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• The interest rate for these loans will be zero percent. No <br />loan payments will be due during the term of the loans which <br />will be 30 years. <br />• The entire loan will be due and payable upon sale or transfer <br />of the property, when the property ceases to be owner occupied, <br />or upon the loan maturity date. <br />• Upon the loan maturity date, and in accordance with CalHome <br />Program regulations, these loans may be amortized over a period <br />of time to be determined by Loan Committee, or may be deferred <br />for an additional period of time to be determined by Loan <br />Committee. <br />Agency Replacement Loan <br />• The Agency loan will be amortized for 30 years. <br />• Interest rates will be as follows: <br />Household Income <br />Interest Rate <br />0 - 50 Percent of Area <br />1.00% Per Annum <br />or 300 basis <br />points below <br />Median <br />the 11th District Federal Home Loan Bank <br />Monthly Cost of <br />Funds Index, <br />whichever is <br />higher. <br />51 - 80 Percent of Area <br />1.50% Per Annum <br />or 250 basis <br />points below <br />Median <br />the 11th District <br />Federal Home Loan Bank <br />Monthly Cost of <br />Funds Index, <br />whichever is <br />higher. <br />• Determination of the interest rate will be made at the time of <br />loan approval. <br />• During the term of the loan, upon sale or transfer, when the <br />home is no longer owner - occupied, or upon loan maturity date, <br />the entire principle is due and payable to the Agency along <br />with the applicable interest rate. <br />• Borrower(s) whose monthly housing debt, inclusive of the Agency <br />loan, is less than or equal to 30 percent of their gross <br />monthly income will make equal monthly payments in an amount <br />that will fully amortize that loan by its scheduled maturity <br />date. <br />• Borrower(s) whose monthly housing debt allows for partial <br />payments only of the Agency loan will be required to make such <br />payments. Partial loan payments will be applied first to <br />accrued interest and then to principal. Such borrower(s) must <br />be income - certified every five years to insure that their <br />monthly housing debt still allows for partial payments only. <br />• Borrower(s) whose monthly housing debt, exclusive of the Agency <br />loan, is equal to or more than 30 percent may have their loan <br />payments deferred. Such borrower(s) must be income - certified <br />every five years to insure that their monthly housing debt is <br />still equal to or greater than 30 percent. <br />EXHIBIT 1 <br />Page 4 <br />