(a) The department may make loans from the fund to individual low-income residents of mobilehome parks to finance any individual interest in the mobilehome park. The purpose of providing loans pursuant to this section is to reduce the monthly housing costs for low-income residents to an affordable level.

1. (1) Loans provided pursuant to this section shall be for a duration, interest rate, and other terms, as determined by the department to be equitable and necessary, and shall not jeopardize the financial stability of the fund, as specified in the guidelines. Any interest rate established pursuant to this paragraph shall not exceed 3 percent per annum.
2. (2) The department shall establish flexible repayment terms for loans provided pursuant to this section to reduce the monthly housing costs for low-income residents to an affordable level, provided that the terms do not represent an unacceptable risk to the security of the fund.

3. (3) Loans provided to low-income residents pursuant to this section shall be for the minimum amount necessary to reduce the borrower’s monthly housing costs to an affordable level. All of the following shall apply to loans to finance individual interests pursuant to this section:

   1. (A) To the extent possible, loan amounts shall not exceed 50 percent of the acquisition costs of the individual interests in the mobilehome parks. However, the loan amounts may be for up to 100 percent of the acquisition costs of the individual interests in the mobilehome parks when approved by the department.

   2. (B) The department may grant approval to exceed 50 percent of the acquisition costs of the individual interests only if both of the following are demonstrated:

      1. (i) That the low-income resident has made an effort to secure additional funding from other sources and these funds are not available.
      2. (ii) That the low-income resident would be unable to purchase an individual interest without a waiver of the 50-percent financing limitation.
   3. (C) The total indebtedness of the loan provided pursuant to this section plus any senior debt upon individual interests shall not exceed 100 percent of the value of the collateral securing the loan, plus the amount of costs incidentally, but directly, related to the acquisition, conversion, rehabilitation, reconstruction, and replacement.

(b)

1. (1) The department may make loans or grants to a resident organization, qualified nonprofit housing sponsor, or local public entity from the fund for the purpose of assisting lower income homeowners to do any of the following:

   1. (A) Make repairs to their mobilehomes.
   2. (B) Make accessibility upgrades to their mobilehomes.
   3. (C) Make energy efficiency upgrades to their mobilehomes.
   4. (D) Replace their mobilehomes.
2. (2) Loans and grants made pursuant to paragraph (1) shall require the applicant entity to demonstrate sufficient organizational stability and capacity to manage a portfolio of individual loans over an extended time period. This capacity may be demonstrated by substantial successful experience performing similar activities or through other means acceptable to the department.
3. (3) For loans issued to an individual, lower income homeowner pursuant to this section, loan repayments, interest rates, and other terms shall be as specified in the guidelines.
4. (4) The department may require annual loan payments in the minimum amount necessary to cover the costs of project monitoring.

(c) The department may make loans or grants from the fund to mobilehome owners whose income is at or below 60 percent of area median income to correct health and safety conditions and make accessibility or energy efficiency upgrades, or both, to restore the condition of the mobilehome, including replacement of a mobilehome.

1. (1) For loans issued to an individual, lower income homeowner pursuant to this section, loan principal and accrued interest shall be forgiven over a period of time, as specified in the guidelines, provided that an eligible household remains in compliance with the loan agreement.
2. (2) Loans or grants pursuant to this section may be administered by a local public entity or nonprofit corporation, as approved by the department.