The department shall make, or undertake commitments to make, construction or rehabilitation loans, including land acquisition costs, and mortgage loans in accordance with subdivisions (a) and (c) for new construction, and subdivisions (b) and (c) for rehabilitation, to sponsors to finance the development of community housing developments and congregate housing developments. The development cost payments may be provided as loans to be repaid at 3 percent interest and payments of principal or interest, or both, may be deferred or made payable over a period of time. For these purposes, the department shall enter into regulatory agreements and other agreements, and security documents, with the sponsors receiving funds from the fund. Upon the recordation, the regulatory agreement and all other agreements or documents included or incorporated by reference within the regulatory agreement shall constitute enforceable restrictions upon the property for the term of the loan. The term of the loan and its schedule for repayment may be extended by the department for additional periods as long as the community housing development or congregate housing development is operated in a manner consistent with the regulatory agreement and the sponsor needs an extension in order to continue to operate the community housing development or congregate housing development in a manner consistent with this chapter. Each extension shall be for a period of not less than 10 years and the total term of the revised loan shall not exceed 55 years. However, the term of any loan, including any extension thereof, shall not exceed the useful life of the community or congregate housing development for which the loan is made.

(a) Loans to sponsors for new construction of community housing developments or congregate housing developments shall be for terms not less than 40 years. After 30 years from the time the loans are made, the sponsor shall begin to repay the loan in accordance with a payment plan, as determined by the department, that shall maintain the rents affordable to eligible households.

(b) Loans made to sponsors of community housing developments or congregate housing developments for acquisition and rehabilitation shall be for terms of not less than 30 years. Loans made to sponsors of community housing developments or congregate housing developments for rehabilitation shall only be for terms of not less than 20 years. The sponsor may elect to begin to repay the loan at any time in accordance with a payment plan, as approved by the department, that shall maintain the rents at levels affordable to eligible households.

(c) Notwithstanding any loan payment plan approved by the department, the department may permit the prepayment of a loan at any time, on the basis of net cashflow of a development, provided that the term of the regulatory agreement shall not be reduced due to any prepayment.

(Amended by Stats. 2011, Ch. 239, Sec. 13. (SB 562) Effective January 1, 2012.)