In areas in which a local public entity or nonprofit corporation is undertaking a rehabilitation or code enforcement program for which federal funds are being used or will be used in conjunction with the program established pursuant to this chapter, a person or family of low income who is the owner of an owner-occupied one-unit to four-unit dwelling may receive a deferred-payment rehabilitation loan for the excess of the cost of meeting rehabilitation standards over the amount of financing or assistance the local public entity or nonprofit corporation is able to provide without exceeding the owner’s ability to afford the monthly payments required. Owners of rental housing
in such areas may receive deferred-payment loans if necessary to avoid increases in monthly debt service which would result in rent increases causing permanent displacement of persons of low income residing in such housing and if the owner enters into an agreement with the local public entity or nonprofit corporation which provides for the regulation of rents, consistent with a fair rate of return for the owner, if such owner is not a nonprofit corporation, and consistent with the provision of affordable rents, to assure that the purposes of this chapter are carried out. Such agreement shall be binding on any successor in interest of the sponsor. The department may adopt regulations which govern the terms of such agreements. Owners of rental housing in such areas may also receive deferred-payment rehabilitation loans in the amount necessary to avoid such increases in monthly debt service as would make it economically infeasible to accept subsidies available to provide affordable rents to persons of low
income if the owner agrees to accept such subsidies.