Section 260.140.114.13 - Financing Policies(a) All mortgage financing obtained by the program or retained upon acquired properties must provide for one of the following:(1) Equal periodic payments (except for differences attributable to adjustable rate loans) on a schedule that would be sufficient to fully amortize the loan over a 20 to 40 year period;(2) Payments of interest only for a period not greater than ten (10) years with the remaining balance payable in equal periodic payments on a schedule that would fully amortize the loan over a 20 to 30 year period;(3) Payments of a portion of stated interest currently and deferral of the remaining interest for a period not greater than five (5) years, with the remaining principal and interest payable in equal periodic payments on a schedule that would fully amortize the loan over a 20 to 35 year period, provided that the amount of deferred interest must be included in calculating the 25% exception referred to in paragraph (c)(1) of this Section.(b) All financing including all-inclusive and wrap-around loans and interest-only loans shall provide that no balloon payment may become due sooner than the earlier of: (1) Ten years from the date the program acquires the property, or(2) Two years beyond the anticipated holding period of the property, provided in such case that a balloon payment shall not become due sooner than seven years from the date the program acquires the property. The anticipated holding period for such properties shall be stated in the prospectus.(c) The foregoing shall not apply to the following:(1) Financing representing, in the aggregate, 25% or less of the total purchase price of program properties or 25% or less of the fair market value of properties which have been financed subsequent to acquisition;(2) Interim financing, including construction financing, with a full take-out commitment for financing which complies with paragraphs (a) and (b) of this Section; or(3) If the program establishes a reserve equal to the amount of the balloon payment and holds the reserve for the purpose of the balloon payment.Cal. Code Regs. Tit. 10, § 260.140.114.13
1. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
2. Amendment and new subsections (a)(1)-(3) and (c)(1)-(3) filed 5-18-92; operative 6-17-92 (Register 92, No. 22).
3. Editorial correction of HISTORY 2 (Register 95, No. 12). Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.
1. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
2. Amendment and new subsections (a)(1)-(3) and (c)(1)-(3) filed 5-18-92; operative 6-17-92 (Register 92, No. 22).
3. Editorial correction of History 2 (Register 95, No. 12).