OAR 813-010-0033: Loans

(1) To be eligible to receive a loan, an Eligible Borrower shall comply with the terms contained in the Commitment issued by the Department and those conditions of eligibility set forth in the Program rules. (2) Each loan shall not exceed the total allowable project costs or 85% of the appraised value of the Project, whichever is less, (3) Except as determined by the Department, each loan shall be insured by the Federal Housing Administration or be for a Project which is the subject of a Housing Assistance Payments Contract between the Department, the Department of Housing and Urban Development (HUD) and the Borrower as well as an Annual Contributions Contract between the Department and HUD pursuant to Section 8 of the National Housing Act. Where a loan is not subject to such insurance or assistance payments, the Project shall be for occupancy by persons eligible for other federal or state assistance payments which would be paid at a level at least commensurate with the Borrower’s annual mortgage payments and operating expenses and which are certified to be likely to continue at least at such level throughout the term of a loan. (4) Each loan shall have a final maturity of not more than 30 years and 62 days from the date of its making and shall be secured by a first lien deed of trust on the property securing the loan. Loans may be made to provide financing for newly-constructed or rehabilitated Projects. (5) Loan Documents shall be on forms approved by the Department. (6) Interest on a loan shall not exceed the rate stated in the Commitment. In establishing the rates of interest applicable to loans the Department shall take into account the rates of interest applicable to Bonds. If the Department is able to charge an interest rate lower than that specified in the Commitment, the Department may provide for the reduction of principal and interest payment on the loan. (7) Each loan shall provide for the monthly collection of Escrow Payments to the extent permitted by law together with the monthly installment of principal and interest. All such payments shall be: (a) Held for the benefit of the Department in an account in a financial institution acceptable to the Department and insured to the full extent legally possible by the Federal Deposit Insurance Corporation, or other similar federal insuring department; or (b) Be held by the State of Oregon as provided and required by law. (8) The Department shall establish prepayment penalties applicable to loans. In setting such penalties the Department shall take into account the need to protect the ability of the state to provide for the payment of the Bonds. Any prepayment penalties shall be set forth in the trust deed note.