Section 10-B4309. PERMANENT LOANS

 

4309.1The DHCD may provide permanent mortgage loans to eligible housing types for which all or any portion of the allowable project costs would be either unavailable from other sources or would be available only at terms which would render the project economically infeasible.

 

4309.2The Department shall provide a leveraged permanent loan for that portion of the project not financed by the private or other public lender, consistent with the policy set forth in §§4305 and 4307.

 

4309.3If to the satisfaction of DHCD no portion of the development cost may be obtained from an institution or lender other than DHCD, DHCD may provide a direct loan for the full amount of project's financing, to the extent allowed in §§4309.5 and 4309.6.

 

4309.4A permanent loan may be used to refinance any or all of an interim loan provided under the HoFEDD Program.

 

4309.5Permanent loans to not-for-profit applicants, when added to any indebtedness secured by the property which is senior or recorded prior to the DHCD loan, shall not exceed one hundred percent (100%) of the post development value of the property as determined by an independent fee appraisal satisfactory to DHCD (or by a DHCD staff appraisal where DHCD, in its sole discretion, elects this option).

 

4309.6Permanent loans to for-profit applicants, when added to any indebtedness secured by the property which is senior or recorded prior to the DHCD loan, shall not exceed ninety percent (90%) of the post development value of the property as determined by an independent fee appraisal satisfactory to DHCD (or by a DHCD staff appraisal where DHCD, in its sole discretion, elects this option).

 

4309.7The DHCD may, from time to time, establish maximum loan levels calculated on the basis of cost per dwelling unit or calculated in another manner as determined by DHCD, based on cost. data available for the Washington, D.C. area.

 

4309.8The principal amount of a permanent loan shall be repaid with interest with an annual rate ranging from zero percent (0%) to five percent (5%), except that for a for-profit sponsor, DHCD may establish an annual rate higher than five percent (5%), so long as the rate is at least one percent (1%) lower than the prevailing market interest rate for equivalent loans.

 

4309.9The maximum loan term of the permanent loan (including acquisition cost) shall be determined by DHCD, but shall not exceed the following:

 

(a)The term of any private first trust loan:

 

(b)Forty (40) years for substantial rehabilitation or new construction projects;

 

(c)Thirty (30) years for moderate rehabilitation projects; or

 

(d)Twenty (20) years for minor rehabilitation or repair projects.

 

4309.10Unless otherwise determined by DHCD, the permanent loan shall be repaid in full in the following manner:

 

(a)On a periodic or installment basis as established by DHCD; or

 

(b)At the time of the sale, transfer or other conveyance of title to the property to a third party purchaser or transferee.

 

4309.11The repayment of the permanent loan shall commence on the first day of the first month following the date of settlement or at such other time as may be determined by DHCD, which may also decide, on a case-by-case basis, to permit deferral of payments of principal and/or interest until sale or transfer of the property securing the loan or until the end of a specific designated period after which DHCD may provide for forgiveness of principal and/or accrued interest.

 

4309.12Permanent loans may be subordinated to other existing or new debt secured by the property.

 

4309.13Each permanent loan shall be secured by a recorded deed of trust on the property, except that, in the sole discretion of DHCD, a portion of the permanent loan funds advanced for pre-development costs in accordance with §4305.1(a), may be determined to be a grant to the applicant.

 

source

Final Rulemaking published at 35 DCR 3535, 3551 (May 13, 1988).