2023 Nevada Revised Statutes › Chapter 682A - Investments › NRS 682A.430 - Mortgage loans.

1. Subject to the limitations of NRS 682A.402, 682A.404 and 682A.406, an insurer may acquire, either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by paragraph (d) of subsection 1 of NRS 682A.380, joint ventures, stock of an investment subsidiary or membership interests in a limited-liability company, trust certificates or other similar instruments, obligations secured by mortgages on real estate situated within a domestic jurisdiction.
2. A mortgage loan which is secured by other than a first lien must not be acquired unless the insurer is the holder of the first lien.
3. The obligations held by the insurer and any obligations with an equal lien priority shall not, at the time of acquisition of the obligation, exceed:
(a) Ninety percent of the fair market value of the real estate, if the mortgage loan is secured by a purchase money mortgage or like security received by the insurer upon disposition of the real estate.
(b) Eighty percent of the fair market value of the real estate, if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period of not more than 30 years and periodic payments made not less frequently than annually. Each periodic payment must be sufficient to ensure that at all times the outstanding principal balance of the mortgage loan is not greater than the outstanding principal balance that would be outstanding under a mortgage loan with the same original principal balance, with the same interest rate and requiring equal payments of principal and interest with the same frequency over the same amortization period. Mortgage loans allowed in accordance with this section are allowed notwithstanding the fact that they provide for a payment of the principal balance before the end of the period of amortization of the loan. For residential mortgage loans, the 80-percent limitation may be increased to 97 percent if acceptable private mortgage insurance has been obtained.
(c) Seventy-five percent of the fair market values of the real estate for mortgage loans that do not meet the requirements of paragraph (a) or (b).
4. For the purposes of subsections 1, 2 and 3, the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the Federal Housing Administration or guaranteed by the Administrator of Veterans Affairs, or their successors.
5. A mortgage loan that is held by an insurer pursuant to NRS 682A.325 or acquired in accordance with the provisions of NRS 682A.430 to 682A.436, inclusive, and is restructured in a manner that meets the requirements of a restructured mortgage loan in conformance with the
Accounting Practices and Procedures Manual
adopted by the NAIC will continue to qualify as a mortgage loan in accordance with the provisions of this chapter.
6. Subject to the limitations of NRS 682A.402, 682A.404 and 682A.406, credit lease transactions that do not qualify for investment pursuant to NRS 682A.408 are exempt from the provisions of subsections 1, 2 and 3 if they meet the following criteria:
(a) The loan amortizes over the initial fixed lease term at least in an amount sufficient so that the loan balance at the end of the lease term does not exceed the original appraised value of the real estate;
(b) The lease payments cover or exceed the total debt service over the life of the loan;
(c) A tenant or its affiliated entity whose rated credit instruments have an SVO rating of 1 or 2, or a comparable rating from a nationally recognized statistical rating organization recognized by the SVO, has a full faith and credit obligation to make the lease payments;
(d) The insurer holds or is the beneficial holder of a first lien mortgage on the real estate;
(e) The expenses of the real estate are passed through to the tenant, excluding exterior, structural, parking and heating, ventilation and air conditioning replacement expenses, unless annual escrow contributions, from cash flows derived from the lease payments, cover the expense shortfall; and
(f) There is a perfected assignment of the rents due pursuant to the lease to, or for the benefit of, the insurer.
(Added to NRS by 2015, 3439)