California Code of Regulations
Title 25 - Housing and Community Development
Division 1 - Housing and Community Development
Chapter 7 - Department of Housing and Community Development Programs
Subchapter 6.5 - California Self-Help Housing Program
Article 5 - Deferred Payment Loans and Other Forms of Mortgage Assistance
Section 7574 - Resale and Loan Assumption

(1) If the sale or transfer is to a low-income household, the purchaser may assume the deferred payment loan upon completion of terms and conditions set forth in Sections 7572 and 7574(c).

(2) If the sale, transfer, or conveyance is not to a low-income household, the deferred payment loan and accrued interest shall be due and payable upon the sale, transfer, or conveyance pursuant to Section 7572.

(3) If, at time of resale, the market value of the housing unit is less than the sum of the outstanding balances on permitted mortgages and permitted liens, plus the value of sweat equity, then the amount of mortgage assistance due in repayment, or available for assumption, shall be reduced by the difference between the market value of the housing unit and said sum. The Department shall establish a value for the sweat equity based on information submitted by the grantee and shall determine the fair market value at the time of the proposed resale.

(1) Apply to the Department on an approved form;

(2) Provide the Department with complete and accurate information as to income and estimated housing costs; and

(3) Execute a new Deferred Payment Loan Agreement for the principal balance remaining on the loan.