NRS682A.230. Mortgages and deeds of trust.

      1.  An insurer may invest in bonds or notes secured by mortgages or deeds of trust representing first or second liens upon real property located in this or another state, or in Canada, subject to the following conditions:

      (a) The amount loaned, or the aggregate amount of bonds issued upon the security of a mortgage or deed of trust, must not at the time of the investment exceed 85 percent of the fair market value of the real property. The value of the property must be substantiated by the appraisal of a recognized or experienced real estate appraiser acceptable to the Commissioner. Before making the investment, a certificate of the value of the property, based on the appraisal, must be executed by the insurer’s board of directors or by an investment committee of the board of directors making or authorizing the investment on the insurer’s behalf.

      (b) There must have been no default as to payment of any part of the principal or interest of any such bond or note.

      (c) The total investment in any one such note, or bond or bonds secured by the same real property, must not exceed $100,000 or 5 percent of the insurer’s assets, whichever is greater.

      (d) In applying the limitation under paragraph (a), there may be excluded from the amount invested that portion of the investment which is guaranteed by the Director of the Department of Veterans Services pursuant to the Servicemen’s Readjustment Act of 1944, as amended, or insured by the Federal Housing Administrator or other agency of the Government of the United States, or by an agency of the Government of Canada.

      2.  “Improved real property” means all farmland which has been reclaimed and is used for the purpose of husbandry, whether for tillage or pasture, and all real property within the limits of an incorporated village, town or city on which permanent buildings suitable for residence or commercial use are situated.

      3.  For the purposes of this section, real property shall not be deemed to be encumbered:

      (a) By reason of the existence of taxes or assessments which are not delinquent, instruments creating or reserving mineral, oil or timber rights, rights-of-way, joint driveways, sewer rights, rights in walls, or by reason of building restrictions or other restrictive covenants; or

      (b) When such real property is subject to lease in whole or in part whereby rents or profits are reserved to the owner, if the security for such investment is a full and unrestricted first lien upon such real property and there is no condition or right of reentry or forfeiture under which such investments can be cut off, subordinated or otherwise disturbed.

      (Added to NRS by 1971, 1625; A 2005, 2121)