If a property has a rent limitations agreement attached to the title that was drawn due to a loan the property owner received through a community development block grant within the county, and the said limitations agreement states that agreement is to be transfered to all successor property owners, does the outstanding loan if any, then transfers as well or does the loan stay as full liability for the initial owner who initiated loan and agreement?
1 Answer from Attorneys
That depends on whether the loan is assumable or not by the buyer. Generally they are, if the new owner meets the same criteria as the original borrower, but not all are and/or the new buyer may not qualify. In some cases the new owner must qualify even if they get their own financing. If for any of those reasons the new owner doesn't assume the loan, then it will need to be paid off out of the escrow at which point it would go away as to both the old and new owner and only the deed restrictions would apply.