Sec. 05.04.06.07. Loan Terms and Requirements — Deferred Payment Loans

A. Deferral. In order to make a loan affordable, the Program may approve deferral of principal and interest payments for a period of time or until the transfer of the property or an interest in the property.

B. Eligibility for a Deferred Payment Loan. The applicant shall submit evidence satisfactory to the Program that the project requires terms of deferral under the Program underwriting criteria.

C. Security for a Deferred Payment Loan.

(1) The amount of the loan may not exceed the value of the property, less the amount of mortgage debt on the property, except that the Program may approve a higher loan-to-value ratio for owner-occupied property housing a lead-affected household.

(2) The loan shall be secured in accordance with the requirements set forth in Regulation .08 of this chapter.

D. Maximum Loan Amount for a Deferred Payment Loan. A sponsor may not receive commitments for more than $250,000 during a fiscal year for grants and deferred payment loans combined. This limit is reduced to $75,000 for child care centers. The sponsor limit applies to the sponsor and all related corporations, partnerships, and other business entities.

E. Forgiveness of Deferred Payment Loans.

(1) The Program may forgive a deferred payment loan at the time of transfer, to the extent that the loan exceeds equity in the property.

(2) The Program may forgive a deferred payment loan after 20 years.