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3.5 TERM AND PAYMENT <br />a. Deferred Loan <br />1. Principal and interest payments may be deferred <br />for fifteen (15) years at such time full payment <br />is due and payable. <br /> b. Amortized Loan <br /> 1. Payments: Borrowers are expected to pay at least <br />thirty percent (30%) of their gross income toward <br />housing costs, which include the sum of all <br />mortgage loan payments, lease fee on leasehold <br />estates, homeowner and liability insurance, real <br />property tax, and the cost of utilities. Former <br />owners with a remaining life interest are also <br />expected to pay at least thirty percent (30%) of <br />their gross income toward housing cost. <br /> 2. Repayment Analysis: A loan repayment analysis <br />shall be performed for all income eligible <br />applicants to determine the applicant's ability to <br />repay the loan. No loan shall be granted unless <br />sufficient household funds are available for loan <br />payments and no loan shall be granted where a <br />repayment delinquency is likely to occur. No loan <br />shall be granted with a deferred repayment period <br />unless the applicant can show the ability to make <br />loan payments after the deferred period. <br /> 3. Loan Terms: All loans shall be fully amortized <br />over the term of the loan. The OHCD shall review <br />each loan applicant's ability to pay to establish <br />the term of the loan. The OHCD shall select the <br />shortest loan term available that maintains <br />affordable monthly payments for the loan <br />applicant. Loan terms are available at five, ten, <br />and twenty year periods. The maximum amortized <br />repayment period for rehabilitation loans are as <br />follows: <br /> Maximum <br /> Loan Amount Loan Term Repayment Period <br /> $2,500 – $5,000 5 years Amortized 60 months <br /> $5,001 - $15,000 10 years Amortized 120 months <br /> $15,001– $25,000 20 years Amortized 240 months <br />7019RBLA -5- RRP RULES/07-07-2016 <br /> <br />