Section 7572 - Terms and Conditions of Deferred Payment Loans to Households(a) An eligible household receiving a loan pursuant to this Article shall enter into a Deferred Payment Loan Agreement (DPLA) with the Department. The term of the DPLA shall not exceed 20 years.(b) The DPLA shall contain the following terms and conditions: (1) The eligible household shall execute a Promissory Note containing the terms set forth in subdivisions (b)(2), (b)(3) and (b)(4) of this section and a Deed of Trust. The Deed of Trust shall be sufficient for recordation and sufficient to secure the obligations of the Promissory Note. The DPLA shall provide for the order of recordation of the Deed of Trust and for its priority with respect to other liens and encumbrances recorded against the assisted unit.(2) The DPLA shall include a provision that the agreement will terminate and the eligible household will be required to repay the outstanding mortgage assistance and accrued interest if the household ceases to occupy the assisted unit as its principal residence, other than as the result of a sale, transfer, or conveyance pursuant to Section 7574.(3) A Deferred Payment Loan shall bear simple interest at seven (7) percent per year for the first ten years of the loan to any one eligible household. Repayment of principal and payment of interest shall be deferred until sale or conveyance of the assisted unit pursuant to Section 7574.(4) The loan principal and accrued interest shall be forgiven at 10 percent per year of the total outstanding amount beginning with the 11th year, with total forgiveness of both interest and principal after 20 years provided that an eligible household remains in compliance with the DPLA.Cal. Code Regs. Tit. 25, § 7572
Note: Authority cited: Section 50697(d), the Health and Safety Code. Reference: Sections 50696 and 50697(d), Health and Safety Code.