Sec. 70.7. Principal reductions

(a) Maximum amount of principal reductions.

Principal reductions provided to program recipients on loans shall be limited to $250,000 or 50 percent of the outstanding principal on a loan, whichever is less.

(b) Applications for principal reductions.

In addition to the application requirements set forth in section 70.10 of this Part, applicants for principal reductions shall submit the following:

(1) a copy of the loan analysis report prepared for the financing institution, and a copy of the financing institution's written approval or disapproval of the loan with respect to the applicant, if available; and

(2) a statement signed by the applicant requesting the principal reduction and authorizing the release of bank records, credit reports, and other pertinent information to the department.

(c) Approval of principal reduction.

A principal reduction will be approved only where the department determines that there is a reasonable assurance that the applicant will be able to repay the loan.