Lenders may make shared appreciation loans pursuant to this chapter for the purchase of real property improved with one- to four-family dwelling units, including structures ancillary to such dwelling units and including attached single-family dwelling units, single-family mobilehome units placed upon permanent foundations, residential condominium units and dwelling units within a planned unit development. Shared appreciation loans shall be made to finance only owner-occupied dwelling units, but in the case of two- to four-unit dwellings financed under this chapter only one of the units need be owner-occupied. The
original recipient of a shared appreciation loan shall certify in writing to the lender that he or she will occupy the security property as his or her principal residence, provided that failure to so occupy the security property shall not void a shared appreciation loan, but at the option of the lender the loan may be accelerated in accordance with the terms and conditions provided in the shared appreciation loan. All shared appreciation loans shall be originated by the lender on behalf of a pension fund which is subject to the Employee Retirement Income Security Act of 1974 (P.L. 93-406, 88 Stat. 829), pursuant to a prior written commitment to purchase the loan.
Article 3Fees of Officers
Section § 1917.030
This law allows lenders to offer shared appreciation loans to help people buy homes, such as one- to four-family houses, condominiums, or mobile homes. These loans are for properties that the buyer will live in. However, if the property has two to four units, only one unit must be lived in by the owner. Borrowers must promise in writing to live in the property, but if they don't, it doesn't automatically cancel the loan. Instead, the lender might decide to speed up repayment, depending on the loan terms. These loans are made on behalf of pension funds governed by specific regulations.
shared appreciation loans one- to four-family dwelling units owner-occupied principal residence loan acceleration pension fund Employee Retirement Income Security Act purchase of real property mobilehome units condominium units planned unit development loan certification loan terms and conditions lender obligations housing finance
Section § 1917.031
This law outlines the terms of a shared appreciation loan, a type of mortgage or loan secured by real estate. The loan must last between 7 to 30 years and have a payment plan designed to pay off the principal in 30 years through equal monthly payments. The interest rate is fixed and slightly below the usual rate at a specific time before closing the loan. The loan must be secured by a deed of trust or mortgage, and the borrower has to pay extra interest when the property increases in value (net appreciated value) upon events like selling the property, transferring ownership, or paying off the loan early. These specific conditions ensure that both lender and borrower have a stake in the property's value appreciation.
A shared appreciation loan shall include the following terms and conditions:
(a)CA Civil Law Code § 1917.031(a) The term of the loan, excluding refinancing under Section 1917.033, shall be at least seven years, but not more than 30 years.
(b)CA Civil Law Code § 1917.031(b) The repayment schedule for the loan, excluding refinancing under Section 1917.033, shall be cast so that full amortization of the principal amount of the loan would occur in 30 years, regardless of the actual term of the loan. Any principal balance remaining at maturity shall be due
and payable at that time, unless refinanced as provided in Section 1917.033. Monthly installment payments shall be equal in amount and in addition to amortization of principal, shall include fixed interest pursuant to subdivision (d).
(c)CA Civil Law Code § 1917.031(c) The loan shall be secured by a deed of trust or mortgage on the real property financed.
(d)CA Civil Law Code § 1917.031(d) The loan shall bear interest at a fixed rate, which shall be one-third below the prevailing rate in effect 90 days prior to the loan closing, or at another date between that date and the loan closing if mutually agreed by the lender and borrower.
(e)CA Civil Law Code § 1917.031(e) The borrower shall additionally be obligated to pay contingent deferred interest in the amount of one-third of the net appreciated value of the real property which secures the loan, at the time the property is sold (including a sale pursuant to a
land sale contract), when title is transferred, other than a transfer specified in Section 2924.6, when a lease with an option to purchase is entered into, when a partnership is formed which in effect transfers the beneficial ownership to another person, when a trust is created which affects title to the property, upon a judicial or nonjudicial foreclosure sale, at the time the loan is prepaid in full, or upon the maturity of the loan, whichever first occurs.
shared appreciation loan loan term repayment schedule full amortization principal amount fixed interest rate deed of trust mortgage net appreciated value contingent deferred interest property sale transferring title nonjudicial foreclosure loan refinancing borrower obligations
Section § 1917.032
This law talks about a borrower's right to pay off their shared appreciation loan early, either completely or partially, without restrictions. If a borrower agrees in writing, they might have to pay a fee for doing this within the first five years of the loan. However, the fee cannot be more than what's allowed under another specific rule, and this fee doesn't apply to any deferred interest that the borrower hasn't yet paid.
(a)CA Civil Law Code § 1917.032(a) The borrower shall have the right to prepay, at any time, in full or in part, the principal loan balance of the shared appreciation loan, together with accrued interest, including deferred contingent interest.
(b)CA Civil Law Code § 1917.032(b) Nothing in this chapter shall prevent a borrower from obligating himself or herself, by an agreement in writing, to pay a prepayment charge, as authorized by this section, upon prepayment of the loan, in full or in part, within five years of the date of execution of the shared appreciation loan.
(c)CA Civil Law Code § 1917.032(c) Any prepayment charge imposed upon the prepayment of a shared appreciation loan shall not exceed the amount authorized and specified in subdivision (b) of Section 2954.9.
(d)CA Civil Law Code § 1917.032(d) No prepayment charge shall be imposed as to any portion of the contingent deferred interest.
shared appreciation loan prepay principal accrued interest deferred contingent interest prepayment charge written agreement five-year limit subdivision (b) of Section 2954.9 contingent deferred interest early loan repayment
Section § 1917.033
This law outlines what happens when a shared appreciation loan reaches maturity without being fully paid off or if the property wasn't sold. In such cases, the lender must offer the borrower a way to refinance the remaining loan balance and any interest that has been deferred. The new loan must last at least 30 years, but the lender might have the option to demand full repayment after seven years if the interest rate is fixed. This option must be clearly explained in the refinancing details. The interest rate can't be higher than the current rate when the original loan matures. The lender may require the refinancing loan to be secured by the best possible claim on the property. The terms for refinancing should already be included in the original loan agreement, and both borrower and lender can agree on different terms if they both accept them. Borrowers can choose from different refinancing options if the lender provides more than one.
(a)CA Civil Law Code § 1917.033(a) If the shared appreciation loan is not prepaid in full or the real property securing the loan is not sold or transferred prior to maturity of the loan, the lender shall offer to the original borrower refinancing of the unpaid balance of the loan and all contingent deferred interest.
(b)CA Civil Law Code § 1917.033(b) The term of the refinancing loan shall be at least 30 years from the date of the refinancing, provided that if the interest rate of the refinancing loan is not adjustable or variable during the term of such loan, the loan may contain a call
provision giving the lender an option to accelerate the principal loan balance making it, together with accrued interest, payable in full at a date specified in the shared appreciation loan, which shall be no earlier than seven years following the date of refinancing under this section. If such a call provision is included in the refinancing loan, a concise description thereof shall be included in upper case print in the disclosures on refinancing required by Section 1917.071.
(c)CA Civil Law Code § 1917.033(c) The interest rate for the refinancing loan shall not exceed the prevailing rate existing at maturity of the shared appreciation loan.
(d)CA Civil Law Code § 1917.033(d) The lender may require as a condition of the refinancing loan that it be secured by a deed of trust or mortgage of first priority on the property financed.
(e)CA Civil Law Code § 1917.033(e) The terms and conditions of refinancing
pursuant to this section shall be specified in the shared appreciation loan, shall be a part of the shared appreciation loan contract, and shall be subject to the applicable laws in effect on the date of execution of the shared appreciation loan. The refinancing shall be fully amortizing and the interest rate may be either fixed or adjustable as permitted by law for home financing offered by banks or savings and loan associations doing business in this state to the public for financing housing similar to the borrower’s property, provided that nothing in this section shall preclude such other lawful refinancing terms as may be mutually acceptable to the borrower and lender. If the lender offers more than one form of refinancing, the borrower may select from among the types of refinancing offered by the lender.
shared appreciation loan refinancing unpaid balance contingent deferred interest 30-year term call provision interest rate limitation deed of trust mortgage priority fully amortizing fixed or adjustable interest rates lender option loan maturity borrower selection mutually acceptable terms
Section § 1917.034
This law allows borrowers to find different financing options instead of the refinancing mentioned in another section. Borrowers and lenders can agree on other terms if they want.
Nothing in this chapter shall preclude the borrower from obtaining any other financing, in lieu of the refinancing provided for in Section 1917.033, including refinancing on other terms that are mutually agreeable to the borrower and lender.
borrower financing alternative refinancing mutual agreement terms negotiation Section 1917.033 lender agreement financial options refinancing alternatives borrower-lender terms flexible financing financing agreement alternative loan terms
Section § 2082
If you find or take up something, any fees related to the officers helping with this will be the same as those for similar services elsewhere. The person who found or took up the item has to pay these fees, but they can try to get the money back from the item’s owner.
The fees of officers under this chapter are the same allowed by law for similar services, and shall be paid by the taker up or finder and recovered from the owner.
fees of officers similar services taker up finder payment responsibility owner recovery item recovery service fees reimbursement officer fees
