Sec. 17a-223. (Formerly Sec. 19a-464f). Requirements of borrowers. Capital loan agreement.
Sec. 17a-223. (Formerly Sec. 19a-464f). Requirements of borrowers. Capital
loan agreement. (a) If the organization is seeking to purchase and renovate a new
community residential facility or to rehabilitate an existing community residential facility, it shall provide to the department: (1) An independent appraisal by a state certified
real estate appraiser; and (2) a structural survey of the home by a state licensed engineer.
The department shall not provide community residential facility loan funds for the purchase of a residential facility in principal amounts which are in excess of its appraised
value and shall not provide such loan funds for renovation or rehabilitation in principal
amounts which are in excess of actual and reasonable cost as defined in department
standards.
(b) The borrower shall sign a capital loan agreement in which it agrees to meet all
existing department guidelines for use of loan funds and to use such loan funds exclusively for the purchase of property, construction, renovation or rehabilitation of a community residential facility approved by the department.
(c) The borrower shall agree to maintain the facility as a licensed community residential facility for a period equal to the amortization period of the loan. The minimum
such obligation shall be five years and the maximum such obligation shall be thirty
years.
(d) If the borrower receives a loan equal to one hundred per cent of the total property
development cost of a new community residential facility, it shall agree to reserve one
hundred per cent of the maximum number of beds in the funded community residential
facility for department referrals from state institutions and waiting lists until such time
as the department determines this no longer to be necessary. If the borrower receives a
loan which provides less than one hundred per cent of the total property development
cost of a new community residential facility, it shall agree to reserve not less than two-thirds of the maximum number of beds in the funded community residential facility
for department referrals from state institutions and waiting lists until such time as the
department determines this no longer to be necessary. The department may establish
priorities for the development of new community residential facilities serving persons
with specialized needs and may give preference in funding to applications addressing
such needs.
(e) The borrower shall provide the department with a promissory note equal to the
amount of the loan which shall provide for repayment of the loan principal and interest
within a period not to exceed thirty years and a mortgage deed as security for the loan.
Such mortgage may be subordinate to a first mortgage interest in the property given by
the organization for the purpose of developing such property, provided that the total of
both mortgage interests shall not exceed the limit of total property development cost as
set forth in section 17a-220. The department shall file a lien against the title of the
property for which community residential facility loan funds are expended.
(f) The capital loan agreement shall require the borrower to make periodic payments
of principal and interest to the department which payments shall be deposited in the
Community Residential Facility Revolving Loan Fund.
(g) In the event of a default or if the capital loan agreement is terminated prior to
the borrower's having satisfied its obligations under said agreement, the department
shall require the return to the Community Residential Facility Revolving Loan Fund of
the outstanding amount of the loan and may foreclose on its mortgage in accordance
with the provisions of chapter 49.
(h) In the event that the borrower's license to operate the community residential
facility is terminated by the department for cause, the department may bring an action
to place the facility into receivership pursuant to sections 17a-231 to 17a-237, inclusive,
may contract with a private nonprofit corporation to operate the facility or may operate
the facility with department staff until such license is restored. If such license is not
restored within one year, this shall constitute a default and the department may pursue
the remedies provided in this subsection.
(P.A. 85-472, S. 4, 7.)
History: Sec. 19a-464f transferred to Sec. 17a-223 in 1991.