§ 110.6 — LOAN TERMS

SEC. 110.6. LOAN TERMS.

(a) Loan Terms and Repayment; Loan Forgiveness. The HRC Director shall prepare Loan documents consistent with the Program Regulations. So long as the applicable Property continues to be used as a Borrower’s Primary Residence and no default arises under the Loan documents, the Loan documents may allow the following loan terms: (1) Loan repayment term of up to 10 years; (2) Deferment of some or all payments during the term without financial penalty; (3) Loans are not required to accrue interest; (4) Shared appreciation loans are prohibited; (5) Loans shall be due upon sale, rental, or title transfer of the Property; (6) If the Property is sold before the end of the term of the Loan, the Borrower will be liable only for the remaining amount on the Loan based on years in, without interest; and (7) The Borrower may be eligible for forgiveness of a Loan after 10 years if all requirements set forth in the Program Regulations are met, provided that the amount of loan forgiveness does not exceed the principal amount of the Loan made to the Borrower under the Program. (b) Security for Loans. The HRC Director shall require Loans made under this Chapter 110 to be secured by a deed of trust and other security instruments for the benefit of the City consistent with Program Regulations. The HRC Director may record and subordinate deeds of trust and other security instruments as needed or appropriate. (c) Compliance with Transaction Documents and Applicable Laws. HRC shall work with MOHCD, the Controller, Assessor-Recorder, and other City agencies as appropriate to monitor compliance with all Loan agreements, Program Regulations, and applicable laws. (Added by Ord. 56-24, File No. 230864, App. 3/22/2024, Eff. 4/22/2024, Oper. 5/22/2024)