Delaware Code
Subchapter III. Housing Development Fund and Financing of Housing Developments
§ 4031. Powers relative to making mortgage loans and temporary construction loans to housing sponsors and persons and families of low- and moderate-income.

(a) DSHA shall have all the powers necessary or convenient to carry out and effectuate the purpose and provisions of this chapter, including the following powers in addition to others herein granted:

(1) To make and undertake commitments to make mortgage loans, including, without limitation, federally insured mortgage loans and to make temporary loans and advances in anticipation of permanent loans to housing sponsors to finance the construction or rehabilitation of housing designed and planned for persons and families of low- and moderate-income upon the terms and conditions set forth in § 4033 of this title;
(2) To make and undertake commitments to make first mortgage loans to persons of low- or moderate-income who may purchase residential housing, including, without limitation, persons and families of low- and moderate-income who are eligible, or potentially eligible, for federally insured mortgage loans or federal mortgage loans. Such loans shall be made only after a determination by DSHA that long-term first mortgage loans are not otherwise available, wholly or in part, from private lenders upon reasonably equivalent terms and conditions;
(3) To make and publish rules and regulations respecting the grant of mortgage loans pursuant to this section, the regulations of borrowers, the admission of housing developments pursuant to this section, and the construction of ancillary commercial facilities;
(4) To enter into agreements and contracts with housing sponsors under this section;
(5) To institute any action or proceeding against any housing sponsor receiving a loan under this chapter, or owning any housing development hereunder in any court of competent jurisdiction in order to enforce this chapter, or to foreclose its mortgage, or to protect the public interest, persons and families of low- and moderate-income, stockholders or creditors of such sponsor. In connection with any such action or proceeding it may apply for the appointment of a receiver to take over, manage, operate and maintain the affairs of such housing sponsor and DSHA, through such agent as it shall designate, is hereby authorized to accept appointment as receiver of any such sponsor when so appointed by a court of competent jurisdiction.
(b) The reorganization of any housing sponsor shall be subject to the supervision and control of DSHA, and no such reorganization shall be had without the consent of DSHA. Upon any such reorganization the amount of capitalization, including therein all stocks, income debentures and bonds and other evidence of indebtedness shall be such as is authorized by DSHA, but not in excess of the fair value of the property received.
(c) In any foreclosure action involving a housing sponsor other than a foreclosure action instituted by DSHA, the municipality in which any tax exemption or abatement is provided, such housing sponsor and DSHA shall, in addition to other necessary parties, be made parties defendant. DSHA and the municipality shall take all steps in such action necessary to protect the interest of the public therein, and no costs shall be awarded against DSHA or the municipality.
(d) Subject to the terms of any applicable agreement, contract or other instrument entered into or obtained pursuant to this chapter, judgment of foreclosure shall not be entered against a housing sponsor unless the court to which application therefor is made shall be satisfied that the interest of the lienholders or holders cannot be adequately secured or safeguarded except by the sale of the property; and in such proceeding the court shall be authorized to make an order increasing the rental or carrying charges to be charged for the housing accommodations in the housing development involved in such foreclosure, or appoint a member of DSHA or any officer of the municipality in which any tax exemption or abatement with respect to the development is provided, as a receiver of the property, or grant such other and further relief as may be reasonable and proper; and in the event of a foreclosure or other judicial sale, the property shall be sold only to a housing sponsor which will manage, operate and maintain the housing development subject to this chapter, unless the court shall find that the interest and principal on the obligations secured by the lien, which is the subject of foreclosure, cannot be earned under the limitations imposed by this chapter, and that the proceeding was brought in good faith, in which event the property may be sold free of limitations imposed by this chapter or subject to such limitations as the court may deem advisable to protect the public interest.
(e) In the event of a judgment against any housing sponsor in any action not pertaining to the foreclosure of a mortgage, there shall be no sale of any of the real property included in any housing development hereunder of such housing sponsor except upon 60 days' written notice to DSHA. Upon receipt of such notice DSHA shall take such steps as in its judgment may be necessary to protect the rights of all parties.

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