§ 310. Deferred Principal Payment Loan Program.

(a) The Department shall consider applicants, who are California veterans as defined in Section 980 of the Military and Veterans Code, for the Department's Deferred Principal Payment Program ( “Program”) if:

(1) the applicant has sufficient income and assets as defined in Section 309.4(a) to make interest-only monthly payments to purchase the home selected, and

(2) the applicant's income can reasonably be expected to increase sufficiently within a five year period to make the transition to fully amortized principal and interest payments.

(b) The forecast for increases in income shall be based on upgrading of job/pay level and not merely on increases in income resulting from cost of living adjustments.

(c) Under the Program, the veteran shall be allowed to make interest only payments for a period of up to five (5) years.

(d) The initial deferment period shall be two years.

(e) Reviews of the veteran's income status shall be performed biennially by the Department during the deferred principal payment interval. If during the review the Department determines that the veteran has sufficient income and assets as defined in Section 309.4(a) to make fully amortized payments, the deferred principal payment shall be converted (increased) to a principal and interest payment that will amortize the loan.

(f) A loan with deferment of principal payment shall be granted only after the Department has determined that the applicant's credit is acceptable in accordance with Sections 309.1.

HISTORY

1. New section filed 11-12-91; operative 12-12-91 (Register 92, No. 7).

Note

Note: Authority cited: Section 700, Military and Veterans Code. Reference: Sections 987.56 and 987.71, Military and Veterans Code.