Sec.8-214h-5. Contract for financial assistance

(a) Following approval of the State Bond Commission pursuant to the provisions of Section 3-20 of the Connecticut General Statutes, the State, acting by and through the Commissioner, may enter into a contract(s) with a developer for financial assistance for project(s) in the form of interim and/or permanent loan(s), grant(s) or any combination thereof in an amount not in excess of the total development cost of the project(s) as determined by a cost certification and as approved by the Commissioner, less any equity interest required.

(b) In the case of a grant or combination loan(s) and grant(s), the total amount of the grant(s) shall be limited to an amount which together with the loan(s), if applicable, is necessary to enable the developer to set and maintain the admission income limits and carrying charges approved by the Commissioner.

(c) Such contract(s) shall include but not be limited to: equity interest to be provided, the amount of financial assistance to be provided, the completion timetable, the term of the loan(s), the amount of the State service charge to be assessed during the development and management of the project(s), the provisions for development and management, and the rights and obligations of the parties under the contract(s).

(d) The term and interest rate of interim and permanent loan(s) shall be as follows:

(1) The term of the interim loan shall be from the closing of the interim loan to the closing of the permanent loan. The interim loan shall bear an interest rate to be determined in accordance with Subsection (t) of Section 3-20 of the Connecticut General Statutes.

(2) The term of the permanent loan shall be for a period not to exceed 50 years. The actual term will be determined by taking into account the financial feasibility of the project and term of the rental subsidy, if any, for the project. The interest rate shall be determined in accordance with Subsection (t) of Section 3-20 of the Connecticut General Statutes.

(3) All permanent loans shall be secured by a mortgage note and deed.

(4) Amortization of the loan shall commence once the monthly project income meets or exceeds the approved operating budget or at the closing of the permanent loan, whichever occurs first. The Commissioner may waive the requirement for amortization prior to the closing of the permanent loan, if it is in the best interest of the State.

(e) A lien shall be filed on all property for which the State has provided financial assistance. The Commissioner may subordinate the State's lien if the level of State financial assistance so warrants. This requirement may be waived if the Commissioner determines that such waiver will be in the best interest of the State.

(Effective August 18, 1988)