Sec. 05.05.02.07. Loan Terms — Restrictions on Ownership

A. Change of Ownership. The sponsor may not sell, cease to own, assign, transfer, or dispose of all or any part of the property, or the sponsor's interest in the property, except for leases of less than 3 years to tenants, during the loan term, without the prior express written consent of the Administration, as set forth in the loan documents.

B. Assumption. A loan may not be assumed without the prior written approval of the Administration.

C. Prepayment. If the prepayment operates to terminate the occupancy covenants for households of limited income, with the prior written approval of the Administration, 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 Administration, the political subdivision in which the project is located, and any interested parties registered with the Administration;

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

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

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

(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, disabled, or households with minors; and

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

D. Continuing Occupancy Income Limits. If after initial occupancy the annual income of a family of limited income exceeds the income limits set by the Secretary, and thereby causes the project to not meet the requirements of the Internal Revenue Code and regulations promulgated under the Internal Revenue Code, as amended from time to time (considering any limited increases permitted by this chapter or applicable federal tax law), the sponsor shall notify the Administration upon the Administration's next subsequent income certification request and shall rent the next available unrestricted rental housing unit to a family of limited income.