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SECTION II: LHAP ASSISTANCE STRATEGY DESCRIPTIONS, IMPLEMENTATION <br />GUIDELINES, AND OPERATING PROCEDURES <br />A. Owner Occupied Rehabilitation Loans (Code #3) <br />a. Summary of the Strategy: <br />To fund all or a portion of the cost encountered in rehabilitating existing owner -occupied <br />housing units or rehabilitation of acquired owner occupied housing units in conjunction <br />with purchase assistance loans. <br />b. Fiscal Years Covered: FY 2021-2022; FY 2022-2023, and FY 2023-2024 <br />c. Income Categories to be Served: <br />Very Low -Income Persons (Not to exceed 50% of median income) <br />Low -Income Persons (between 50-80% of median income) <br />d. Maximum Award: <br />Maximum award: Very Low and Low $60,000 <br />e. Terms, Recapture, Default: <br />Rehabilitation loans are deferred payment 10 -year loans secured by a mortgage and note <br />(5 years if used in conjunction with -CDBG funding). The repayment of funds awarded as <br />a rehabilitation loan is not required, except in cases where the assisted housing unit is sold, <br />refinanced with a cash out prior to, termination of the unit's affordable classification <br />timeframe (10 years without CDBG funding or 5 years with CDBG funding), or occupied <br />by someone other than the original loan recipient. In cases where the unit is sold, <br />refinanced with a cash out, or occupied by someone else, the entire original loan amount <br />and accumulated interest must be paid back. There will be a 3% simple interest rate for <br />rehabilitation loans. The entire loan amount and interest accumulated will be forgiven after <br />10 years occupancy for very low and low income households (5 years when used in <br />conjunction with CDBG funds). Program income funds will be deposited in the county's <br />affordable housing trust fund. Eligible persons may repay the entire amount of the loan at <br />any time. In the event of the death of the homeowner, an income eligible heir may assume <br />the county SHIP loan as long as the home is utilized as household's homesteaded property <br />(rehabilitation loans in conjunction with CDBG funding will be forgiven upon death of <br />homeowner). <br />f. Recipient Selection Criteria: <br />Eligible applicants will be approved for assistance on a first qualified first served basis <br />43 <br />