Oregon Administrative Rules
Chapter 813 - OREGON HOUSING AND COMMUNITY SERVICES DEPARTMENT
Division 60 - DISABLED HOUSING PROGRAM
Section 813-060-0062 - Loan Prepayments

Universal Citation: OR Admin Rules 813-060-0062

Current through Register Vol. 63, No. 9, September 1, 2024

(1) It is the general policy of the Department not to accept prepayments. The Department may, however, permit a prepayment if, in its sole discretion, the Department determines that the prepayment is consistent with the best interests of the Department, including its public purpose as defined in ORS 456.550.

(a) The Borrower must submit to the Department a written request for prepayment at least 90 days prior to the Borrower's estimated prepayment date;

(b) The Department may charge the Borrower a prepayment review charge to cover the Department's cost of review and processing the prepayment request.

(2) The Department must give prior written approval of any loan prepayment. In order to be valid, a written approval of prepayment must be signed by an authorized representative of the Department. In making a decision whether or not to allow prepayment of a loan, the Department may consider criteria that include, but are not limited to, the following:

(a) The financial impact of the prepayment on the Department's programs or on an individual program or Bond indenture;

(b) Economic factors, including, but not limited to, portfolio diversification and relative cost of capital;

(c) The cash flow and other relevant financial considerations of the Project loan for which prepayment is requested;

(d) The ability of the Department to use proceeds of the loan prepayment to increase the availability of housing affordable to low-income Oregonians;

(e) The willingness of the Borrower to execute a written agreement or give other assurances that the Project will continue to be used for the purpose(s) originally intended, as specified in the Loan Documents, or for an alternate use consistent with the best interests of the Department, including its public purpose as defined in ORS 456.550. Such continued use will be for a period of time mutually agreed on by the Department and the Borrower;

(f) Tax law consequences; and

(g) Other factors the Department considers appropriate to insure the security for and the ability of the State to repay the Bonds, and to insure the ongoing financial viability and stability of the Department's programs.

(3) If the Department determines that a loan prepayment is consistent with the best interests of the Department, it only shall authorize the prepayment provided that the sum to be prepaid, computed as of the date of prepayment, shall equal the unpaid principal balance of the loan plus accrued interest and all other obligations plus, at the Department's discretion, a penalty or premium for the privilege of prepayment. Such prepayment penalty shall be determined based on terms of the original Loan Documents, and amendments thereto which have been mutually agreed on by the Department and the Borrower. The Department may waive all or a portion of such prepayment penalty if it determines in its sole discretion that such waiver is in the best interests of the Department. In making a decision whether or not to waive any or all of a prepayment penalty, the Department may consider, but is not limited to, the criteria identified in OAR 813-060-0062(2)(a) through (g).

(4) Where Section 8 Housing Assistance contracts or other rent subsidies are in place, the Department may approve a loan prepayment request only if such rent subsidies are not unduly impaired, determined at the sole discretion of the Department.

(5) Failure to make timely submission of a prepayment penalty will cause additional interest to accrue at loan rate or statutory rate, whichever is higher.

Stat. Auth.: ORS 456.555

Stats. Implemented: ORS 456.555 & 456.625

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