California § 50662 - The department shall adopt regulations establishing terms upon which deferred-pay

§ 50662. The department shall adopt regulations establishing terms upon which deferred-pay

The department shall adopt regulations establishing terms upon which deferred-payment rehabilitation loans may be made. The amount of a deferred-payment rehabilitation loan shall in no case exceed the costs of meeting rehabilitation standards. The amount, when combined with other financing provided, shall in no case exceed the combined costs of meeting rehabilitation standards and refinancing existing indebtedness. Except for loans made to local agencies pursuant to Section 50664, deferred-payment rehabilitation loans shall bear interest at the rate of 3 percent per annum on the unpaid principal balance. In the discretion of the department, which may differentiate among the types of programs specified in Section 50663, such interest shall either be payable periodically as it accrues during the term of the loan or payment of interest shall be deferred until payment of the principal is due. However, regulations of the department may provide for waiver of interest payments when a local public entity or nonprofit corporation contracting pursuant to Section 50663 remits to the department in advance on behalf of the borrower a sum equal to not less than 15 percent of the original principal balance, which may be in lieu of interest. The regulations of the department may also provide for payment of interest as accrued, in circumstances determined appropriate by the department to serve the purposes of this chapter. In the case of a deferred-payment rehabilitation loan to an elderly person who is the owner of an owner-occupied one-to-four family residence, the note and deed of trust securing the loan shall require payment of the obligation upon transfer of the property. Notwithstanding any other provisions of this chapter, the department may permit the making of a deferred-payment rehabilitation loan to an elderly person of low income who is the owner of an owner-occupied dwelling without requiring that other financing be provided to the extent of the owner’s ability to afford the cost of such other financing. In the case of a deferred-payment rehabilitation loan to a nonelderly person who is the owner of an owner-occupied one-to-four family residence, payment shall be required after five years or upon transfer of the property, whichever first occurs. However, the loan may be renewed for additional five-year terms so long as the property is not transferred and the owner is unable to refinance the obligation when the debt comes due. In the case of a deferred-payment rehabilitation loan to an owner of a residence other than an owner-occupied one-to-four family residence, payment shall be required after five years unless it is determined by the department that a longer term is required to ensure the economic feasibility of obtaining other rehabilitation financing or accepting subsidies. The loan may be renewed for up to five additional five-year terms so long as persons of low income residing in the residence will benefit. The department shall establish standards and determine eligibility for renewal. Regulations of the department shall permit the assumption of a deferred-payment rehabilitation loan authorized by this section when the property which has been rehabilitated by such loan is transferred to a person who meets the eligibility requirements of this section, as determined by the department.