Section 8117 - Interest Rate and Loan Repayments(a) Loans for development costs shall bear simple interest of three percent per annum on the unpaid principal balance. Loans or advances made pursuant to sections 8140 and 8141 shall be the same interest as calculated annually on the Pooled Money Investment Account created under Government Code section 16480. Interest shall accrue from the date that funds are disbursed by the department to or on behalf of the sponsor.(b) Accrued interest shall be paid from project cash flow. Such interest, to the extent project cash flow is available, shall be paid to the department commencing on the last day of the initial operating year and continuing on each anniversary thereafter until loan interest and principal is paid full. For purposes of this section, "project cash flow" means operating income remaining after payment of approved operating expenses, regularly scheduled debt service on loans other than the program loan which have been approved by the department and which are to be paid prior to payments on the program loan, deposits into department approved project reserve accounts, and sponsor distributions.(c) Upon request by the sponsor, at the time of application or any time thereafter, the department shall approve the deferral of accrued interest, due but unpaid because of insufficient project cash flow, for such periods and subject to such conditions as are necessary to enable the sponsor to maintain affordable rents and the fiscal integrity of the project, and pay distributions.(d) Program loan principal shall be payable annually in accordance with all of the following: (1) Such payments will not jeopardize the fiscal integrity of the project or the sponsor's ability to maintain rents in accordance with program requirements.(2) Such payments shall be the lesser of (A) the amount remaining from project cash flow after paying all current and deferred interest pursuant to subdivision (b) and (c); or(B) the amount required to fully amortize the loan according to the scheduled term of the loan.(3) Such payments shall be consistent with a written schedule approved by the department at loan closing or any time thereafter which provides that (A) for loans involving new construction, the first principal payment shall be due on the thirtieth (30th) anniversary of the loan closing; and(B) for loans involving rehabilitation, the first principal payment shall be on that date proposed by the sponsor and approved by the department prior to loan closing.(e) In any year that payments of principal and interest are paid in full in accordance with subdivisions (a), (b), (c), and (d), remaining project cash flow shall be used as follows:(1) The sponsor shall first pay regularly scheduled debt service on loans other than the program loan which were used to finance assisted units and which have been approved by the department and which are to be paid following payments of the program loan;(2) Thereafter, the sponsor shall pay project cash flow as either: (A) prepayments on the program loan; or(B) payments into the Account, to be prorated among the emergency reserve subaccount described in section 8140 and the feasibility subaccount described in section 8141 in a manner which assures that each subaccount is fully funded.(f) All program loan payments shall be applied first to interest and second to principal.(g) The total amount of the outstanding principal and interest, including deferred interest, shall be due and payable in full to the department at the end of the loan term or upon the department's termination of the loan.Cal. Code Regs. Tit. 25, § 8117
1. New section filed 12-14-90 as an emergency; operative 12-14-90 (Register 91, No. 11). A Certificate of Compliance must be transmitted to OAL by 4-15-91 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of law on 4-16-91.
3. New section filed 7-19-91 as an emergency; operative 7-19-91 (Register 92, No. 16). A Certificate of Compliance must be transmitted to OAL 11-6-91 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 11-15-91 as an emergency; operative 11-15-91 (Register 92, No. 16). A Certificate of Compliance must be transmitted to OAL 3-16-92 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 11-15-91 order transmitted to OAL 12-12-91 and filed 1-13-92 (Register 92, No. 16). Note: Authority cited: Sections 50406(n), 50884 and 50895, Health and Safety Code. Reference: Section 50893, Health and Safety Code.
1. New section filed 12-14-90 as an emergency; operative 12-14-90 (Register 91, No. 11). A Certificate of Compliance must be transmitted to OAL by 4-15-91 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of law on 4-16-91.
3. New section filed 7-19-91 as an emergency; operative 7-19-91 (Register 92, No. 16). A Certificate of Compliance must be transmitted to OAL 11-6-91 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 11-15-91 as an emergency; operative 11-15-91 (Register 92, No. 16). A Certificate of Compliance must be transmitted to OAL 3-16-92 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 11-15-91 order transmitted to OAL 12-12-91 and filed 1-13-92 (Register 92, No. 16).