The commissioner is authorized to make interim and permanent loans for the development and construction or rehabilitation of a moderate rental housing project to eligible developers. Any interim or permanent loan to a developer other than a housing authority must be secured by a mortgage on the moderate rental housing project on terms and conditions satisfactory to the commissioner. The commissioner will establish and provide the forms necessary for a housing authority or developer to requisition funds. The terms of the loans shall be as follows:

1. (a) Interim Loan: The interim loan shall be for the period from the closing of the interim loan to the closing of the permanent loan. The interim loan shall bear an interest rate which will be established by the state bond commission and shall in no event be more than the same rate as the interest cost to the state on the notes or bonds issued pursuant to section 8-80 of the Connecticut General Statutes. Payments will be made by the commissioner on the following basis:

   1. (1) first payment at the time of the interim loan closing for all development costs approved by the commissioner which are incurred prior to the interim closing.
   2. (2) Interim payments will be made on a monthly basis based on the actual costs incurred less 10% of the construction if progress is satisfactory to the commissioner. When the project is 50% complete, the total retainage will be reduced to 5% and subsequent payments will be reduced by 5% of the cost of construction.
2. (b) Permanent Loan: The term of the permanent loan shall be for a period not to exceed 50 years. The actual term will be determined by taking into account the financial feasibility of the project and term of any rental subsidy for the project. The interest rate shall be determined by the state bond commission and the amount of the permanent loan shall be for an amount not to exceed the total development cost of the project as determined by a cost certification audit.

(Effective April 21, 1986)