1. (a) Interest. The interest rate for Predevelopment Loans is 3%. Interest will be charged only on funds actually advanced to, or on behalf of, the Borrower.

2. (b) Reduced Interest. The interest rate for loans may be reduced or eliminated prior to repayment of the loan if the Director makes a finding that charging it would prevent a significant number of Persons of Very Low Income from owning or occupying new or rehabilitated Assisted Housing.

   1. (1) To obtain a reduction or elimination of the current interest rate, the Borrower shall expressly so request and submit written evidence which demonstrates the necessity of the reduction or elimination of the interest rate.
   2. (2) On the basis of the written evidence submitted, the Department shall determine the appropriate interest rate, if any, to be charged on the loan.

   3. (3) For all loans for which no interest is to be charged, an amount not to exceed 2% of the loan amount shall be charged as a loan origination fee, which may be:

      1. (A) Paid in cash by the borrower at the time of loan closing; or
      2. (B) Added to the approved loan amount and be payable at the time of loan repayment.
3. (c) Term. Predevelopment Loans may be made for a term of up to two years. Existing loans may be extended at the discretion of the Director.

Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Sections 50530, 50530.5, 50531 and 50532, Health and Safety Code.

History

1. Amendment filed 4-7-78; effective thirtieth day thereafter (Register 78, No. 14).

2. Amendment of subsections (a) and (c) filed 1-5-82; effective thirtieth day thereafter (Register 82, No. 2).

3. Amendment of subsections (a) and (b) filed 10-4-84; effective thirtieth day thereafter (Register 84, No. 40).

4. Amendment filed 8-13-85; effective thirtieth day thereafter (Register 85, No. 33).

5. Amendment of section and Note filed 9-19-2003; operative 10-19-2003 (Register 2003, No. 38).

6. Amendment of subsections (b) and (c) filed 11-1-2004; operative 12-1-2004 (Register 2004, No. 45).