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I.  POLICY STATEMENT

The College is committed to attracting and retaining excellent faculty to support its mission to provide students with a total educational experience of the highest quality. The College recognizes that housing costs can present a barrier for faculty who wish to relocate to or remain within the Los Angeles area. This Faculty Housing Assistance Program is designed to alleviate those barriers, make local home ownership more affordable, and help the College recruit and retain tenured and tenure-track faculty.

This policy provides information and guidelines for participants in Occidental’s Faculty Housing Assistance Program (the “Program”). This policy sets forth basic information concerning the Program and summarizes the benefits and obligations of Program participants. Participants will also be required to sign certain Program documents, including a Note and Loan Agreement and a Deed of Trust (“Program Documents”). The Program Documents set forth in detail the legal rights and obligations associated with participation in the Program, and supersede this policy to the extent of any conflict. 

READING THIS STATEMENT IS NOT A SUBSTITUTE FOR A CAREFUL REVIEW OF THE PROGRAM DOCUMENTS. THE PROGRAM DOCUMENTS ARE THE ACTUAL LEGAL DOCUMENTS THAT SET OUT AND CONTAIN THE RIGHTS AND LIABILITIES OF THE PARTIES AND PROGRAM PARTICIPANTS SHOULD BE SURE TO READ AND UNDERSTAND ALL THE PROGRAM DOCUMENTS BEFORE SIGNING THEM AND PARTICIPATING IN THE PROGRAM.

II. APPLICABILITY

This policy is applicable to any tenured faculty who participate in the Program.

III.  DEFINITIONS

Annual Forgiveness Date - the December 15th following the College’s payment of the loan and each December 15th thereafter until the Maturity Date is reached.

Cash Out Refinancing - (1) any increase in the obligation secured by the first trust deed that is subsequent to the initial acquisition of the qualifying Home and is an amount sufficient to allow the withdrawal of cash in excess of the points and closing costs associated with the initial acquisition of the qualifying Home, or (2) execution of a third trust deed obligation secured by the Home.

Changed Circumstance - an event described in Section IV.G.2 of this policy and Section 5 of the Note and Loan Agreement.

Default Event - an event described in Section IV.G.3 of this policy and Section 6 of the Note and Loan Agreement.

Due Date - the date following a Changed Circumstance and/or Default Event on which the remaining unpaid/unforgiven principal loan balance is due and payable.

Home - a qualifying, local (within 50 miles of the College) property to be used as a Participant’s principal residence. This property may be a single-family home, condominium, townhouse, or duplex. If the Participant purchases 100% of a duplex, the Participant may not sell any portion of the duplex while it is subject to the Program loan.

Maturity Date - the twelfth Annual Forgiveness Date.

Participant – an eligible full-time tenured faculty member who is in good standing and is approved for participation in the Program

Program – the �鶹Ƶ�� Faculty Housing Assistance Program.

Program Documents – the Note and Loan Agreement, Deed of Trust, and any other legal documents that the College requires a Participant(s) to sign in connection with the Program.

Termination Event – a Changed Circumstance or Default Event that terminates Participant’s participation in the Program and renders the Program loan due and payable.                    

IV. POLICY

A. Program description

The Program provides eligible Participants with up to $150,000 in financial assistance for the purchase of a Home in the form of a twelve-year forgivable loan secured by a second Deed of Trust. This loan does not typically qualify as an initial down payment by mortgage banks, but may help lower the Participant’s overall monthly mortgage payment.  Participants are strongly encouraged to discuss the Program with their chosen primary lender to understand how it fits within the underwriting process.

The loan will be payment- and interest-free unless and until it becomes due and payable pursuant to this policy and the Program Documents. Unless otherwise stated in this policy or the Program Documents, equal amounts of the principal balance of the loan will be forgiven on each Annual Forgiveness Date until the Maturity Date is reached (except that the amount forgiven on the first and/or last Annual Forgiveness Dates may be prorated based on the number of months of active Program participation during those years).

Participants should be aware that Program participation has income tax implications and may result in additional income tax withholding: Contributions to the Participant’s closing costs, loan forgiveness, and imputed interest are all taxable. Participants are responsible for all tax consequences associated with their participation in the Program. PARTICIPANTS ARE URGED TO CONSULT WITH THEIR TAX ADVISOR ABOUT THE CONSEQUENCES AND RISKS ASSOCIATED WITH PROGRAM PARTICIPATION.

This policy is supplemental to and does not alter the College’s Rental Housing Policy.

B. Eligibility & Participation Priority

1. Eligibility

Full-time tenured faculty in good standing are eligible for the Program if they do not already own a home and: (1) they are offered Program participation at the time of hire, or (2) they have completed at least one full academic year of employment at the College.  Where a household contains two eligible faculty members, the household is only eligible for a single Program loan. Faculty may only participate in the Program once during their aggregate employment with the College.

Program eligibility will be verified by the Dean of the College, the Vice President & Chief Operating Officer, the Chief Human Resources Officer, and the Faculty Council President.  Faculty must remain a full-time tenured College faculty member in good standing to continue their participation in the Program.

The Program is limited to (i) four (4) loans per year or (ii) the number of loans possible based on available funding for that year. Application to the Program does not guarantee participation.

2. Application

Eligible faculty must write to the Dean of the College to declare their intent to participate in the Program by June 15th of each year. Failure to do so may result in non-consideration for the Program that year.

3. Participation Priority

Participation in the Program will be prioritized as follows. Eligible applicants who are not selected through the lottery process may be considered again in future years (and must reapply in each year where they wish to receive consideration).

i) First priority will be given to eligible tenured faculty members who will be required to vacate College-owned rental housing that year, provided that they were hired by the College within the previous ten years. If the number of eligible faculty in this priority group exceeds the number of available loans in a given Program cycle, selections will be made by random lottery.

(ii) Second priority will be given to eligible tenured faculty applicants who were hired by the College within the previous ten years. Within this group, applicants will be selected by random lottery.

(iii) Third priority will be given to other eligible tenured faculty who apply. Within this group, applicants will be selected by random lottery.

C. Mortgage Requirement

Participants are required to procure a primary mortgage from a commercial lender that is secured with a standard California first Trust Deed. Participants must independently qualify for this loan and comply with all of the mortgage lender’s requirements including, without limitation, qualification, credit, and minimum down payment. Participants should be aware that they may be required to purchase private mortgage insurance if their total down payment (including Participant’s contribution and, where possible, the Program loan) is less than 20% of the purchase price.

D. Escrow Deadline

Participants must initiate escrow by June 1st following their selection for participation in the Program. Failure to meet the escrow deadline will result in the forfeiture of eligibility for that year, and the opportunity to participate will pass to the next eligible faculty member, based on the priorities described above in Section IV.B.3.

E. Home Qualifications

Program loans are only available for the purchase of a Home, as defined in this policy. Program loans are not available for purchase of a vacation home, investment property, non-principal residence, or property to replace the Participant’s current, owned residence.

F. Other Participation Requirements

To continue their participation in the Program, Participants must also:

• Maintain hazard insurance against loss by fire, earthquake, and other natural causes as may be reasonably required by the College.
• Provide the College, on an annual basis, proof that property taxes for the Home have been paid and that the Home is insured for the replacement value of the structure with the College named as an additional insured. If the Home is a duplex, proof of insurance and payment of property taxes must be for the entire duplex.
• Notify the College of any Changed Circumstance (as described in Section IV.G.2 of this policy).
• Notify the College of any Default Event (as described in Section IV.G.3 of this policy).
• Furnish to the College, upon reasonable request, Participant’s then current financial information
• Be solely responsible for paying all taxes, insurance premiums, repairs, and other charges relating to ownership of the Home.
• Keep the Home in good condition and repair; not remove or demolish any building; complete and restore any building which may be constructed, damaged or destroyed; comply with all laws affecting the property or requiring any alterations or improvements to be made; not commit or permit waste; cultivate, irrigate, fertilize, fumigate, prune and do all other acts which may be reasonably necessary based on the character or use of the Home.

Failure to comply with these requirements may constitute a material breach of the Program Documents and constitute a Default Event.

G. Termination Events and Repayment

1. Promise to Pay

If Participant’s tenured or tenure-track employment with the College terminates, for any reason, their participation in the Program ends, and the unpaid/unforgiven loan balance will become due and payable, with interest, according to the terms of the Program Documents.

2. Changed Circumstance

The following events (each a “Changed Circumstance”) will end Participant’s participation in the Program and require Participant to repay the unpaid/unforgiven loan balance, plus interest, within ninety (90) days of the Changed Circumstance, unless otherwise specified below or in the Program Documents:

1. Participant’s employment at the College as a full-time tenured faculty member terminates for any reason (other than the reasons stated below in Section IV.G.2.b) prior to the Maturity Date.  
2. Participant’s employment at the College terminates due to Participant’s death or permanent disability. In such case, the next scheduled principal forgiveness will occur on the Annual Forgiveness Date immediately following Participant’s death or permanent disability, at which time the unpaid/unforgiven loan balance, plus interest, shall become due and payable. The Due Date for Participant (or Participant’s estate) will be one hundred eighty (180) days after the Annual Forgiveness Date immediately following Participant’s death or permanent disability.
3. Participant takes leave from the College for a period of more than one hundred twenty (120) continuous days; or Participant has taken at least one hundred twenty (120) days of leave within the previous twelve (12) months. In such case, principal forgiveness will be suspended, and the term of the loan will be extended until Participant returns to full-time duty in their qualifying faculty employment at the College. At each Annual Forgiveness Date following a period in which Participant has taken leave as described in this section, the principal forgiveness amount will be reduced on a pro-rated basis. The Maturity Date will be extended by a length of time equal to the suspension of principal forgiveness. If Participant is determined to be permanently disabled during the principal forgiveness suspension and extension period, loan repayment will be administered in accordance with Section IV.G.2.b.
4. Participant engages in a Cash Out Refinancing. For purposes of calculating the Due Date, the Change Circumstance shall be the date when cash which is made available to or controlled by the Participant following a Cash Out Refinancing.
5. The Home is sold or title to the Home is transferred out of Participant’s ownership. For purposes of calculating the Due Date, the Change Circumstance will be the earlier of the (1) closing date or (2) transfer date of the Home (whichever occurs first). If Participant provides notice before the Due Date of Participant’s request for Loan Reinstatement as described below, the Due Date may be extended by the College for up to thirty (30) days to facilitate a Loan Reinstatement. 
   1. Loan Reinstatement: If Participant (1) sells their Home prior to the Maturity Date or a Termination Event, (2) purchases a new Home within ninety (90) days of the closing or transfer of the original Home, and (3) executes a new set of Program Documents relative to the new Home, the College will reinstate Participant’s participation in the Program and loan Participant an amount equal to the previously unpaid/unforgiven loan balance, for a term equivalent to the unexpired term of the Program Documents. If Participant does not close escrow on a new Home within ninety (90) days of the closing or transfer of the original Home, Participant’s participation in the Program will not be reinstated and no further Program loans or benefits will be extended.
6. The Home ceases to serve as Participant’s principal residence.
7. The Home is a duplex and (1) Participant sells or transfers any interest in the Home, or (2) the Second Trust Deed securing the Program loan no longer occupies at least the second position on the entire duplex property. If Participant initially purchases a duplex jointly with a third party, the Program loan must be secured by no less than a Second Trust Deed on the entire Home. The third party may sell their ownership interest in the duplex during the period of the Program loan; however, the Second Trust Deed securing the Program loan must continuously occupy no less than second position on the entire qualifying duplex property.

3. Default Events

The following events constitute events of default (“Default Events”) under the Program. Upon the occurrence of a Default Event, the unpaid/unforgiven loan balance shall become immediately due and payable, with interest.

1. Any material misrepresentation by Participant in connection with obtaining the Program loan;
2. Participant purchases a second residential property and uses it as a residence within the meaning of Section 280A(d) of the Internal Revenue Code or any successor provision;
3. Participant converts the Home to a rental property, excluding rental use of the portion of a duplex that is not Participant’s primary residence;
4. Participant becomes the subject of a bankruptcy, insolvency or receivership proceeding;
5. The Home is destroyed by fire, earthquake, or other event and insurance proceeds are used for purposes other than restoration of the Home;
6. A lien is recorded against the Home that takes priority over the mortgage lender’s first Deed of Trust or the College’s second Deed of Trust;
7. Participant fails to timely pay the loan secured by the first Deed of Trust or commits any other act or event which results in a default under the first Deed of Trust or the College’s second Deed of Trust;
8. Participant fails to make timely payment to the College of the cash available to or controlled by Participant pursuant to a Cash Out Refinancing; or
1. Participant materially breaches any provision of the Program Documents.

4. Voluntary Withdrawal and Prepayment

If Participant decides to voluntarily withdraw from the Program, the unpaid/unforgiven loan balance will immediately become due and payable on the date of Participant’s withdrawal from the Program.

Participant may make voluntary prepayment, without penalty, of any or all of the unpaid/unforgiven loan balance prior to the due date. Any prepayment will be applied to reduce the unpaid/unforgiven principal loan balance.

H. Additional Information

For more information about the Faculty Housing Assistance Program or Policy, please contact the Controller, �鶹Ƶ��, 1600 Campus Road M-20, Los Angeles, CA 90041 or business@oxy.edu. This Program was approved by the �鶹Ƶ�� Board of Trustees on April 19, 2024.

Any substantive changes or updates to this policy, including the eligibility criteria, will be communicated to all faculty members in a timely manner.

V.  POLICY HISTORY

Responsible Officer(s): Vice President for Finance, Planning, and Operations; Vice President for Academic Affairs

Effective Date: October 14, 2024

VI.  RELATED POLICIES AND RESOURCES