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RESOLUTION 2007-131 participation, the Indian River County Commission must notify the Department of Community Affairs (DCA) in writing. Prior to any rehabilitation, Indian River County must receive written notification of DCA's approval of the application, in accordance with 24 C.F.R. Section 570.489. If this process is not followed the local government and/or the applicant may be liable for returning funds to the program. IV. HOUSING REHABILITATION FINANCING The Housing Rehabilitation Program provides financing to homeowners in the form of 100% Deferred Payment Loans, the amount of which shall include the accepted bid amount plus a contingency reserve. A. Deferred Payment Loans Deferred Payment Loans are conditional grants, and are provided to homeowners who are unable or unlikely to obtain conventional financing due to their income limits. The Deferred Payment Loan (DPL) involves a security instrument (lien) requiring repayment of the loan only if the homeowner sells or transfers ownership of the rehabilitated home, ceases to use it as his/her primary residence within five years of the date of the DPL, or fails to maintain reasonable required standards of care and maintenance. During the five-year period, the principal is "forgiven" or subtracted from the principal balance in equal monthly amounts, so that at the end of the fifth year of owner occupancy (by at least one of the recipients if owned jointly), the loan is fully amortized. There is no interest charged during the five years. In the event that the sole owner dies or all owners die within the five-year loan period, repayment of the loan will not be required. If repayment of a DPL becomes due, the prorated principle balance will be due in full within thirty (30) days of the sale/transfer of ownership or the owner's cessation of primary residence at the property. If the owner is unable to make such a payment, the Indian River County Commission may, at their discretion, allow repayment of the DPL over a term not to exceed ten (10) years, at a yield of not more than six percent (6%) interest per annum. Homeowners whose household incomes do not exceed the HUD Section 8 low -to -moderate income limit will receive a Deferred Payment Loan for 100% of the cost of rehabilitation. The Maximum DPL for an owner -occupied single family dwelling is $50,000. The owner - occupied units in a two to four unit dwelling may receive a DPL of up to $30,000 per unit. If rehabilitation costs require more than $50,000 and the owner is unable to finance the additional cost, the dwelling unit may be disqualified unless alternative funding is available. Grant application scoring indicates an average rehabilitation amount that is to be attained. Very high costs frequently adversely impact other units planned for rehabilitation; therefore, the ability to maintain the necessary average must enter into the decision process. As a general policy, a contingency amount of about 10% should be placed on reserve for change orders. Exception may be made to this rule of the owner provides a firm commitment to pay for all required changes exceeding the authorized loan limit, or if the Administrator determines that the situation does not require a contingency fund. T