to reduce the interest payable by borrowers who develop housing under (b)(1) of this section. If a project developed by a borrower with a reduced interest subsidy made under this subsection ceases to be used for congregate housing, the corporation shall adjust the interest rate payable on the unpaid balance of the loan to the prevailing rate of interest charged by the corporation on loans made for other residential purposes, but may not reduce the interest rate payable below the subsidized rate.

(m) The corporation shall adopt regulations to implement (b)(1) and (l) of this section that

(1) determine borrower eligibility, including regulations to determine that the borrower has the ability to repay the loan;

(2) define procedures for the application, review, and approval of authorized loans;

(3) establish loan guidelines, loan terms, and acceptable security for loans; and

(4) identify characteristics of housing projects eligible for loans.

(n) In (b)(1) and (l) of this section, “congregate housing” means a multi-family housing development with fully independent living units and services integrated in the buildings that may include, but are not limited to, housekeeping, meal service, and resident training or development programs.