Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
All mortgage financing obtained by the program or retained upon acquired
properties must provide for one of the following:
(1) Equal periodic payments (except for
differences attributable to adjustable rate loans) on a schedule that would be
sufficient to fully amortize the loan over a 20 to 40 year period;
(2) Payments of interest only for a period
not greater than ten (10) years with the remaining balance payable in equal
periodic payments on a schedule that would fully amortize the loan over a 20 to
30 year period;
(3) Payments of a
portion of stated interest currently and deferral of the remaining interest for
a period not greater than five (5) years, with the remaining principal and
interest payable in equal periodic payments on a schedule that would fully
amortize the loan over a 20 to 35 year period, provided that the amount of
deferred interest must be included in calculating the 25% exception referred to
in paragraph (c)(1) of this Section.
(b) All financing including all-inclusive and
wrap-around loans and interest-only loans shall provide that no balloon payment
may become due sooner than the earlier of:
(1) Ten years from the date the program
acquires the property, or
(2) Two
years beyond the anticipated holding period of the property, provided in such
case that a balloon payment shall not become due sooner than seven years from
the date the program acquires the property. The anticipated holding period for
such properties shall be stated in the prospectus.
(c) The foregoing shall not apply to the
following:
(1) Financing representing, in the
aggregate, 25% or less of the total purchase price of program properties or 25%
or less of the fair market value of properties which have been financed
subsequent to acquisition;
(2)
Interim financing, including construction financing, with a full take-out
commitment for financing which complies with paragraphs (a) and (b) of this
Section; or
(3) If the program
establishes a reserve equal to the amount of the balloon payment and holds the
reserve for the purpose of the balloon payment.
1.
Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No.
4).
2. Amendment and new subsections (a)(1)-(3) and (c)(1)-(3) filed
5-18-92; operative 6-17-92 (Register 92, No. 22).
3. Editorial
correction of HISTORY 2 (Register 95, No. 12).
Note: Authority cited: Section
25610,
Corporations Code. Reference: Section
25140,
Corporations Code.
