(1) The Housing and Community Services Department may insure residential, manufactured dwelling, manufactured dwelling park and manufactured dwelling park nonprofit cooperative loans or obtain reinsurance on such loans. All such loans shall be used only to provide residential housing for persons and families of lower income and the insured must agree to any restrictions placed upon such residential housing by the department. The department may establish dedicated accounts within the Housing Finance Fund to provide reserves against losses in connection with that insurance.
(2) All applications for residential loan insurance under subsection (1) of this section shall be made on such forms and accompanied by such application fee as the department may prescribe.
(3) The department shall notify the applicant of its determinations and the approval or denial of the application.
(4) Notwithstanding subsection (1) of this section, the department may insure loans for manufactured dwelling units, manufactured dwelling parks and manufactured dwelling park nonprofit cooperatives if the department determines that the unit, park or cooperative has a significant percentage of residents who are persons of lower income.