| (a) An approved loan must be secured by a mortgage, deed of trust, or other lien on the land prior to any disbursement of funds. All paperwork associated with the note and lien shall be deposited for safekeeping with the board, or as the board may direct. (b) The security for the board's loan will be provided by: (1) A first lien mortgage with the board as mortgagee, or the board and a participating lending institution joining as mortgagees, each receiving the payment as provided by its note. (2) Hazard insurance on any improvements securing the loan. The policy must name the board loss payee in at least the amount of the board's loan. (c) The board shall adopt credit, underwriting, and appraisal standards that protect the best interest of the program and limit the exposure of the fund to any losses. |
