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9.A. - Page 3 <br /> • The owner of a pre-1989 multi-family residential building within the City that lacks an <br /> automatic sprinkler system may apply to participate in the Program at the same time <br /> they apply to the City for a building permit to install an automatic sprinkler system in <br /> their pre-1989 residential building. <br /> • The Program allows an eligible Owner to receive either a Low-Interest Program <br /> Loan or a Rent Stabilization Program Loan to assist them in paying for the cost of <br /> the automatic sprinkler installation. The amount of the Program Loan may not <br /> exceed $5.00 per square foot (gross square footage) of the residential building <br /> unless the Program Manager approves a greater amount due to unusual <br /> circumstances. <br /> • A Low-Interest Program Loan will be payable over five (5) years. Payments of <br /> principal and interest will be due monthly. The annual interest rate for the loan will be <br /> either 3% or the federal funds rate (11th district cost of funds index) in effect at the <br /> time the loan is made, whichever is higher. <br /> • A Rent Stabilization Program Loan starts as a Low-Interest Program Loan but an <br /> eligible Owner may elect to have the loan payments deferred and ultimately forgiven <br /> if they voluntarily agree to not increase the rents in their residential building more <br /> than 5% or the increase in CPI, whichever is less, in any 12 month period during the <br /> 5 year term of the loan. If these voluntary rent restrictions are breached, then the <br /> loan becomes immediately due and payable with accrued interest. <br /> • To receive the Program Loan, the eligible Owner must complete and execute a loan <br /> agreement, promissory note and deed of trust as required by the Program Manager. <br /> The loan agreement contains the terms of the contract between the Owner/borrower <br /> and incorporates the promissory note and deed of trust by reference. The <br /> promissory note represents the instrument reciting the promise to repay the amount <br /> loaned and the mechanics by which the loan must be repaid. The deed of trust <br /> creates a lien against the property where the automatic sprinkler system has been <br /> installed as security for the Program Loan. <br /> • An eligible Owner's priority to receive a Program Loan is set as of the time they <br /> submit a building permit application so long as they obtain a Program Loan <br /> Commitment Letter from the Program Manager within 60 days following the initial <br /> submission of their application. <br /> • A Program Loan Commitment Letter will only be issued if the Program Manager <br /> determines the proposed cost for design, purchase and/or installation of the <br /> Page 3 of 5 <br />