(a) In addition to payments otherwise authorized by this chapter, the head of the displacing agency shall make an additional payment not in excess of twenty-two thousand five hundred dollars ($22,500) to any displaced person who is displaced from a dwelling actually owned and occupied by such displaced person for not less than one hundred eighty (180) days prior to the initiation of negotiations for the acquisition of the property. Such additional payment shall include the following elements:

(1) The amount, if any, which, when added to the acquisition cost of the dwelling acquired by the displacing agency, equals the reasonable cost of a comparable replacement dwelling;

(2) The amount, if any, which will compensate such displaced person for any increased interest costs and other debt service costs which such person is required to pay for financing the acquisition of any such comparable replacement dwelling. Such amount shall be paid only if the dwelling acquired by the displacing agency was encumbered by a bona fide mortgage which was a valid lien on such dwelling for not less than one hundred eighty (180) days immediately prior to the initiation of negotiations for the acquisition of such dwelling; and

(3) Reasonable expenses incurred by such displaced person for evidence of title, recording fees, and other closing costs incident to the purchase of the replacement dwelling, but not including prepaid expenses.

(b) The additional payment authorized by subsection (a) shall be made only to a displaced person who purchases and occupies a decent, safe, and sanitary replacement dwelling within one (1) year after the date on which such person receives final payment from the displacing agency for the acquired dwelling or the date on which the displacing agency's obligation under § 13-11-108(c)(3) is met, whichever is later, except that the displacing agency may extend such period for good cause. If such period is extended, the payment under subsection (a) shall be based on the costs of relocating the person to a comparable replacement dwelling within one (1) year of such date.