Sec. 05.05.01.13. Prepayment

A. For an income-restricted project, if the prepayment operates to terminate the occupancy covenants for households of limited income, with the prior written approval of the Department, a sponsor may prepay a loan subject to any prohibition on prepayment contained in the loan documents and if the sponsor complies with the following requirements:

(1) Provide written notice to each tenant residing in the project which describes the impact of the prepayment on the tenant, and, if applicable, any assistance to which the tenant is entitled;

(2) Provide written notice of the prepayment to the Department, the political subdivision in which the project is located, and any interested parties registered with the Department;

(3) Offer a right of first purchase to the Department, the political subdivision in which the project is located, the local public housing authority, if any, and any interested parties registered with the Department;

(4) Provide a lease extension for at least 1 year following the notice of the prospective prepayment action to each tenant residing in an assisted unit;

(5) Make relocation assistance payments to each tenant in an amount determined by the Department;

(6) Provide 3-year lease extensions or 3 months rent equivalent payments to 20 percent of the tenants who live in assisted units and qualify as elderly households, disabled, or households with minors; and

(7) Comply with any procedural requirements of the Department with respect to the right of first purchase, relocation payments, and lease extensions.

B. A sponsor of an office and commercial space conversion project may prepay a loan at any time.