§ 108.206. Percentage of Asset or Percentage of Statutory Net Worth Limitations.

(a) If a loan on unimproved real property under Section 6705.1 or 6705.2 and an improvement loan under Section 6705.4 do not together exceed the limitations for an original loan, then both such loans may be classified as original loans and excluded from the percentage of asset and net worth limitations of Sections 6705 and 6705.5. If a loan on unimproved real property under Section 6705.1 or 6705.2 and an improvement loan under Section 6705.4 together exceed the limitations for an original loan, then both such loans are included in the percentage of asset and net worth limitations of Sections 6705 and 6705.5 until the sum of the unpaid balances of both loans is reduced to the limitations of an original loan; both loans may then be reclassified as original loans and should no longer be classified as Section 6705 loans.

(b) Under Section 6705.5 the total of an association's investment in unimproved Section 6705 property plus its investments or loans under Sections 6705.1, 6705.2, 6705.3, 6705.4 and 6705.6 together may not at any time exceed (1) 2 1/2 percent of the association's total assets, or (2) 50 percent of its statutory net worth, whichever is less.

(c) An association shall not make an investment under Section 6705 if such investment together with the aggregate of existing Section 6705 investments and loans by the association under authority of Sections 6705.1, 6705.2, 6705.4 and 6705.6 would cause an excess over the lesser of (1) 5 percent of its total assets, or (2) its statutory net worth.

(d) An association shall not make an investment in unimproved real property under Section 6705, nor investments authorized under Sections 6705.1, 6705.2, 6705.3, 6705.4 and 6705.6 if such investment together with the aggregate of existing investments under such Sections 6705.1, 6705.2, 6705.3, 6705.4 and 6705.6, and investments in unimproved real property under Section 6705, would cause an excess over the lesser of (1) 2 1/2 percent of the association's total assets, or (2) 50 percent of its statutory net worth.

HISTORY

1. Change without regulatory effect renumbering former Section 243.6 to Section 108.206 (Register 87, No. 14). For prior history, see Register 76, No. 20.

Note

Note: Authority cited: Section 5500.5, Financial Code. Reference: Sections 6705-6705.6 and 6706, Financial Code.