D.C. Mun. Regs. tit. 10, r. 10-B3906

Current through Register Vol. 71, No. 36, September 6, 2024

Rule 10-B3906 - SCHEDULE, TERMS AND CONDITIONS OF DEFERRAL AND FORGIVENESS

3906.1

The schedule for deferral and repayment of any indebtedness to the District shall be determined by the DHCD, based on the financial feasibility review and analysis required in § 3904 of this chapter. In determining the schedule, DHCD shall use the following criteria:

(a) The period of initial deferral, during which no payment of the amount deferred is due, shall not exceed a maximum of five (5) tax years following the first tax year when the project is certified for the program under § 3908.6 of this chapter; and

(b) The total period of deferral, including the period for repayment of deferred indebtedness, shall not exceed ten (10) full tax years from the first tax year when the project is certified for the program under § 3908.6 of this chapter.

3906.2

When a project has been certified eligible for deferral of indebtedness under the rules of this chapter, and a Conditional Agreement for Deferral has been executed by the DHCD and the housing provider under § 3908.6, no further interest or penalties shall accrue on that portion of the unpaid indebtedness which has been deferred beyond that which had accrued through the end of the last tax year prior to the tax year in which the Conditional Agreement for Deferral for the project was executed.

3906.3

Penalties and interest on any indebtedness which have not been deferred shall continue to accrue and be charged as provided elsewhere in D.C. Law.

3906.4

If the housing provider, or his or her successor, fails to meet the schedule for payment of deferred indebtedness established under § 3906.1, any indebtedness due under the schedule shall remain and be considered as taxes due, water or sewer fees due, or other indebtedness, if any, due to the District as of the date established in such schedule, and the District shall collect such indebtedness using all legally available means, including but not limited to, the imposition of tax liens on the property, and the sale of the property at the next scheduled tax sale.

3906.5

All deferral of indebtedness owed to the District under this program shall be considered conditional during the entire period of the rent regulatory agreement provided for in § 3907 of this chapter. This provision shall be enforced as follows:

(a) Each housing provider granted a deferral of indebtedness under this program shall execute and deliver to the District at the time the deferral takes effect, a Deed of Trust Note ("Note") for the entire amount of deferred indebtedness; and

(b) The terms of the Note shall include, but not be limited to, the following:

(1) The entire amount of indebtedness shall become due and payable immediately upon a finding by DHCD that the housing provider has violated any provision of the rent regulatory agreement executed with and attached to the Note;

(2) The amount of indebtedness shall be considered paid in full and canceled upon the payment in full of the deferred indebtedness according to the established scheduled, and upon the completion of the term of the rent regulatory agreement without violation of the provisions of the agreement;

(3) The amount of indebtedness shall be secured by a Deed of Trust given by the owner of the property to the District, in form and content acceptable to the District; and

(4) The District may, at the request of the housing provider, allow for the subordination of the Deed of Trust securing the note to such other liens, securing private financing for the rehabilitation of the subject property as the District may, in its discretion, accept as necessary for the rehabilitation of the property; the District shall not unreasonably withhold agreement to subordinate the subject Deed of Trust to such private financing.

3906.6

All forgiveness of indebtedness owed to the District under this program shall be considered conditional during the entire period of the rent regulatory agreement provided for in § 3907 of this chapter. This provision shall be enforced by means of a Deed of Trust Note, executed by each housing provider granted a forgiveness of indebtedness under this program, similar in form and content to the Deed of Trust Note established in § 3906.5 but substituting provisions appropriate to the forgiveness of indebtedness in place of deferral of indebtedness.

3906.7

All taxes, water and sewer fees and other indebtedness owed to the District which is not explicitly deferred or forgiven under this program shall be paid when due, whether or not a project has received a deferral or forgiveness of any past indebtedness to the District under this program.

D.C. Mun. Regs. tit. 10, r. 10-B3906

Final Rulemaking published at 34 DCR 980, 990 (February 6, 1987); as amended by Final Rulemaking published at 34 DCR 2404 (April 10, 1987)